Global Competitiveness Report

[sam i am]

http://www.weforum.org/site/homepublic.nsf/Content/Global+Competitiveness+Programme%5CGlobal+Competit iveness+Report

I found this fascinating. One of my big questions was : how the hell did Finland beat the US? They're a Democratic Socialist nation!

Anyhow, what do y'all think about this?

[D_Raay]

Hmmm, 2 Scandinavian countries in the top 3...

[EN[i]GMA]

Scandanavian countries have some advanages, being small and homogenous, they can easily redistribute their wealth and re-invest it in human capital.

They probably have a better education system than the US which plays a big role.

These sorts of things are also rather subjective, without actualy reading the study I can't mention any particular flaws, but there are certainly some areas where a case could be made for other countries being chosen.

Also, they don't have a significant influx of lower skilled workers as the US does.

[Qdrop]

so this study is saying that china is only #49 and japan is only #12 in the world competative market?

does not compute...

[sam i am]

so this study is saying that china is only #49 and japan is only #12 in the world competative market?

does not compute...

Yes. I'm not sure exactly what the criteria is....just saw the headline, delved a bit into it, then posted it.

As far as China being #49 - my guess is that globally they are not as strong as they are in the US market, so they must suffer a bit for exports to places like Europe and Africa? Not sure - maybe we can do some research and find out more why....

As for Japan - probably a function of the devaluation of the yen and the lack of economic growth (or productivity) since the big fall in the Nikkei index in the past few years. They are not as competitive as they used to be back when Rising Sun was a big book/movie in the late 80's / early 90's....

[sam i am]

GMA']Scandanavian countries have some advanages, being small and homogenous, they can easily redistribute their wealth and re-invest it in human capital.

They probably have a better education system than the US which plays a big role.

These sorts of things are also rather subjective, without actualy reading the study I can't mention any particular flaws, but there are certainly some areas where a case could be made for other countries being chosen.

Also, they don't have a significant influx of lower skilled workers as the US does.

Spot-on analysis, enigma. More homogenous societies DO tend to have less restrictions on the distribution of wealth. Also, I'm sure geography and natural resource availability play a part as well....

[EN[i]GMA]

Spot-on analysis, enigma. More homogenous societies DO tend to have less restrictions on the distribution of wealth. Also, I'm sure geography and natural resource availability plays a part as well....

I'm not so certain about geography.

Finland doesn't have much in the way of resources either, unlike Norway which is rolling in oil.

[sam i am]

GMA']I'm not so certain about geography.

Finland doesn't have much in the way of resources either, unlike Norway which is rolling in oil.

I was thinking in terms of the size of the country - ease of transporting goods, ease of establishing schools and transference of ideas more readily...etc....

Finland does have some pretty large mining components to its' economy, as do Norway and Sweden (especially Iron Ore)....

[EN[i]GMA]

I was thinking in terms of the size of the country - ease of transporting goods, ease of establishing schools and transference of ideas more readily...etc....

Finland does have some pretty large mining components to its' economy, as do Norway and Sweden (especially Iron Ore)....

Fair enough.

I would have to say its cold climate might also have an effect: People are indoors more and therefore more inclined to do productive work/research.

[sam i am]

GMA']Fair enough.

I would have to say its cold climate might also have an effect: People are indoors more and therefore more inclined to do productive work/research.

Possible. I'm betting the education system and lack of language barriers might have their parts to play as well. Invest enough in education and reap the rewards of increased productivity/competitiveness, perhaps?

Probably not, but it's a theory....

[EN[i]GMA]

Possible. I'm betting the education system and lack of language barriers might have their parts to play as well. Invest enough in education and reap the rewards of increased productivity/competitiveness, perhaps?

Probably not, but it's a theory....

Certainly those are the major factors.

[Ali]

GMA']Fair enough.

I would have to say its cold climate might also have an effect: People are indoors more and therefore more inclined to do productive work/research.Like in Russia?

[EN[i]GMA]

I've found out why Finland beat us: Debt. Finland has a very low national debt, and a very low budget deficit. This is a good thing for the economy.

[sam i am]

GMA']I've found out why Finland beat us: Debt. Finland has a very low national debt, and a very low budget deficit. This is a good thing for the economy.

Interesting. Is that debt as percentage of GDP?

Also, this would explain why Russia is not there, ali, per your inquiry above.

[EN[i]GMA]

Interesting. Is that debt as percentage of GDP?

Also, this would explain why Russia is not there, ali, per your inquiry above.

I believe so.

[sam i am]

GMA']I believe so.

Do you have a link to the Finland debt thing? I'd like to read it if you have it.

[EN[i]GMA]

Do you have a link to the Finland debt thing? I'd like to read it if you have it.

I quoted it out of the back of this week's Economist. They declare this debt the reason for Finland's victory, and it makes a lot of sense.

[Ali]

I found this fascinating. One of my big questions was : how the hell did Finland beat the US? They're a Democratic Socialist nation!Word to Socialism!

Aren't Sweden and Denmark also quite Socialist?

Maybe the Nanny State doesn't let her children (and herself) get into quite so much debt?

Amazed to see the US up there, with a deficit of 6% of GDP!

I suppose having the US dollah as sole currency for global oil transactions does help a bit ;) (http://www.ratical.org/ratville/CAH/RRiraqWar.html)

The U.S. prints hundreds of billions of fiat dollars, which U.S. consumers provide to other nations via the purchase of imported goods. These dollars become "petro-dollars" when are then used by those nation states to purchase oil/energy from OPEC producers ... and invested back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, bonds, real estate, etc. This recycling bolsters the dollar's international liquidity value. (http://www.ratical.org/ratville/CAH/RRiraqWar.html) No wonder Chavez is so unpopular in the US, what with directly trading his oil for other assets, instead of making people buy dollars first! And now I hear that he's planning to exchange his dollars for Euros and sell his oil in that currency. (http://www.freemarketnews.com/WorldNews.asp?nid=1184) Moving assets from dollars to euros or gold is a way of launching a bloodless but fairly effective attack on the United States which routinely spends a great deal more than it takes in from taxes and other revenue sources. Were other countries to follow this lead, the United States would have a harder time finding buyers at Treasury auctions – and would either have to find another way of funding its deficits or would have to cut back on social and military spending.Notice how Saddam was left to butcher and torture Iraqis, unmolested, right up until 2000, when he decided to do what Chavez is planning. The next thing you know, there are planes crashing into the World Trade Center and Nooklear Weppinz in Eye Rak. And when the Iranians (http://www.globalresearch.ca/articles/CLA410A.html) try to do the same thing, they suddenly have a Nooklear Weppinz Program, too! In June of 2004 Iran declared its intention of setting up an international oil exchange (a bourse) denominated in the Euro currency. Many oil-producing as well as oil-consuming countries had expressed their welcome to such petroeuro bourse. The Iranian reports had stated that this bourse may start its trade with the beginning of 2006. Naturally such an oil bourse would compete against London’s International Petroleum Exchange (IPE), as well as against the New York Mercantile Exchange (NYMEX), both owned by American corporations.

Oil consuming countries have no choice but use the American Dollar to purchase their oil, since the Dollar has been so far the global standard monetary fund for oil exchange. This necessitates these countries to keep the Dollar in their central banks as their reserve fund, thus strengthening the American economy. But if Iran — followed by the other oil-producing countries — offered to accept the Euro as another choice for oil exchange the American economy would suffer a real crisis. We could witness this crisis at the end of 2005 and beginning of 2006 when oil investors would have the choice to pay $57 a barrel of oil at the American (NYMEX) and at London’s (IPE), or pay 37 Euros a barrel at the Iranian oil bourse. Such choice would reduce trade volumes at both the Dollar-dependent (NYMEX) and the (IPE). (http://www.serendipity.li/wot/akleh.htm)Does anybody notice a trend here?

[sam i am]

Not bad, ali.

Trend? Maybe.

Actuality? Well, we'll just have to wait and see. Any country going off the dollar to trade in euros for oil will have a rude awakening : see previous threads for links to the article that talked about the possibility and plausibility of doing so - it's not a doable idea for nigh any country in the world, save the Brits. ;)

As for Iran - my prediction, IMHO, is that it is a paper tiger. We WILL NOT go militatrily after Iran, at least not without the UN fully behind us. Iran is far too strong in a TRADITIONAL military sense to effectively take out. They don't need nukes or chemical or bio agents - they have enough tanks and a trained army that the US would not take that on without full UN backing.

[Ali]

Not bad, ali.

Trend? Maybe.

Actuality? Well, we'll just have to wait and see. Any country going off the dollar to trade in euros for oil will have a rude awakening : see previous threads for links to the article that talked about the possibility and plausibility of doing so Which one?

[sam i am]

Which one?


Gotta catch a plane this morning, but I'll search it out tonight from my hotel room. Ok?

Talk to ya later.

[Ali]

Gotta catch a plane this morning, but I'll search it out tonight from my hotel room. Ok?

Talk to ya later.Was it this one (http://www.ratical.org/ratville/CAH/RRiraqWar.html)?

It's referenced above, in the ;) (http://www.ratical.org/ratville/CAH/RRiraqWar.html)

I believe we had a minor disagreement about the validity of said article... so it must be some other one.

Why is it unfeasible for an oil producer to sell their oil in a currency other than US dollaz? What is the "Rude Awakening" of which you speak? A cruise missile? Iraq were quite happily selling their oil in Euros, before the "Regime Change" occurred, why can't Iran and Venzuela do the same?

How can the Brits price their oil in Sterling? They are 14th in the world (http://www.cia.gov/cia/publications/factbook/rankorder/2178rank.html) (Venzuela's 8th) and the Squid has been steadily losing ground to the euro over the past few years, due to its' unhealthy relationship with the U$.

Enjoy your flight. You going Low Cost or Chapter 11?

[sam i am]

Was it this one (http://www.ratical.org/ratville/CAH/RRiraqWar.html)?

It's referenced above, in the ;) (http://www.ratical.org/ratville/CAH/RRiraqWar.html)

I believe we had a minor disagreement about the validity of said article... so it must be some other one.

Why is it unfeasible for an oil producer to sell their oil in a currency other than US dollaz? What is the "Rude Awakening" of which you speak? A cruise missile? Iraq were quite happily selling their oil in Euros, before the "Regime Change" occurred, why can't Iran and Venzuela do the same?

How can the Brits price their oil in Sterling? They are 14th in the world (http://www.cia.gov/cia/publications/factbook/rankorder/2178rank.html) (Venzuela's 8th) and the Squid has been steadily losing ground to the euro over the past few years, due to its' unhealthy relationship with the U$.

Enjoy your flight. You going Low Cost or Chapter 11?

Yes. It was that article. I still think it says the opposite of what you are backing, but we just disagree there.

I don't believe the Iraqis WERE selling their oil in Euros. They were, and are, selling them in dollars.

Iran and Venezuela can do whatever they want, but they will pay a price for Euro selling over dollar selling. There's a reason why the dollar is still king worldwide, not the Euro or the pound or the yen : can you tell me what the reason is?

Thanks for the enjoyment wishing of my flight. It was quite pleasant going and coming back. I was on Southwest, which is a low cost carrier that is the only profitable US airline as of right now, I believe. They also DO NOT get government funding....

[ChrisLove]

Clearly Micheal Porter had a big hand in this and I guess his big field of expertise is 'competitive advantage' so the following things ( I would imagine) play a big part in identifying a nations competitiveness,

Central Bank independance (well done US, UK etc)
Education,
Research and Development
Health
Strong controls to separate corprations from government.
Free and undistorted markets

I think what might surprise a lot of people is that many of the things that make a country competitive and are a source of its competitive advantage often require government intervention in some form or another.

You can muck around with deregulation and tax rates and monetary policy all you want but ultimately the things in the list above are what will deliver your long term growth. And most of all its education, not just in terms of spending on edcation but the integration of that education system with the economiy so that it contributes to the pool of ideas and innovation.

Fundamentally, all the things the ideas that Micheal Porter or Robert Solow might identify as being a source of competitive advantage or long term economic growth probably stem from an underlying national spirit that is hard to define. Cetainly the political systems that exist in Scandinavian countries where such good work is done on healthcare and education (which are likely key sources of their competitive advantage) have grown out of the underlying Clearly Micheal Porter had a big hand in this and I guess his big field of expertise is 'competitive advantage' so the following things ( I would imagine) play a big part in identifying a nations competitiveness,

[Ali]

I don't believe the Iraqis WERE selling their oil in Euros. They were, and are, selling them in dollars.Really? (http://www.globalpolicy.org/nations/sovereign/dollar/2000/1101baghdad.htm)
Iran and Venezuela can do whatever they want, but they will pay a price for Euro selling over dollar selling.What is that price? Is this an economic price, or some other penalty. Please clarify?

The Euro is currently stronger and more stable than the Dollar, therefore a better candidate for being the Fiat currency for oil.

Why is it that the US doesn't want OPEC countries to sell oil in Euros? Why is it that any country in the world who needs to buy oil has to buy US dollars first? It's not like the dollar is a stable currency, or anything. There's a reason why the dollar is still king worldwide, not the Euro or the pound or the yen : can you tell me what the reason is?US military spending?

Oh, and the dollar is not "king worldwide". In case you haven't noticed. Ask anybody who's been on a trip to Europe recently how far their mighty dollars went...
Thanks for the enjoyment wishing of my flight. It was quite pleasant going and coming back. I was on Southwest, which is a low cost carrier that is the only profitable US airline as of right now, I believe. They also DO NOT get government funding....Unlike your bankrupt National Carriers?

[ChrisLove]

Clearly Micheal Porter had a big hand in this and I guess his big field of expertise is 'competitive advantage' so the following things ( I would imagine) play a big part in identifying a nations competitiveness,

Central Bank independance (well done US, UK etc)
Education,
Research and Development
Health
Strong controls to separate corprations from government.
Free and undistorted markets

I think what might surprise a lot of people is that many of the things that make a country competitive and are a source of its competitive advantage often require government intervention in some form or another.

You can muck around with deregulation and tax rates and monetary policy all you want but ultimately the things in the list above are what will deliver your long term growth. And most of all its education, not just in terms of spending on edcation but the integration of that education system with the economiy so that it contributes to the pool of ideas and innovation.

Fundamentally, all the things the ideas that Micheal Porter or Robert Solow might identify as being a source of competitive advantage or long term economic growth probably stem from an underlying national spirit that is hard to define. Cetainly the political systems that exist in Scandinavian countries where such good work is done on healthcare and education (which are likely key sources of their competitive advantage) have grown out of the underlying Clearly Micheal Porter had a big hand in this and I guess his big field of expertise is 'competitive advantage' so the following things ( I would imagine) play a big part in identifying a nations competitiveness,

errrr. that wen a bit wrong a the end! I was trying to say that the sources of competitive advantage stem from the underlying principles and morals of the soceity in question