Washington briefing: Rankings measure economic competitiveness, extent of state failure

by Emil Sanamyan

Published: Saturday September 12, 2009

The Global Competitiveness Report.

Washington - Armenia is behind its neighbors when it comes to the ability to attract foreign investments and do business, while it has done a relatively better job establishing state institutions, recent studies say.

According to the Global Competitiveness Index published by the World Economic Forum and released on September 8, Armenia's ranking was unchanged at 97th, behind Azerbaijan (51st, registering improvement from 69th place last year), Turkey (61st, up from 63rd), Russia (63rd, down from 51st), and Georgia (90th, with its rank unchanged in spite of last year's conflict) out of 133 countries ranked.

The index, published since 2004, takes into account factors that normally serve as a draw for foreign investments. These include wealth, economic and social development, and stability, as well as market size; this leaves countries with smaller populations with a built-in disadvantage. These data is then combined with executive opinion surveys conducted among individuals doing business in particular countries.

The World Bank's Doing Business Report, released on September 9, put Armenia (ranked 43rd) behind Georgia (11th), Azerbaijan (38th), but ahead of Turkey (73rd) and Russia (120th).

That report focuses on the legislative framework for doing business and considers criteria such as the availability of credit, employment regulations, and the ease of getting permits.

Meanwhile, the latest Failed States Index, published by the journal Foreign Policy and the Fund for Peace, identified Armenia as the only country in its neighborhood to avoid being described as "in danger" of state failure.

In reverse rankings, where the lower the rank the better off the country is believed to be, Armenia was ranked 101st and described as a "borderline" case, with Turkey (85th), Russia (71st), Azerbaijan (56th), Iran (38th), and Georgia (33rd) exhibiting various degrees of state failure.

The index, published since 2005, looks at state cohesion and performance in 177 countries studied.

While the two surveys might seem to produce contradictory results for Armenia and its neighbors, there is substantial overlap when it comes to identifying the most competitive and least failing states.

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Gala Danilova. HALO Trust

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Gala Danilova will discuss the Karabakh conflict and ongoing de-mining efforts at an LA area event on November 23; for details about this and other upcoming Armenian happenings in America consult the Calendar of Events.