Solability published the The Sustainable Competitiveness Index 2015 edition. This Index is calculated based on 104 quantitative indicators collected from international agencies (World Bank, UN agencies, IMF). Scandinavia tops the 2015 Index.
The Global Sustainable Competitiveness Index is based on 106 quantitative indicators collected by the World Bank and other international agencies to evaluate the ability of countries to sustain and generate new income based on all elements that enable successful development. The index is based on 5 pillars:
- Natural Capital,
- Resource Intensity and Efficiency,
- Social Cohesion
- Intellectual Capital
- Governance Capital
Key findings of the 2015 Global Sustainable Competitiveness Index include:
- The country that refused to bail out the banks is leading the Index for a second consecutive year – Iceland. Iceland is followed by the other Scandinavian countries
- The only non-European countries in the top 20 are Japan (11), New Zealand (12) and Canada (16). The Baltic states are also in the top 20.
- The World’s largest economy, the US, is ranked 41; the UK 48. China is above both on 25. Of the booming emerging economies, Brazil is ranked 24, South Korea 40, and India 133.
- The Natural Capital sub-ranking is topped by countries with a rich biodiversity, favorable climate and sufficient water resources – Congo followed by Suriname and Guyana.
- Asian nations (South Korea, Singapore, Japan, and China) lead the Intellectual Capital ranking. However, achieving sustained prosperity in these countries might be compromised by Natural Capital constraints and current high resource intensity/low resource efficiency
- The Social Capital ranking is headed by Northern European (Scandinavian) countries, indicating that social cohesion is the result of economic growth combined with a certain level of social consensus.
The top 40:
The Sustainable Competitiveness World map: dark indicates high, light low sustainable competitiveness:
Do sovereign ratings reflect investor risks?
Sovereign risks are calculated based on a mix of economic, political and financial risks – aspects that, like GDP calculations, do not take into account the framework that enables and defines the current situation. To assess whether sovereign risk evaluation sufficiently covers all risk related to investments in a specific country, the scores calculated for the Sustainable Competitiveness Index have been converted to rating grades and then compared to the average ratings calculated by the “three sisters” Moody’s, S&P, and Fitch – with interesting results:
The US, the UK and Australia would be downgraded by 3-4 levels
Most countries in South America, Eastern Europe and Central Africa most nations receive a credit rating upgrade
Download the report (pdf)