The United States has lost its place as the world's most competitive economy, according to a survey released today, falling behind Switzerland mainly because of the financial crisis and accumulated fiscal deficits.
The United States has lost its place as the world's most competitive economy, according to a survey released today, falling behind Switzerland mainly because of the financial crisis and accumulated fiscal deficits.
The survey, which combines opinions of over 13,000 business executives with economic statistics and government regulations, put Switzerland in first place and dropped the U.S. to second place.
From 2006 to 2008, the United States was No. 1 in the survey conducted by the Geneva-based World Economic Forum. Before that Finland held the top spot.
"Given that the financial crisis originated in large part in the United States, it is hardly surprising that there has been a weakening of the assessment of its financial market sophistication," the survey said. "The country's greatest weakness continues to be related to its macroeconomic stability."
The United States' high budget deficit, a very low savings rate and a public debt that has been rising over the past years have weakened macroeconomic stability, said Margareta Drzeniek Hanouz, a senior economist who worked on the survey.
Pollsters asked business leaders to assess how growth-oriented 133 countries were, using the following criteria: good government; transport and telecommunications infrastructure; openness to innovation; intellectual property protection, and availability of talent. They also took into account economic output, number of computers and the procedures required to start up a business.
Switzerland has overtaken the U.S. because its economic performance has been "relatively stable," the survey said. Swiss financial markets have "weakened somewhat," it said, citing difficulties for banks.
The major Swiss banks have been hard hit by the financial crisis. The survey made no mention of Swiss banking secrecy, which has started to crumble under U.S. pressure to hand over client names of American taxpayers suspected of setting up secret offshore accounts with Swiss bank UBS AG.
Singapore came third, followed by Sweden, Denmark, Finland, Germany, Japan, Canada and the Netherlands.
