By Sven Egenter
GENEVA (Reuters) – Switzerland knocked the United States off the position as the world’s most competitive economy as the crash of the U.S. banking system left it more exposed to some long-standing weaknesses, a report said on Tuesday.
The World Economic Forum’s global competitiveness report 2009/2010 showed economies with a large focus on financial services such as the U.S., Britain or Iceland were the losers of the crisis.
The U.S. as the world’s largest economy lost last year’s strong lead, slipping to number two for the first time since the introduction of the index in its current form in 2004.
“We have been expecting for some time that it may lose its top-position. There are a number of imbalances that have been building up,” said Jennifer Blanke, Head of the WEF’s Global Competitiveness Network.
“There are problems on the financial market that we were not aware of before. These countries (like the U.S. and Britain) are getting penalized now,” she said.
Trust in Swiss banks also declined. But in the assessment of banks’ soundness, the Alpine country still ranked 44th. U.S. banks fell to 108 — right behind Tanzania — and British banks to 126 in the ranking, now topped by Canada’s banks.
The WEF bases its assessment on a range of factors, key for any country to prosper. The index includes economic data such as growth but also health data or the number of internet users.
The study also factors in a survey among business leaders, assessing for example the government’s efficiency or the flexibility of the labor market.