Cyprus was the most-improved nation in the IMD World Competitiveness Rankings 2020, which are an amalgam of hard data taken from 2019 and survey responses from early 2020, after it rose 11 places from 2019 to rank 30 among 63 nations.
According to the report, Cyprus’ impressive progress was mainly due to the continued improvement of the general economic situation, especially in the field of employment and investment attraction. The state’s improved efficiency was mainly in public finances, a better institutional and business environment and the improvement of the welfare state.
Another factor was the increased efficiency of businesses due to the reduction of corporate debt, increase in workforce, and improvement of the financial environment and business practices.
Singapore was number one for the second year in a row. In second to fifth place, in order, came: Denmark, Switzerland, the Netherlands and Hong Kong SAR. The IMD said the strength of smaller economies was a marked pattern in this year’s results.
Director of the IMD World Competitiveness Centre and Professor of Finance Arturo Bris said: “The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness. In part these may be fed by the fact it is easy to find social consensus.”
Cyprus’s position has improved in all categories that make up the overall ranking, with a particularly significant improvement in the categories of business efficiency and state efficiency, as well as overall economic performance.
In the category of business efficiency, Cyprus rose to 35 up from 52 last year. In terms of economic performance, Cyprus ranked 13, rising from 19 last year, and in terms of state efficiency, Cyprus ranked 21, compared to 32 in 2019.
Cyprus also recorded great progress compared to 2019 in the long-term growth rate of the workforce, the budget surplus and the growth rate of fixed capital investments. However, export of goods, the cost of electricity for industrial purposes and the degree of concentration of exports to a few trading partners were among the criteria that deteriorated sharply in 2020.
Based on an opinion poll carried out by the IMD, the three most important factors that made the Cyprus economy attractive were its prevailing business-friendly environment, its competitive tax regime and the high level of education of the workforce.
“Sovereign applauds Cyprus’ constant improvement and reassures its existing and potential clients that we will continue to provide the highest standards of service,” said Sovereign Trust (Cyprus) Managing Director George Ayiomamitis.
“Both companies and individuals can count on Sovereign to establish their EU-based business or set up the most suitable structure for their personal circumstances. But it doesn’t stop there. We provide all the necessary management expertise and the administrative support to maximise opportunities ensure compliance and achieve long-term sustainability.”
The US has failed to recover having been toppled from its number one spot on the IMD World Competitiveness Rankings last year by Singapore, It fell further in 2020, from three down to 10. Trade wars have damaged both China and the US economies, reversing their positive growth trajectories. China this year dropped to 20 from 14th place last year.
The Institute for Management Development (IMD) is an independent academic institution with Swiss roots and global reach, founded almost 75 years ago.