Key Takeaways: - Switzerland falls to third place in the IMD World Competitiveness Ranking. - Singapore claims the top position, followed by Hong Kong in second. - The Swiss decline is attributed to weakened economic performance and high US tariffs. The World Competitiveness Ranking published Thursday by the IMD business school now places Singapore at the top, relegating Switzerland to third position. This ranking evaluates economic performance, business and government efficiency, and infrastructure across 70 countries. Hong Kong occupies the second spot, ahead of Switzerland, while Taiwan and the United Arab Emirates rank fourth and fifth, respectively. The United States is in tenth place, while Venezuela remains at the bottom of the list.
Tariffs and Declining Investment
According to Arturo Bris, a professor at IMD, Switzerland's decline is primarily due to weakened economic performance, notably due to high US tariffs and a drop in foreign direct investment last year. The Trump administration had imposed the highest US tariffs in Europe on Switzerland until an agreement was reached in November. The study also highlights that the Swiss governance model, based on consensus, has slowed the country's ability to react to crises. Switzerland has suffered from the rise of protectionism and the slowdown of globalization. Arturo Bris notes that, in the current global context which is marked by a deterioration of the rule of law, Switzerland, as a very small country, has few means of defense, as small nations outside of major trading blocs are particularly exposed.
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