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Once a member of the top 30, Thailand also saw its ranking drop last year to 34th place.
"The country's competitiveness suffers from protracted instability. Unsurprisingly, the quality of public institutions continues to deteriorate. Ranked 63rd in this category, Thailand has dropped 20 places over the past three years. Insufficient protection of property rights (75th) and security (85th) are of particular concern to the business community," the report said.
Aside from concerns over public health, Thailand's technological readiness (63rd) is also lagging. Although mobile-telephone penetration is among the densest in the world, at 124 mobile subscriptions per 100 population, the use of the Internet (21 users per 100) and computers (6 per 100) remains scarce.
On the positive side is Thailand's macroeconomic performance, which is ranked 22nd among 134 countries. The situation improved slightly from 2007 and 2008. The efficiency of the labour market (25th) constitutes another strength. Finally, the sheer size of its domestic (22nd) and foreign (18th) markets is a source of economies of scale.
On top of the chart is Switzerland, which overtakes the United States this year as the world's most competitive economy, thanks to a relatively stable performance. It is also ranked second in terms of innovation capacity and third in business-culture sophistication. The country is characterised by high spending on research and development, with strong collaboration between the academic and business sectors.
Switzerland's public institutions are rated among the most effective and transparent in the world (7th), ensuring a level playing field and enhancing business confidence; these include an independent judiciary, strong rule of law and a highly accountable public sector. Competitiveness is also buttressed by excellent infrastructure (5th) and a well-functioning goods market (5th), as well as a labour market that is among the most efficient in the world (2nd).
European economies continue to prevail in the top 10, with Finland, Germany and the Netherlands following suit.
After several years at the top of the rankings, the United States fell one place and is ranked No 2 this year, as it continues to be endowed with many structural features that make its economy extremely productive and which place it on a strong footing to ride out business cycle shifts and economic shocks.
A highlight of the report is that in Asia, Singapore remains the highest-ranked country, moving up two ranks from last year to No 3. The country's institutions continue to be ranked the best the world; at a time when confidence in governments in many countries has diminished, they are assessed even more strongly than in past years. Singapore places highest for efficiency of its goods and labour markets and No 2 for its financial-market sophistication, ensuring the proper allocation of these factors to their best use.
Singapore also has world-class infrastructure (4th), leading the world in the quality of its roads, ports and air-transport facilities. In addition, the country's competitiveness is propped up by a strong focus on education, providing highly skilled individuals for the workforce. In order to strengthen its competitiveness further, Singapore could encourage even stronger adoption of the latest technologies - especially broadband Internet - as well as the innovative capacity of its companies.
Several Asian economies perform strongly, with Japan, Hong Kong, South Korea and Taiwan also in the top 20.
China continued to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. India is up one position at 49th. Taiwan rose five places to 12th position overall, thanks to a combination of small improvements in the areas of institutions (38th), infrastructure (16th) and education (15th). South Korea fell six places to 19th position.