Chairperson, hon Ministers present here, hon Deputy Ministers, hon members, ladies and gentlemen, it gives me great pleasure to be part of this debate on this topic, especially during the exciting times in our country when we are experiencing political jittering and uncertainty among our opposition parties. Their crisis is showcased in the types of topics they now choose to put before us to discuss in this august House of Parliament.
Today we are called on to debate the so-called Global Competitiveness Report, produced in terms of the World Economic Forum, WEF, Global Competitiveness Index on our country's competitiveness. I must say that we see this as an act of opportunism and desperation on the part of the DA. We say so mainly because we have been ranked 50th on average for the past three years. That is to say, in 2010 we were ranked 54th, in 2011 we ranked 50th and this year we are rated 52nd.
The question is, why didn't the DA put the matter up for debate last year, when the country was ranked 50th? This confirms that they see nothing unusual and extraordinary about these rankings, but rather are seeking attention that they are scarcely getting during serious debates. [Applause.]
According to the report, South Africa is the most competitive economy in Africa and it is more competitive than two other Brics member countries, Russia and India. Can you believe it? It further gives us a better ranking than some of the developing countries and it ranks us the first on some indicators globally, a fact that I think my colleagues who will speak after me will acknowledge.
We welcome this as the ANC. However, we feel the report is not an objective study but an amalgamation of business opinions and some data analysis. Some of our areas of contention are as follows: Firstly, at the general level, the World Economic Forum Index has a major problem, being that its underlying assumption is that markets are efficient and that policy intervention, where necessary, must be market-friendly.
Secondly, at the heart of the report is a survey of opinion of local business people. In South Africa, it is simply an opinion of 45 large formal sector business executives - only 45, in this report that Dr Rabie is talking about. Those opinions account for some three quarters of the basis of each country's ranking.
We feel that, as much as it is important to know what some business executives think, it cannot be an objective yardstick of competitiveness. This report is masterminded by academics and remains entirely a business school product. Some developing economies are also sceptical of attempts to quantify competitiveness. This is because they are rated at the same level as developed economies. Here the scepticism seems more justifiable, though there is a strong case for constructing indices that reliably and objectively benchmark national performance.
While the Global Competitiveness Report is well-written and contains useful material, its competitiveness indices do not merit the attention they attract and the policy concern and debate they generate. The strong point of the World Economic Forum analysis is its emphasis on the microeconomy as the vital determinant of competitive performance. It is also correct that getting the macroeconomic situation right, while necessary, cannot by itself lead to sustained growth in countries with serious deficiencies. The economic structure has to be changed and improved because there is a large and positive role for government in doing this by improving markets, remedying market failures and strengthening institutions.
The qualitative data used to generate indices, held up as one of the report strengths by the World Economic Forum, are of dubious origins and it is surprising that the WEF chooses to rely on questionnaire responses for some items on which hard data are available, especially from the governments concerned. We therefore would like to call upon the World Economic Forum to improve their methodology of work. They need to be as inclusive as possible in gathering and using data to support their final opinion, and when setting up indicators, let them set them for the like-minded economies so that they can get fair outcomes.
As the ANC, we recognise that we have done well in building parts of the economy into competitive hubs. We really do not need to be told by a few people. One excellent example is in the automobile sector, where large companies have increased their investments and created more jobs in the past 12 months. Again, investment in infrastructure and skills development by this ANC government is an active measure to build long-term competitiveness. Hence we have cause to reflect, to celebrate, to work hard to strengthen economic performance, and also to address inequality and poverty.
In conclusion, as the ANC, we would welcome a real debate about competitiveness wherein we are going to debate hardcore business issues from our country, by our country, for our country, and not based on assumptions. I thank you. [Applause.]