Malta scores well in primary education. Photo: Chris Sant Fournier

Malta has dropped six places in its ranking in the World Economic Forum competitiveness report for 2014/2015.

The island is back in 47th place out of the 144 countries surveyed, down from 41st a year before.

It was 47th in the WEF’s 2012-2013 report.

The annual report looks at various indicators, with Malta getting an overall score of 4.4, compared with the 5.70 of leader Switzerland.

The ranking is based on three main pillars. Malta scored 5.1 on basic requirements, with health and primary education scoring 6.4.

It scored 4.4 on efficiency enhancers, with the highest score in this section given to technological readiness (5.6) and the lowest to market size (2.5).

On innovation and sophistication factors, the island scored 4. It was also ranked as one of the 37 “innovation-driven economies”, the top category.

The report also looks at the factors that hinder business and, once again, inefficient government bureaucracy emerged as the main thorn, with access to financing and insufficient capacity to innovate in second and third place respectively.

The Ministry for the Economy, Investment and Small Business pointed out that Malta ranked 18th out of the 28 EU member states and was ahead of countries like Italy, Hungary, Slovenia and the Slovak Republic.

“Malta ranks 65th in the macroeconomic environment and Malta’s country credit rating placed at the 35th position out of all the 144 countries surveyed.

“Malta also scored significantly well in the soundness of banks, quality of health and primary education,” it said.

The ministry said new and innovative initiatives to help start up business and reduce bureaucracy would be launched in the coming months to give a boost to the island’s competitiveness.

It said it was committed to widening the span of services provided by Business First to cut unnecessary bureaucracy.

At a global level, the World Economic Forum said the report found insufficient progress in adopting and implementing structural reforms necessary for long-term economic growth.

In its annual assessment of the factors driving countries’ productivity and prosperity, the report identified uneven implementation of structural reforms across different regions and levels of development as the biggest challenge to sustaining global growth.

It also highlighted talent and innovation as two areas where leaders in the public and private sectors had to collaborate more effectively to achieve sustainable and inclusive economic development.

According to the report’s Global Competitiveness Index (GCI), the United States improves its competitiveness position for the second consecutive year, climbing two places to third on the back of gains to its institutional framework and innovation scores.

Elsewhere in the top five, Switzerland tops the ranking for the sixth consecutive year, Singapore remains second, while Finland (fourth) and Germany (fifth) both drop one place. They are followed by Japan (sixth), which climbs three places and Hong Kong SAR (seventh), which remains stable.

Europe’s open, service-based economies follow, with the Netherlands (eighth) also stable and the United Kingdom (ninth) going up one place.

Sweden (10th) rounds up the top 10 of the most competitive economies in the world.

In Europe, several countries that were severely hit by the economic crisis, such as Spain (35th), Portugal (36th) and Greece (81st), have made significant strides to improve the functioning of their markets and the allocation of productive resources. At the same time, some countries that continue to face major competitiveness challenges, such as France (23rd) and Italy (49th), appear not to have fully engaged in this process. China (28th) climbed one position.

“The strained global geopolitical situation, the rise of income inequality and the potential tightening of the financial conditions could put the still tentative recovery at risk and call for structural reforms to ensure more sustainable and inclusive growth,” said Klaus Schwab, founder and executive chairman of the World Economic Forum.