30.09.2005
Finland Most Competitive

from YLE news

Finland has been ranked the world's most competitive economy for the third time running by the World Economic Forum. The Swiss-based think-tank said that the Nordic countries in general challenged the conventional wisdom that high taxes and large safety nets undermine competitiveness.

Finland received high points on its high educational level, innovativeness and low level of corruption. Finland also received praise for preparing to face the challenges of an aging population through budget surpluses. The country was criticised for its high taxation, inflexibility in the labour market and a great dependence on the good fortunes of mobile phone giant Nokia. The WEF warned that this dependence was a greater risk than inflation.

The US was ranked second and Sweden third in the WEF survey. The study is based on hard economic data and business opinion surveys in 117 countries.

Finland has maintained its position at the top of the list for three years in a row. One might think that Finland would have become an attractive country for foreign investment, but this is not the case. In fact, more and more Finnish companies are investing abroad in their search for low production costs and bigger markets.

Economists say that Finland's peripheral position on the map and its small population count against it, when foreign investors consider their next moves. Some analysts also question the structure of the Worl Economic Forum's survey. Half of the points are based on economic statistics, while the other half is based on interviews with corporate leaders.Analysts say that Finnish bosses tend to be quite patriotic and easily paint a very rosy picture of the business climate, which distorts the results of the survey.

As an indication of this, they say that Finland does not fare as well in surveys that are based purely on economic figures. Nonetheless, even in those studies Finland's performance has been among the top ten.

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