Test of Economic Resilience

Countries from Northern Europe and Southeast Asia scored high in the “stress test” conducted by the International Institute for Management Development, the Switzerland-based business school that publishes the annual World Competitiveness Yearbook.

The Stress Test on Competitiveness provides an analysis of which countries are better equipped to survive the global financial crisis and improve their competitiveness in the near future. The test focuses on exposure, readiness, and resilience during a world recession. It is a new feature of the World Competitiveness Yearbook 2009.

Denmark finished first in the stress test, followed by Singapore. The United States came in 28th place in the stress test but finished first as the most competitive country in the overall 2009 rankings.

Other countries with less than 30 million inhabitants from northern Europe and Southeast Asia ranked high in the stress test.

“Smaller economies are often more fit to adapt and rebound in difficult times,” says Professor Stéphane Garelli, director of the World Competitiveness Center of the International Institute for Management Development. “Another explanation is that several of these nations have already undergone quite severe financial and real estate crises in the not-so-distant past and may have been more cautious in their policies. Qatar and Chile also display advantages to confront the crisis.”

He adds, “Smaller nations, which are export-oriented, resilient, and with stable sociopolitical environments, are better equipped to benefit immediately from the recovery.”

The larger exporting nations occupy the 18th and 30th positions in the stress test. These include the People’s Republic of China in 18th place; Brazil, 22nd; Germany, 24th; Japan, 26th; and Republic of Korea, 29th. •

—Compiled and written by Liza Solano