The country’s leaders – business and political – should not get too carried away by the jump in the country’s competitiveness ranking according to the recent International Institute for Management Development 2010 World Competitiveness Yearbook report.

Without trying to take too much away from the positive reception being accorded to the New Economic Model unveiled by the government which has rekindled foreign investor interest in the country, a large part of the improved ranking is also due to the larger Asian region’s resilience to the economic turmoil that has engulfed the US and Europe, and the recent strong upsurge in the country’s exports.

There are at least three important concerns that we need to pay attention to before we congratulate ourselves. The most important is that there is little evidence of substantial productivity increases in the major sectors during the past one year. If there is, perhaps the data and evidence can be shared by the government with a very skeptical public.

The second is whether this improved performance is sustainable or whether this is a flash in the pan – a one or two-year phenomenon before we drop back.

The third is that the improved ranking is based on the perception that the changes announced in the country’s economic policies in the way of liberalisation, greater transparency, an emphasis on merit and need, a crackdown on corruption and cronyism, etc, as well as in the lower cost of doing business arising from a lean and mean bureaucracy will be quickly and fully implemented.

Astute marketing of reform policies can improve our image and ranking for a while. If the political will to carry out the right set of economic reforms and increase the nation’s productivity is missing, we will see our ranking quickly plummet downwards just as quickly.

The author is director of Centre for Policy Initiatives (CPI).