South Korea’s global competitiveness ranking climbed five spots this year, buoyed by improvement in government, business and infrastructure efficiencies amid the coronavirus pandemic, according to an annual global competitiveness report.

The report by the Switzerland-based International Institute for Management Development, which was released here by the Korea Institute for International Economic Policy on Tuesday, showed that the nation ranked No. 23 out of 63 countries and saw the fastest on-year climb since 2000.

Since 1997, The institute has been ranking economies based on four categories: economic performance, government efficiency, business efficiency and infrastructure.

Compared to last year, government efficiency rose three notches from 31st to 28th while corporate efficiency and infrastructure climbed from 34th to 28th and 20th to 16th, respectively.

Regarding business efficiency, it saw improvements in the labor market, entrepreneurship and value. The low long-term unemployment rate, simplified startup launching process, swift corporate digitalization and sufficient investment in research and development drove Korea’s ranking upward.

But concerns of corporate relocation, high tariff barriers, inefficient management of boards of directors and a lack of multilateral eco-friendly agreements were cited as drawbacks.

Economic performance -- which takes the domestic economy, international trade and employment into account -- remained flat from last year’s No. 27 ranking.

Korea’s exports slipped for the third consecutive month in May due to the growing economic fallout from the coronavirus pandemic, data from financial authorities showed. Outbound shipments dropped 23.7 percent to hit $34.8 billion last month, compared to $45.7 billion a year earlier.

On Korea’s performance this year, KIEP said the nation’s successful containment of the COVID-19 was a contributing factor, but it faces further tasks in maintaining and improving its competitiveness.

“From now on, protection of the job market and businesses amid economic uncertainties, leading an innovative economic growth in the post-virus era, acceleration of North Korea’s denuclearization, bolstering economic recovery from external risks and policies to brace for changes in the global trade and value chain (will have to be prepared),” KIEP researcher Kim Young-gui said.

Overall, Singapore ranked as the world’s most competitive economy for a second consecutive year. Denmark ranked in the No. 2 spot this year, rising from last year’s eighth place, and Switzerland ranked third, climbing up a notch in the same period.

The US ranked 10th, slipping seven spots on-year, while other East Asian economies including China, Hong Kong and Japan fell to Nos. 20, 5 and 34, respectively.

KIEP has been distributing IMD’s reports and data in partnership with the Switzerland-based firm since 2013.

By Jung Min-kyung (mkjung@heraldcorp.com)