Tuesday September 5, 1995, 6:18 p.m. EDT
GENEVA (Reuter) - The United States, powered by newly aggressive industry, is easily the world's most competitive economy but a vibrant Singapore is hot on its heels, an authoritative study said Tuesday.
With the two leaders pulling away from the rest, Hong Kong comes in third, but Japan has dropped into fourth place due to its economic woes and a general crisis of confidence, according to the annual World Competitiveness Report.
The report, whose assessments are widely used around the globe as a guide for business and investment, is issued by the Lausanne International Institute for Management Development (IMD) and the Geneva-based World Economic Forum.
The gap between a resurgent United States, which recaptured the lead in 1994, and a declining Japan which had previously held the top competitivity spot for nine years, ``is widening even more,'' the wide-ranging study said.
Switzerland, in fifth place, leads European countries in a league table covering the world's top 48 economies. Included for the first time, China comes in at 34th and Russia is last.
Competitiveness in Asia in general, the report said, was booming with China and India showing tremendous potential. ``The dynamism of East Asia remains staggering,'' it added with Hong Kong strong and Taiwan surging from 18th to 11th in the table.
Malaysia came in 21st, with South Korea 24th, Thailand 26th, Indonesia 33rd and the Philippines 35th, underlining, the report said, ``the more difficult task of developing the competitiveness of heavily-populated countries.''
Latin America was moving strongly into the competitivity scene through Chile (20), Argentina (29th), Peru (32nd) and Colombia (36th). But South Africa, the only sub-Saharan African country in the league, dropped from 35th to 42nd place.
Compilers of the study defined international competitiveness as the ability of a country ``to proportionally generate more wealth than its competitors in world markets'' and this year tapped the views of 3,292 top executives around the globe.
The assessments are based on eight factors, from domestic economic strength through government policies affecting competitivity to infrastructure and people, or the availability and qualifications of a country's human resources.
IMD Professor Stephane Garelli, director of the project, said the U.S. revival had three prime sources.
These were ``strong resilience in the economy thanks to deregulation and privatization programs, leadership in new technologies -- such as computers, telecommunications, bio-engineering -- and services, and strict control on the operating costs of enterprises, in particular labor costs.''
The ``aggressiveness of (U.S.) industry'' was especially noticeable in the new technology area, the report said.
Garelli warned the U.S. model ``has a high social cost, with the risk of destabilizing certain sectors of society, especially the lower and the lower middle classes.'' It also suffered from poor secondary education and work attitudes.