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Title: The present state of economy- [Perpendicular File]

Notes: Policy-makers in developing countries and economies in transition face the daunting challenge of coming forth with ever more relevant, focused and effective policies to attain sustained growth, improve living standards and eliminate poverty and disease. As an unprecedented wave of policy reforms sweeps across developing countries and economies in transition, new ways are being sought to meet these demands. Recent experience demonstrates that unilateral liberalization programmes in developing countries and economies in transition need to be coupled with policies aimed at assisting the economic structure cope with unprecedented levels of exposure to international competition. Competitiveness policy benchmarking is a relatively new tool to monitor process and to assess the situation against continuously improving best practice worldwide on an ongoing basis. Its effective use requires close consultation and joint work with the enterprises sector. It serves to assess not just well or poorly firms, specific subsectors and entire sectors perform in a given country as compared with their counterparts in other countries but also the factors that determine competitive performance. It goes beyond competitive analysis by providing an understanding of the processes, skills and capabilities that create superior performance. In doing so, policy benchmarking links up with the key medium- and long-term issues of concern to industrial development policy. Economic performance results from the interplay between resources, institutions and policy catalyzed by the action of economic agents. As globalization proceeds and capital and technology move ever more freely across borders, countries increasingly compete through policies (`policy competition`) in order to take advantage of their natural and human resources shaping their institutions, as best they can, to raise continuously their competitive performance standards. Roughly similar countries that do better provide the ideal yardstick for comparison.

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