On Wednesday, the American Chamber of Commerce in Luxembourg (AMCHAM) organised an ABAL luncheon at the Sofitel in Kirchberg on the topic of the relative competitiveness of Luxembourg, EU-15 and USA.

Paul Schonenberg, AMCHAM Chairman, introduced the guest speaker, Prof Dr Jorge Vasconcellos, as someone who has undertaken much analysis on aspectes of the economy. Prof Dr Vasconcellos, was awarded the Jean Monnet Chair (by the Jean Monnet Foundation Brussels) and is one of the world's authorities on Peter Drucker and his books have been translated into eleven languages. He used 20+ diagrams based on official data from the OECD, IMF and Eurostat to illustrate various points. In his introduction, he stressed that denial will not change reality.

Looking at productivity, Luxembourg's 155.6 (perr person employed im 2016) is way above the EU-15 average of 100, with Belgium (119.3) and Ireland (137.9) the closest. One of the intesresting observations is that Portugal's figure of 74.3 is at the lowest end of the scale, interesting when Portuguese make up circa 20% of Luxembourg's population.

Looking at GDP per capita between 1980 and 2015, the EU-15 is significantly below the US (almost 40% difference). Regarding GDP per hour, the EU-15 (42.3) is below that of the US (50.8); in Euros (2014), the figures show a similar discrepancy (66,489 for the EU-15 against 88,285 for the US). Yet, the activity rate of the US has decreased and that of the EU-15 has increased, so they are now almost identical, yet significantly below that of Japan.

He asked why productivitiy in the US is far higher than in the EU-15 and explained that the answers are multiple. The US has a higher media population age than Luxembourg and the EU-15, with only Ireland younger. Also, there is a higher percentage of women involved actively in the workforce in the US than in the EU-15. Other issues are national pride and culture, with the US much higher than EU countries on both counts. On the percentage of people with higher education qualifications, US is at 43%, Luxembourg at 39% and the EU-15 average at 29%; only Canada (53%) and Japan (47%) are higher than the US; however, Luxembourg's GDP per capita is 100.779 USD, 2nd behind Brunei, with the US in 11th position (USD 55.904).

He stated that the richest countries have the best management, with the US outscoring EU economies, with BRIC countries scoring low; Germany, Sweden and Japan came next after the US. Statistics also show that multinationals are the best managed companies, compared to local/family businesses, by achieving high management scores whereve they locate.

According to the Index of Economic VFreedom, Hong Kong is top with the US at 12th, and Luxembourg at 21st. He stressed the link between GDP per capita and cometitiveness which is linked with economic freedom. Transparency (viewed also as corruption perception), Luxembourg is at 9th position and the USA at 74th; the most transparent societies are Denmark, New Zealand and other Nordic countries.

On inequalities, Luxembourg's score in the GINI Index was 0.28 and the US 0.39, with Chile worst at 0.50 and Mexico at 0.48. Slovenia, Norway and Iceland led the index, all at 0.25.

In conclusion he summarised that most causes favoured the US being more competitve than the EU-15 and Luxembourg. He asked whether Europe is part of the solution or part of the problem? He said taht European cannot have a strong social model without a strong economy. Looking at the Domocracy Index (measuring religious freedom, gender equality, etc.), emerging powers have a long way to go. However, the US does have a major problem according to the Global Peace Index; out of 162 countries. the US ranks at #94, with the EU-15 in 29th position (Iceland is #1). The US's health is also a problem in that its population's life expectancy is way below that of other developed developed countries.

Photo by Geoff Thompson (L-R): Paul Schonenberg, AMCHAM; Prof Dr Jorge Vasconcellos