UAE outperforms major economies in competitiveness

The UAE continued to outperform many major economies in a number of parameters, most notably in infrastructure, economic stability and high government efficiency, according to the Global Competitiveness Report 2011-2012, released today by the World Economic Forum (WEF).

“The country’s overall competitiveness reflects the high quality of its infrastructure, where it ranks a very good 8th, as well as its highly efficient goods markets (10th),” the WEF report highlighted.

“Strong macroeconomic stability (11th) and some positive aspects of the country’s institutions – such as an improving public trust in politicians (8th) and high government efficiency (5th) – round up the list of competitive advantages,” it added.

The WEF, however, pointed out that the UAE rankings may be affected by the impact of the global economic slowdown, “Over recent years, we have observed a lower assessment of institutions overall – an assessment that was probably affected by the particular severity of the country’s economic crisis,” it said, adding that the emerging new economic model should help the UAE improve the rankings in years to come.

“The resulting reorientation of the country’s development model will demand solid foundations in competitiveness and a continuation of competitiveness-enhancing structural reforms to reduce the risk of asset bubbles and put economic development on a more stable footing. Priorities in this context should include further investment to boost health and educational outcomes. Raising the bar with respect to education will require not only measures to improve the quality of teaching and the relevance of curricula but also incentivizing the population to attend schools at the primary and secondary levels,” it said.

Regionally, some of the other GCC countries continue to make progress in the global rankings, with Qatar climbing three steps to No. 14 globally, emerging as the top performer in the region, followed by Saudi Arabia, which improved four positions this year to land at No. 17 ion the global competitiveness sweepstakes. Oman too climbed two spots – from No. 34 last year to No. 32 in this year’s index, while Kuwait jumped one position to No. 34 this year. Bahrain brings up the bottom of the GCC rakings, staying put at No. 37.

Overall, Switzerland tops the overall global rankings while Singapore overtakes Sweden for second position. Northern and Western European countries dominate the top 10 with Sweden (3rd), Finland (4th), Germany (6th), the Netherlands (7th), Denmark (8th) and the United Kingdom (10th). Japan remains the second-ranked Asian economy at 9th place, despite falling three places since last year.

The US continues its decline for the third year in a row, falling one more place to fifth position. In addition to the macroeconomic vulnerabilities that continue to build, some aspects of the United States’ institutional environment continue to raise concern among business leaders, particularly related to low public trust in politicians and concerns about government inefficiency. On a more positive note, banks and financial institutions are rebounding for the first time since the financial crisis and are assessed as somewhat sounder and more efficient.

Regionally, the WEF says that the Middle East and North Africa (Mena) region continues to make progress in competitiveness ratings although there remains a wide gap in the performance of various countries within the region, with Gulf countries faring much better than others.

“Over the past year, the Mena region has been affected by a great deal of turbulence that will have an impact on national competitiveness and might further exacerbate the competitiveness gap between the Gulf economies and the rest of the region. This trend is reflected in this year’s GCI results, where most Gulf countries continue to move up in the rankings, while the competitiveness of many countries from North Africa and the Levant stagnates or deteriorates,” the report states.

According to the report, although some impact of the Arab Spring may have been factored into this year’s rankings of the region’s economies, the full impact will only be felt in next year’s index. “The events now being called the Arab Spring began sweeping across the region in early 2011, bringing about political change and creating expectations of increased prosperity over time. The Global Competitiveness Report covers a number of countries that were affected by these events and notes shifts in the competitiveness performance of some economies. However, the full extent of the impact of the Arab Spring could not be captured this year because of lags in data,” it said.

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