When making a GCC countries comparison, the UAE is the Arab world’s most competitive economy. So says a new report by the World Economic Forum and the World Bank Group. In fact, these two groups ranked the UAE 17th on the latest Global Competitiveness Index (GCI). Not only that, but it also ranks as one of the best economies in the Middle East. (Qatar comes in 25th and Saudi Arabia a distant 30th place among the region’s most developed Middle Eastern countries.)
A Fiscal Collage
Indeed, some Arab countries have made efforts to reform and increase investments to improve fiscal growth. Still, in many ways the region continues to fall behind. In fact, it has remained less competitive than East Asia and Europe for the last 10 years.
Still, the region contains a vastly diverse set of economies. There are those countries that rank among the world’s richest nations. Likewise, there are nations where data couldn’t be gathered like Iraq and Syria because of conflicts and Middle East politics. Also, even for the richest countries in the Middle East, 2020 wasn’t a good fiscal year for anyone thanks to COVID-19.
Key issues in the region include young people without jobs and low levels of female workers to name a couple. Indeed, young people and women need increased opportunities for the region to better compete.
The Top 10
Below are 10 of the most powerful Arab countries with the UAE, Qatar and Saudi Arabia taking the top 3 spots. This list mirrors the overall trend of resource-rich countries unchanged by conflict.
United Arab Emirates
With other countries seeing larger gains, the UAE fell on spot from 16th to 17th place on the CGI. Despite the other countries seeing larger gains, the UAE improved it’s economy thanks in part to its jobs creation. Still, the country could speed up its progress more if they focus on the latest digital tech and improve education.
Though it fell from 18th place to 25th, Qatar still remains in second place in the region. The cause of the slide was likely a drop in oil and gas prices. As a result, the drop had a significant impact on its fiscal situation. Public debt increased from 35.8% to 47.6% of GDP from 2015 to 2016. At the same time, a fiscal surplus of 10.3% was replaced by a deficit of 4.07%. Still, its greatest strengths remain its infrastructure facilities and a proficient goods market.
Saudi Arabia’s also slipped one position from 29th to 30th place on the CGI. However, its performance has remained fairly steady, thus it retains its 3rd place position among Middle Eastern countries. Saudi strengths are its stable institutions, first-rate infrastructure and the largest market in the Arab world. Saudi decision-makers name restrictive labor laws as the biggest issue for doing business. Likewise, they believe the country could also improve the fairness of its education in order to improve its ranking.
Bahrain is now ready for tech advances and has improved its economic setting. Still, constant problems still remain which include a large fiscal shortfall, safety, new ideas and market size.
From 2016 to 2017, Kuwait dropped from 52nd place overall – down 20 places from the previous year. This is mainly due to its economy falling apart. Kuwait is also not showing any advances in its technology. The country needs to invest in higher education and training to increase its ability to create new ideas.
Rising from 66th to 62nd on the CGI, Oman has improved its fiscal settings. That, along with higher education and training, is the reason for this rise. It also has strong schools and great roads, bridges and the like. As good as its schools are, however, work is still needed in the area of education. Labor markets could also be reformed.
Good schools and relatively good roads, bridges, along with new ideas and keen business acumens are areas of strength for Jordan Still, the large flood of Syrian refugees put a great strain on Jordan’s fiscal state. Credit must be given to the kingdom, however, for being able to remain fiscally stable nonetheless.
For three years, Morocco has stood at 71st on the GCI. Though it scores well when it comes to its schools, its labor market and quality of higher education and training could be improved.
Algeria has moved up an impressive 25 places in the last decade. Its strength lies in its market size, though its labor market and fiscal market growth scores poorly.
We now end our top 10 with Tunisia which comes in 95th on the GCI – the same score it has held for two years. (It scored higher in the years before, but has seen a steady fall over the past decade nonetheless.) It scores somewhat well in its health and primary education sectors, but poorly when it comes to its labor market efficiency and economy.
A Decade of Change
Over the past decade, six countries on our list saw their GCI score improve, and four have seen their scores fall. If countries invest in new roads, bridges, and the like, they can continue to see growth. Still, nearly all countries in the region would do well to update their social and economic models
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