The UAE is the most competitive economy in the Arab world, and in the top 20 of the best performing economies in the world, according to a new report from the World Economic Forum.
The 2016 global competitiveness report – an assessment of productivity and economic health in 138 countries – puts the Emirates at 16th position in the world, up one place from last year and the highest placed in the Middle East and North Africa.
The UAE performance lifts it above Qatar, which slipped two places to 18th, Saudi Arabia at 29th and Kuwait at 38th.
The new ranking was welcomed by Sheikh Mohammed bin Rashid, the Vice President and Prime Minister and Ruler of Dubai, who praised the efforts of the federal, local and private sector work teams.
“We’ll go at a steady pace to achieve our development vision … and prosperity, well-being and happiness for the homeland and its citizens,” Sheikh Mohammed said. Such global indicators were “an effective incentive for continuous self-assessment, and a mirror of our strengths and the opportunities for improvement and self-discovery”.
The WEF said: “The UAE continues to lead the Mena region, building on improvements in competitiveness in recent years. This year small gains in areas such as technological adoption and business sophistication are partially offset by deteriorating macroeconomic stability that is the result of lower energy prices, which have led to a rise in inflation and public debt and to the emergence of a fiscal deficit.
“Overall, the UAE boasts a number of competitive strengths: infrastructure is top- notch (fourth overall) and goods and labour markets are open and efficient. Going forward, for the country to diversify its economy, enhancing innovation – where the country currently ranks 25th – will be crucial.
“There is equal scope for better leveraging digital technologies that are an important enabler of business innovation. Currently the country ranks 29th in use of information and computer technology,” the WEF said.
Saudi Arabia slipped by four places from last year, “mainly as a result of a deteriorating macroeconomic environment … The country has recently revealed its ambitious economic development programme, which aims at widespread diversification of the economy to reduce dependence on oil by 2030.
“Achieving higher diversification will require building capacities in high-end industries and services sectors. Strengthening education, particularly in terms of the quality of maths and science training but also in management and primary education, will be necessary but so will a more flexible labour market that ensures that talent is used efficiently. Significant potential for improvement also exists in financial market development, which remains less stable than in peer economies,” WEF said.
The position of the top three most competitive economies – Switzerland, Singapore and the United States – remained unchanged. It is the eighth year Switzerland has topped the list.
The WEF, well known for its annual meeting in the Swiss town of Davos, said that “a 10-year decline in the openness of economies at all stages of development poses a risk to countries’ ability to grow and innovate”.
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