The UAE among top 20 in global competitiveness ranking

The country benefits from high levels of openness to trade, investment

1 October 2015

Dubai: The UAE is ranked 17th in the Global Competitiveness Index of the Global Competitiveness Report 2015-2016, which profiles 140 economies.

The report observed that the country has excellent macroeconomic environment, highly developed infrastructure, and strong institutions that provide a solid base, and the Emirati economy is significantly more diversified than other GCC countries.

Compared to last year, the UAE’s ranking has slipped five places from number 12 to 17 this year as a result of the new availability of an indicator on tertiary education, which led to a significant drop in the assessment of higher education and training.

However, the Global Competitiveness Report notes that the UAE has benefited from high levels of openness to trade and investment (5th on foreign competition), which ensure intense competition and high levels of innovation. Its business environment is welcoming to investment and characterised by regulations that are easy to comply with, a fairly efficient labour market, and the presence of sophisticated businesses.

“The country will have to continue its gradual path of fiscal consolidation to ensure that its fiscal position remains strong despite the drop in oil prices; the recent decision to abolish energy subsidies is a step in the right direction. The UAE will also need to strengthen its capacity for innovation ranked 26th globally, including by upgrading scientific research,” the report said.

For the Middle East and North Africa region, it is a mixed picture. The strong performance of countries such as the UAE, Qatar and Saudi Arabia contrasts starkly with countries in North Africa, where the highest-placed country is Morocco at 72nd position, and the Levant, which is led by Jordan at 64th rank.

“With geopolitical conflict and terrorism threatening to take an even bigger toll, countries in the region must focus on reforming the business environment and strengthening the private sector,” the report said.

The first place in the GCI rankings, for the seventh consecutive year, goes to Switzerland. Its strong performance in all 12 pillars of the index explains its remarkable resilience throughout the crisis and subsequent shocks.

“The fourth industrial revolution is facilitating the rise of completely new industries and economic models and the rapid decline of others. To remain competitive in this new economic landscape will require greater emphasis than ever before on key drivers of productivity, such as talent and innovation,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Singapore remains in second place and the United States third. Germany improves by one place to fourth and the Netherlands returns to the fifth place it held three years ago. Japan (sixth) and Hong Kong SAR (seventh) follow, both stable. Finland falls to eighth place — its lowest position ever — followed by Sweden (ninth). The United Kingdom rounds up the top 10 of the most competitive economies in the world.

In Europe, Spain, Italy, Portugal and France have made significant strides in bolstering competitiveness. Thanks to reform packages aimed at improving the functioning of markets, Spain (33rd) and Italy (43rd) climb two and six places respectively. Similar improvements in the product and labour market in France (22nd) and Portugal (38th) are outweighed by a weakening performance in other areas. Greece stays in 81st place this year, based on data collected before the bailout in June.