The recently-released 2012-13 Global Competitiveness Report shows mixed results but generally improved competitiveness of Gulf Cooperation Council (GCC) economies. Of the six-member grouping, three countries experienced material improvement in their ranking especially Qatar and the UAE. Still, Oman’s ranking remained standstill whilst that of Kuwait suffered a setback.
The World Economic Forum publishes the annual report which ranks reviewed economies on the basis of their performance on the Global Competitiveness Index (GCI). To its credit, GCI is noted for undertaking a comprehensive look into reviewed economies by relying on a set of variables.
The index ranks economies on the basis of their achievement on three broad categories, namely basic requirements, efficiency enhancers and innovation and sophistication factors. The basic requirements category is subdivided into institutions, infrastructure, macroeconomic stability, health and primary education. The efficiency enhancers category comprises of higher education and training, goods and market efficiency, labour market efficiency, financial market sophistication, technological readiness and market size. The innovation and sophistication factors category is made up of business sophistication and innovation.
These three categories are brought together in the formation of GCI, which comprises of a maximum seven points. The index is developed by using publicly available data and WEF’s own opinion surveys. Hundreds of business leaders are polled for the purpose of gathering data for the report.
The latest report provides ranking of 144 economies, two above the earlier one, suggesting growing appreciation on the study. The report ranks Qatar as the 11th most competitive economy in the world, the best within GCC, Arab and Middle East and North Africa region. The achievement partly reflects budgetary surpluses, in turn allowing for absence of debt threat, hence macroeconomic stability.
As a proof, the budget for fiscal year 2012-13 starting in April projects a surplus of $7.7 billion (Dh28.32 billion). Still, the report highlights other points of strengths for Qatar, not least boasting per capita income of $98,329, certainly an exceptional figure.
Saudi Arabia’s ranking fell by a single notch partly reflecting inefficiencies in the labour market. The Saudi job market is characterised by limited participation of Saudi women together with increasing pressures on firms to offer certain desired jobs to Saudi males.
Nevertheless, the size of the economy works to Saudi Arabia’s benefit, as the kingdom boasts the largest gross domestic product (GDP) in the GCC and Arab world. This partly explains the reason behind Saudi Arabia securing ranking No. 18 worldwide.
Conversely, labour market efficiency is a point of strength for the UAE, as the country provides employment opportunities for people of more than 100 countries from all continents. Also, the UAE is a regional leader in such areas as infrastructure like the Dubai Metro. Still, continuous development and upgrading of airports throughout the country together with being home to global airlines such as Emirates and Etihad add to the country’s economic competitiveness.
Sadly, Kuwait saw its ranking dropped by three notches to No. 37 globally, thereby replacing Bahrain as the least competitive economy amongst GCC economies. It is not wrong to partly fix the blame on infighting between the executive and legislative branches over priorities. In particular, Kuwait lags behind in innovation as well as health and primary education variables.
At any rate, global ranking of GCC states could be improved through integration of regional economies. Comprehensive and speedy implementation of the Gulf Central Market (GCM) scheme should serve the cause of all member countries. Commenced in January 2008, the GCM calls for free flow of factors of production amongst member states.
— The writer is a Member of Parliament in Bahrain.
