Dubai: The UAE has jumped eight places to 8th in the latest world competitiveness ranking published by Switzerland-based IMD World Competitiveness Centre on Thursday, from 16th position last year.
The country scored 88.439 to be the top Arab country and the fourth ranking in Europe, Middle East and Africa, and ahead of countries such as China, Japan, Korea, Germany, Netherlands, Denmark, United Kingdom and France – among many other competitive countries.
The country ranked No 1 in Government Efficiency — making the UAE government the most efficient in the world.
“We are pleased with this rise — the UAE is in the top 10 countries of the world, with the very best, and the leading nation regionally,” Abdullah Lootah, Secretary General of Emirates Competitiveness Council, told Gulf News. “If we look at the last two years we see a more impressive rise — UAE’s position has risen by 20 ranks. UAE’s rise in the ranking is recorded as the highest jump of any country recorded in the report.”
The improvement is driven by a number of factors. “UAE’s strong economic performance in the past several years,” Lootah said. “Government efficiency is an important factor in driving UAE’s competitiveness. The performance of the business environment, coupled a strong economic results in greater of on-the-ground confidence among business executives.”
Only Qatar amongst the Arab world, ranked 10th, could come close to the UAE. Qatar’s rank remained unchanged from last year – while Saudi Arabia, the biggest Arab economy – did not feature in the ranking. The only other Arab country featuring in the top 60 is Jordan, which slipped from 49 to 56 this year.
“The UAE is actively strengthening its competitive position and the results are a reflection of this policy. UAE is a world-class business hub,” Dr Giyas Gokkent, Chief Economist at National Bank of Abu Dhabi, told Gulf News. “Economic indicators have improved and these appeared to have played a role. Crucially, business efficiency indicators have also shown relative improvement.”
UAE – the second biggest Arab economy – with a gross domestic product (GDP) of $373.9 billion (Dh1.37 trillion) – is also ranked 29th in the world in terms of its size. However, with a population of 8.48 million – that translates to a per capita GDP of $46,596 (Dh171,000) – the country ranks 8th in terms of per capita GDP on purchasing power parity basis.
IMD, a top-ranked global business school based in Switzerland, announced its 25th anniversary world competitiveness rankings, in addition to ranking 60 economies for 2013,
This is one of the biggest jump in ranking by a country in recent years – that has seen many European countries losing competitiveness due to financial crisis.
“The improvement in UAE’s competitiveness ranking will further underscore the position of the UAE as an attractive destination for business,” Dr Gokkent says.
Challenges
Despite the UAE’s success, challenges remain, the Swiss business school, IMD, said in the country report.
Maintaining the edge as a global international hub for aviation, tourism and trade and building up research and development and the innovative sectors of the economy have been identified as key challenges. “Outsiders would assume that the only challenge would be is how to maintain this outstanding performance at this level. Being heavily engaged with government entities and the private sector, I personally don’t see it as a challenge, but as an opportunity,” Lootah said.
Focus on industry-academia partnerships and encouraging entrepreneurship as well as strengthening the educational system to ‘ensure labour force is equipped for a knowledge-based economy’ and bringing the national data infrastructure in line with international best practices – also have been underlined by IMD as areas of improvement and challenges for the UAE.
Other economies are also investing to maintain or improve their competitive position, “This is a continuous journey. Key is building and attracting human capital further and providing the soft and hard infrastructure for economic activity to flourish,” Gokkent said. “Economic growth is a function of labour, capital, and technology. Research and innovation are, therefore, important elements for growth. IMD study scores research and development culture in the UAE and workforce skill at similar levels with room for improvement,” he added.
“Competitiveness requires a fine balance so that regulation does not stifle, but at the same time provides a world class platform. The IMD study does point to relative room for improvement on this front. Greater harmonisation in certain areas may also be something to consider,” Gokkent said.
