Dubai: The UAE inched down one spot in terms of its national competitiveness, coming in as the 17th most competitive economy among 137 countries.
According to the Global Competitiveness Report for 2017 issued by the World Economic Forum (WEF), the UAE continued to lead the Arab world in terms of competitiveness, but it lost one place as “other countries post even larger gains.”
Globally, the US jumped one spot moving from third place to second, while Switzerland remained in first place and Singapore came in third place. They were followed by the Netherlands and Germany, respectively.
“Although the IMF [International Monetary Fund] predicts GDP [gross domestic product] growth to drop to 1.3 per cent this year, non-oil growth is expected to pick up, suggesting that the country’s diversification strategy is bearing fruit,” the report said.
From a regional perspective, the Middle East and North Africa improved its average performance this year, partly because the "new normal" of low oil prices is forcing many countries to implement new reforms to diversify their economy.
The UAE will have to speed up progress in terms of spreading the latest digital technologies as well as improving education in order to further raise the economy’s competitiveness, according to the Global Competitiveness Report for 2017 issued by the World Economic Forum (WEF) on Tuesday.
Though the UAE and other Gulf countries have invested in technology, this has not yet translated into strong innovation.
While the decline in oil prices has negatively impacted the economies of countries in the Gulf Cooperation Council (GCC), it has also spurred heavy investment in digital and technological infrastructure.
Such investments have not yet led to an equally large turnaround in the region’s level of innovation, the report said.
The report ranked the UAE in 17th place in terms of competitiveness amongst 137 countries.
The UAE’s competitiveness rating was supported by strong rankings in infrastructure, goods and market efficiency, labour market efficiency, financial market development, business sophistication and the country’s macroeconomic environment, among other factors.
UAE on top
Under the overall competitiveness index, the UAE was in first place on the Efficiency of Government Spending index, having been ranked second for the last three years.
“The Ministry of Finance continues its efforts to adopt and implement the best practices with regards to effective financial management, which are based on a set of values and benchmarks aimed at protecting and developing the financial system and building a stable and sustainable economy...” said Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
Meanwhile, Reem Al Hashemi, Minister of State for International Cooperation and Chairwoman of the Federal Competitiveness and Statistics Authority, said it was a global achievement to have the UAE on the global competitiveness map as one of the world’s most efficient governments.
In its analysis of the UAE, the WEF cited access to financing as the most problematic factor for doing business, followed by inflation and an inadequately educated workforce.
A survey by the WEF asking respondents on hurdles for doing business in the country also cited restrictive labour regulations, as well as other challenges.
Other problematic factors included insufficient capacity to innovate, foreign currency regulation, inefficient government bureaucracy and tax rates.
After the UAE’s 17th spot ranking, the next Middle Eastern country was Qatar, in 25th place. Saudi Arabia was the 30th most competitive, while Bahrain was ranked at 44th, Kuwait 52nd and Oman 62nd.
Across the region, the most-improved country this year was Egypt, which jumped 14 spots on the ranking.