INTERNATIONAL. Qatar tops the MENA rankings, followed by Saudi Arabia and the UAE, according to the World Economic Forum's (WEF) Global Competitiveness Report 2010-2011.
Switzerland remains the world's most competitive economy, while the United States has fallen from second to fourth after losing the top spot last year. Sweden, in second spot, and Singapore in third leapfrogged the United States.
Qatar, ranked 17th, enters the top 20 this year and reaffirms its position as the most competitive country in the MENA region, the WEF said.
With a projected growth rate of 18.5% for 2010, the country is the fastest-growing economy in the world, as well as one of the wealthiest, it said.
Qatar's strong competitiveness rests on solid foundations made up of a high-quality institutional framework, ranked 10th overall, a stable macroeconomic environment (8th), and an efficient goods market (12th).
Low levels of corruption and undue influence on government decisions, high government efficiency, and excellent security are the cornerstones of the country’s solid institutional framework, the report said
Compared with many other economies, the country was relatively unharmed by the global economic crisis, with its growth rate slowing to 9% in 2009, down from 16.4% in 2008. This high growth, combined with prudent government support for the financial sector, contributed to maintaining macroeconomic and financial stability, the report concluded.
Saudi Arabia moves up by seven places to take the second-highest place in the region at 21st.
The country has witnessed a number of improvements to its competitiveness in recent years, which resulted in
a strong a solid institutional framework, efficient markets, and sophisticated businesses.
Improvements to the institutional framework (up by 11 places to 21st), in particular a better assessment of the security situation by business (19th) and a stronger corporate governance framework (26th), have contributed to this year’s better positioning, according to the WEF report.
Additionally, the government enacted a massive stimulus package, improving infrastructure in the country, although it led to a deterioration of macroeconomic stability as the budget balance moved into deficit.
As much as the recent improvements are commendable, the country faces important challenges going forward. Health and education do not meet the standards of countries at similar income levels, WEF said.
Following a difficult year, the United Arab Emirates loses two places in this year’s Global Competitiveness Index (GCI) to take the 25th position.
The country’s overall competitiveness reflects recent investments in infrastructure, where it ranks an excellent 3rd; high penetration rates of new technologies (14th); and highly efficient goods markets (6th), the report said.
Macroeconomic stability and some positive aspects of the country’s institutions, such as high public trust of
politicians and efficient government, round up the list of competitive advantages.
Over the past year, there has been a deterioration in the assessment of institutions overall, and in particular of private institutions, where accountability standards and the efficacy of corporate boards are evaluated less positively than before, it added.
This lower assessment is likely related to the difficulties that Dubai World, a state-owned company, faced in paying back debt toward the end of 2009.
The difficulties of Dubai World raised doubts about the sustainability of the development model of Dubai, which has since been reoriented toward the more traditional role of commercial and logistics hub and away from property development.
Tunisia retains the lead within North Africa, moving up by eight places to 32nd.
Oman, Kuwait and Bahrain rank 34th, 35th and 37th respectively in the WEF's GCI, placing all Gulf Cooperation Council states among the world's 40 most competitive countries, the report said.
The Islamic Republic of Iran enters the GCI for the first time at 69th position, which reflects a number of pronounced strengths as well as important challenges.
Egypt moves down to 81st in this year’s GCI rankings.
The country’s main competitive strengths are the sheer size of its market (26th) that allows businesses to exploit economies of scale, the fairly well developed private institutions (60th) that ensure good governance, and its satisfactory transport infrastructure (56th overall).
The challenges, on the other hand, are numerous. The labor market continues to be overregulated, which reduces its ability to property allocate and employ human resources.
Although some progress has been achieved, the continuing labor market rigidities are worrisome because of the widespread unemployment among young
people, WEF said.
Included for the first time in the GCR, Lebanon occupies the 92nd position in the rankings.
Following its low growth performance toward the middle of the decade, growth rates rebounded to 9% in 2008 and remained unaffected by the economic crisis in 2009.
Lebanon can depend on a healthy and well educated population with advantages in the quality of education, which stands out positively in regional comparison. Lebanon ranks an excellent 16th for the quality of education, with a particular strength in math and science education, where it achieves 7th place, and in the quality of primary education (12th).
Syria and Libya
The regional ranking closes with Syria (97th) and Libya (100th).
The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004.
The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development.
The pillars are: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication, and innovation.
The rankings are calculated from both publicly available data and the Executive Opinion Survey, comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the study.
This year, over 13,500 business leaders were polled in 139 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.
For more information and to dowload the report, please visit www.weforum.org/en/index.htm