best place in the Gulf region and moves up by four ranks to reach 17th position in “The Global Competitiveness Report 2011-2012” released by the World Economic Forum (WEF) Wednesday. In the 544-page report which features a record number of 142 economies, WEF said the Kingdom “has seen a number of improvements to its competitiveness in recent years, which have resulted in a solid institutional framework, efficient markets, and sophisticated businesses.” The report noted that improvements to the institutional framework have increased by nine places — in particular, a better assessment of the security situation by business (4th) and stronger private institutions (17th), as well as better macroeconomic results — have contributed to a better positioning in this year's Global Competitiveness Index (GCI). The report further said that the macroeconomic environment benefited from rising energy prices, which buoyed the budget balance into surplus in 2010, although it still remained significantly below pre-crisis levels. Additionally, the Kingdom's largest stimulus package among the G-20 contributed to improving infrastructure in the country. The latest WEF Global Competitiveness Report however noted that though the recent developments are commendable, “the country faces important challenges going forward,” saying that health and education do not reach the standards of other countries at similar income levels.” “While some progress is visible in health outcomes and the quality of education is increasing quickly, improvements are taking place from a low level.” As a result, the country continues to occupy low ranks in the health and primary education pillar (61st), and room for improvement remains on the higher education and training pillar (36th), the report noted. Boosting these areas, in addition to fostering a more efficient labor market (50th), are of great significance to Saudi Arabia given the growing numbers of its young people who will enter the labor market over the next years. “More efficient use of talent will increase in importance as global talent shortages loom on the horizon and the country attempts to diversify its economy, which will require a more skilled and educated workforce,” the report said. It suggested that the latest technologies can be enhanced (43rd) – an area where Saudi Arabia continues to lag behind other Gulf economies. In the Gulf, Qatar reaffirms its position as the most competitive economy by moving up three places to 14th position, sustained by improvements in its macroeconomic environment, business sophistication, and innovation. Its strong performance in terms of competitiveness rests on solid foundations made up of a high-quality institutional framework where it ranks 14th overall, a stable macroeconomic environment (5th), and an efficient goods market (17th). Given Qatar's high wage level, diversification into other sectors will require the country to raise productivity by continuing to promote a greater use of the latest technologies (33rd) and by fostering more openness to foreign competition, currently ranked at 53rd-reflecting barriers to international trade and investment, the WEF report said. However, the UAE loses two places in the GCI to take the 27th position for the second year in a row. The drop reflects deterioration in a number of areas, but the most striking is the country's loss of its ability to harness the latest technologies for productivity improvements.
