The Global Competitiveness Report 2009-2010 released Tuesday by the World Economic Forum ahead of its annual meeting in Dalian, the northeast port city of China, showed that a number of countries in the Middle East and North Africa region are in the upper half of the rankings, led by Qatar, United Arab Emirates, Saudi Arabia, Bahrain, Kuwait and Tunisia, with particular improvements noted in the Gulf states, which continue their upward trend of recent years. The United Arab Emirates climb by eight places to 23rd position, mainly due to a more favorable assessment of institutions, and higher technological readiness and innovative capacity. Saudi Arabia consolidates its position after the significant improvements of past years. In North Africa, Tunisia maintains its leading position, despite a slight drop to 40th rank. Following recent reform efforts, Egypt moves up by 11 ranks and overtakes Morocco. Qatar and UAE have emerged as among the most competitive economies in the Middle East and North Africa region, the report said. Qatar and UAE were placed 22nd and 23rd, respectively, of the 133 countries covered in the study. Besides Qatar and UAE, other countries in the Middle East featured in the upper half of the rankings included Saudi Arabia (28), Bahrain (38), Kuwait (39) and Tunisia (40), with particular improvements noted in the Gulf States. All other Arab countries came in below the six GCC nations. Switzerland topped the overall ranking, followed by the United States, Singapore, Sweden, Denmark, Finland, Germany, Japan, Canada and the Netherlands. In sub-Saharan Africa, South Africa, Mauritius and Botswana feature in the top half of the rankings, with a number of other countries from the region measurably improving their competitiveness. “Amid the present crisis, it is critical that policy-makers not lose sight of long-term competitiveness fundamentals amid short-term urgencies,” Xavier Sala-i-Martin, professor of economics at Columbia University and co-author of the report, said in a statement. “Competitive economies are those that have in place factors driving the productivity enhancements on which their present and future prosperity is built.” In its assessment of the UAE, the report said notwithstanding the current cyclical downturn, the available data suggested that the UAE had in place the underlying fundamentals of a competitive economy.” It said the lower score in macroeconomic stability due to rising public debt and lower budget surplus was in line with most other countries' results in this field. WEF, however, said serious doubts persisted about the sustainability of public finances in Dubai and the potential effect a further deterioration may have on the country as a whole. “ As the global downturn continues to limit the availability of finance and reduces tourism and trade, the country's main sectors of activity are likely to be adversely affected,” it said. According to the report, despite the fall in real estate prices, the assessment of its financial markets so far proved more resilient than many other countries. “It has to be noted, however, that businesses assess banks as somewhat less sound than previously,” it said. “The strong interdependence among the world's economies makes this a truly global economic crisis in every sense. Policy-makers are presently struggling with ways of managing these new economic challenges, while preparing their economies to perform well in a future economic landscape characterized by growing uncertainty. In a difficult global economic environment, it is more important than ever for countries to put into place strong fundamentals underpinning economic growth and development,” said Klaus Schwab, founder and executive chairman of the World Economic Forum. The WEF said consistent upgrading of institutions, infrastructure and rising technological readiness and innovative capacity over the past few years would help the UAE maintain its competitive edge in the longer term. “ Perhaps more emphasis will be needed on education, where quantitative measures still point to low secondary and tertiary enrolment rates,” said the report. WEF added that the UAE should also consider boosting its innovative capacity which remained constrained by the quality of research institutions and relative disconnect between universities and businesses. 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 include institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market sophistication, technological readiness, market size, business sophistication, and innovation. The UK, while remaining very competitive, has continued its fall from last year, moving down one more place this year to 13th, mainly attributable to continuing weakening of its financial markets. The People's Republic of China continues to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil. __
