How well is the UAE econ­omy per­form­ing glob­ally?

UAE econ­omy ranked 16th in the world

7 Days in Dubai - - FRONT PAGE - By Pa­trick Ryan @ThatPad­dyRyan pa­trick@7days.ae

The UAE has been named as the 16th best econ­omy in the world, ac­cord­ing to a re­port by the World Eco­nomic Fo­rum.

The Global Com­pet­i­tive­ness Re­port also named the UAE as the lead­ing econ­omy in the MENA re­gion, ahead of Qatar (18th) and Saudi Ara­bia (29th).

The top econ­omy in the world, ac­cord­ing to the re­port, re­mains Switzer­land, ahead of Sin­ga­pore and the United States in sec­ond and third places.

The Nether­lands is fourth, Ger­many fifth and Swe­den sixth. We take a look at the re­port’s key find­ings...

In which ar­eas has the UAE made gains?

Ac­cord­ing to the re­port: “The UAE con­tin­ues to lead the Mid­dle East and North Africa re­gion, build­ing on im­prove­ments in com­pet­i­tive­ness in re­cent years.

“This year small gains in ar­eas such as tech­no­log­i­cal adop­tion and busi­ness so­phis­ti­ca­tion are par­tially off­set by de­teri- orat­ing macroe­co­nomic sta­bil­ity that is the re­sult of lower en­ergy prices, which have led to a rise in in­fla­tion and pub­lic debt and to the emer­gence of a fis­cal deficit.”

What are the UAE’s big­gest strengths?

“The UAE boasts a num­ber of com­pet­i­tive strengths: in­fra­struc­ture is top notch [fourth over­all] and goods and labour mar­kets are open and ef­fi­cient.”

How can the UAE econ­omy con­tinue to grow? “Go­ing for­ward, for the coun­try to di­ver­sify its econ­omy, en­hanc­ing in­no­va­tion – where the coun­try cur­rently ranks 25th – will be cru­cial. There is equal scope for bet­ter lev­er­ag­ing dig­i­tal tech­nolo­gies that are an im­por­tant en­abler of busi­ness in­no­va­tion. Cur­rently the coun­try ranks 29th in ICT use.”

What are the most prob­lem­atic fac­tors re­lat­ing to do­ing busi­ness in the UAE?

The re­port says the big­gest ob­sta­cles to busi­ness in the UAE are: re­stric­tive labour reg­u­la­tions, ac­cess to fi­nanc­ing, in­fla­tion, in­ad­e­quately ed­u­cated work­force, poor work ethic in the na­tional labour force, in­ef­fi­cient gov­ern­ment bu­reau­cracy, for­eign cur­rent reg­u­la­tions and pol­icy in­sta­bil­ity.

What ef­fect does hav­ing a large por­tion of state-owned em­ploy­ers have on economies in the MENA re­gion?

“First, de­spite re­cent pri­vati­sa­tion ef­forts, most na­tional economies re­main state-dom­i­nated and not di­ver­si­fied.

“In Saudi Ara­bia, for ex­am­ple, the state’s stake in state-owned en­ter­prises amounts to 19.8 per cent of GDP; in the UAE, this is 21.8 per cent; and in Qatar, 23.1 per cent.

“Ef­fi­ciency and pro­duc­tiv­ity could be im­proved by con­tin­ued pri­vati­sa­tion, re­duc­ing reg­u­la­tory bar­ri­ers to en­try for do­mes­tic com­pa­nies and mak­ing busi­ness en­vi­ron­ments more wel­com­ing for for­eign di­rect in­vest­ment and more con­ducive to the growth of small and medium-sizes en­ter­prises.”

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