How well is the UAE economy performing globally?
UAE economy ranked 16th in the world
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.”