Gulf rankings do not reflect ground reality

Not much weightage has been given to the fact that there are no restrictions on expats

The 2018 version of Economic Freedom of the World, issued by Canada’s Frazer Institute, has opted to grant more realistic rankings for most of the Gulf states. This is a departure from the past when the index has given them exceptionally low — and unfair — rankings.

Bahrain leads GCC and Arab countries with its 30th ranking, reflecting enhanced liberalisation of the economy and the opening of nearly all commercial activities to nationals of other countries.

The UAE maintained its 37th ranking, while Qatar experienced an improvement by seven notches to 45th. The country’s ranking is projected to rise with the implementation of the asylum law, a novelty in the Gulf.

Oman and Kuwait saw their ranking advance by eight and seven spots, allowing the two to share the 97th spot. Saudi Arabia gained nearly 20 positions to be 104th, and the highest advance by a GCC country.

The GCC member-states remain below rankings that they actually deserve. The index overlooks the fact that foreign workers constitute a majority of the labour force in the six countries without exception, extraordinary by international standards. They do not face any restrictions whatsoever with regards to repatriation of funds.

This is extraordinary at a time when several countries are placing restrictions on employing immigrant workers in the name of protecting opportunities for locals. The same notion holds true with regard to introducing higher tariffs.

One major impediment to economic freedom concerns the public sector in the Gulf, with governmental spending compromising a key component of GDP. At times, the private sector must compete with public sector entities to obtain banking facilities. This practice causes a crowding out, forcing business entities and individuals to accept unfavourable terms.

The index relies on some 40 variables, grouped into five broad areas. These relate to government efforts in terms of expenditure, subsidies and investments; a legal system that upholds property rights, has an impartial judicial system as well as enforcement of contracts and others.

■ Dr Jasim Ali is a Member of Parliament in Bahrain.