JEDDAH – The World Economic Forum's (WEF) “Global Competitiveness Report 2013-2014” released Wednesday listed excellent innovation and strong institutional environments increasingly influencing economies' competitiveness. The report's Global Competitiveness Index (CGI) enumerates 12 pillars of competitiveness under 3 sub-Indexes namely, Basic Requirements, Efficiency Enhancers and Innovation & Sophistication factors – as the driving factors explaining an economy's growth potential. In the Middle East and North Africa, Qatar (13th) tops the region's rankings, with the United Arab Emirates (19th) entering the top 20 for the first time. Saudi Arabia (20th) falls two places but remains among the top 20. Israel ranks 27th. Egypt (118th) drops a further 11 places on last year's index. Bahrain (43rd), Jordan (68th) and Morocco (77th) also decline. Elsewhere in the region, Algeria moves up to 100th place and Tunisia re-enters the index at 83rd. Under ‘Basic Requirements' sub-Index, the UAE ranks 4th, with only Singapore, Switzerland and Hong Kong ahead on that scale. Qatar came next, ranking 5th. In the Efficiency Enhancers sub-Index, Qatar tops the region (18th), followed by the UAE (20th) and Saudi Arabia (27th). Also, in the Innovation & Sophistication factors sub-Index, Qatar again takes the lead with 14th ranking, while the UAE was ranks 24th and Saudi Arabia 29th. The report noted the stark contrast in the Arab World economies: the first category of countries that are mired under political turmoil with the continued effects of Arab Spring and its aftermath, and the other category of oil-rich countries. The Arab World sees a twofold development in terms of competitiveness, with, on the one hand a stagnation or drop in the rankings for countries affected by political turmoil and, on the other hand, energy-rich economies performing well linked to competitiveness-enhancing structural reforms and investments, according to the report. The report underlined that the Arab world urgently needs institutional reform and extra investment in education. The report analyzed 13 countries in the Arab world, and Qatar, Saudi Arabia and United Arab Emirates led in the overall competitiveness; with Jordan slightly improving its performance. With the burgeoning population growth in the Arab World, the Competitiveness Report 2013 highlights job creation as the major economic challenge for leaders in the Middle East. Underdeveloped skills, weak institutions and labor market inefficiency are the main factors limiting competitiveness and the ability to create jobs vary across the region The Arab world must improve its economic competitiveness if the region is to solve its biggest economic challenge of creating enough jobs for its youthful and growing population, the report added. The report identified a number of areas where regional leaders could prioritize reform in order to unlock barriers to job creation and private sector expansion. These barriers differ across the region: with weak institutions and labor markets singled out as the most significant areas for improvement in North Africa; weak infrastructure and institutions in the Levant; and a pervasive education and innovation gap in countries in the Gulf. The report also noted that leaders in the Arab world who embrace the challenge of lifting competitiveness and enabling private sector growth could look forward to a “win-win” scenario, characterized by higher employment and greater social stability. Børge Brende, Managing Director of WEF, said: “Strong leadership based on a shared vision of the future political and economic system will be necessary to navigate the countries of the region through the turbulent times. The findings of this report are crucial for informing the discussions at the World Economic Forum on the Middle East and North Africa.” The report's GCI placed Switzerland at the top of the ranking for the fifth year running. Singapore and Finland remained in second and third positions respectively. Germany moved up two places (4th) and the United States reversed a four-year downward trend, climbing two places to fifth. Hong Kong (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall. Of the BRICS, the People's Republic of China (29th) continued to lead the group, followed by South Africa (53rd), Brazil (56th) India (60th) and Russia (64th). Among the BRICS, only Russia improved its ranking, climbing three places, while Brazil dropped eight places. – SG
