International Finance

UAE most competitive economy in Mena region, according to World Bank and WEF

UAE, Economy, oil,gas
Both World Bank and World Economic Forum reports state that UAE’s economy is resilient to shock

The new study from the World Bank Group and the World Economic Forum has declared the UAE as the most competitive economy in the Middle East and North Africa (Mena).

The Arab World Competitiveness Report 2018, launched Tuesday in Dubai, ranked the UAE as the 17th most competitive country in the world.

Saudi Arabia, ranked 30th most competitive, was another Mena nation to crack the global top 30.The rankings are based on 12 factors—ranging from education to infrastructure– that are critical for economic growth and productivity.

This increased diversification makes the UAE’s economy the most resilient and capable of weathering the double shock of lower oil and gas prices, as well as reduced overall global trade, according to the report. It is considered better suited to maintain a stable macroeconomic environment.

The report stated: “The resilience of its fiscal policy will be further strengthened in the future because the UAE was … among the early adopters of the new VAT.”

Education and innovation are two areas where the Mena countries most deviate from their counterparts in more developed nations. However, the UAE benefits from strong institutions, good infrastructure, and good quality health care and primary education, according to the report.

Despite this, the UAE will have to speed up progress in spreading the latest digital technologies and upgrading education.

Throughout the region, however, there are strong macroeconomic headwinds facing the 20 Mena countries. Mouayed Makhlouf, regional director for the IFC, stated: “what is very common across the countries in the Arab world is the issue of the dominance of the public sector …[they] have been the provider of all the jobs, 60 to 80 per cent.”

“That is a serious issue.” He added.

The changing economic landscape will require the region to generate 58 mn jobs by the year 2040 to maintain unemployment rates, and even more to lower them, according to the report.

The report recommended that countries to diversify their economies and move away from a model of government-led growth—in order to lessen reliance on natural resources exports.

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