Qatar remains region’s most competitive

Ranked 11th in the Global Competitiveness Index 2012-2013 rankings, Qatar has moved up three places from the previous year Qatar has reaffirmed its position as the most competitive economy in the region, according to the Global Competitiveness Report 2012-2013, released yesterday by the World Economic Forum. Ranked 11th in the Global Competitiveness Index (GCI) 2012-2013 rankings, Qatar has moved up three places from 2011-2012. In the region, Saudi Arabia remains among the top 20 (18th). The UAE (24th) has improved its performance but Kuwait (37th) shows a slight decline. Switzerland, for the fourth consecutive year, has topped the overall rankings. Singapore remains in second position and Finland in third position, overtaking Sweden (4th). These and other Northern and Western European countries dominate the top 10 with the Netherlands (5th), Germany (6th) and UK (8th). The US (7th), Hong Kong (9th) and Japan (10th) complete the ranking of the top 10 most competitive economies. Qatar sustained the regional number one position by improvements in its macroeconomic environment, the efficiency of its markets for goods and services, and its institutional framework. Qatar’s strong performance in terms of competitiveness rests on solid foundations made up of a high-quality institutional framework, a stable macroeconomic environment (2nd), and an efficient goods market (10th). Low levels of corruption and undue influence on government decisions, high efficiency of government institutions, and high levels of security are the cornerstones of the country’s very solid institutional framework, which provides a good foundation for heightening efficiency. The World Economic Forum has suggested that going forward, as noted in previous editions of the Global Competitiveness Report, reducing Qatar’s vulnerability to commodity price fluctuations will require diversification into other sectors of the economy and reinforcing some areas of competitiveness. Qatar’s efforts to strengthen its financial sector appear to be paying off as the trustworthiness and confidence in the country’s financial markets improved from 80th to 44th this year. However, the legal rights of borrowers and lenders remain underprotected (99th). Given its high wage level, diversification into other sectors will require the country to raise productivity by continuing to promote a greater use of the latest technologies (27th) and by fostering more openness to foreign competition - currently ranked at 42nd, reflecting barriers to international trade and investment. Saudi Arabia maintains the second-best place in the region and falls by one position from 17th to 18th position overall. The country has seen a number of improvements to its competitiveness in recent years that have resulted in a solid institutional framework, efficient markets, and sophisticated businesses. The UAE has gained three places in the GCI to take the 24th position. The improvement reflects a better institutional framework as well as greater macroeconomic stability. The World Economic Forum has observed that the Middle East and North Africa region continues to be affected by political turbulence that has impacted individual countries’ competitiveness. Countries that embarked on partial reforms such as Jordan and Morocco move up in the rankings, while economies that were more significantly affected by unrest and political transformations tend to drop or stagnate in terms of national competitiveness. Addressing the unemployment challenge will remain the key economic priority of the region as a whole for the foreseeable future. Despite growing its overall competitiveness score, the US continues its decline for the fourth year in a row, falling two more places to seventh position. The report indicates that Switzerland and countries in Northern Europe have been consolidating their strong competitiveness positions since the financial and economic downturn in 2008. On the other hand, countries in Southern Europe, i.e. Portugal (49th), Spain (36th), Italy (42nd) and particularly Greece (96th) continue to suffer from competitiveness weaknesses in terms of macroeconomic imbalances, poor access to financing, rigid labour markets and an innovation deficit. The large emerging market economies (BRICS) display different performances. Despite a slight decline in the rankings of three places, the People’s Republic of China (29th) continues to lead the group. Of the others, only Brazil (48th) moves up this year, with South Africa (52nd), India (59th) and Russia (67th) experiencing small declines in rankings. The Global Competitiveness Report  is a yearly report published by the World Economic Forum. The first report was released in 1979.  Since 2004, the Global Competitiveness Report ranks countries based on the Global Competitiveness Index, developed by Xavier Sala-i-Martin. The Global Competitiveness Index integrates the macroeconomic and the micro/business aspects of competitiveness into a single index.  From GT