Saudi Arabia and UAE Climb Higher in Global Competitiveness Rankings

Saudi Arabia and UAE Climb Higher in Global Competitiveness Rankings

Saudi Arabia and UAE Climb Higher in Global Competitiveness Rankings

Saudi Arabia and the UAE have climbed higher in the annual IMD World Competitiveness Ranking. The UAE has moved up to 7th place globally in the competitiveness rankings, up from 10th place last year. This places the UAE ahead of major economies like Norway, Japan, and Canada. The UAE’s strong performance was due to its business-friendly environment, growing economy, reliable infrastructure, and competitive tax regime. The UAE ranked 2nd globally in economic performance and 4th in government efficiency.

Saudi Arabia also climbed one position to 16th place out of 67 of the world’s most competitive countries. This improvement was due to advancements in business legislation, infrastructure, and economic performance. Saudi Arabia secured top global rankings in several key indicators, including long-term employment growth, cyber security and entrepreneurial activity.

Other Gulf countries also saw improvements, with Qatar climbing to 11th place and Bahrain moving up to 21st position. This shows the growing competitiveness of the Gulf region on the global stage.

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Key Factors Driving the Rankings

Saudi Arabia has moved up in the global competitiveness rankings, driven by several key factors:

  • The country has created a business-friendly environment that has attracted more investments and supported economic growth.
  • Saudi Arabia has seen strong economic performance, with a big increase in foreign investment licenses and a record high in foreign investment projects.
  • The country has invested heavily in its infrastructure, including developing special economic zones and expanding its transportation network.
  • Saudi Arabia has improved its government efficiency, which has helped its ranking.
  • Both Gulf states have invested heavily in AI, which has been described as “like a honey pot for economies seeking productivity boosts.”
  • The UAE ranked second globally for employment and third for international trade.
  • Saudi Arabia has focused on developing its human capital, increasing female participation in the workforce, and improving overall labor market efficiency.
  • The country has also made significant progress in digital transformation, enhancing its competitiveness and ability to adapt to changing global trends.

These factors have collectively contributed to Saudi Arabia climbing from 17th to 16th place in the global competitiveness rankings.

Economic Reforms and Policies

Saudi Arabia and the UAE have implemented various economic reforms and policies to make them more competitive. Saudi Arabia’s plan, called Vision 2030, aims to reduce its dependence on oil, attract more foreign investment, and become more competitive globally.

The country is focusing on developing non-oil sectors like manufacturing, logistics, and tourism and building new cities, airports, and seaports. It has also created special economic zones and simplified regulations to attract foreign investment and operate in the country. Additionally, Saudi Arabia is investing in artificial intelligence, human capital development, and programs to increase female labor force participation.

The UAE has also expanded its economy, focusing on sectors like tourism, logistics, and renewable energy. It has a business-friendly environment with a low corporate tax rate and simplified rules and regulations. The country has invested heavily in infrastructure development, including world-class airports, seaports, and transportation networks, and has adopted emerging technologies like AI and blockchain to enhance productivity and efficiency.

The UAE has also implemented initiatives to improve government efficiency, such as simplifying regulatory procedures and establishing a single window for business registration. The UAE has also made efforts to attract foreign direct investment, with Dubai being the world’s top location for “greenfield” foreign direct investment for the third consecutive year. These changes have helped both countries improve their competitive rankings.

Comparison with Previous Years

The UAE has risen three places to 7th place, up from 10th in 2023 and 12th in 2022. Saudi Arabia has also improved its ranking, moving up to 16th position from 17th in 2023 and 32nd in 2021.

Impact on Regional Economy

Saudi Arabia and the UAE have become more competitive globally. This has helped their economies grow.
The UAE has seen a big increase in housing costs, as more people want to live there. The UAE has also attracted a lot of foreign investment, with Dubai being the top place for new foreign investment projects for 3 years in a row.

The region has invested heavily in new infrastructure like cities, airports, and seaports. Using artificial intelligence has made businesses more productive and efficient. This has led to more jobs, with the UAE and Saudi Arabia aiming to create millions of new jobs by 2040.

There are also more entrepreneurs in the region, with more angel investment networks helping startups. The economies have become more broad, focusing on sectors like tourism, logistics, and renewable energy, not just oil. The governments have also become more efficient, simplifying regulations and making it easier to do business.

The improved rankings of Saudi Arabia and the UAE are expected to have a positive impact on the regional economy. As two of the largest economies in the Gulf Cooperation Council (GCC), their competitiveness will likely attract more foreign investment and strengthen their position in the global market.

Future Projections and Goals

Both countries are likely to continue their efforts to further enhance their competitiveness. The UAE has signed an agreement with France to increase collaboration in AI, which will cover investments in infrastructure, cloud computing, and talent development.

Saudi Arabia is also expected to continue its focus on expanding its economy and reducing its reliance on oil. The government is making it easier for businesses to operate by having low taxes and simple regulations. The UAE aims to remain a top destination for foreign investment, especially in fast-growing sectors.

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