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Arabs rise in the global competitiveness index
27 September 2006 16:48
Arabs rise in the global competitiveness index

The report, released yesterday by the World Economic Forum, shows that of the ten Arab countries researched, only two had a performance inferior to that reached in 2005. The increase in oil revenues made four of these nations rise to the top of the list in the 'macroeconomy' pillar, one of the nine considered in the study.

Alexandre Rocha*

São Paulo - Nearly all of the Arab countries researched improved their position in the Global Competitiveness Index, a study released yesterday (26) the World Economic Forum (WEF). Of the 125 nations included in the list, ten are from the region and only two had a performance inferior to that of the report last year.

Tunisia is the best positioned Arab country in the ranking and went from the 37th place in 2005 to 30th this year. Next comes the United Arab Emirates, which remained in the 32nd position; Qatar, went up from 46th to 38th; Kuwait, climbed form 49th to 44th; Bahrain, stepped from 50th to 49th; Morocco, rose from 76th to 70th; and Algeria, jumped from 82nd to 76th.

The only two that dropped positions were Jordan, which went from 42nd to 52nd, and Egypt, which was in 52nd place and went to 63rd. Mauritania entered the list for the first time and made the 114th position.

To prepare the list, the WEF considered nine basic pillars: institutions, infrastructure, macroeconomy, health and primary education, higher education and training, market efficiency, technological readiness, business sophistication and innovation. It was elaborated based on public information and on the Executives' Opinion Research, carried out with 11,000 business leaders from the 125 countries in the list.

In the case of the Arab countries, especially those in the Gulf, the report says that "the commercial gains related to the increase in oil prices raised growth rates, strengthening the confidence of the business community, which was already high due to institutional modernisation and improvement in macroeconomic governance."

With this, four Arab countries are amongst the first four positions in the "macroeconomy" pillar, with Algeria in first, Kuwait in second, Qatar in third and the Emirates in fourth. All of them are great oil and gas producers.

In the case of Algeria, for example, the report says that the country gave "impressive strides" on going from the 82nd position to 76th. This, according to the study, happened due to significant advances in the institutions, health and primary education and innovation.

"A strong macroeconomic pillar characterised by increasing revenues from oil and gas sales appears to have boosted its performance relative to the government balance and government debt, while its inflation environment also saw a significant favourable development," stated the document. The country, however, had a bad performance in areas like market efficiency, technological readiness and business sophistication.

Another example is Morocco, which, according to the research, had significant development in its institutions, infrastructure, health and education. Apart from that, there were advances in technological availability, with "big gains" in the absorption of technology by companies and technology transfer through foreign direct investment (FDI).

"The country has seen an increase in Internet users and improved innovation - in particular through stronger university/industry research collaboration - better protection of intellectual property rights, and has benefited from a greater availability of scientists and engineers," says the report. It adds, however, that the population of Morocco continues poor and, despite the advances, has little access to services like health and education, both basic and upper.

The report says that despite the availability of funds and advances in the areas of health and fundamental education, several of the Arab countries researched have not yet had the same performance in the sectors of upper education, professional training and infrastructure.


In Latin America, the highest ranked country is Chile, which remained in the 27th position. Brazil fell from the 57th to the 66th position. According to the WEF, despite the country's great availability of natural resources, diversified industrial basis, highly competitive agribusiness, greater and greater potential for diversification of the trade basket, significant volumes of FDI and lower dependence on primary products, the country's economy is not growing at the same speed as those of other emerging nations due to the large budget deficit, high interest rates, inefficient institutional environment, bureaucracy and informality.

Switzerland was in the first place in the ranking, followed by Finland, Sweden, Denmark, Singapore, the United States (which fell from the 1st to the 6th position), Japan, Germany, Holland and the United Kingdom.

*Translated by Silvia Lindsey and Mark Ament
27 September 2006 17:20
I saw the interview yesterday on BBCWorld, I'm not sure I agree on the assessments, they tend to dismiss social efforts as counterproductive. In the case of our country, as I applaud how investments are facilitated, they must be a social awareness and efforts on healthcare coverage, education, otherwise it'll blow up in our faces 10 years from now.
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