KUWAIT: Kuwait dropped four spots on the World Economic Forum's Global Competitiveness Ranking for 2014-2015. Falling from 36 to 40 this year, Kuwait's evaluation highlighted problems with inefficient government bureaucracy, restrictive labor regulations, corruption, access to financing and policy instability as among the top issues inhibiting the state's global economic competitiveness.
Kuwait recorded among the worst rankings in the Gulf Cooperation Council (GCC) states, falling far below the UAE (ranked 12), Qatar (16) and Saudi Arabia (24). It is listed as a transition economy. Other economies in transition on the global list include the Philippines (52), Algeria (79), Iran (83), Mongolia (98) and Bhutan (103).
The annual report evaluates nations using more than 100 indicators of competitiveness based on 12 pillars including institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labor market efficiency, financial market development, technological readiness, market size, business sophistication and innovation. Specific indicators cover the range of factors impacting an economy's ability to compete at the global level and include such indicators as government bureaucracy, corruption, labor regulations, access to financing, human resources and others.
Out of 144 countries, Kuwait ranked 135 in burden of government regulation; transparency of government policy making (103); quality of primary education (104); intensity of local competition (114); effectiveness of anti-monopoly policy (131); number of procedures to start a business (131); pay and productivity (104) and almost dead last for FDI and technology transfer (141). On the positive side, Kuwait ranked 1 out of 144 on inflation; mobile phone subscriptions (3) gross national savings (3) and [lack of] HIV prevalence (1).
The report is one of the most widely read on global competiveness indicators. In its introduction, the WEF report notes that the world is finally "emerging from the worst financial and economic crisis of the past 80 years and returning to a pre-crisis situation: large interest rate spreads for public debt in hard-hit countries are falling; banking systems seem more robust, even if financial reform has not yet been completed; and access to credit, while still limited, is slowly recovering."
Though government spending on mega projects and tenders has resulted in a growth in optimism in Kuwait, the WEF report clearly indicates the many structural problems the country continues to face in trying to develop its economy. "The leading economies in the index all possess a track record in developing, accessing and utilizing available talent, as well as in making investments that boost innovation....These smart and targeted investments have been possible thanks to a coordinated approach based on strong collaboration between the public and private sectors," the report said.
© Kuwait Times 2014
