Other Arab countries such as Lebanon, Oman and Yemen lost some ground in the ranking, said the report that ranked 141 countries around the world.
The Arab world has caught up significantly on ICT adoption and many countries have built sound infrastructure, said the report, adding that most of the countries in the region witnessed an improvement in ranking. However, greater investments in human capital are needed to transform the countries in the region into more innovative and creative economies, it said.
With a population of 10.4 million, the UAE’s GDP per capita stood at USD 40,711.4 and the 10-year average annual GDP growth was 3.2 per cent, according to the report released on October 9, 2019.
While the five-year average for foreign direct investment inward inflow growth was 2.6 per cent of the GDP in the UAE, the unemployment rate was 2.6 per cent, it said.
The United States (2nd overall ranking) is the leader in Europe and North America, while Singapore is number one in overall ranking, according to the report.
The United States remains an innovation powerhouse, ranking first on the business dynamism pillar and second on innovation capability. It is followed by the Netherlands (4th), Switzerland (5th), Germany (7th), Sweden (8th), the United Kingdom (9th) and Denmark (10th). Among other large economies in the region, Canada is 14th, France 15th, Spain 23rd and Italy 30th. The most improved country is Croatia (63rd).
With increased connectivity and globalistion, even growth economies are feeling the pinch of turmoil elsewhere. The report said that global economy continues to face a cycle of low or flat productivity since the financial downturn in 2008 despite the injection of more than USD 10 trillion by central banks.
In 2019, the report finds that, as monetary policies begin to run out of steam, it is crucial for economies to boost research and development, enhance the skills base of the current and future workforce, develop new infrastructure and integrate new technologies, among other measures.
“The Global Competitiveness Index 4.0 provides a compass for thriving in the new economy where innovation becomes the key factor of competitiveness. The report shows that those countries which integrate into their economic policies an emphasis on infrastructure, skills, research and development and support those left behind are more successful compared to those that focus only on traditional factors of growth,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum (WEF).
The report documents emerging areas of promising policies, reforms and incentives to build more sustainable and inclusive economies. To manage the transition to a greener economy, the report recommends four key areas of action: engage in openness and international collaboration, update carbon taxes and subsidies, create incentives for R&D, and implement green public procurement.
To foster shared prosperity, the WEF report recommends four additional areas of action: increase equality of opportunity, foster fair competition, update tax systems and their composition as well as social protection measures, and foster competitiveness-enhancing investments.
Global Trends and Highlights
Besides an annual assessment of economies’ long-term health, the report also highlights five trends in the global economy and their implications for economic policymakers:
- The last ten years saw global leaders take rapid action to mitigate the worst of the financial crisis: but this alone has not been enough to boost productivity growth.
- With monetary policy running out of steam, policymakers must revisit and expand their toolkit to include a range of fiscal policy tools, reforms and public incentives
- ICT adoption and promoting technology integration is important but policymakers must in parallel invest in developing skills if they want to provide opportunity for all in the era of the Fourth Industrial Revolution.
- Competitiveness is still key for improving living standards, but policymakers must look at the speed, direction and quality of growth together at the dawn of the 2020s.
- It is possible for an economy to be growing, inclusive and environmentally sustainable – but more visionary leadership is needed to place all economies on such a win-win-win trajectory.
The report’s data also shows growing inequalities in the global economy.
- Market concentration: The report finds that business leaders in the United States, China, Germany, France and the United Kingdom believe that market power for leading firms has intensified over the past 10 years.
- Skills gap: Only the United States among G7 economies features in the top 10 on the ease of finding skilled employees. It is, in fact, the best economy in the world in this category. Of the others, the United Kingdom comes next (12th) followed by Germany (19th), Canada (20th), France (41st), Japan (54th) and Italy (63rd). China comes 40th.
- Technology governance: Asked how the legal frameworks in their country are adapting to digital business models, only four G20 economies make it into the top twenty. These are; the United States (1st), Germany (9th), Saudi Arabia (11th) and the United Kingdom (15th). China comes 24th in this category.
Launched in 1979, the report provides an annual assessment of the drivers of productivity and long-term economic growth. The assessment is based on the Global Competitiveness Index (GCI), which maps the competitiveness landscape of 141 economies through 103 indicators organized into 12 pillars. These pillars are: Institutions, Infrastructure; ICT adoption; Macroeconomic stability; Health; Skills; Product market; Labour market; Financial system; Market size; Business dynamism; and Innovation capability.
For each indicator, the Index uses a scale from 0 to 100 and the final score shows how close an economy is to the ideal state or “frontier” of competitiveness.
(Writing by Atique Naqvi, editing by Seban Scaria firstname.lastname@example.org)
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