Riyadh:—Saudi Arabia is in the top quartile globally when it comes to change level scores, according to a recently released report by The Boston Consulting Group (BCG), Striking a Balance Between Well-Being and Growth: The 2018 Sustainable Economic Development Assessment. Saudi Arabia outperforms other GCC countries in the dimensions of economic stability, education and environment, but is losing ground across all other dimensions.

Overall, Saudi Arabia’s well-being performance is good and improving. The report found that wealthier countries show higher well-being levels, and Saudi Arabia is in the second quartile globally; however, the country is slightly below global average when it comes to converting wealth into well-being.

The finding runs counter to conventional wisdom that countries must make trade-offs between policies that support economic growth and those that elevate the well-being of their citizens. The research, based on BCG’s proprietary  Sustainable Economic Development Assessment (SEDA), a comprehensive diagnostic tool that assesses the relative well-being of countries, reveals that there is actually a virtuous cycle between well-being and growth in which gains in one power progress in the other.

"BCG has been a strong advocate of the need for countries to focus policies and development strategies on improving well-being,” notes Joao Hrotko, a BCG partner and coauthor of the report. “But there remains a belief that policies aimed at improving well-being may lead to weaker GDP growth. Our analysis finds this tradeoff can be avoided. In fact, an approach that balances both well-being and growth is not just advisable under normal circumstances—it is equally important during times of crisis. In such periods, countries must resist the temptation of pursuing policies that come at the expense of promoting well-being.”

Saudi Arabia is good and improving in the dimensions of income, education economic stability, and to a lesser degree, health. It is weak but improving in employment. Conversely, the country is good but losing ground in environment, equality and infrastructure, and is weak and losing ground in governance and civil society.

“While most GCC countries perform below global peers, Saudi Arabia's ability to convert wealth to well-being is close to 1 and is above most of its GCC peers,” said Alexander Tuerpitz, Partner and Managing Director at BCG Middle East. “For countries that already enjoy a relatively high level of well-being, our analysis points to the importance of prioritizing education and employment. Progress in these mutually reinforcing areas can better prepare citizens—and therefore society as a whole-- for the challenges presented by globalization and relentless technological change.”

Saudi Arabia Performance Over the Past 10 Years

“Saudi Arabia has improved most in ranking when compared to other GCC countries jumping four places in the SEDA rankings between 2009 and 2018. Over the last ten years, the country’s ability to convert wealth into well-being has improved to surpass that of Oman, and remains only slightly below the global average,” said Tuerpitz. 

Over the last ten years, Saudi Arabia has shown improvement across all dimensions except the environment, where the country has witnessed a negative growth of -3 points. It has improved most in the dimensions of infrastructure and education at 11 points each, followed by economic stability at 7 points, employment at 6 points, and income at 5 points. Saudi Arabia has also shown slight improvement in equality (2 points), civil society (1 point) and governance (1 point).

Addressing Barriers to Progress

The report also examined which areas, or “dimensions”, seemed to be critical to making progress relative to peers—and how the importance of a dimension might differ depending on a country’s level of development.

  • Among countries starting with a low level of well-being, the dimensions that differentiated those that made significant improvements in well-being from those that did not were education, infrastructure and governance.
  • Among countries with high levels of well-being, the dimensions that differentiated those that made weak improvements in well-being from those that posted good progress were employment and education. 

Certainly, there is no blue print for development and each country’s circumstances require different policy responses. However, these results yield an important insight for policymakers: the dimensions that distinguish countries that performed better are areas that, if overlooked, can become bottlenecks and constrain progress. 

Well-Being Improves Around the World 

The 2018 analysis also assessed the overall direction of absolute well-being around the globe by looking into data for the 40 metrics that make up the SEDA composite measure—finding reason for optimism.

“Looking at the most recent ten-year period it is clear well-being has generally improved around the world,” says Enrique Rueda-Sabater, a senior BCG advisor and co-author of the report. “This is encouraging – particularly given the fact that this period included a major financial crisis that triggered recessions in many countries.”

In particular, there were significant gains in key health outcomes, education and infrastructure from 2007 through 2016. Although trends were less encouraging in governance and environment, overall most countries showed improvement in a majority of SEDA’s 40 composite metrics.

-Ends-

About SEDA

SEDA is a fact-based analysis that assesses well-being based on ten key dimensions, including health, education and infrastructure. SEDA scores 152 countries on a relative basis in terms of their current well-being and the change in their well-being over time. It also measures how well countries are able to convert the wealth they have into well-being, regardless of their income level.

About The Boston Consulting Group

The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with offices in more than 90 cities in 50 countries. For more information, please visit www.bcg.com 

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© Press Release 2018

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