Global Competitiveness Report 2013-2014

09 Sep 2013 WEF

QBA Members attended

Qatar once again lead the Arabic world and the Middle Eastern countries to rank 13th on the Global Competitiveness Index that was declared in the World Economic Forum’s annual report for this year.

Conveyed by this year’s report, Qatar’s strong Competitiveness rests on solid foundations consisting of high quality institutional frame work, stable macro economical environment, and efficient goods market. The high growth combined with prudent governmental support to the financial sector contributed to maintaining a strong macroeconomic and financial stability.

As per the report "Qatar reaffirms once again its position as the most competitive economy in the region at 13thposition, although Qatar ranked 11th in the GCR 2012–2013 but the drop in the rankings reflects the higher weight put on innovation and business sophistication this year, as Qatar is being assessed as an innovation-driven economy. The country’s strong performance in terms of competitiveness rests on solid foundations made up of a high-quality institutional framework (4th), a stable macroeconomic environment (6th), and an efficient goods market (3rd). Low levels of corruption, high efficiency of government institutions, and strong security are the cornerstones of the country’s solid institutional framework, which provides a good basis for heightening efficiency.

The Report also draw's the attention on the importance of diversifying the economy and reinforcing some areas of competitiveness. "As a high income economy, Qatar will have to continue to pay significant attention to developing into a knowledge- and innovation-driven economy, although elements that could contribute to fostering innovation are in place. The government also drives innovation by procuring high-technology products, universities collaborate with the private sector, and scientists and engineers are readily available. To become a truly innovative economy, Qatar will have to continue to promote a greater use of the latest technologies and ensure universal primary education".

The Report details the country’s economic profile for each of the 148 economies featured in the study, providing a comprehensive summary of the overall position in the Index rankings as well as a guide to what are considered to be the most prominent competitive advantages to each while shedding light to the areas that need more development and support.

The rankings are based on a combination of publicly available hard data and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum (WEF), together with its network of Partner Institutes in the countries covered by the Report.

Throughout eight consecutive years, the Qatari Businessmen Association (QBA) has been the local partner of WEF to highlight the strengths of the local economy, especially with respect to the investment climate and opportunities in all areas, and as last year QBA cooperated with Qatar University, specifically the Social and Economic Research institute (SESRI) to conduct this survey, and the two institutes had put massive efforts to distribute, follow up and collect the survey questionnaire, which is designed to capture a broad range of factors affecting the economy expressed by the views of the business community, and to deliver a comprehensive overview of the main strengths and weaknesses in the national economy, making it possible to identify key areas for policy formulation and reform.

Given the importance of executing a competent macroeconomic management in the institutions, coupled with world-class educational attainment and a focus on technology and innovation, which favorably boost the competitiveness in an increasingly complex global economy, The report’s Global Competitiveness Index (GCI) places Switzerland at the top of the ranking for the fifth year running. Singapore and Finland remain in second and third positions respectively, on the other hand Germany moves up two places (4th) and the United States reverses a four-year downward trend, climbing two places to fifth. Hong Kong SAR (7th) and Japan (9th) also close the gap on the most competitive economies, while Sweden (6th), the Netherlands (8th) and the United Kingdom (10th) fall.

The United States continues to be a world leader in bringing innovative products and services to market. Its rise in the ranking is down to a perceived improvement in the country’s financial market as well as greater confidence in its public institutions. However, serious concerns persist over its macroeconomic stability, which ranks 117 out of 148 economies.

In Europe, efforts to tackle public debt and avoid a break-up of the euro have taken the focus of addressing deeper competitiveness issues. Southern European economies such as Spain (35th), Italy (49th), Portugal (51st) and notably Greece (91st) all need to continue addressing weaknesses in the functioning and efficiency of their markets, boost innovation and improve access to finance in order to help bridge the region’s competitiveness divide.

Some of the world’s largest emerging market economies must also engage business, government and civil society to implement long-overdue reforms. Of the five BRICS, the People’s Republic of China (29th) continues to lead the group, followed by South Africa (53rd), Brazil (56th) India (60th) and Russia (64th). Among the BRICS, only Russia improves its ranking, climbing three places, while Brazil drops eight places.

Among the Asian economies, Indonesia jumps to 38th, making it the most improved of the G20 economies since 2006, while Korea (25th) falls by six places.  Behind Singapore, Hong Kong SAR, Japan and Taiwan (China) (12th) all remain in the top 20. Developing Asian nations display very mixed performances and trends: Malaysia places 24th while countries such as Nepal (117th), Pakistan (133rd) and Timor-Leste (138th) are near the bottom of the ranking. Bhutan (109th), Lao PDR (81st) and Myanmar (139th) join the index for the first time. 

In the Middle East and North Africa, Qatar (13th) tops the region’s rankings, with the United Arab Emirates (19th) entering the top 20 for the first time. Saudi Arabia (20th) falls two places but remains among the top 20. Israel ranks 27th, Egypt (118th) drops a further 11 places on last year’s index. Bahrain (43rd), Jordan (68th) and Morocco (77th) also decline. Elsewhere in the region, Algeria moves up to 100th place and Tunisia re-enters the index at 83rd.

In sub-Saharan Africa, Mauritius (45th) overtakes South Africa (53rd) as the region’s most competitive economy. With only eight countries in the region featuring in the top 100, profound efforts across the board are clearly needed to improve Africa’s competitiveness. Among low-income economies, Kenya makes the biggest improvement, rising by ten places to 96th position. Nigeria (120th) continues to be ranked low, highlighting the need for it to diversify its economy.

Despite robust economic growth in previous years, Latin America continues to suffer from low rates of productivity and the results show overall stagnation in competitiveness performance. Chile (34th) continues to lead the regional rankings ahead of Panama (40th), Costa Rica (54th) and Mexico (55th), which all remain relatively stable.