Saudi Arabia most improved economy for business

Frank Kane
Tue, 2019-05-28 22:50

DUBAI: Business competitiveness in Saudi Arabia has improved
more than any other country in the world, according to a new survey
by Switzerland-based business school and think tank the
International Institute for Management Development (IMD).
The Kingdom rose 13 places in the latest edition of the annual
survey, jumping to 26th in the world. IMD highlighted Saudi
investment in education, where the country achieved the highest
ranking in the world, as well as the quality of public and business
finance, as factors behind the improvement.
Christos Cabolis, chief economist and head of operations at IMD’s
World Competitiveness Center, said the Kingdom invested nearly
double the global average on education. “Saudi Arabia spends 8.8
percent of its gross domestic product on education, against a
global average of 4.6 percent.”
He also noted the efficiency of public-sector finance and the
stability of Saudi Arabia’s tax regime as factors in the improved
ranking. “The message is to keep up the good reforms and attempt
to be more transparent.”
The UAE was the highest-ranked regional performer in the survey,
becoming the first Middle East country to break into the top five,
with particular praise for its business efficiency.
Cabolis said that the improvement for both Saudi Arabia and the UAE
came despite challenges in the economic performance of their
oil-dominated economies. But non-oil exporters in the Middle East,
such as Turkey and Jordan, suffered because of inflationary and
other fiscal challenges.
Singapore emerged as the most competitive economy in the world,
replacing the third-placed US, last year’s top economy. Hong Kong
was ranked second.
“Singapore’s rise to the top was driven by its advanced
technological infrastructure, the availability of skilled labor,
favorable immigration laws, and efficient ways to set up new
businesses. Hong Kong SAR held on to second place, helped by a
benign tax and business environment and access to business
finance,” IMD said.
“The initial boost to confidence from President Donald Trump’s
first wave of tax policies appears to have faded in the US,
according to the ranking. While still setting the pace globally for
levels of infrastructure and economic performance, the
competitiveness of the world’s biggest economy was hit by higher
fuel prices, weaker hi-tech exports and fluctuations in the value
of the dollar,” it added.
Ireland rose five places to rank 7th, while the UK — partly as a
result of Brexit uncertainty — slipped to 23rd. In Saudi Arabia,
Cabolis said that the strategy of economic diversification under
the Vision 2030 plan was “slow but noticeable” and had
contributed to the Kingdom’s rise.
However, the Kingdom performed comparatively poorly in some
categories, notably international trade, technology and
infrastructure, health and environment.
Challenges remain for Saudi competitiveness, IMD said. Policymakers
have to continue government efforts to boost the non-oil economy,
as well as to increase employment opportunities for young Saudi men
and women under the human capability development program.
They should also continue reforms to restructure and streamline
procedures and fees for licensing activities, and increase efforts
to attract foreign direct investment.
“Economists regard competitiveness as vital for the long-term
health of a country’s economy as it empowers businesses to
achieve sustainable growth, generate jobs and, ultimately, enhance
the welfare of citizens,” IMD said.

Main category: 

Saudi Arabia scores high on prices and tax efficiency: IMD
surveyUS-Saudi business council reports $13bn in contracts
Source: FS – All-News-Economy
Saudi Arabia most improved economy for business