Saudi Arabia has broken into the top 20 most competitive economies of the world for the first time, which also saw other Gulf countries continue their upward trend of recent years.
The Global Competitiveness Report 2011-12, released Wednesday by the World Economic Forum (WEF), put Saudi Arabia at No. 17 from No. 21 in 2010-11. Qatar (14th) solidifies its place in the top 20, followed by the United Arab Emirates (27th), Kuwait (34th) and Bahrain (37th).
Commenting on the improvement in Saudi Arabia's ranking, Jarmo T. Kotilaine, chief economist at the National Commercial Bank (NCB), said: "The ranking highlights the payoff of years of prudent policymaking and regulatory overhaul. At a time when the global storm clouds are gathering, Saudi Arabia as well as Qatar are consolidating their positions as attractive places to do business. This underscores the value of the strategic approach these Gulf economies have adopted in their policymaking.
"Somewhat more problematically, the current global environment will make it challenging for any economy to attract foreign direct investment, but the ability of Saudi Arabia to appeal to investors seeking long-term value creation has been further enhanced. This should bolster the resilience of the Kingdom at times of global uncertainty."
Over the past year, the Middle East and North Africa (MENA) region has been affected by a great deal of turbulence that will have an impact on national competitiveness and might further exacerbate the competitiveness gap between the Gulf economies and the rest of the region. This trend is reflected in this year's GCI results, where most Gulf countries continue to move up in the rankings, while the competitiveness of many countries from North Africa and the Levant stagnates or deteriorates. One country, Yemen, has been added to the sample this year and enters at 138th position.
Switzerland tops the overall rankings while Singapore overtakes Sweden for second position. Northern and Western European countries dominate the top 10 including Sweden (3rd), Finland (4th), Germany (6th), the Netherlands (7th), Denmark (8th) and the United Kingdom (10th).
The United States continues its decline for the third year in a row, falling one more place to fifth.
Germany maintains a strong position within the euro zone, although it goes down one position to sixth place, while the Netherlands (7th) improves by one position in the rankings. France drops three places to 18th, and Greece continues its downward trend to 90th.
The WEF report shows that while competitiveness in advanced economies has stagnated over the past seven years, in many emerging markets it has improved, placing their growth on a more stable footing and mirroring the shift in economic activity from advanced to emerging economies.
China (26th) continues to lead the way among large developing economies, improving by one more place and solidifying its position among the top 30. Among the four other BRICS economies, South Africa (50th) and Brazil (53rd) moved upward while India (56th) and Russia (66th) experienced small declines. Several Asian economies performed strongly, with Japan (9th) and Hong Kong (11th) also in the top 20.
The Global Competitiveness Report 2011-2012 comes out amid multiple challenges to the global economy. After a number of difficult years, a recovery from the economic crisis is tentatively emerging, although it has been very unequally distributed: Much of the developing world is still seeing relatively strong growth, despite some risk of overheating, while most advanced economies continue to experience sluggish recovery, persistent unemployment, and financial vulnerability, with no clear horizon for improvement.
This year's competitiveness report features a record number of 142 economies, and thus continues to be the most comprehensive assessment of its kind.