The UAE made significant advances in competitiveness globally and regionally last year, with the country improving its business friendly environment and serving as a springboard for more start-ups, according to the latest survey from IMD Business School.
The UAE edged up two notches to fifth place in the IMD World Competitiveness Rankings out of 63 countries. In its peer group of countries across Europe, the Middle East and Africa the country rose to second place, from fourth.
"The two main components of the UAE's success this year are government efficiency – including good management of public finances and tax policies – and business efficiency, such as labour market productivity and management processes, helping companies to adapt to changing market conditions," Christos Cabolis, chief economist of the IMD World Competitiveness Center, told The National.
The UAE topped the global ranking for improvements in business efficiency, rising to first position from 18th in four years since 2015, according to the survey. The country ranked second for government efficiency, from third in 2015 and seventh in 2016.
The business school interviewed mid- and upper-tier managers globally and received around as many as 6,500 responses. The number of UAE responses was not provided.
Growing the number of patents in force and patent applications per capita – which points to an uptick in innovation and entrepreneurship - are among the other 15 biggest improvements the UAE has made since 2018. The country has also advanced when it comes to reducing the time it takes to launch a start-up.
The economic resilience of the UAE has strengthened over the past year, as the level of government subsidies and cost of capital fell while the private sector matures, the survey found.
In the past 12 months, the UAE took measures to strengthen its economy and further boost the private sector to mitigate against lower oil revenues. Last year, Abu Dhabi’s government announced a Dh50 billion economic stimulus and the country has implemented reforms, including lowering business registration fees.
The UAE’s GDP growth is expected to strengthen this year, boosted by higher levels of government spending and increased oil production, with headline economic growth forecast to rise to 2.2 per cent from an estimated 1.7 per cent in 2018, according to the latest outlook from Oxford Economics and the ICAEW in April. The International Monetary Fund’s earlier projections depicteds even stronger growth, of 3.7 per cent in 2019.
On infrastructure, which includes technology, science, health and education, the UAE moved up to 32nd place – from 38th in 2015. Given the importance the UAE government has placed on the knowledge economy to drive future growth, “more concentration is needed to boost scientific infrastructure in particular, including investment in research and development, R&D output and human resources”, Mr Cabolis said.
Globally, Singapore was ranked the world’s most competitive economy for the first time since 2010 – boosted by advanced technology, skilled labour and efficiency – while the US slipped from top spot to third position and economic uncertainty took its toll on Europe.
Hong Kong occupied second position in the ranking, helped by its favourable tax environment and access to finance.
The Arabian Gulf’s biggest economy, Saudi Arabia, climbed 13 places to 26th, on stronger trade revenues.
