The Arab world must accelerate progress toward an innovation-driven economic model that creates productive jobs and widespread opportunities, according to the World Economic Forum.
Its Arab World Competitiveness Report 2018 said that in spite of unprecedented improvements in technological readiness, the Arab World continues to struggle to innovate and create broad-based opportunities for its youth.
It said government-led investment alone in the region will not suffice to channel the energies of society toward more private sector initiative, better education and ultimately more productive jobs and increased social mobility.
The report ranked the UAE as the most competitive country in the region and 17th globally, with Saudi Arabia ranked 30th.
The rankings are based on 12 factors, from education to infrastructure, that are critical for productivity and economic growth.The report added that the gap between the competitiveness of the Gulf Cooperation Council (GCC) and of the other economies of the region, especially the ones affected by conflict and violence, has further increased over the last decade.
“However, similarities exist as the drop in oil prices of the past few years has forced even the most affluent countries in the region to question their existing social and economic models,” the report noted.
The World Economic Forum said that across the region, education is currently not rewarded with better opportunities to the point where the more educated the Arab youth is, the more likely they are to remain unemployed.
It added that financial resources, while available through banks, are rarely distributed out of a small circle of large and established companies and a complex legal system limits access to resources locked in place and distorts private initiative.At the same time, the report said a number of countries in the region are trying out new solutions to previously existing barriers to competitiveness.
The UAE was highlighted for increasing equity investment in technology firms from $100 million to $1.7 billion in just two years while Bahrain is piloting a new flexi-permit for foreign workers to go beyond the usual sponsorship system that has created inefficiencies in the labour market of most GCC countries. It also praises Saudi Arabia for committing to significant changes to its economy and society as part of its Vision 2030 reform plan.
“We hope that the 2018 Arab World Competitiveness Report will stimulate discussions resulting in government reforms that could unlock the entrepreneurial potential of the region and its youth,” said Philippe Le Houérou, CEO of the International Finance Corporation, which partnered to produce the report.
“We must accelerate progress toward an innovation-driven economic model that creates productive jobs and widespread opportunities.”
For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
more recommended stories
Revealed: the average flight delay you can expect in the Gulf
Concerns have been voiced over air.
Coffee shop chain eyes 40 Gulf outlets by 2020
ICONS Coffee Couture, a health conscious.
Young Arabs believe religion is key to their identity
Young Arabs believe that religion is.
Oil price could touch $100 on supply crunch, says Citi
Oil prices are likely to be.