IMD World has ranked Qatar as the most competitive economy in the Middle East in its 2016 Competitiveness Yearbook.
The rankings, produced by Swiss business school IMD for the past 25 years, cover 61 economies around the world. The rankings are based on 340 criteria centered on economic performance, government efficiency, business efficiency and infrastructure, as well as on a survey of 5,400 business executives.
Qatar was ranked in the 13th position and the United Arab Emirates was ranked in the 15th position. Other major regional economies, including Saudi Arabia, Egypt and Iran, are not included in the rankings.
The 2016 edition ranks China Hong Kong first, Switzerland second and the USA third, with Singapore, Sweden, Denmark, Ireland, the Netherlands, Norway and Canada completing the top 10.
Professor Arturo Bris, Director of the IMD World Competitiveness Center, said a consistent commitment to a favorable business environment was central to China Hong Kong’s rise and that Switzerland’s small size and its emphasis on a commitment to quality have allowed it to react quickly to keep its economy on top.
“The USA still boasts the best economic performance in the world, but there are many other factors that we take into account when assessing competitiveness,” he said.
“The common pattern among all of the countries in the top 20 is their focus on business-friendly regulation, physical and intangible infrastructure and inclusive institutions.”
A leading banking and financial center, China Hong Kong encourages innovation through low and simple taxation and imposes no restrictions on capital flows into or out of the territory.
It also offers a gateway for foreign direct investment in China Mainland, the world’s newest economic superpower, and enables businesses there to access global capital markets.
China Hong Kong and Singapore aside, however, the research suggests Asia’s competitiveness has declined markedly overall since the publication of last year’s ranking.
Other Rankings: Doing Business, The Global Innovation Index
Taiwan, Malaysia, Korea Republic, and Indonesia have all suffered significant falls from their 2015 positions, while China Mainland declined only narrowly retaining its place in the top 25.
The study reveals some of the most impressive strides in Europe have been made by countries in the East, chief among them Latvia, the Slovak Republic and Slovenia.
Western European economies have also continued to improve, with researchers highlighting the ongoing post-financial-crisis recovery of the public sector as a key driver.
Meanwhile, 36th-placed Chile is the sole Latin American nation outside the bottom 20, while Argentina, in 55th, is the only country in the region to have improved on its 2015 position.
Each ranking is based on analysis of over 340 criteria derived from four principal factors: economic performance, government efficiency, business efficiency and infrastructure.
Responses from an in-depth survey of more than 5,400 business executives, who are asked to assess the situation in their own countries, are also taken into consideration.
Professor Bris said: “One important fact that the ranking makes clear year after year is that current economic growth is by no means a guarantee of future competitiveness.
“Nations as different as China Mainland and Qatar fare very well in terms of economic performance, but they remain weak in other pillars such as government efficiency and infrastructure.”
Data gathered since the first ranking was published more than 25 years ago also lend weight to fears that the rich are getting richer and the poor poorer, said Professor Bris.
“Since 1995 the world has become increasingly unequal in terms of income differences among countries, although the rate of increase is now slowing,” he said.
“The wealth of the richest countries has grown every year except for the past two, while the poorer countries have seen some improvement in living conditions since the millennium.
“Unfortunately, the problem for many countries is that wealth accumulation by the rich doesn’t yield any benefits for the poor in the absence of proper social safety nets.
“Innovation-driven economic growth in poorer countries improves competitiveness, but it also increases inequality. This is obviously an issue that demands long-term attention.”
For more information, please visit IMD.