Kingdom scores high on prices and tax efficiency, IMD survey finds

The Kingdom was ranked highly for its consumer price inflation policy and exchange rate management. (AFP)
Updated 23 May 2018
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Kingdom scores high on prices and tax efficiency, IMD survey finds

  • Kingdom ranks second in the world for pricing of goods and services, according to IMD survey.
  • Kingdom slips three places to 39th position out of 63 countries assessed.

DUBAI: Competitive pricing and an efficient tax regime are two big highlights of the Saudi Arabian economy according to the annual ranking of global competitiveness by the Swiss business school IMD.
The Kingdom ranks second in the world for pricing of goods and services, and seventh for the efficiency of the government’s tax regime, according to the IMD’s World Competitiveness Ranking 2018.
But despite improvements in some areas of the economy, Saudi Arabia slipped three places in the global rankings, to 39th position out of 63 countries assessed.
IMD said that most countries in the Middle East overcame political tensions in the region to experience improvements in their competitiveness. The UAE was the top ranked, in 7th position, mainly due to strengthening of its international trade.
In a survey of executive opinion which accompanied the rankings, large proportions of respondents identified Saudi Arabia’s cost of competitiveness (53.7 percent), the dynamism of its economy (52.4 percent) and its competitive tax regime (45.1 percent) as key reasons for the attractiveness of the economy.
The Kingdom was ranked highly for its consumer price inflation policy and exchange rate management, and for its efficiency in assessing and collecting consumer and other taxes. Expenditure on education was also highly rated.
However, IMD also identified five key challenges in the current year to enhance overall competitiveness: Balancing the budget deficit and mitigating exposure to oil price fluctuations; developing legal and regulatory frameworks to support privatization and the development of strategic sectors in the Vision 2030 strategy.
It also stressed the need to develop human capital and increase workforce participation for men and women; continue the changes to the fees structure for business startups; and the need to adopt international best practice for licensing activities.
The US was the highest ranked country in the survey, now in its 30th year, overtaking Hong Kong in the top slot. Singapore, the Netherlands and Switzerland made up the rest of the top five countries.
The return of the US to the top slot was driven by its strength in economic performance and infrastructure, which were both ranked No. 1 in the world. Nordic countries and Canada comprised the rest of the top ten, along with the UAE.
Two big risers in the 2018 rankings are Austria (18th, up seven places) and China (13th, up five places).
Professor Arturo Bris, director of the Geneva-based World Competitiveness Center, said: “This year’s results reinforce a crucial trait of the competitiveness landscape. Countries undertake different paths toward competitiveness transformation. Countries at the top of the rankings share an above average performance across all competitiveness factors, but their competitiveness mix varies. One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure; another may approach competitiveness through their governmental efficiency.”
The bottom five economies show a slight change in their performance, especially those countries that have experienced economic and political distress in the past few years. While Mongolia (62) and Venezuela (63) remained in the last positions, Ukraine (59) and Brazil (60) improved.
Brazil’s improvement is the first since 2010 due to a positive shift in real GDP and employment. Ukraine increased because of its business efficiency. Their rise pushed Croatia down two places to 61, IMD said.


Companies in Oman need government permission before hiring expats

Updated 09 December 2018
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Companies in Oman need government permission before hiring expats

  • A new traffic light-themed online system is currently being rolled out in Oman, in which companies’ Omanization quotas are being monitored
  • “The new system focuses on enhancing Omanization rates in the private establishments”

DUBAI: Oman-based companies will have to secure the Ministry of Manpower’s go ahead before they can hire expats, local daily Times of Oman reported this week.
A new traffic light-themed online system is currently being rolled out in Oman, in which companies’ Omanization quotas are being monitored.
Under this new system, companies that meet Omanization standards set by the government will receive a green signal online, allowing them to proceed with hiring expat employees.
Companies with unclear Omanization policies will be given a yellow signal, while companies that fall short of meeting their quotas will receive a red signal, barring them from moving forward with hiring expat employees.
“The new system focuses on enhancing Omanization rates in the private establishments,” said a ministry spokesperson.
The step taken by the government is part of the Omanization drive to recruit more of its citizens in private companies, a similar push is underway across the GCC where countries like Saudi Arabia and Kuwait have also been trying to increase the number of nationals in private sector employment.

Earlier this year, expat workers in the country faced a six-month visa ban across 87 industries, including media, engineering, marketing and sales, accounting and finance, IT, insurance, technicians, administration and HR.