DOHA, 5 April 2005 — Saudi Arabia has been commended for its “extremely low inflation” in a survey of 12 Arab countries by Geneva-based World Economic Forum.
The Forum’s Arab World Competitiveness Report, which was released at a conference in Doha this week, said the Kingdom has “one of the most stable macroeconomic environments in the region.”
The competitiveness report ranks the 12 nations based on the quality of public institutions, the ability to adopt and develop technology and their economic structure.
Qatar, the United Arab Emirates and Bahrain are placed at the top of the report’s Growth Competitiveness Index for the 12 nations covered. “The small Gulf states are found to be the most competitive” as measured by the index.
Saudi Arabia ranks seventh in the index, listed after Oman, Jordan and Tunisia. The countries measured “as being the least competitive” are Lebanon and Yemen. Morocco, Egypt and Algeria are placed below Saudi Arabia in the index.
Among the countries assessed for the “state and usage of technology”, Saudi Arabia is placed sixth in the survey, coming in the middle among the group.
The Kingdom, the report admits, “has one of the highest PC penetration rates in the region.” Despite that it “has significant weaknesses in harnessing information and communication technologies, with the government seen as not giving the adoption of these technologies a priority.”
The report finds that “as in several other countries innovation is also a clear weakness (in Saudi Arabia), with low company spending on research and development, and very little collaboration between businesses and universities in key areas of research.”
The Kingdom ranks only eighth in technology transfer, indicating that “little technology is being absorbed from abroad, except possibly in the energy sector through licensing agreements.”
Saudi Arabia’s poorest showing in the survey is in public institutions, where it ranks eighth overall. “Corruption is perceived as a more significant problem in Saudi Arabia, than in most other countries under assessment, especially as regards irregular payments for imports and exports,” the report claims.
“And while, as in most other countries, crime does not impose significant costs on businesses, there are problems reported in relation to contracts and law in the country.”
The report also points out that the business community in the country “considers that the government favors well-connected firms and individuals when deciding on policies and contracts.”
Discussing foreign direct investment (FDI) in the Arab world, the report states that in the Gulf region, Saudi Arabia accounts for the lion’s share of America’s FDI.
“More than half of US investment in Arab countries is concentrated in Saudi Arabia, Qatar, the UAE and Kuwait.” A major share of this investment is in petroleum and gas-related sector.
The Doha meeting, during which the Arab World Competitiveness Report was released, saw more that 200 delegates, mainly from business and politics, coming together to discuss ways to tackle the economic problems facing the region.