SHARJAH, 5 June 2005 — The World Economic Forum (WEF) has given high marks to the UAE’s fast pace of expansion and certified the country as the most transparent in customs procedures.
The certification also took in to consideration the efficiency of customs procedures, organized efforts to improve competitiveness, trade barriers, imports, exports, interest rate spread and inflation as against the performance of some advanced and industrial countries.
In its in Global Competitiveness Report 2004-05, the WEF reviewed various aspects of the economy such as macroeconomic environment, public institutions, technology, quality of national business environment, sophistication of company operations and strategy. The report said it took into consideration each factor and compared it with those in other countries of the world and found that the UAE, especially Dubai, which is the international business hub, as holding higher ranks in many crucial factors, even surpassing them. On business impact of customs procedures, the UAE was rated the 4th, whereas advanced countries like Germany and Australia have been ranked 10th and 13th respectively.
In customs procedures, the UAE was the 3rd rank as against advanced countries like the UK, Australia and US ranking 14th, 18th and 17th respectively. When openness of customs regime is considered, UAE retains its 3rd rank while Australia is ranked 21st, US 19th and UK 12th.
In organized effort to improve competitiveness, the UAE is placed 3rd, while other developed countries like Australia, UK and US are placed in the 13th, 17th and 20th ranks. It shows that in the UAE, markets are far more competitive and prices much more stable than in these highly developed economies. As a result, the inflationary tendencies are much less in UAE, lending stability to economic growth.
When inflation is considered, the UAE has been estimated to have an inflationary rate of 2.8 percent as computed by percentage change in consumer price index.
When compared with advanced economies like Germany (1.1 percent), Switzerland (0.6 percent) and UK (1.4 percent), it is slightly high. The reason that can be ascribed to this comparatively high rate of inflation is the huge developmental expenditure that is being injected into the income stream of the economy. It increases the purchasing power of the people, precipitating a gap between demand and supply forces, reacting on the price level and precipitating an inflationary spiral.
Regarding tax burden on enterprises, the UAE stands second with 1.6 percent. Bahrain tops the list with 1.5 percent tax. All the other countries in the world have been estimated to having higher percentage of tax burden on their enterprises. The lower the tax burden, the higher and the brighter the business prospects.