JEDDAH, 1 November 2007 — Saudi Arabia ranks 35th in The Global Competitiveness Report 2007-2008, released yesterday by the World Economic Forum. Several countries in the Middle East and North Africa region are in the upper half of the rankings, led by Kuwait (30th), Qatar (31st), Tunisia (32nd), Saudi Arabia (35th) and United Arab Emirates (37th).

The United States regained its status as the world’s most competitive economy, rebounding from sixth place last year and knocking off Switzerland from the top spot. The study by the Geneva-based forum said the United States was boosted by its close cooperation between universities and business on research and development, high intellectual property protection, as well as efficient use of employees and investment.

This year’s report has expanded coverage to 13 Arab economies — Algeria, Bahrain, Egypt, Jordan, Kuwait, Libya, Mauritania, Morocco, Oman, Qatar, Syria, Tunisia and United Arab Emirates. Libya, Oman and Syria are assessed for the first time. Rankings are presented in three country groups according to the stage of development to enable benchmarking against peers in other parts of the world.

United Arab Emirates is the most competitive economy in the Arab world among the countries at the third and most advanced stage of development according to report. It is followed by Qatar and Kuwait. Among countries at the second stage of development, Tunisia and Oman are the best performing Arab economies while Egypt is the regional best performer in the third group of countries.

China and India continue to lead the way among large developing economies. Chile is the highest ranked country in Latin America, followed by Mexico and Costa Rica. In sub-Saharan Africa, only South Africa and Mauritius feature in the top half of the rankings, with several countries from the region positioned at the very bottom. Nine Asia Pacific countries are among the top 30 in the GCI rankings, led by Singapore, Japan, Korea and Hong Kong.

“High oil prices and intensifying global trade linkages have led to very high rates of growth for the past half-decade in many of the region’s countries. Initial reform efforts carried out in recent years have also contributed to this outcome, but, as shown by the GCI results in many countries, the region is still far from realizing its full productive potential. This will require an acceleration of the reform process to tackle many of the obstacles to competitiveness and productivity. Leaders in the region must seize the opportunity afforded by the windfall oil revenues in the region, which provide a cushion for making the necessary reforms, and they must resist the temptation of allowing what may be a short-lived boon to lead to complacency,” said Margareta Dzreniek Hanouz, senior economist responsible for MENA competitiveness research at the World Economic Forum.

The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the report. This year, over 11,000 business leaders were polled in a record 131 countries. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

“Economic policy, especially at the microeconomic level, needs to set priorities that reflect the most important constraints to competitiveness in each country. The GCR enables countries to move beyond abstract theoretical policy debates and identify the specific tasks ahead of them,” said Michael E. Porter, Harvard Business School Professor, and co-director of the report.

“In an uncertain global financial environment it is more important than ever for countries to put into place the fundamentals underpinning economic growth and development. The Global Competitiveness Report 2007-2008 offers policy-makers and business leaders an important tool in the formulation of improved economic policies and institutional reforms,” noted Klaus Schwab, founder and executive chairman of the World Economic Forum.

However, the report pointed out that increasing public indebtedness in the US threatens to hamper the country’s growth.

“This danger has most recently been demonstrated by the fallout and contagion caused by the country’s subprime mortgage crisis and the ensuing global credit crunch,” said Xavier Sala-i-Martin, a professor of economics at Columbia University and one of the authors of the survey, adding that the weaknesses “present a risk to the country’s overall competitiveness potential and to the global economy as a whole.”

Switzerland was credited with an excellent capacity for innovation, a sophisticated business culture, outstanding scientific research institutions and strong intellectual property protection.

Denmark and Sweden were ranked third and fourth respectively, followed by Germany and Finland. The Nordic countries — traditionally strong in the survey — were praised for their budget surpluses and very low levels of public indebtedness.

Germany’s good performance is largely due to its high-quality infrastructure and the efficiency of its goods and financial markets, according to the survey. The same positive elements also boosted Britain, which came in ninth.

Singapore was ranked seventh, followed by Japan, Britain and the Netherlands.

China and India, two emerging economies, were in the middle of the 131-nation list.

China has improved to 34th from 54th last year. Its competitiveness was based mainly on its large market and a stable economy with low inflation and high savings.

India’s 48th place ranking was mainly attributed to the high availability of scientists and engineers and good quality of scientific research institutions in an economy with a large market size.

At the bottom of the list were countries primarily in sub-Saharan Africa, such as Mozambique, Zimbabwe, Burundi and Chad.