Saudi Arabia scores high on prices and tax efficiency: IMD survey

The Kingdom was ranked highly for its consumer price inflation policy and exchange rate management. (AFP)
Updated 24 May 2018

Saudi Arabia scores high on prices and tax efficiency: IMD survey

  • The Kingdom ranks second in the world for pricing of goods and service
  • IMD said that most countries in the Middle East overcame political tensions in the region to experience improvements in their competitiveness

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 number one 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 last 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.


NMC Health removes CEO amid investigation of UAE firm’s finances

Updated 27 February 2020

NMC Health removes CEO amid investigation of UAE firm’s finances

  • Chief Executive Prasanth Manghat was dismissed with immediate effect
  • Chief Operating Officer Michael Davis was appointed as interim CEO

NMC Health has removed Chief Executive Prasanth Manghat with immediate effect and granted its finance chief extended sick leave, as more details emerge from an investigation into the UAE health care firm’s finances.
Abu-Dhabi based NMC said after Wednesday’s market close that it had appointed Chief Operating Officer Michael Davis as interim CEO to succeed Manghat and said Chief Financial Officer Prashanth Shenoy had been placed on longer leave.
Manghat had been with NMC for about 10 years in various roles, including deputy CEO and CFO, and had seen the company through its 2012 listing on the London Stock Exchange.
The moves are the latest blow for the firm whose shares have lost about two thirds of their value since US-based short-seller Muddy Waters late last year questioned its financial statements.
NMC had said at the time that the report was “false and misleading,” but had opened its own investigation into company finances. The review is being led by Louis Freeh, who was director of the Federal Bureau of Investigation in the United States from 1993 to mid-2001.
NMC on Wednesday said the investigation committee had identified supply chain financing arrangements that were entered into by the company and “which are understood to have been used” by entities controlled by founder BR Shetty and former vice-chair Khaleefa Butti Omair Yousif Ahmed Al Muhairi.
Reuters was unable to reach Manghat, Shetty and Muhairi for comment outside business hours on NMC’s latest statement.
The company, which operates clinics and hospitals, specialized maternity and fertility clinics, and long-term care homes in 19 countries, said the committee was reviewing a drawdown of its facilities that had not been disclosed or approved by the board.
Its shares closed 6.6% higher before Wednesday’s statement.
NMC also said it had suspended a member of its treasury team over possible discrepancies in its bank statements and ledger entries, and said it would be unable to publish its annual results till at least the end of April.
Indian billionaire Shetty resigned as NMC’s co-chairman this month, after British regulators said they were looking into NMC following a disclosure that he had misstated the size of his stake.
Shetty had said this month that his NMC shareholdings were under a legal review looking into a large portion of his shares signed to two of NMC’s top investors in 2017, while some of his other stock had been pledged as security against loans.