DUBAI: Saudi Arabia has risen two places in the annual world competitiveness rankings calculated by the Switzerland-based International Institute for Management Development (IMD).
The rise — from 26 to 24 out of 63 countries ranked in the prestigious report — reflected a surge in the value of the Kingdom’s stock market after the record listing of Saudi Aramco last year, as well as a positive view by global business executives of its economic dynamism, policy stability and reliable infrastructure.
Arturo Bris, director of the IMD World Competitiveness Center, told Arab News that Saudi Arabia is “doing competitiveness by the book,” and praised the Vision 2030 strategy.
“Five years ago, Saudi Arabia was in the bottom 10 in the world for competitiveness. Now it has reached number 24,” he said.
“Vision 2030 has written the competitiveness playbook, and is a case study for the rest of the world.”
— CIC Saudi Arabia (@CICSaudi) June 16, 2020
The rankings are calculated on economic data relating to last year, before the global COVID-19 pandemic struck, but also take in the views of business executives surveyed between February and April this year, when the Kingdom and the world were in the middle of economic lockdown.
The IMD warned that the Kingdom faces challenges this year, including the need to “raise the regional competitiveness within Saudi Arabia to align with Vision 2030 goals.”
It also has to “continue the strategic government initiatives to mitigate economic loss” during the pandemic.
Bris said the pandemic will have a big impact on Saudi Arabia as the process of diversification away from oil dependency is still underway, and much depends on the response of policymakers to the economic impact of the crisis.
“I’m not sure that the new tax rules are a move in the right direction. Liquidity injections into the banking system are positive initiatives, but they don’t necessarily transfer into more competitiveness,” he added.
Saudi Arabia has big advantages over many countries in the form of large financial reserves and low indebtedness, which give it the capacity to raise funds on global capital markets.
“Saudi has huge horsepower in its ability to raise debt and in reserves. The purpose of a sovereign wealth fund is to support the sustainability of the economy for future generations,” Bris said.
Weaknesses perceived by executives in the Saudi economy in 2019 included relatively low income growth per capita and continued over-reliance on oil as is main export, the IMD survey found.
Singapore came top of the global rankings for the second consecutive year, followed by Denmark and Switzerland.
The US fell seven places to 10, one slot below the UAE, which was the top-ranking Middle East country.