Policies win Kingdom accolades from WEF

JEDDAH: Saudi Arabia has won 18th position among 144 countries in the Global Competitiveness Report 2012–2013 published by the World Economic Forum based in Geneva.
“The Kingdom won top placing in the WEF report as a result of different positive indicators including the growing confidence of Saudis in the country’s government and decision-makers,” the Saudi Press Agency said.
Saudi Arabia’s effort to combat corruption was another reason that qualified it to become the second country from the Gulf region to top the prestigious listing. Qatar was listed 11th while UAE got the 24th position. Switzerland is No. 1 on the list followed by Singapore, Finland, Sweden and Holland.
The official agency said Saudi Arabia got fifth position in areas such as protecting intellectual property rights, diversity of government spending and independence of judiciary and careful use of public funds.
“Saudi Arabia maintains the second-best place in the region and falls by one position from 17th to 18th position overall,” the report said. The country has seen a number of improvements to its competitiveness in recent years that have resulted in a solid institutional framework, efficient markets, and sophisticated businesses, the report added.
The Kingdom scored high points on excellent telecom and communication facilities, efficiency in settling disputes, good corporate performance, efficiency of monitoring agencies, fighting monopoly and quality of taxation system.
Higher macroeconomic stability (6th) and more prevalent use of ICT for productivity improvements contribute to maintaining Saudi Arabia’s strong position in the GCI. Its macroeconomic environment benefits from rising energy prices, which buoyed the budget balance into an even higher surplus in 2011.
As much as the recent developments are commendable, the country faces important challenges going forward, the report said. “Health and education do not reach the standards of other countries at similar income levels,” it pointed out.
Although some progress is visible in health outcomes, improvements are being made from a low level. As a result, the country continues to occupy low ranks in the health and primary education pillar (58th), and room for improvement remains on the higher education and training pillar (40th) as well.
“Boosting these areas, in addition to fostering a more efficient labor market (59th), will be of great significance to Saudi Arabia given its growing number of young people who will enter the labor market over the next several years,” the report said.
More efficient use of talent will increase in importance as global talent shortages loom on the horizon and the country attempts to diversify its economy, which will require a more skilled and educated workforce. “Although some progress has been recorded over the past years, the use of the latest technologies can be enhanced further (35th), especially as this is an area where Saudi Arabia continues to lag behind other Gulf economies,” the report said.
The WEF report described world economic outlook as fragile. “Global growth remains historically low for the second year running with major centers of economic activity — particularly large emerging economies and key advanced economies — expected to slow in 2012–13, confirming the belief that the global economy is troubled by a slow and weak recovery,” it pointed out.
The International Monetary Fund (IMF) estimates that, in 2012, the euro zone will have contracted by 0.3 percent, while the United States is experiencing a weak recovery with an uncertain future. Large emerging economies such as Brazil, the Russian Federation, India, China, and South Africa are growing somewhat less than they did in 2011.
“At the same time, other emerging markets — such as developing Asia — will continue to show robust growth rates, while the Middle East and North Africa as well as sub-Saharan African countries are gaining momentum,” the report said.
Recent developments — such as the danger of a property bubble in China, a decline in world trade, and volatile capital flows in emerging markets — could derail the recovery and have a lasting impact on the global economy.