KUWAIT: Kuwait leaped eight spots to rank 46 out of 141 countries on the World Economic Forum’s Global Competitiveness Index, a signal that government efforts to improve Kuwait’s investment climate and diversify the oil-based economy are starting to pay dividends. Kuwait earned the label “most improved in the [MENA] region”, scoring high in macroeconomic stability, health and financial sector, though it earned lower marks for institutions, labor markets and innovative capabilities.
Among the Gulf states, UAE ranked highest at 25, Qatar came next at 29 and Saudi Arabia 36. Bahrain at 45 scored just above Kuwait, and Oman completed the GCC states at 53. The annual WEF report examines a variety of factors including macroeconomic stability, labor market, institutions, infrastructure, innovation, business dynamism, health, skills and adoption of ICT. It then ranks the world’s economy on a variety of subfactors, positing that these are the key factors that produce economic growth and stability.
“The Global Competitiveness Index 4.0 (GCI 4.0) provides stakeholders with a detailed map of the factors and attributes that drive productivity, growth and human development,” the report notes. The WEF report is utilized by governments and investors as one way to gauge a country’s economic potential and especially its attractiveness to foreign investors.
“The Global Competitiveness Report is designed to help policymakers, business leaders and other stakeholders shape their economic strategies in the era of the Fourth Industrial Revolution,” writes WEF founder Klaus Schwab in the report’s preface. Performance of economies across the globe, however, received mixed ratings and the WEF report notes that changes to fiscal policy and other political tools may be needed in the coming decade to exploit the disruptions created by the technological and digital revolutions.
“The report demonstrates that 10 years on from the financial crisis, while central banks have injected nearly 10 trillion dollars into the global economy, productivity-enhancing investments such as new infrastructure, R&D and skills development in the current and future workforce have been suboptimal. As monetary policies begin to run out of steam, it is crucial for economies to rely on fiscal policy, structural reforms and public incentives to allocate more resources towards the full range of factors of productivity to fully leverage the new opportunities provided by the Fourth Industrial Revolution,” Schwab writes.
Improving Kuwait’s competitiveness has been a key focus of government policy in recent years, with a slate of initiatives aimed at easing investor access to local markets, reforming the bourse and establishing entities like KDIPA (Kuwait Direct Investment Promotion Authority) to facilitate and promote foreign investment in the country. At the same time, the government has set up ‘business centers’ aimed at reducing bureaucracy in starting new businesses.
By Jamie Etheridge