Gulf states most competitive among Arab countries

Small Gulf states are the most competitive among Arab countries, according to a World Economic Forum report released on Saturday as Arab and world business leaders met here to discuss its findings. "Qatar is ranked first in the region, followed closely by the United Arab Emirates and Bahrain," said the WEF's Arab World Competitiveness Report 2005, which covered 12 Arab countries. Qatar earned high marks for its sound economy and business climate, smooth-working public institutions, and a fiscally prudent government that is largely free of corruption, the report said.

The United Arab Emirates, home to the tourist boomtown of Dubai, ranks a close second for many of the same reasons, with the tiny island nation of Bahrain coming in third, according to the rankings in the report. The report was released Saturday by the Geneva-based World Economic Forum, which is meeting here today. Ranking last were Lebanon and Yemen, respectively, due to security problems, high levels of debt and government corruption. The countries also suffer low national savings rates, poor credit ratings and high inflation. In Yemen, the report found the worst corruption in the region and a business community feeling "extremely pessimistic" about the country's economic prospects. "The small Gulf states are thus found to be the most competitive of the countries in the region, with stable macroeconomic environments and institutional reforms providing the background against which governments are engaged in processes of rapid modernization," said the report, prepared by a team of leading scholars. It said Arab countries need to significantly raise their competitiveness if they are to remain viable in the global economy in areas other than the energy.

In particular, they must improve macroeconomic management and institute reforms to enhance the efficiency of public sector institutions and, more generally, the quality of governance, and to facilitate the absorption of new technologies.

A study by Georgetown University economics professor Tarek Yussef included in the report identified government intervention and poor administration as obstacles to the emergence of a strong private sector in the region.

The slow pace of economic reforms and a climate not attractive to investment explain the private sector's disappointing contribution to productivity and investment, it said. Coming in fourth place was Oman, followed by Jordan, Tunisia, Saudi Arabia, Morocco, Egypt, Algeria, Lebanon and Yemen Some 200 Arab and world business, academic and political figures, in addition to 100 members of the Arab Business Council, attended Saturday's roundtable.