UAE still the most prosperous Arab nation, study finds
The UAE maintained its position as the most prosperous country in the Arab world for the 12th year in a row, a new study found, with the country ranked highly for its “ease of starting a business”.
According to the 2018 Legatum Prosperity Index, a global ranking that reflects the wealth and well-being of 149 countries, the UAE came in 39th - retaining the same position for the last three years.
“The UAE ranks among the top 40 most prosperous nations in the world because of its world-class economic quality, business environment, social capital and health, which all score among the top 25 countries in the world,” said Mark Lunn of Legatum. “That is an outstanding result and these are the drivers of such high living standards in the UAE.”
The UAE is also one of the biggest risers for its ease of starting a business, moving from 81st to 45th position in the last 10 years, according to Legatum.
Earlier this month, the UAE climbed 10 spots to 11th place in the World Bank’s annual ease of doing business ranking, following a package of reforms in the past year that boosted the country’s economic competitiveness.
“A continuous and focused reform agenda keeps an economy competitive and vigilant,” the World Bank said.
According to the Prosperity Index, Bahrain was ranked 62 and Oman 73.
Oman also ranked 52nd for business environment, making it the second most-improved regionally, behind the UAE, in the ease of starting a business over the last 10 years.
Graphic by Roy Cooper
The index said the basis of prosperity for the Gulf countries comes from “good ranks in safety and security as well as relatively strong economic foundations. The area is also particularly successful in health, outperforming many countries in the world”.
The economic foundations have also continued to improve, with the Gulf area open to reform. The Prosperity Index cited the World Bank’s ease of doing business report, where Saudi Arabia is ranked the second best reformer among high-income countries.
The Legatum report said the Gulf scored well for social tolerance and having a “a strong rule of law’ with all countries ranked within the top 50 for judicial independence.
“For example, the UAE is second globally for tolerance to immigrants,” it said.
The wider Mena region’s business environment has also experienced “a clear and consistent rise since 2007", where various countries have improved access to credit and ease of starting a business, the report found.
However, despite positive results for the GCC, Mena overall was one of only two regions globally to experience a decline in overall prosperity this year, with 11 of 18 countries’ scores dropping since 2017.
The report found that of the 20 nations whose prosperity fell the most over the last decade, 12 are in Africa and the Middle East.
Many of these countries “lack the institutional resilience to recover from major setbacks,” the report said. “Others are war-torn and highly insecure places to live, and are fast-becoming the source of a significant proportion of the world’s forced migration, having a disproportionate impact on their neighbours, as seen following the civil war in Syria.”
Health was also a factor regionally, as the level of obesity in the adult population rose in every Mena country this year, with the largest risers the UAE, Algeria and Egypt.
“This is already a significant issue in Mena, with the percentage of the population classed as obese ranging from 26 per cent to 38 per cent across the region,” the report found.
The Legatum Institute also found a significant divergence in prosperity between the wealthier Gulf states and the poorer and less stable North African countries.
“In sub-Saharan Africa, one of the greatest challenges lies in improving the Education pillar, where the region lags significantly behind the rest of the world, both in enrolment levels and the quality of education,” it said.
Overall the index is at its highest level in its 12-year history, with more people living prosperous lives than ever before.
Norway topped the rankings for the second year in a row due to having the best safety and security in the world, as well as coming in the top 10 in all nine criteria except business environment.
However, the gap between countries with the highest and lowest prosperity is widening, the index found.
Asia-Pacific is the fastest growing region over 10 years, with many middle and lower-ranking countries improving their prosperity levels the fastest, such as Nepal, Indonesia and India.
“A nation is prosperous when it has an open economy, an inclusive society with strong institutions and empowered people who are healthy, educated and safe. Safety and security is fundamental to prosperity and the cornerstone on which to build all the pillars of prosperity,” said Stephen Brien, director of policy at the Legatum Institute.
Business licences issued in the UAE rose by 9 per cent on 2017 from the start of this year to the end of August, according to the Ministry of the Economy.
A total of 532,000 licences were issued in the period, with the emirates of Abu Dhabi and Dubai accounting for about 85 per cent of that figure.
This week Abu Dhabi reduced the fees for issuing country-of-origin certificates as part of incentives aimed at attracting foreign direct investments and lowering the cost of doing business.
The Abu Dhabi Chamber of Commerce is undertaking seven initiatives out of 10 announced in June as part of a three-year Dh50 billion stimulus package, which aims to diversify the economy away from oil and make it easier for companies to do business.
Dubai has also introduced a series of initiatives to ease business conditions. In June, the Dubai World Trade Centre, a commercial free zone in the emirate, slashed licensing and incorporation fees for businesses by up to 70 per cent, joining other commercial hubs in efforts to boost foreign investments inflows into Dubai.
Editor's Note: This article was originally published in The National on Thursday November 28th, 2018 http://bit.ly/TheNationalUAEProsperity