LAUSANNE — The 30th edition of the IMD World Competitiveness Yearbook, saw a slight decrease in the ranking of the Kingdom of Saudi Arabia, moving down three places, and landing on 39th.
Despite experiencing a minor decline, the Kingdom saw a remarkable improvement in various indicators, such as public finance, which in turn lead to an improved basic infrastructure. Additionally, Saudi saw an increase in the number of international investments as well as international trade throughout the year. Something which can be seen as a direct result of the reforms the kingdom is experiencing. Similarly, the societal framework, and overall attitudes and values indicators saw an improvement as well.
In spite of improved performance in these indicators, Saudi’s quest to rank among the world’s top competitive countries is long. The Kingdom still ranks low in finance and domestic economy, and is challenged in balancing the budget deficit due to fluctuations in oil prices. Additionally, the labor market saw a remarkable decline from 35th to 57th place. Something that can be closely linked to the low number of women in employment.
With the Saudi Vision 2030 already in full bloom, there is no doubt that Saudi economy’s will catch up its neighboring countries in securing top rankings in the coming years. For developing the Saudi human capital especially youth and women, falls in line with the Vision 2030 objectives of driving a sustainable economy in the Kingdom will undoubtedly play a leading role in stimulating its national economy and increasing its competitiveness.
Professor Arturo Bris, director of the IMD World Competitiveness Center, said “Saudi Arabia is undergoing an important phase of reforms which might have increased perceptions of uncertainty about the future. Also, the country is currently pursuing a strategy of diversification of its economy in order to reduce the dependence from the oil sector. These changes as well as a slowdown in GDP growth and gross fixed capital formation led to a decline of three positions in the 2018 ranking with respect to last year.”
Globally, the 2018 rankings emphasize a long-term trend highlighted in past editions — that the countries on the top of the list each have a unique approach to becoming competitive.
The top five most competitive economies in the world remain the same as in the previous year, but their order changes. The United States returns to the first spot, followed by Hong Kong, Singapore, the Netherlands and Switzerland. The United States improves three positions from last year while Hong Kong drops one spot and Singapore remains 3rd. The return of the United States to the top is driven by its strength in economic performance (1st) and infrastructure (1st). Hong Kong takes a somewhat different approach exploiting its government efficiency (1st) and business efficiency (1st).
The Netherlands moves one place to 4th, swapping with Switzerland which moves down to 5th. The Netherlands’ advancement shows a “balanced” path to competitiveness, ranking in the top 10 in economic performance, government and business efficiency. Switzerland declines mainly due to a slowdown in exports and, to a lesser extent, an increase in perceptions about threats of relocation of R&D facilities.
The remaining places in the top 10 are occupied largely by Nordic countries: Denmark, Norway and Sweden rank 6th, 8th and 9th respectively. These countries show strong performance in the overall productivity of the private sector and its management practices. The UAE (7th) and Canada (10th) close the top of the rankings. Other high performing economies advanced even further this year. Notably, Austria (18th) and China (13th) considerably improve their positions by seven and five places respectively.
Regionally, despite the increase of political tensions in the area, other Arabic countries experienced competitiveness improvements with the UAE being the only Arab country to rank in the top ten (7th), while Qatar ranked in the top 20 (14th), and Jordan climbed four positions to land 52nd.
The IMD World Competitiveness Center, a research group at IMD business school in Switzerland, has published the rankings every year since 1989. It compiles them using 258 indicators. ‘Hard’ data such as national employment and trade statistics are weighted twice as much as the ‘soft’ data from an Executive Opinion Survey that measures the business perception of issues such as corruption, environmental concerns and quality of life. This year 63 countries are ranked. — SG