In the news: UAE’s measures of success

The UAE ranks highly in competitiveness, but its economic growth is dampened
by Bethan Rees

The UAE is placed in fifth position globally and first in the Middle East in the Swiss-based Institute for Management Development (IMD) World Competitiveness Rankings 2019, according to Bernd Debusmann Jr for Arabian Business

The rankings place the UAE “first globally for business efficiency and [it] outshines other parts of the world with regards to productivity, digital transformation and entrepreneurship”. Saudi Arabia climbed the ranks to 26th position, up 13 places from 2018. It also has the highest global ranking for investment in education and performed positively in public and business finance.

Singapore comes first for the most competitive economy – the first time since 2010 – and the US has dropped two places to third “after being badly hit by higher fuel prices, weaker high-tech experts and fluctuations in the value of the dollar”. 

The IMD rankings were established in 1989 and incorporate 235 indicators from each of the 63 ranked economies, which are measured using factors such as GDP, social cohesion and government spending on health and education. Arturo Bris, IMD professor and director of the IMD World Competitiveness Center, which compiles the rankings, is quoted: “In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity. 

“A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” Bris concludes.

Arabian Business article

Revised projectionsHowever, news of the UAE’s economic growth is not so positive. The UAE is the Organization of the Petroleum Exporting Countries’ (OPEC) third biggest producer, but its economic growth in 2019 is set to fall short of previous estimates and projections, reports Abeer Abu Omar for Bloomberg. 

The Central Bank of the UAE says that GDP will expand by just 2% in 2019, compared to a previous forecast in March 2019 of 3.5%. 

According to the central bank, the oil economy is set to grow 2.7%, versus an earlier forecast of 3.7%, and the non-oil economy will grow by an estimated 1.8%, versus an earlier forecast of 3.4%, writes Omar. 

“The central bank singled out a deceleration in oil production as a drag on the economy, with crude output forecast at 3.1 million barrels a day in 2019 from an average of 3.3 million in the fourth quarter of 2018. OPEC and its allies have been cutting supplies to counter a global supply glut and have suggested they may extend production cuts beyond June.”

Bloomberg article

Waiving fees
The country’s government is looking at ways to improve its economic prospects. The UAE cabinet has approved the decision to waive or reduce fees for more than 1,500 government services, according to Sarah Townsend for The National

In a tweet from the UAE government, it explains that the decision was made in an effort to attract more foreign investment and enhance the national economy. It has not yet clarified which fees will be reduced or cancelled. Townsend references a statement from UAE’s state news agency WAM, which says the decision aims to “make the UAE a distinctive destination for investments”. 

To strengthen its economy and boost the private sector to combat the lower oil revenues in the UAE, some measures have been taken, including Abu Dhabi’s Ghadan 21 strategy, says Townsend. The series of reforms are aimed at diversifying the economy and creating jobs, and as part of this, Abu Dhabi announced in 2018 a Dh50bn stimulus package. 

The National article

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Published: 31 May 2019
  • News
  • The Review
  • economy
  • GDP
  • UAE

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