Grading the economies of the Middle East

This year's Arab World Competitiveness Report, released in May by the World Economic Forum in partnership with the European Bank for Reconstruction and Development, comes at a pivotal time for the MENA region, as some countries grapple with the impact of the Arab Spring and the often chaotic struggle for democracy, while others, namely in the Gulf, maintained or improved on their status as some of the world's most competitive nations.
The report builds on data from the WEF's 2012-13 Global Competitiveness Report and Global Competitiveness Index, released last September. It analyzes "key factors determining future prosperity and economic growth in the Arab world," while focusing on pressing regional issues such as education, infrastructure, employment and financial systems. The GCI ranks the competitiveness of 144 countries according to a scorecard that factors in big picture characteristics like macro-stability along with specific traits relating to health, education, innovation and technology, institutional strength and market efficiency. The data is derived from major global organizations as well as worldwide surveys of executives. The AWCR provides insight and context to the GCI ranking of 13 MENA countries. The challenges they face are diverse. In the tumultuous aftermath of the Arab Spring, North African countries (Algeria, Egypt, Libya, Morocco) continue to grapple with labor market inefficiencies and the need for institutional improvements. Many Gulf states (Bahrain, Kuwait, Qatar, Saudi Arabia, the UAE, Yemen), on the other hand, still demonstrate "low levels of innovation" despite reaping the benefits of oil exports and enjoying significant growth. Meanwhile, Jordan and Lebanon, which have experienced remarkable stability and resilience in the face of the civil strife in neighboring Syria, face challenges related to their "infrastructure shortages and small market size."
Unemployment is a universal problem. The report explores joblessness--widely considered "the most important socio-economic challenge" facing the region--in particular among women, the educated and the youth. With rapidly ballooning populations, creating jobs is critical for Middle Eastern governments. The issue is especially resonant among countries in political turmoil that have been hit by flights of foreign investment and tourism (such as Egypt). Since business creates jobs, fostering better environments for commerce is essential for these nations. Their success at achieving competitive climates has varied widely.
The Gulf
Gulf states continue to flourish economically, with three countries in the top 25 on the GCI: Qatar, Saudi Arabia and the United Arab Emirates, which are ranked 11th, 19th and 24th, respectively. These economies, traditionally dependent on oil exports and buoyed by high energy prices, are also making moves to become more innovative and diverse. With already strong macroeconomic fundamentals and relatively efficient governments, Gulf nations are focusing on improving education, technology and infrastructure. Qatar has made learning a cornerstone of its national vision, along with science and technology. In the last decade, the country has made "great strides in education reform," according to the AWCR. Saudi Arabia has also named education as a key priority, establishing a science and technology-focused university. The UAE's "Vision 2021" is an effort to establish a knowledge-based economy "driven by innovation and talented human capital." These countries have all made significant infrastructure investments and implemented reforms to improve financial markets and facilitate business.
The region's next three most-competitive countries in the GCI include Oman (32nd) Bahrain (35th) and Kuwait (37th), where similar efforts are underway. The report highlights deficits in education in Oman, however, while it explains that Kuwait and Bahrain are both in need of measuresKobe 13 A.D. Shoes