Living in a competitive world
This report is based on a study conducted on a scientific basis. The results are based on an annual executive opinion survey of more than 14,000 renowned economists, covering 140 countries.
This study included data and scientific assessments of the economic situation of the countries under study. What gives value to this report is that it is objective and neutral and is based on indicators and benchmarks with simple marginal errors.
The report recommended many proposals that could help achieve further growth and increase the degree of competitiveness. These proposals include reducing administrative barriers and increasing the efficiency of the financial sector and improving corporate governance standards. It focuses more on “broad-based access to high-quality education and the promotion access to and use of ICTs, which would also create employment opportunities.”
This report has been issued at a time when the global economy is witnessing a decline in growth and productivity and a rise in unemployment and increasing migration with several downside risks looming on the horizon, such as the normalization of monetary policies in the US, exchange rate and commodity prices fluctuation, geopolitical conflicts and political instability.
The authors of the report believe that world governments have exhausted short-term efforts to resolve the crisis. Therefore, there is an urgent need for productivity-enhancing policies to ensure long-term prosperity, high-quality jobs and inclusive growth.
In order to achieve effective reforms, they believe, is that the decision-makers, businessmen and civil society leaders should understand the complex and interrelated forces that drive productivity and competitiveness.
Therefore, this report is intended to support stakeholders in the adoption of a collaborative approach and identify assets on which they can build, as well as areas of concern that need solutions.
The report warns that the failure to strengthen the competitiveness weakens resilience in the face of recession and any other future shocks and that the failure to adopt long-term structural reforms that enhance productivity and free up entrepreneurial talent is harming the ability of the global economy to improve living standards, solve high unemployment and generate adequate resilience for future downturns.
The report found a relationship between highly competitive countries and those that have either withstood the global economic crisis or made a swift recovery from it. What is important in this report is that it gave a positive assessment of the Saudi economy and said that its macroeconomic environment remains the most distinctive strength — although the drop in oil prices, which is not yet fully reflected in the data, may lead to less favorable assessment in this respect.
Saudi Arabia has dropped one place to 25th in world ranking — one point less than the previous report. The report has cited increased spending that has already seen the country move from a budgetary surplus in 2013 to a deficit in 2014, and an additional fiscal spending package of about 4 percent GDP was announced last February. It estimates the Kingdom needs the price of oil to be at about $100 per barrel to achieve neutrality. The lower oil prices will also necessitate further efforts to create employment opportunities and that entrepreneurship and private sector growth could be supported by reducing administrative barriers. The Saudi Arabian General Investment Authority (SAGIA) does a lot to make the Kingdom the best investment environment in the region.
Commenting on this part of the report relating to the Kingdom, Prince Saud bin Khalid Al-Faisal, chief executive of investment rules and regulations at the SAGIA said that the suggested points for achieving more improvement and development are part of the Authority’s plans in this respect.
In a statement carried by the official news agency, he said that the Authority has formed eight working teams from more than 50 concerned parties to prepare an action plan with definite targets and timetables and will submit a report to the king to start implementation of the action plan.
This report, in spite of the bright spots contained therein, should motivate us more to work, especially since spending requirements imposed by the war in Yemen and the drop in oil prices, “requires further efforts in order to diversify the sources of the economy and increase private sector growth to create more employment opportunities”
The next stage requires practical plans and procedures on the part of all officials in the public and private sectors to maintain the strength of the national economy. These officials shouldn’t wait for instructions from top to carry out their duties.
Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News' point of view
