ECONOMIC DEVELOPMENT - UAE Interact

92 UNITED ARAB EMIRATES YEARBOOK 2006ECONOMIC DEVELOPMENT93Business Competitiveness RankingWORLD ECONOMIC FORUM: GROWTH COMPETITIVENESS INDEX1401301201101009080706050403020100Finland0FranceAustriaSwedenSingaporeSouth AfricaCzech Rep.NorwayIndiaKorea, RepGrowth and Competitiveness RankingsGhanaBrazilKuwaitQatarUnited Arab EmiratesSri LankaKenyaPakistanBahrainThe great strides that have taken place in economic growth in the UAE and thecompetitiveness on which it depends in an increasingly-globalised world have beenrecognised in the 2005 World Economic Forum Report. In formulating the range offactors that go into explaining the evolution of growth in a country, the Reportidentifies ‘three pillars’: the quality of the macroeconomic environment, the stateof the country’s public institutions and the level of its technological readiness. TheGrowth Competitive Index (GCI) uses a combination of hard data – e.g. universityenrolment rates, inflation performance, the state of the public finances, the natureof the regulatory environment, the level of penetration of new technologies, suchas mobile telephones and the Internet, and less quantifiable data such as judicialindependence and government efficiency. These various factors are brought togetherunder different subindexes, each capturing a different aspect of the growth process(e.g. the importance of contract and law, the stability of the macroeconomicenvironment) and are aggregated to give an overall competitiveness score.The 2005 GCI Index ranks the UAE eighteenth in the world with a high score of4.99, (the United Kingdom, for instance is in thirteenth place and Germany infifteenth) and at the top of the list of the Gulf Cooperation Council (GCC) countries(Qatar is nineteenth, Kuwait thirty-third and Bahrain thirty-seventh). According tothe Report, the UAE is ’going through a particularly good phase. Terms-of-tradeEgyptZimbabweCameroonNigeriaPeruBulgariaAlgeriaBeninKyrzyg Rep.MoldavaBoliviaAlbaniaHonduras20 40 60 80 100 120Growth Competitiveness Rankinggains have boosted growth rates and reinforced already high levels of confidencein the business community, resulting from ongoing institutional modernizationand improvements in macroeconomic management.’ The Report also commentsfavourably on the fact that the Government has made good use of the revenuefrom higher oil prices ‘to reduce debt, to invest and to save’.The Business Competitiveness Index (BCI) specifically measures two areas that arecritical to the microeconomic business environment: the sophistication of companyoperations and strategy and the quality of the national business environment,especially in relation to the transparency of the environment, the level of bureaucracyand the strength of the financial markets. The BCI ranks the UAE at thirty-third,again high up in the list of developing countries and topping the list of GCC countries.It is thirty-sixth in the company operations and Strategy ranking and thirty-thirdin quality of the national business environment ranking. The Technology Index (TI)ranks the UAE thirty-third on a world scale, again the highest-ranked GCC countrywith Qatar at fortieth, Bahrain at forty-first and Kuwait at forty-eighth. TI measuresInternet access to schools, frequency of interruptions, government priority in ICT,personal computer and Internet users per capita. At company level, technologicalabsorption has been among the most advanced and public access to the Internethas grown rapidly and is one of the highest in the region.