The Arab World

Competitiveness Review
2010

Margareta Drzeniek Hanouz, World Economic Forum

Sofiane Khatib, World Economic Forum
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ISBN 10 - 92-95044-90-8
ISBN 13 - 978-92-95044-90-6
 The Arab World Competitiveness Review 2010
Contents

Preface 3

Strengthening Recovery in the Arab World: Findings from the Global Competitiveness 5
Index 2010-2011
By Margareta Drzeniek Hanouz, World Economic Forum

Trade Competitiveness and Growth in the MENA Region 23

By Masood Ahmed, International Monetary Fund and Members of the Regional Agenda Council
on the Future of the Middle East and North Africa

Country Profiles 27

About the Authors 57


Preface
The Arab World Competitiveness Review 2010 is being
released at a time of economic turbulence and uncertainty.
Within one decade, the region has experienced an
economic boom fuelled by global growth, rising energy
prices and an acceleration of economic reforms, which
was halted by the global economic crisis. At the same time,
while growth remains sluggish in a number of advanced
economies despite significant government stimulus
packages, a number of emerging markets appear to have
come out in a strengthened position. The uncertainty
and the shifting balance of economic activity towards
the developing world will require strategic responses
from policy-makers across the Arab world to best place
the region’s economies on a sustainable economic
footing going forward. In a changing global economic
environment, it is more important than ever for Arab
countries to continue the reform process and to put into
place the fundamentals that underpin future economic
growth and development.
The World Economic Forum has played a facilitating
role in this process for more than 30 years, by providing
detailed assessments of the productive potential of nations
worldwide through The Global Competitiveness Report
series. In this context, this Review is a contribution to
understanding the key factors determining prosperity and
economic growth in the Arab world, explaining why some
countries are more successful than others in raising income
levels and providing economic opportunities for their
respective populations. It offers policy-makers and business
leaders an important tool in the formulation of improved
economic policies and institutional reforms.
Against this background, this Review analyses the
competitiveness performance of the region with a
special focus on education. Although competitiveness
has improved in some parts of the region, efforts must be
continued so that Arab countries can reap the benefits of
the shift in economic activity towards developing countries,
in particular those in Asia. In addition to the analysis, the
review contains detailed profiles for all the economies
covered by the study, providing an overview of the results
on all indicators included in the Global Competitiveness
Index.
The Arab World Competitiveness Review 2010
The Arab World Competitiveness Review 2010 could not have
been put together without the leadership and enthusiasm
of its co-editors, Margareta Drzeniek Hanouz and Sofiane
Khatib. I would also like to thank the members of the
Regional Agenda Council on the Future of the Middle
East and North Africa and, in particular, Massod Ahmed,
Director of the Middle East and Central Asia Department
at the International Monetary Fund, for their thoughtful
contribution. Appreciation also goes to Robert Greenhill,
Chief Business Officer, Sherif El Diwany, Head of the
Middle East Team, and Jennifer Blanke, Head of the
Centre for Global Competitiveness and Performance at the
World Economic Forum. I am also grateful to members
of the competitiveness team, Ciara Browne, Roberto 3
Crotti, Thierry Geiger, Carissa Sahli, Irene Mia and Pearl
Samandari, for their continued support. In addition,
this Review would have not been possible without the
commitment and enthusiasm of our network of Partner
Institutes in the region, who carry out the Executive
Opinion Survey, which provides much of the underlying
information used in this review. Finally, I would also like
to convey my gratitude to all the business executives in
the Arab world who took the time to participate in the
Executive Opinion Survey and whose valuable feedback
made the publication of this Review possible.
Klaus Schwab
Founder and Executive Chairman
World Economic Forum
 The Arab World Competitiveness Review 2010
Strengthening Recovery in the Arab World:
Findings from the Global Competitiveness Index 2010-2011
By Margareta Drzeniek Hanouz, World Economic Forum

Following a relatively prosperous period at the beginning
of the decade, growth in the Arab world slowed during
the global economic crisis with average growth rates
falling from 6.1% in 2008 to 2.2% in 2009. As most Arab
countries had weaker financial and trade links with global
markets, they were less affected by the downturn than
other regions, such as Europe or Central Asia. The effects
of the global recession on domestic markets were further
dampened by the substantial stimulus packages put into
place in many countries. As a result, only two countries
experienced negative growth rates in 2009: the United
Arab Emirates and Kuwait (see Table 1).
Despite its relatively mild effect on national economies
in the region, the global economic crisis has highlighted
some economic vulnerability in the Arab world. Almost
all countries are highly dependent on commodity prices,
for example as exporters of hydrocarbon products or
importers of agricultural goods. In some countries, the
financial crisis has exposed that financial markets were
under-regulated, while, in some economies, markets for
labour and goods do not have the flexibility to adapt
quickly to new situations. Greater resilience to these types
of global shocks will necessitate that first, vulnerability
is reduced so that domestic economies are less affected
by adverse global developments and that second, the
economies strengthen their ability to cope with economic
crises once they happen.1 Both factors are closely related
to national competitiveness therefore by assessing the
performance of Arab countries in this area, this chapter
can contribute to a better understanding of the factors that
determine each country’s resilience to crises as well as its
future growth path. In this context, this Review discusses
the competitiveness-related strengths of countries from 5
the region and analyses the challenges that will need to
be addressed to put economic development on a more
sustainable path and to fully realize the Arab world’s growth
potential.

Table 1: Selected economic indicators for the Arab world countries

Current
GDP Real GDP GDP
account balance
(US$ billion) growth (%) per capita (US$)
(in % of GDP)
2009 2000-05 average 2009 2010 (estimate) 2009 2009
Algeria 140.8 4.5 2.0 4.6 4,027 0.3
Bahrain 20.2 6.0 2.9 3.5 19,455 4.1
Egypt 187.9 4.0 4.7 5.0 2,450 -2.4
Jordan 22.9 6.0 2.8 4.1 3,829 -5.6
Kuwait 111.3 7.7 -2.7 3.1 31,482 25.8
Lebanon 33.5 3.9 9.0 6.0 8,707 -11.1
Libya 60.3 4.3 1.8 5.2 9,529 16.9
Morocco 90.8 4.4 5.2 3.2 2,865 -5.0
Oman 53.4 3.5 3.4 4.7 18,013 0.3
Qatar 83.9 9.0 9.0 18.5 68,872 16.4
Saudi Arabia 369.6 4.0 0.1 3.7 14,486 5.5
Syria 52.5 3.5 4.0 5.0 2,579 -4.5
Tunisia 40.1 4.5 3.0 4.0 3,852 -3.4
United Arab Emirates 229.9 7.7 -0.7 1.3 46,857 -3.1

Source : IMF 2010a

The Arab World Competitiveness Review 2010
Methodology
Competitiveness is defined as the set of institutions, policies
and factors that determine the level of productivity of a
country. The level of productivity, in turn, determines the
rates of return obtained by investments in an economy.
Because the rates of return are drivers of growth rates, a
more competitive economy is likely to grow more and be
more prosperous in the medium to long term.
Since its introduction in 2005, the Global Competitiveness
Index (GCI) has been the key methodology used
by the World Economic Forum in its assessment of
competitiveness. The model, which was developed by
Xavier Sala-i-Martin and the World Economic Forum,
rests on the belief that the determinants of competitiveness
are numerous and interact with each other in a complex
manner. The GCI captures these interactions through a
weighted average of many different components, each
of which reflects one aspect of competitiveness. These
components are grouped into 12 categories,2 as follows:
1. Institutions are crucial for competitiveness as they
determine the legal and administrative framework
within which individuals, firms and the government
interact to create wealth. Examples of well-functioning
institutions include clearly defined and enforced
property rights, an efficient and transparent public
administration, a fair and independent judiciary,
provision of physical security and high corporate
6 governance standards.
2. Infrastructure is key to economic activity for a number
of reasons. Transport infrastructure is crucial to get
goods to markets rapidly and at low cost, electricity
for smooth and interruption-free production and
telecommunications for efficient communication.
3. Stability in the macroeconomic environment is important
to ensure predictability and availability of capital for
investment. Inflation limits companies’ ability to plan
and invest. Continued fiscal lassitude, high government
debt or inefficiencies in the financial system can result
in high interest rates and lack of funds, restraining
investment.
4. Health and primary education are crucial as a healthy
workforce that has received at least a basic education is
much better positioned to perform to its full potential.
5. Countries cannot move up the development ladder
without investing in higher education and training,
as more complex products and production processes
require a skilled workforce.
6. Healthy competition is an important driver of
efficiency and innovation, as it forces inefficient
businesses out of the market and enables new ventures
to enter the market. This concept is captured under the
goods market efficiency pillar.
7. Labour market efficiency is important to ensure that
talent is always put to its best use in an economy. A
flexible labour market, accompanied by meritocratic
incentive structures and absent of discrimination
against societal groups is best placed to contribute to
competitiveness.
8. Much attention has recently been paid to the
functioning of financial markets. The financial market
development pillar captures two major factors that
contribute to competitiveness: efficiency of the
financial system as a source of finance for businesses and
stability and trustworthiness of the financial system.
9. Technological readiness reflects a country’s ability to
adopt the latest technologies and use them to increase
productivity. We distinguish between adoption of
technology and technological innovation, as these
two factors affect competitiveness in different ways.
Adopting technology raises the productivity of existing
processes, whereas innovation expands the technology
frontier. Much of the productivity enhancing effect,
in particular in emerging markets that do not operate
at the technology frontier, can therefore be harnessed
through adoption of foreign technologies.
10. Market size is taken into account because large markets,
which are viewed as domestic markets, combined with
international markets through trade, enable companies
to realize economies of scale.
11. Business sophistication plays an important role in
productivity. The presence of clusters raises the
efficiency of many processes within businesses, while
activities such as marketing and distribution raise
productivity by increasing the value of products and
services.
12. As noted above, innovation is crucial, as it can expand
the technology frontier. Businesses in advanced
economies can only sustain the high wage levels in
the country through moving the technology frontier
outwards; they must therefore develop cutting edge
products or services and/or use unique processes.
Although taken into account separately in the index, the
categories are highly interrelated. In fact, they tend to
reinforce each other. For example, innovation (Pillar 12)
is difficult in a country where weak competition among
companies (Pillar 6) or poor protection of intellectual
property (Pillar 1) reduce incentives to innovate. A well-
educated population (Pillar 5) best contributes to raising
productivity when the labour market is flexible and
meritocratic incentives are common in the workplace
(Pillar 7).
The index also takes into account that the different
dimensions of competitiveness are not of equal importance
to all countries. As a country becomes increasingly
advanced in economic terms, its products and services
must become increasingly sophisticated to sustain the rising
productivity levels necessary to maintain an increasing
wage level. The index therefore attributes different
weighting schemes depending on the level of development
of a country. Economies are grouped in three stages of
development: factor-driven stage, efficiency-driven stage
and innovation-driven stage, based on GDP per capita and
the importance of natural resources in their economy.3
The pillars are grouped into sub-indexes as shown in
Figure 1 and different weights are applied on the sub-
indexes depending on the stage of development. Basic
requirements are relatively more important for factor-
driven economies, efficiency enhancers matter relatively
more for efficiency-driven economies, and innovation and
sophistication factors also take on increasing importance
for innovation-driven economies. Table 2 shows how
countries in the Arab world are allocated in the three stages
and provides details about the weighting scheme.
 The Arab World Competitiveness Review 2010
Figure 1: The 12 Pillars of competitiveness

Basic requirements
• Institutions Key for
• Infrastructure factor-driven
• Macroeconomic environment economies
• Health and primary education

Efficiency enhancers
• Higher education and training
• Goods market efficiency Key for
• Labor market efficiency efficiency-driven
• Financial market development economies
• Technological readiness
• Market size

Innovation and sophistication factors Key for

• Business sophistication innovation-driven
• Innovation economies

Source: The Global Competitiveness Report 2010-2011

It is important to note that the index is calculated using
two distinct types of data. About one-third of the indicators
are data obtained mainly from major international
organizations, such as the World Bank, the International
Monetary Fund, UNESCO and so on. For the remaining
part, indicators from the World Economic Forum’s annual
Executive Opinion (Survey) are used. This survey of
business executives provides an assessment of the qualitative
aspects of competitiveness, as well as dimensions for which
statistical sources are not available for all countries covered
by the GCI.
Over the past decade, the GCI coverage of Arab countries
has been increasing steadily. The 2010-2011 edition of the 7
index covers 14 Arab countries, namely Algeria, Bahrain,
Egypt, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman,
Qatar, Saudi Arabia, Syria, Tunisia and the United Arab
Emirates. While most countries have been covered for a
number of years, Lebanon was only added to the sample in
the most recent edition. To enable comparisons with the
full sample of the GCI, the results are presented based on
the entire sample of 139 countries.

Table 2: Arab countries according to stages of development

Stage 1 (factor-driven)
GDP per capita (US$) < 2,000
Transition from 1 to 2
2,000 < GDP per capita (US$) < 3,000
Stage 2 (efficiency-driven)
3,000 < GDP per capita (US$) < 9,000
Transition from 2 to 3
9,000 < GDP per capita (US$) < 17,000
Stage 3 (innovation-driven)
GDP per capita (US$) > 17,000
Arab countries
Algeria, Egypt, Kuwait, Libya, Morocco,
Qatar, Saudi Arabia, Syria
Jordan, Lebanon, Tunisia
Bahrain, Oman
United Arab Emirates
Other countries in this stage of
development
Bangladesh, Bolivia, Kenya, Pakistan,
Vietnam
Azerbaijan, Brunei Darussalam,
Indonesia, Iran, Islamic Rep., Ukraine,
Venezuela
Argentina, Brazil, China, Malaysia,
Mexico, Russian Federation, South
Africa, Turkey
Chile, Croatia, Poland, Trinidad and
Tobago
Germany, Israel, Korea, Rep, Norway,
Spain, United Kingdom, United States
Important areas for competitiveness
Basic requirements (60%) and
efficiency enhancers (35%)
Basic requirements (between 40%
and 60%) and efficiency enhancers
(between 35% and 50%)*
Basic requirements (40%) and
efficiency enhancers (50%)
Basic requirements (between 20% and
40%), efficiency enhancers (50%), and
innovation factors (10% to 30%)*
Basic requirements (20%), efficiency
enhancers (50%) and innovation factors
(30%)*

* The exact weight depends on the GDP of the country and the share of mineral goods in total exports. See Sala-i-Martin et al. 2010 for more details.
The Arab World Competitiveness Review 2010

How competitive is the Arab world as a region? high commodity prices of the pre-crisis period enabled
many countries to put their macroeconomic environments
The Arab world is composed of highly diverse economies on a sounder footing, reflecting better macroeconomic
in terms of size, geography, stage of development and management than during previous oil booms. Indeed, the
economic structure. It is therefore not surprising that macroeconomic environment is among the world’s best.
countries from the region span across all three stages of Going forward, GCC countries will need to continue
development as defined by the GCI. To take this diversity to diversify their economies away from the hydrocarbon
into account and enable meaningful comparisons, we
benchmark countries’ competitiveness against their peers, Table 3: GCI ranking for factor-driven economies
i.e. economies at the same level of development.4 Along
those lines, Tables 3 to 5 show how Arab countries place GCI 2010-2011
GCI
2009-2010
among all countries included in their respective stages of
Rank in
development. Countries in transition between stages are Rank constant Rank
attributed to the closest stage of development. In the group Economy Rank (out of 139) Score 2009 sample (out of 133)
of factor-driven economies, led by Brunei Darussalam Brunei
1 28 4.75 28 32
and including 51 countries, Kuwait stands out in a very Darussalam

good second ranking in terms of competitiveness. Egypt Kuwait 2 35 4.59 35 39

Indonesia 3 44 4.43 44 54
and Algeria also achieve fairly good places in comparison
India 4 51 4.33 51 49
with their peers appearing towards the top of the ranking
Azerbaijan 5 57 4.29 57 51
at 10th and 12th, respectively, while Libya occupies a
Vietnam 6 59 4.27 59 75
somewhat lower 18th position. In the efficiency-driven
Sri Lanka 7 62 4.25 62 79
group of countries, Qatar and Saudi Arabia occupy the
Botswana 8 76 4.05 75 66
top positions among 41 countries, showing their strong
Rwanda 9 80 4.00 n/a n/a
leadership in terms of competitiveness not only at the
Egypt 10 81 4.00 79 70
regional, but also at the global level. They are followed
Philippines 11 85 3.96 83 87
closely by Tunisia and Oman at sixth and seventh places,
Algeria 12 86 3.96 84 83
respectively. Further down the ranking we see Jordan
Gambia, The 13 90 3.90 88 81
at 21st, still in the top half of the league table, while
Honduras 14 91 3.89 89 89
Morocco (31st), Lebanon (38th) and Syria (41st) fall into
8 the lower half. Only two Arab countries are among the 40
Georgia 15 93 3.86 90 90
Moldova 16 94 3.86 n/a n/a
innovation-driven economies, the United Arab Emirates Mongolia 17 99 3.75 95 117
and Bahrain. Both trail their peers in this assessment, Libya 18 100 3.74 96 88
occupying the 23rd and 28th positions, respectively, lagging Benin 19 103 3.69 99 103
behind top-placed Switzerland, Sweden and Singapore by a Senegal 20 104 3.67 100 92
wide margin. Kenya 21 106 3.65 102 98
Bangladesh 22 107 3.64 103 106
In addition to the diverging performance of Arab countries Bolivia 23 108 3.64 104 120
in the GCI sample, we also observe very different results Cambodia 24 109 3.63 105 110
among the geographic sub-regions, reflecting common Cameroon 25 111 3.58 107 111
features of countries within these groupings. Figure 3 Nicaragua 26 112 3.57 108 115
shows how the three sub-regions, Gulf Cooperation Tanzania 27 113 3.56 109 100
Council (GCC) members, North Africa and the Levant Ghana 28 114 3.56 110 114
fare against the average scores of members of the Zambia 29 115 3.55 111 112
Organization of Economic Cooperation and Development Tajikistan 30 116 3.53 112 122
(OECD). Uganda 31 118 3.51 113 108
Ethiopia 32 119 3.51 114 118
It is striking that GCC members outperform North Africa Paraguay 33 120 3.49 115 124
and the Levant on almost all measures except market size Kyrgyz Republic 34 121 3.49 116 123
and reach, or exceed OECD levels in some categories. Venezuela 35 122 3.48 117 113
The Gulf region has made great strides in improving Pakistan 36 123 3.48 118 101
its competitiveness over the past years, addressing many Madagascar 37 124 3.46 119 121
challenges. Institutions were upgraded to levels above those Malawi 38 125 3.45 120 119
of OECD member countries. By and large, governments Nigeria 39 127 3.38 121 99
are considered efficient and transparent, physical security Lesotho 40 128 3.36 122 107
is ensured and corporate governance complies with Côte d’Ivoire 41 129 3.35 123 116
high standards. During the pre-crisis years, much of the Nepal 42 130 3.34 124 125
oil windfall and, in some countries, also a large share of Mozambique 43 131 3.32 125 129
stimulus spending in 2009 and 2010 (e.g. in Saudi Arabia) Mali 44 132 3.28 126 130
have been invested in upgrading transport infrastructure, Timor-Leste 45 133 3.23 127 126
which presently also reaches OECD levels, both for Burkina Faso 46 134 3.20 128 128

transport as well as electricity and telephony facilities. The Mauritania 47 135 3.14 129 127
Zimbabwe 48 136 3.03 130 132
Burundi 49 137 2.96 131 133
Angola 50 138 2.93 n/a n/a
Chad 51 139 2.73 132 131

sector. Such a move will require an appropriately educated
labour force, sophisticated businesses and sufficient
innovative capacity to achieve the levels of productivity
necessary to sustain the high wages prevalent in the sub-
region. Although the sub-region is home to sophisticated,
globally operating businesses, their low innovative capacity
could restrain diversification efforts if not addressed. In
The Arab World Competitiveness Review 2010
particular, this is the case in Kuwait, Bahrain and Oman,
where the quality of research institutions is low and
collaboration between business and academia is rare. The
innovative potential is higher in the United Arab Emirates,
Saudi Arabia and Qatar because of targeted efforts in the
past.

Table 4: GCI ranking for efficiency-driven economies Table 5: GCI ranking for innovation-driven economies
GCI GCI
GCI 2010-2011 GCI 2010-2011
2009-2010 2009-2010
Rank in Rank in
constant constant
Rank 2009 Rank Rank 2009 Rank
Economy Rank (out of 139) Score sample (out of 133) Economy Rank (out of 139) Score sample (out of 133)
Qatar 1 17 5.10 17 22 Switzerland 1 1 5.63 1 1
Saudi Arabia 2 21 4.95 21 28 Sweden 2 2 5.56 2 4
Malaysia 3 26 4.88 26 24 Singapore 3 3 5.48 3 3
China 4 27 4.84 27 29 United States 4 4 5.43 4 2
Chile 5 30 4.69 30 30 Germany 5 5 5.39 5 7
Tunisia 6 32 4.65 32 40 Japan 6 6 5.37 6 8
Oman 7 34 4.61 34 41 Finland 7 7 5.37 7 6
Thailand 8 38 4.51 38 36 Netherlands 8 8 5.33 8 10
Poland 9 39 4.51 39 46 Denmark 9 9 5.32 9 5
Lithuania 10 47 4.38 47 53 Canada 10 10 5.301 10 9
Montenegro 11 49 4.36 49 62 Hong Kong SAR 11 11 5.271 11 11
Hungary 12 52 4.33 52 58 United Kingdom 12 12 5.25 12 13
Panama 13 53 4.33 53 59 Taiwan, China 13 13 5.21 13 12
South Africa 14 54 4.32 54 45 Norway 14 14 5.14 14 14
Mauritius 15 55 4.32 55 57 France 15 15 5.13 15 16 9
Costa Rica 16 56 4.31 56 55 Australia 16 16 5.11 16 15
Brazil 17 58 4.28 58 56 Austria 17 18 5.09 18 17
Turkey 18 61 4.25 61 61 Belgium 18 19 5.07 19 18
Russian Luxembourg 19 20 5.05 20 21
19 63 4.24 63 63
Federation
Korea, Rep. 20 22 4.93 22 19
Uruguay 20 64 4.23 64 65
New Zealand 21 23 4.92 23 20
Jordan 21 65 4.21 65 50
Israel 22 24 4.91 24 27
Mexico 22 66 4.19 66 60
United Arab
Romania 23 67 4.16 67 64 23 25 4.89 25 23
Emirates
Colombia 24 68 4.14 68 69 Ireland 24 29 4.74 29 25
Iran, Islamic Iceland 25 31 4.68 31 26
25 69 4.14 n/a n/a
Rep.
Estonia 26 33 4.61 33 35
Latvia 26 70 4.14 69 68
Czech Republic 27 36 4.57 36 31
Bulgaria 27 71 4.13 70 76
Bahrain 28 37 4.54 37 38
Kazakhstan 28 72 4.12 71 67
Cyprus 29 40 4.50 40 34
Peru 29 73 4.11 72 78
Puerto Rico 30 41 4.49 41 42
Namibia 30 74 4.09 73 74
Spain 31 42 4.49 42 33
Morocco 31 75 4.08 74 73
Barbados 32 43 4.45 43 44
Guatemala 32 78 4.04 77 80
Slovenia 33 45 4.42 45 37
Macedonia,
33 79 4.02 78 84 Portugal 34 46 4.38 46 43
FYR
Italy 35 48 4.37 48 48
El Salvador 34 82 3.99 80 77
Malta 36 50 4.34 50 52
Argentina 35 87 3.95 85 85
Slovak Republic 37 60 4.25 60 47
Albania 36 88 3.94 86 96
Croatia 38 77 4.04 76 72
Ukraine 37 89 3.90 87 82
Greece 39 83 3.99 81 71
Lebanon 38 92 3.89 n/a n/a
Trinidad and
Jamaica 39 95 3.85 91 91 40 84 3.97 82 86
Tobago
Serbia 40 96 3.84 92 93
Syria 41 97 3.79 93 94
Armenia 42 98 3.76 94 97
Dominican
43 101 3.72 97 95
Republic
Bosnia and
44 102 3.70 98 109
Herzegovina
Ecuador 45 105 3.65 101 105
Guyana 46 110 3.62 106 104
Cape Verde 47 117 3.51 n/a n/a
Swaziland 48 126 3.40 n/a n/a
The Arab World Competitiveness Review 2010
Figure 2: Competitiveness performance in Gulf countries, North Africa, Levant and OECD
Innovation
Business sophistication
Market size
Technological readiness
Financial market
development
Labor market efficiency
GCC
GCC members covered here include: Bahrain, Oman, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates
The Levant region comprises Syria, Jordan and Lebanon.
North Africa includes Algeria, Egypt, Libya, Morocco, and Tunisia.
One important precondition for developing commercial
innovation is a highly educated population. However,
despite numerous efforts to attract international schools
10 and teaching talent, enrolment rates as well as the quality of
education remain far below OECD standards. The special
focus on education in this chapter sheds light on the
region’s performance on the GCI’s education indicators.
Upgrading innovative capacity and education outcomes
necessitate urgent action and given the small size of
the countries, stronger regional collaboration should be
envisaged. Both areas are essential for moving towards a
more diversified and flexible economy, thereby reducing
vulnerability by advancing into more diversified, higher
value-added industries and services.
The Levant region, here composed of Syria, Jordan and
Lebanon, lags behind the OECD average by a significant
margin. The region’s most important competitive advantage
is its healthy population with a good basic level of
education, where the results are particularly impressive as
they almost match OECD levels and outperform North
Africa by a significant margin. Lebanon and Jordan have
made progress in developing their countries’ financial
markets and adequate levels of domestic and foreign
competition ensure efficient functioning of the goods
markets in both countries. In Syria, on the other hand,
efficiency remains stifled by barriers to international
trade and investment. Further enhancing competitiveness
across the region will require fostering the use of the
latest technologies, which could considerably raise
efficiency across many sectors of the domestic economies,
upgrading the poor state of infrastructure and further
efforts to stabilize the macroeconomy. All countries face
serious labour market challenges, which reflect mainly
the absence of meritocratic structures, low participation
Institutions
7
Infrastructure
6
5
Macroeconomic environment
4
3
Health and primary
2
education
Hight education and
training
Goods market efficiency
Levant North Africa OECD
of women in the workforce and a significant brain drain.
As these countries move into the more advanced stages of
development, quality higher education, an area which in
particular Syria lags behind, will become more crucial for
competitiveness.5
North Africa lags behind the OECD by a significant
margin and displays similar strengths to the Levant
region. In comparison with the latter, it benefits from
a more stable macroeconomic environment, although
the average assessment masks significant differences
between oil exporting economies, such as Libya and
Algeria where rising hydrocarbon receipts led to low debt
and high savings rates, and the other countries which,
despite stabilization efforts undertaken over the past
years (e.g. in Egypt or Morocco) continue to struggle.
Overall, the region should take advantage of its relatively
larger market size and its healthy and literate population.
Countries need to keep an eye on infrastructure, which
although more efficient and widespread than in the Levant
region, could potentially become a bottleneck to further
development. There is also room for improvement with
respect to transparency and efficiency of institutions, where
adopting approaches based on the experience of GCC
countries could be helpful. Last but not least, advances in
technological readiness and improved higher education and
training systems would prepare the countries to be more
competitive in the future.
Over the past five years, Arab countries have been at the
forefront of economic reform efforts, taking advantage of
the window of opportunity provided by historically high
oil prices and healthy economic growth. In the context of
the present Review, inevitably the question arises whether
these reform efforts translated into higher rankings in
 The Arab World Competitiveness Review 2010
Figure 3: Evolution of rankings of Arab countries from 2005 to 2010 by decile

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Ku

Eg

Sy
Le
Jo
Tu
GCI 2010-2011 rank > 17 21 25 32 34 35 37 65 75 81 86 92 97 100
High 1
2
3
4
Decile rank

5
6
7 NEW
8
9
Low 10

GCI 2010-2011 GCI 2005-2006 or edition of earliest inclusion No change in decile ranking

national competitiveness, which would mean that Arab

countries have reformed faster than other economies in
the GCI sample. Figure 3 shows how the performance of
countries covered has evolved since the 2005 edition of
the GCI by decile. The decile analysis enables us to take
into account changes in the sample size of the GCI, as the
number of countries covered increased from 117 to 139
since 2005. The analysis points to different evolutions of
competitiveness in the geographical sub-regions of the
11
Arab world. The GCC countries stand out for having
improved their competitive position significantly (except
for Kuwait which has remained stable) while the rest of
the region stagnated or deteriorated. The competitiveness
of Jordan and Libya deteriorated in relative terms, while
Algeria, Egypt and Syria.
The Arab World Competitiveness Review 2010
Special Focus: Education in the Arab World: Preparing for
a Competitive Economy?
Over the past three decades, countries in the Middle
East and North Africa have made great progress in
improving access to education. Between 1980 and 2008,
average literacy rates in the region increased from 39
to 73% and the literacy gap between males and females
narrowed considerably.1 Education is key not only to
the competitiveness of economies but also to broader
economic and social development, and to the functioning
of political systems. Children of educated mothers tend to
be healthier; access to education ensures social mobility
so that all available talent in the country is put to its best
use and political participation is broadened if the majority
of the population is literate. From a purely economic
perspective, education is the main vehicle to transfer
general knowledge, which is increasingly becoming
more important for competitiveness. It enables countries
to adjust as they move up the development ladder and
businesses face evolving human capital needs. To date,
despite significant progress achieved with respect to access
to education in the region, the efforts have not yet fully
translated neither into improved quality of education nor
into higher economic growth or in better employment
opportunities for citizens.
One element that could accelerate improvements in
educational outcomes is better availability of data, which
12 by providing a more detailed assessment could kick-start
discussions on the necessary policy changes and, hence,
contribute to improving educational performance across
the region. The present analysis aims to contribute to the
debate by benchmarking countries in the Arab world
against a number of relevant comparators using the unique
dataset on educational indicators that enters the World
Economic Forum’s Global Competitiveness Index (GCI).2
Given the focus of the index, the value of these indicators
lies mainly in providing insight on how education could
better contribute to raising competitiveness and which
particular areas would need to be addressed on a priority
basis.
Table 1: Enrolment in education by gender
Ratio female to male in enrolment in education by level
Primary
Algeria 0.98
Bahrain 1.00
Egypt 0.96
Jordan 1.02
Kuwait 0.97
Lebanon ▬-
Libya ▬-
Morocco 0.95
Oman 1.02
Qatar 1.00
Saudi Arabia 0.99
Syria 0.95
Tunisia 1.01
United Arab Emirates 0.99
Source : UNESCO, Institute for Statistics, Education Indicators and World Bank, World Development Indicators, Online Database
The World Economic Forum has been collecting data
on education for use in the GCI for a number of years
including basic quantitative indicators (enrolment rates
at the different levels of education) as well as a number
of qualitative indicators from the Executive Opinion
Survey (EOS).3 The measures of the qualitative aspects
of education captured by the EOS are correlated with
other, more detailed assessments of educational quality
such as those undertaken by the OECD Programme for
International Student Assessment (PISA).4 Given the
shortage of data on the quality of education in countries
of the Arab world,5 EOS data, which captures business
perceptions on a 1 to 7 scale (1 worst score; 7 best score),
provide a wealth of information on the most important
areas to be addressed across the 14 countries from the
region. The following analysis aims to provide a first view
of the performance of Arab countries on these indicators
by benchmarking the region against the best performer
on education among the OECD countries in the PISA
study, Finland, as well as two countries that may provide
meaningful comparisons, Malaysia and Turkey.
A comparison of the Arab world and Finland on the wide
array of qualitative and quantitative education indicators
from the GCI shows that many countries of the region
continue to lag behind, despite the progress achieved over
the past five decades. Figure 1 presents the detailed results
obtained by Arab countries in the indicators that make up
the two education-related components of the GCI, Pillar
4b (Primary Education)6 and Pillar 5 (Higher Education
and Training).
Primary education became significantly more accessible over
the past 40 years7 and has reached levels comparable to best
performers in this area such as Finland in a large majority
of Arab countries. Notable exceptions include Oman
(68.3%) and Saudi Arabia (84.5%) which remain most
significantly below the average of the region (90.1%).8
Notwithstanding these successes, educational reforms of
recent years have not led to significant improvement in the
quality of primary education in many countries and the
region shows significant disparities in this respect. While
some countries such as Qatar (5.96), Lebanon (5.45) and
Secondary Tertiary
1.06 1.40
1.05 2.46
0.94 ▬-
1.01 1.10
1.01 2.32
▬- ▬-
▬- ▬-
0.85 0.89
1.01 1.18
0.98 2.87
1.08 1.50
0.97 -▬
1.10 1.51
1.03 2.32
Figure 1: Arab countries’ performance in selected education-related indicators from the Global Competitiveness Index 2010-2011

4th pillar: Health and primary

5th Pillar: Higher Education and training
education (Selected indicators)
Local
Primary Secondary Tertiary Quality of availability of
Quality of Higher Quality of the Quality of Internet
B. Primary education A. Quantity of education education B. Quality of math and C. On-the-job specialized Extent of staff
primary education educational management access in
education* enrolment education* enrolment enrolment education* science training* research training*
education* and training* system* schools* schools*
rate rate rate education* and training
services*
Algeria 4.80 3.15 94.86 3.59 4.11 83.22 24.02 3.22 2.94 3.63 3.76 2.55 3.44 3.38 3.50
Bahrain 5.65 4.52 97.85 4.64 4.79 96.80 29.94 4.72 4.44 4.52 4.56 5.34 4.40 3.92 4.88
Egypt 4.40 2.47 93.62 3.59 4.11 79.31 28.45 2.92 2.47 2.70 3.26 3.27 3.75 4.15 3.35
Jordan 4.92 3.98 89.49 4.32 4.81 88.22 40.65 4.17 3.90 4.42 3.94 4.43 3.98 4.42 3.55
Kuwait 4.59 3.55 87.61 3.87 4.20 89.82 18.90 3.62 3.32 3.54 3.71 3.92 3.79 3.98 3.60
Lebanon 5.58 5.45 88.34 4.57 4.90 81.55 51.53 4.85 5.04 5.61 5.12 3.65 3.95 4.37 3.53
Libya 2.45 2.45 n/a 3.63 5.46 93.48 55.74 2.41 2.00 3.11 2.24 2.28 3.01 2.66 3.37
Morocco 4.45 3.05 89.47 3.51 2.76 55.85 12.29 3.82 3.11 4.01 4.52 3.63 3.97 4.23 3.71
Oman 3.73 4.41 68.26 4.22 4.38 88.12 26.89 4.25 4.24 4.24 3.95 4.55 4.04 3.79 4.29
Qatar 6.17 5.96 94.11 4.84 4.08 93.25 10.98 6.01 5.67 5.89 6.14 6.32 4.45 4.07 4.82
Saudi Arabia 4.73 4.20 84.55 4.55 4.70 94.56 29.85 4.38 4.30 4.47 4.33 4.43 4.55 4.70 4.41
Syria 4.87 3.33 94.51 3.31 3.88 73.96 27.40 3.15 3.08 3.95 3.40 2.15 2.90 3.27 2.52
Tunisia 5.88 5.01 97.71 4.89 4.72 91.83 33.70 5.04 4.95 5.57 5.11 4.55 4.90 4.97 4.83
United Arab
5.48 4.88 91.58 4.80 4.53 93.77 25.19 5.01 4.74 4.89 4.97 5.42 4.87 5.08 4.66
Emirates

Finland 6.60 6.62 96.05 6.06 6.89 110.30 94.44 5.78 5.63 6.16 5.28 6.07 5.52 5.81 5.23
Malaysia 5.73 4.87 96.10 4.55 3.82 68.19 32.11 4.85 4.89 4.79 4.75 4.96 4.99 5.02 4.97
Turkey 4.81 3.19 94.69 4.04 4.51 81.96 38.37 3.63 3.24 3.42 3.58 4.30 3.99 4.24 3.74

Arab world
4.84 4.03 90.15 4.17 4.39 85.98 29.68 4.11 3.87 4.32 4.22 4.04 4.00 4.07 3.93
average

Selected countries /region in percent of Finland’s score

Arab world
73.3 60.9 93.9 68.7 63.7 78.0 31.4 71.1 68.8 70.3 79.8 66.5 72.5 70.0 75.2
average
Syria 73.8 50.3 98.3 54.5 56.3 67.0 29.0 54.3 54.7 64.1 64.4 35.3 52.4 56.2 48.3
Libya 37.1 37.0 n/a 59.8 79.3 84.7 59.0 41.6 35.5 50.4 42.3 37.5 54.6 45.7 64.4
Tunisia 89.1 75.6 101.7 80.6 68.5 83.2 35.6 87.2 87.9 90.4 96.7 74.9 88.8 85.5 92.4
Qatar 93.4 90.0 97.9 79.8 59.1 84.5 11.6 103.8 100.7 95.6 116.3 104.1 80.5 70.0 92.2

* Scores are on a 1 to 7 scale

The Arab World Competitiveness Review 2010
13
The Arab World Competitiveness Review 2010
Table 2: PISA 2006 scores in science, reading and math
Science
Finland 563
Turkey 424
Jordan 422
Qatar 349
Tunisia 386
Source: OECD
Tunisia (5.01) have reached values close to those recorded
in Finland (6.62), other countries have not even achieved
half this value (all on a scale of 1 to 7), such as Egypt
(2.47) and Libya (2.45). Both countries show serious
shortcomings in the area of primary education, although
this segment has been at the forefront of reforms for a
number of years. While Turkey lags behind the average of
the Arab world, Malaysia could serve as a potential example
to follow for some Arab countries as it obtains a score of
4.87 on this indicator.
Secondary and tertiary levels of education are assessed in Pillar
5 of the GCI (Higher Education and Training). The
pillar captures the results in terms of the quantity (Pillar
5a) and the quality of education (Pillar 5b) as shown in
Figure 1. The best performers of the region, Tunisia and
Qatar, only achieve scores that amount to approximately
80% of the Finnish level (6.06). Interestingly, among the
14 weakest performers are countries that achieve significantly
better results with respect to primary education, Syria
(3.31) and Morocco (3.51). And, as was the case for
primary education, Malaysia outperforms the Arab world
on average. An analysis of the data used for calculating
the pillar gives additional insight into the main areas for
improvement. While the region as a whole outperforms
Malaysia in terms of quantity of education by a wide
margin (4.39 as opposed to 3.82), it only obtains 63% of
Finland’s score. Libya appears to be the country which
most successfully has fostered access to secondary and
Figure 2: Quality of the educational system in selected Arab countries 2004 - 2010
How well does the educational system in your country meet the needs of a competitive economy?
1 = Not well at all, 7 = Very well
EOS 2005 EOS 2006 EOS 2007
* 7 always corresponds to the best possible score
Source: World Economic Forum, Executive Opinion Survey
Note: For more information about the Survey and aggregation methods please consult The Global Competitiveness Report 2010-2011.
Reading Math
547 548
447 424
401 384
312 318
380 365
tertiary education over recent years, reaching by regional
standards high enrolment rates (81.5% for secondary
education and 51.5% for tertiary, which corresponds to
84.7% and 59% of the value achieved by Finland). On the
other hand, in Morocco the data points to significant room
for improvement with respect to access to secondary and
tertiary schooling. Only approximately half of the children
attend secondary school and only little more than 10% of
youth study at tertiary institutions.
With respect to the quality of education, the data shows a
somewhat different picture highlighting wide disparities
among countries. The best performer, Qatar, achieves levels
higher than Finland in this category, while students in
Libya, despite easy access, are provided with educational
quality that is only about 40% of that found in Finnish
classrooms. Disparities in the overall quality among the
countries mainly stem from differences in management
education. Business schools in Qatar are assessed as above
Finnish standards, while Egypt struggles with strengthening
quality management education, reaching a value of only
3.26 on a scale of 1 to 7. The quality of math and science
education, on the other hand, is somewhat more evenly
distributed across the region, at a similar distance from
Finland on average. Data from the PISA study provides
further details on educational outcomes in secondary
schools. PISA tests the reading, mathematics and science
abilities of 15-year-old students. Results for the three
countries of the Arab world covered by the study - Qatar,
Score*
7
1
EOS 2008 EOS 2009 EOS 2010

Figure 3: Male-female differences in PISA scores
Finland
Turkey
Jordan
Tunisia
Qatar
-75 -50
Note: A negative sign indicates that female students perform better
Source: OECD
Tunisia and Jordan - show that students in these countries
achieve levels between 57% and 75% of the Finnish value.
Jordanian students obtain on average higher scores than
Qatar and Tunisia and on average students perform better
in science than in reading and mathematics.
On-the-job training is another area captured by the GCI,
in view of the importance of lifelong learning for the
ability of the workforce to adjust to the changing needs
of the economy. On average, the business sector in the
Arab world invests some effort in training employees and
relevant institutions capable of delivering training are
available in a number of countries. Tunisia and the United
Arab Emirates are close to Finnish levels. Room for
upgrading training services available to enterprises remains
in Syria, Libya and Egypt. Syria also lags behind in terms of
the readiness of enterprises to train employees.
Historical data from the EOS (available since 2004) shows
that in most countries little progress has been achieved in
improving the quality of education over the past few years.
The exceptions are some Gulf economies which show that
quick progress is possible. Figure 2 shows the evolution of
results on the survey variable capturing the overall quality
of education across selected countries in the region. The
most notable improvement over recent years has been
achieved by Qatar, where the score improved by over 30%
since 2004. Saudi Arabia and Oman have also recorded
improvements over the period while in most other
countries from the region, educational quality remained
unchanged.
Data obtained from the World Economic Forum’s Gender
Gap Report shows that overall, in terms of enrolment, the
gap between girls and boys has been closed. Cases such as
Morocco where fewer girls attend secondary and tertiary
schools than boys remain exceptional (see Table 1). As for
the other countries, there appears to be a predominance
of female students at the tertiary level and to some extent
also in secondary institutions. The PISA study provides an
indication on gender differences in school performance
for the few countries from the region covered (Jordan,
Tunisia and Qatar, see Figure 3 below). Turkey and Finland
have been added as comparators. Turkey and Tunisia display
in this respect a similar pattern to Finland with female
students performing better in reading and science, and male
students in mathematics. In two countries from the Arab
world, Jordan and Qatar, the female students outperform
The Arab World Competitiveness Review 2010
Math
Reading
Science
-25 0 25
the male students in all areas. According to this data, the
gender gap in education regarding both enrolment as well
as quality appears to have been closed.
To sum up, this brief analysis finds that although access
to education in Arab countries has reached levels found
in advanced economies, and is relatively good at the
secondary level, tertiary education remains elusive to the
vast majority of young people. With respect to quality of
education, the Arab world achieves on averge around 70%
of Finnish scores. At the same time, however, we observe 15
large disparities with respect to quality of education
among countries across all levels of education with Tunisia,
Lebanon and Qatar displaying the highest levels in the
region. Over the recent years, some Gulf economies have
improved their education outcomes, while most of the
region stagnated. An analysis of gender differences shows
that gaps in enrolment rates have closed significantly over
the past years and that girls appear to have caught up with
boys in terms of learning performance.
Endnotes
1
World Bank. World Development Indicators.
2
For more details on the GCI, see Sala-i-Martin et al. 2010.
3
The qualitative data reflect opinions of business leaders
collected through the Executive Opinion Survey
conducted annually by the World Economic Forum,
while the quantitative data (mainly enrolment rates) is
obtained from a number of renowned statistical resources
in education, such as UNESCO or the World Bank. For
more details on the survey, please see Browne and Geiger
2010.
4
The correlation between the average PISA 2006 scores
and the GCI category assessing the quality of education
(Pillar 5b) amounts to 0.68.
5
PISA covers only Tunisia, Qatar and Jordan among the
Arab countries.
6
Primary education is part of the Health and Primary
Education pillar of the GCI (Pillar 4).
7
See World Bank, 2008.
8
The primary enrolment rate for Libya is not available.
The Arab World Competitiveness Review 2010
The competitiveness of Arab countries
Qatar, ranked 17th affirms its position as the most
competitive country in the Arab world. With a projected
growth rate of 18.5% in 2010, the country is the fastest-
growing economy in the world, as well as one of the
wealthiest. Its strong competitiveness rests on solid
foundations made up of a high-quality institutional
framework, ranked 10th globally, a stable macroeconomic
environment (8th) and an efficient goods market (12th).
Low levels of corruption and undue influence on
government decisions, high government efficiency and
excellent security are the cornerstones of the country’s
solid institutional framework. Compared to many other
economies, the country was relatively spared from the
global economic crisis, with the growth rate slowing
to 9% in 2009, down from 16.4% in 2008. This high
growth, combined with prudent government support
for the financial sector, contributed to maintaining
macroeconomic and financial stability. In fact, in
international comparison, the macroeconomic environment
emerged stronger from the crisis, moving from 13th to 8th
place. Going forward, reducing the country’s vulnerability
to commodity price fluctuations will require diversification
into other sectors of the economy and improving
some of the areas of competitiveness. Despite efforts to
strengthen the financial sector, it does not inspire suffcient
trustworthiness and confidence among the business
16 community (62nd) with soundness of banks ranked 46th
and legal rights of borrowers and lenders under-protected
(103rd). Given the high-wage level, the country will have
to foster the use of the latest technologies (36th) as well as
business sophistication and innovation.
Saudi Arabia occupies the second-highest place
in the region at 21st. The country has witnessed a
number of improvements in competitiveness in recent
years, which resulted in a strong and solid institutional
framework, efficient markets and sophisticated businesses.
Improvements to the institutional framework (up by
11 ranks to 21st), in particular a better assessment of
the security situation by business (19th) and a stronger
corporate governance framework (26th) have contributed
to the better positioning in 2010. In addition, the
government enacted a massive stimulus package aimed
at improving infrastructure in the country, although
it led to a deterioration of macroeconomic stability as
the budget balance moved into deficit. As much as the
recent improvements are commendable, the country faces
important challenges going forward. Health and education
do not meet the standards of countries at similar income
levels. While some progress is visible in health outcomes as
well as in the quality of education, improvements are taking
place at a low level. As a result, the country continues to
occupy low ranks in the health and primary education
(74th) and higher education and training (51st) pillars.
Both these areas, in addition to a more efficient labour
market (66th), are of critical importance to Saudi Arabia
given the growing number of young people who will enter
the labour market over the next years. Last but not least,
some room for improvement remains with respect to the
use of the latest technologies (42nd).
Following a difficult year, the United Arab Emirates
loses two places to take the 25th position. The country’s
overall competitiveness reflects recent investments in
infrastructure, where it ranks an excellent third, high
penetration rates of new technologies (14th) and highly
efficient goods markets (6th). Macroeconomic stability and
some positive aspects of the country’s institutions, such as
strong public trust in politicians and efficient government
round up the list of competitive advantages. Over the past
year, there has been deterioration in the assessment of
institutions overall and, in particular, of private institutions
where accountability standards and the efficacy of
corporate boards are evaluated less positively than before.
This lower assessment is likely related to the difficulties
that Dubai World, a state-owned company, faced in paying
back debt towards the end of 2009. The difficulties of
Dubai World raised doubts about the sustainability of
the development model of Dubai, which has since been
reoriented towards a more traditional role as commercial
and logistics hub and away from property development.
Going forward, continued competitiveness-enhancing
structural reforms will be necessary to keep the economy
growing, most notably in health and education.
Tunisia retains the lead within the North Africa region
at 32nd. The country’s efficient government institutions
remain its main strength along with a high level of security
(14th) and good quality education (23rd), although
enrolment rates in secondary and tertiary institutions
are fairly low, 53rd and 69th, respectively. At the same
time, Tunisia boasts a relatively efficient domestic market
for goods and services. Despite the crisis, the country
improved its macroeconomic stability since the last
assessment. Inflation has come down, and the savings
rate increased while the budget deficit remained stable
at around 3%. Although public debt increased, it remains
manageable. This result is commendable in light of the
recent deterioration of macroeconomic stability during the
recession. Two areas emerge from the GCI results where
there is room for improvement. First, Tunisia will have
to address inefficiencies related to its labour market. The
low ranking of 79th, although improving with respect to
the last edition, reflects in particular rigid employment
regulations and wage setting processes, high taxes and the
low participation of women in the labour force. Second,
low confidence in the stability of the banking system
(90th) will need to be addressed; in particular, the legal
protection of investors’ rights is insufficient. However,
some progress has been made in the efficiency of financial
markets (35th). Different forms of finance are more easily
available to the business community, but restrictions on
capital flows are still considered as burdensome by the
business community.
Oman occupies a strong 34th position following
consistent improvements over recent years. This
improvement no doubt reflects the country’s commitment
to rapid economic reform, which aims at diversifying the
economy away from the hydrocarbon sector and putting
it on a higher and more sustainable growth path. The
reform process was initiated in the mid 1990s and outlined
in the government’s “Vision 2020” document. The GCI

results highlight that Oman’s competitiveness benefits from
two key strengths: a solid institutional framework and an
excellent macroeconomic environment. However, these are
counterbalanced by weaknesses in education and health
which prevail despite the country’s continued efforts in
these areas. Oman benefits from efficient, transparent and
well-functioning public institutions (13th) with private
institutions obtaining slightly lower marks (27th). The
strength of public institutions rests on high government
efficiency, which does not impose an undue regulatory
burden on the business sector (8th) and ensures that public
funds are put to good use (4th). Further, in the view of
the business sector, Omani politicians enjoy a high level
of public trust in their ethical standards (11th). As such,
no major weaknesses are apparent within the institutional
framework in Oman, although enhanced government
transparency and stronger auditing and reporting standards
would improve the institutional assessment even further.
Given the high public governance standards and the
wealth of hydrocarbon resources, it is not surprising that
macroeconomic stability is high in Oman (3rd). Going
forward, efforts to upgrade the quality and quantity of
education as well as public health must be pursued to put
Oman’s future growth on a stronger footing. Presently,
Oman performs poorly in international comparison on the
health and primary education pillar, where it ranks 99th
and on the higher education and training pillar, where it
ranks 63rd. These weak assessments reflect a worryingly
low primary education enrolment rate, with only 68.3%
of children attending school (131st in the sample) as well
as low participation in secondary and tertiary education
institutions. The quality of education has improved
somewhat in recent years moving up from 63rd in 2008 to
52nd in 2010, likely reflecting efforts undertaken under the
Vision 2020 agenda.
Kuwait and Bahrain occupy the 35th and 37th places
in the overall GCI ranking, respectively. Both economies
are highly dependent on oil revenues, which on the
one hand significantly helped to maintain an excellent
macroeconomic environment with high savings and solid
public finances (in particular in Kuwait, which comes in
second in the macroeconomic environment pillar) but on
the other hand poses significant risks related to the future
development of oil prices. Kuwait is, together with the
United Arab Emirates, the only GCC country to have
experienced a contraction of GDP in 2009 amounting
to -2.7%, a stark drop in comparison to the 7.7% average
annual growth during 2000-2005. Bahrain maintained
positive growth rates by mitigating the effects of the
economic crisis through expansionary fiscal policy, at the
expense of macroeconomic stability, which dropped by six
notches to 11th place. Bahrain’s overall competitiveness
performance is more balanced with better results across the
board and in particular with respect to the quality of health
and education, and the functioning of the financial and
goods markets, while Kuwait faces challenges in all these
areas. In particular, the Kuwaiti financial sector (ranked
63rd in this pillar) is still in a vulnerable position after non-
performing loans in the banking system doubled their ratio
in 2009 to 9.7% and investment companies experienced
pressures with respect to funding and the quality of
investments.6
The Arab World Competitiveness Review 2010
Jordan, where the growth rate was cut in half in 2009,
posted the biggest loss in terms of competitiveness in
the region between the 2009 and 2010 editions of the
GCI, down by 15 positions to 65th. A significantly
poorer assessment of institutions, goods market efficiency
and education largely explains this weakening and
counterbalances the developments in the macroeconomic
environment, which deteriorated less then in other
countries following the economic crisis. Although the
deficit-to-GDP ratio more than doubled to 11.8% in
2009, the government is committed to consolidating the
budget in 2010.7 Jordan’s institutional environment, despite
this year’s lower marks, remains among the country’s
areas of competitive strength, alongside the development
of financial markets (54th), the efficiency of the goods
market (46th) and the flexibility of the labour market
(35th). At the same time, economic reform efforts will
have to be accelerated in a number of areas if the country
is to strengthen its competitiveness. The two factors that
stand out are public finances which remain strained
(136th) and burdened by high government debt, and the
inefficient use of talent (135th). The latter is fuelled by
the underdeveloped incentive structures in the workplace
(100th) and low female participation in the labour force, an
indicator on which the country occupies the last position
out of all 139 countries.
Morocco at 75th boasts a largely even performance
across the categories taken into account by the GCI. Past
efforts to stabilize the macroeconomy were not derailed 17
by the economic crisis and are paying off as the country
provides a fairly predictable and stable environment for
businesses, ranked 31st overall. A number of reforms have
also contributed to reducing administrative barriers to the
creation of firms. However, Morocco’s biggest challenge
remains high unemployment which amounted to 9.4%
in 2008 according to the ILO.8 Making labour markets
more flexible (127th) and raising the efficiency of the
use of talent (127th) would help reduce unemployment.
At the same time, the country’s educational system does
not prepare the population well for the challenges of a
competitive economy (105th). This is reflected in the low
enrolment rates across all levels of education – tertiary,
secondary and primary – and also in the poor assessment of
educational quality by the business sector with the quality
of management schools being one exception (49th).
Egypt ranks 81st among 139 countries. The country’s
main competitive strengths are the sheer size of its market
(26th) that allows businesses to exploit economies of scale,
the fairly well-developed private institutions (60th) that
ensure good governance, as well as satisfactory transport
infrastructure (56th overall). The challenges, on the other
hand, are numerous. The labour market continues to be
overregulated, which reduces its ability to properly allocate
and employ human resources. The country is among the
poorest performers in the GCI sample in the efficiency
of using talent (132nd). Although some progress has been
achieved, the continuing labour market rigidities are
worrisome because of the widespread unemployment
among young people. Also, the participation of women
in the labour force remains low (130th) despite some
preliminary positive results of the government’s efforts
The Arab World Competitiveness Review 2010
to address this shortcoming. As in previous years, Egypt
continues to struggle with serious challenges related to
macroeconomic stability, but unlike in other countries,
these were not exacerbated in a major way during the
crisis. Government debt has been reduced - a still high
80% of GDP, following the downward trend of previous
years - and the budget deficit has remained stable at 6.6%
of GDP in 2009 (6.8% in 2008) although inflation has
been rising from an already high level (16.2%, which
corresponds to the 135th rank compared to 11.7% in the
GCI 2009-2010). Furthermore, the solvency of Egypt’s
banking system, despite some improvements, continues to
be cause for concern, as reflected in the 99th position in
the ranking.
Algeria follows Egypt at 86th place. The downturn led to
a loss of the country’s major competitive advantage of the
past years, the stable macroeconomic environment, which
has fallen from 2nd to 57th position since 2009. A high
budget deficit, lower national savings, higher inflation and
rising public debt all contribute to a significantly poorer
assessment of the country’s macroeconomic stability. This
deterioration is counterbalanced by small, yet consistent,
improvements in almost all other areas captured by the
index.9 This points to a number of positive developments
in the country with respect to competitiveness, although
improvements are taking place at a low level. Going
forward, Algeria should focus on improvements to the
efficiency of goods, labour and financial markets. The
18 country remains closed to foreign competition (127th).
It could benefit by opening up to more intense trade and
investment linkages, and a better use of available human
capital (133rd for efficiency of the use of talent). The latter
is particularly worrying, as the country faces very high
youth unemployment (24%).10 At the same time, despite
available oil revenues, businesses face severe difficulties
in accessing finance (131st for the availability of financial
services) and there is a lack of investor confidence in the
financial sector (135th).
Included for the first time in the GCR, Lebanon occupies
92nd position in the ranking. Following its low growth
performance towards the middle of the decade, growth
rates rebounded to 9% in 2008 and remained unaffected by
the economic crisis in 2009. Competitiveness-enhancing
reforms could help sustain the growth momentum.
The GCI results point to a number of strengths that
Lebanon could build on. The country has a healthy and
well-educated population with advantages in the quality
of education, which stand out positively in regional
comparison. The country ranks an excellent 16th for the
quality of education with a particular strength in math
and science education, where it achieves 7th place, as well
as in the quality of primary education (12th). At the same
time, this excellent educational system should be made
available to a larger share of the population, as enrolment
rates in primary and secondary education remain low
(105th and 86th, respectively). The lack of meritocracy
in the labour market limits employment opportunities
for young talent and is one of the factors fuelling a brain
drain. Other strengths include an efficient goods market,
reflecting intense local competition, as well as a well-
developed financial sector, which provides easy access
to loans (36th) and other financial services (39th) and
is buttressed by a highly solvent banking sector (4th).
Challenges to be addressed include dismal infrastructure
for transport, electricity and telephony (123rd) as well as
a fragile macroeconomic environment characterized by
poorly managed public finances.Yet, the biggest challenge
is to reform the institutional environment related to both
public institutions and corporate governance. Currently, the
country’s governing institutions are characterized by a lack
of transparency (129th), high undue influence (130th) and
inefficient government operations (122nd).
The regional ranking closes with Syria (97th) and
Libya (100th). Although both countries have stable
macroeconomic environments (especially Libya) they
face numerous challenges related to the inefficiency
of their goods, labour and financial markets, as well
as underdeveloped infrastructure and low levels of
technological adoption, among others.
Conclusions
This short Review has analysed the performance of 14
Arab countries using the Global Competitiveness Index.
Results show that the global economic crisis appears to
have reinforced a trend that has already been observed over
the past five years, namely, the increasing competitiveness
gap between GCC countries and the rest of the region.
Following reforms of past years, GCC countries have
reached OECD levels on a number of categories of
the index, such as institutions, infrastructure, as well as
efficiency of goods, labour and financial markets.
On average, the Arab world’s competitive strengths lie in
sound and transparent institutions, macroeconomic stability
and business sophistication, while countries will need to
accelerate efforts in raising the efficiency of their labour
markets and furthering the development and stability
of financial markets. Weaknesses in the latter were a key
source of vulnerability during the economic crisis and
could potentially slow down recovery if not addressed.
Over the past five years, efforts have on average improved
the region’s competitiveness and yielded better results in
key areas such as health and primary education, higher
education and training, and technological readiness.
The chapter closes with an analysis of strengths and
weaknesses of each country of the region covered by the
GCI. Given the need to reduce the region’s exposure to
economic risks and to raise the ability of countries to cope
with economic shocks, the results of the GCI provide
insight into the key challenges to competitiveness. By
doing so, it can provide a basis for public-private dialogue
on how barriers to competitiveness can be overcome
to put economic development on a sounder and more
sustainable footing for the benefit of future generations.
 The Arab World Competitiveness Review 2010
References Endnotes

Browne, Ciara, and Thierry Geiger. 2010. The Executive 1

See IMF 2010a for a more detailed discussion of
Opinion Survey: The Business Executives’ Insight into resilience in the Middle East.
their Operating Environment. In: World Economic Forum, 2
For a more detailed discussion of the 12 pillars and their
The Global Competitiveness Report 2010-2011. Geneva, contributions to competitiveness, see Sala-i-Martin et al.
Switzerland 2010. The Appendix shows the detailed structure of the
GCI.
Financial Times. 2010. A trade to ply. Roula Khalaf and 3
This is proxied by the share of exports of mineral products
Simeon Kerr. 5 July as share of total exports.
4
Although the rankings in this part of the text refer to the
International Labour Organization. 2010. Laborsta database. position within the stage of development, we use overall
Retrieved on 30 August 2010 rankings in the remaining text of this article.
5
For more material on education reform in the region, see
International Monetary Fund. 2010a. Regional Economic World Bank 2008.
Outlook Middle East and Central Asia. Washington. May 6
See IMF 2010b.
7
IMF 2010c.
International Monetary Fund. 2010b. Kuwait: 2010 Article 8
ILO 2010.
IV Consultation Staff Report and Public Information 9
Algeria’s performance in the market size pillar remains
Notice on the Executive Board Discussion. Washington stable.
DC. 29 July 10
IMF 2010d.

International Monetary Fund. 2010c. Jordan: 2010 Article

IV Consultation Concluding Statement of the IMF
Mission. Washington DC. 17 July

International Monetary Fund. 2010d. Algeria: 2009 Article

IV Consultation Staff Report and Public Information
Notice. Washington DC. March 19

World Bank. 2008. The Road not traveled. Education Reform

in the Middle East and North Africa. MENA Development
Report. Washington DC

World Bank. 2009. Middle East and North Africa Region.

2009 Economic Developments and Prospects: Navigating through
the Global Recession. Washington DC

Sala-i-Martin, Xavier, and Jennifer Blanke, Margareta

Drzeniek Hanouz, Thierry Geiger and Irene Mia. The
Global Competitiveness Index 2010-2011: Looking
Beyond the Global Economic Crisis. In: World Economic
Forum, The Global Competitiveness Report 2010-2011.
Geneva, Switzerland.
The Arab World Competitiveness Review 2010
Appendix: Computation and Structure of the Global
Competitiveness Index 2010–2011
This appendix presents the structure of the Global
Competitiveness Index 2010–2011 (GCI). The number
preceding the period indicates to which pillar the variable
belongs (e.g. variable 1.01 belongs to the 1st pillar and
variable 12.04 belongs to the 12th pillar).
The computation of the GCI is based on successive
aggregations of scores from the indicator level (i.e. the most
aggregated level) all the way up to the overall GCI score.
Unless otherwise mentioned, we use an arithmetic mean
to aggregate individual variables within a category.a For
higher aggregation levels, we use the percentage shown
next to each category. This percentage represents the
category’s weight within its immediate parent category.
Reported percentages are rounded to the nearest integer,
but exact figures are used in the calculation of the GCI.
For example, the score a country achieves in Pillar 9
accounts for 17% of this country’s score in the efficiency
enhancers sub-index, irrespective of the country’s stage of
development. Similarly, the score achieved on the sub-pillar
transport infrastructure accounts for 50% of the score of the
infrastructure pillar.
Unlike the case for lower levels of aggregation, the weight
put on each of the three sub-indexes (basic requirements,
20 efficiency enhancers and innovation and sophistication factors) is
not fixed. Instead, it depends on each country’s stage of
development, as discussed in the chapter.b For instance,
in the case of Benin - a country in the first stage of
development - the score in the basic requirements sub-
index accounts for 60% of its overall GCI score, while it
represents just 20% of the overall GCI score of the United
Arab Emirates, a country in the third stage of development.
Variables that are not derived from the Executive Opinion
Survey (survey) are identified by an asterisk (*) in the
following pages. The Technical Notes and Sources section
at the end of the Global Competitiveness Report 2010-2011
provides detailed information about these indicators.
To make the aggregation possible, these variables are
transformed onto a 1-to-7 scale to align them with the
survey results. We apply a min-max transformation, which
preserves the order of, and the relative distance between,
country scores.
Variables that are followed by the designation “1/2” enter
the GCI in two different pillars; to avoid double counting,
we assign a half-weight to each instance.d
Weight (%) within immediate
parent category
BASIC REQUIREMENTS
Pillar 1: Institutions...............................................................25%
A. Public institutions........................................................................75%
1. Property rights...........................................................................20%
1.01 Property rights
1.02 Intellectual property protection 1/2
2. Ethics and corruption................................................................20%
1.03 Diversion of public funds
1.04 Public trust of politicians
1.05 Irregular payments and bribes
3. Undue influence.........................................................................20%
1.06 Judicial independence
1.07 Favoritism in decisions of government officials
4. Government inefficiency..........................................................20%
1.08 Wastefulness of government spending
1.09 Burden of government regulation
1.10 Efficiency of legal framework in settling disputes
1.11 Efficiency of legal framework in challenging regulations
1.12 Transparency of government policy-making
5. Security........................................................................................20%
1.13 Business costs of terrorism
1.14 Business costs of crime and violence
1.15 Organized crime
1.16 Reliability of police services
B. Private institutions.......................................................................25%
1. Corporate ethics........................................................................50%
1.17 Ethical behaviour of firms
2. Accountability.............................................................................50%
1.18 Strength of auditing and reporting standards
1.19 Efficacy of corporate boards
1.20 Protection of minority shareholders’ interests
1.21 Strength of investor protection*
Pillar 2: Infrastructure...........................................................25%
A. Transport infrastructure...............................................................50%
2.01 Quality of overall infrastructure
2.02 Quality of roads
2.03 Quality of railroad infrastructure
2.04 Quality of port infrastructure
2.05 Quality of air transport infrastructure
2.06 Available seat kilometres*
B. Energy and telephony infrastructure........................................50%
2.07 Quality of electricity supply
2.08 Fixed telephone lines* 1/2
2.09 Mobile telephone subscriptions* 1/2
Pillar 3: Macroeconomic environment..............................25%
3.01 Government budget balance*
3.02 National savings rate*
3.03 Inflation* e
3.04 Interest rate spread*
3.05 Government debt*
3.06 Country credit rating*
 The Arab World Competitiveness Review 2010
Pillar 4: Health and primary education.............................25% Pillar 7: Labour market efficiency......................................17%
A. Health.............................................................................................50% A. Flexibility........................................................................................50%
4.01 Business impact of malaria f 7.01 Cooperation in labour-employer relations
4.02 Malaria incidence* f 7.02 Flexibility of wage determination
4.03 Business impact of tuberculosis f 7.03 Rigidity of employment*
4.04 Tuberculosis incidence* f 7.04 Hiring and firing practices
4.05 Business impact of HIV/AIDS f 7.05 Redundancy costs*
4.06 HIV prevalence* f 6.04 Extent and effect of taxation 1/2
4.07 Infant mortality*
4.08 Life expectancy* B. Efficient use of talent...................................................................50%
7.06 Pay and productivity
B. Primary education........................................................................50% 7.07 Reliance on professional management 1/2
4.09 Quality of primary education 7.08 Brain drain
4.10 Primary education enrollment rate* g 7.09 Female participation in labour force*

Pillar 8: Financial market development............................17%
A. Efficiency........................................................................................50%
EFFICIENCY ENHANCERS
8.01 Availability of financial services
8.02 Affordability of financial services
Pillar 5: Higher education and training.............................17%
8.03 Financing through local equity market
A. Quantity of education...................................................................33%
8.04 Ease of access to loans
5.01 Secondary education enrolment rate*
8.05 Venture capital availability
5.02 Tertiary education enrolment rate*
8.06 Restriction on capital flows
B. Quality of education.....................................................................33%
B. Trustworthiness and confidence...............................................50%
5.03 Quality of the educational system
8.07 Soundness of banks
5.04 Quality of math and science education
8.08 Regulation of securities exchanges
5.05 Quality of management schools
8.09 Legal rights index*
5.06 Internet access in schools
21
C. On-the-job training.......................................................................33%
Pillar 9: Technological readiness.......................................17%
A. Technological adoption...............................................................50%
5.07 Local availability of specialized research and training
9.01 Availability of latest technologies
services
9.02 Firm-level technology absorption
5.08 Extent of staff training
9.03 FDI and technology transfer

Pillar 6: Goods market efficiency.......................................17%
B. ICT use...........................................................................................50%
A. Competition....................................................................................67%
9.04 Internet users*
1. Domestic competition.....................................................variable h
9.05 Broadband Internet subscriptions*
6.01 Intensity of local competition
9.06 Internet bandwidth*
6.02 Extent of market dominance
2.08 Fixed telephone lines* 1/2
6.03 Effectiveness of anti-monopoly policy
2.09 Mobile telephone subscriptions* 1/2
6.04 Extent and effect of taxation 1/2
6.05 Total tax rate*

6.06 Number of procedures required to start a business* i
Pillar 10: Market size...........................................................17%
A. Domestic market size..................................................................75%
6.07 Time required to start a business* i
10.01 Domestic market size index* j
6.08 Agricultural policy costs
2. Foreign competition........................................................variable h
B. Foreign market size.....................................................................25%
6.09 Prevalence of trade barriers
10.02 Foreign market size index* k
6.10 Trade tariffs*
6.11 Prevalence of foreign ownership
6.12 Business impact of rules on FDI
INNOVATION AND SOPHISTICATION FACTORS
6.13 Burden of customs procedures
10.04 Imports as a percentage of GDP* g
Pillar 11: Business sophistication......................................50%
11.01 Local supplier quantity
B. Quality of demand condition......................................................33%
11.02 Local supplier quality
6.14 Degree of customer orientation
11.03 State of cluster development
6.15 Buyer sophistication
11.04 Nature of competitive advantage

11.05 Value chain breadth
11.06 Control of international distribution
11.07 Production process sophistication
11.08 Extent of marketing
11.09 Willingness to delegate authority
7.07 Reliance on professional management 1/2

The Arab World Competitiveness Review 2010

Pillar 12: Innovation..............................................................50% f. The impact of malaria, tuberculosis, and HIV/AIDS on

12.01 Capacity for innovation competitiveness depends not only on their respective
12.02 Quality of scientific research institutions incidence rates but also on how costly they are for business.
12.03 Company spending on R&D Therefore, to estimate the impact of each of the three
diseases, we combine its incidence rate with the survey
12.04 University-industry collaboration in R&D
question on its perceived cost to businesses. To combine
12.05 Government procurement of advanced technology these data we first take the ratio of each country’s disease
products incidence rate relative to the highest incidence rate in the
12.06 Availability of scientists and engineers whole sample. The inverse of this ratio is then multiplied
12.07 Utility patents* by each country’s score on the related survey question.
1.02 Intellectual property protection 1/2 This product is then normalized to a 1-to-7 scale. Note
that countries with zero reported incidences receive a 7,
regardless of their scores on the related survey question.

g. For this variable we first apply a log-transformation and then a

Notes min-max transformation.
a. Formally, for a category i composed of K indicators, we have:

h. The competition sub-pillar is the weighted average of two

category = Σ
K
k=1
indicatork components: domestic competition and foreign competition.
i
K In both components, the included variables provide an
indication of the extent to which competition is distorted.
b. As described in the article, the weights are the following: The relative importance of these distortions depends on the
relative size of domestic versus foreign competition. This
interaction between the domestic market and the foreign
Factor- Efficiency- Innovation- market is captured by the way we determine the weights
driven stage driven stage driven stage of the two components. Domestic competition is the sum of
Weights (%) (%) (%) consumption (C), investment (I), government spending (G) and
exports (X), while foreign competition is equal to imports (M).
Basic requirements 60 40 20 Thus we assign a weight of (C + I + G + X)/(C + I + G + X + M)
to domestic competition and a weight of M/(C + I + G + X + M)
Efficiency enhancers 35 50 50
22 to foreign competition.
Innovation and sophistication factors 5 10 30
i. Variables 6.06 and 6.07 combine to form one single variable.
c. Formally, we have:
j. The size of the domestic market is constructed by taking the
natural log of the sum of the gross domestic product valued
(country score – sample minimum)
6 x + 1 at purchased power parity (PPP) plus the total value (PPP
(sample maximum – sample minimum) estimates) of imports of goods and services, minus the total
value (PPP estimates) of exports of goods and services.
The sample minimum and sample maximum are, respectively, the Data are then normalized on a 1-to-7 scale. PPP estimates
lowest and highest country scores in the sample of economies of imports and exports are obtained by taking the product of
covered by the GCI. In some instances, adjustments were made exports as a percentage of GDP and GDP valued at PPP. The
to account for extreme outliers. For those indicators for which a underlying data are reported in the data tables section (see
higher value indicates a worse outcome (e.g. disease incidence, Tables 10.03, 10.04, and 10.05).
government debt) the transformation formula takes the following
form, thus ensuring that 1 and 7 still corresponds to the worst
k. The size of the foreign market is estimated as the natural
and best possible outcomes, respectively:
log of the total value (PPP estimates) of exports of goods
and services, normalized on a 1-to-7 scale. PPP estimates of
(country score – sample minimum)
-6 x + 7 exports are obtained by taking the product of exports as a
(sample maximum – sample minimum) percentage of GDP and GDP valued at PPP. The underlying
data are reported in the data tables.
d. For those categories that contain one or several half-weight
variables, country scores for those groups are computed as
follows:
1
(sum of scores on full-weight variables) + — x (sum of scores on half-weight variables)
2
1
(count of full-weight variables) + — x (count of half-weight variables)
2

e. To capture the idea that both high inflation and deflation are
detrimental, inflation enters the model in a U-shaped manner
as follows: for values of inflation between 0.5 and 2.9%, a
country receives the highest possible score of 7. Outside
this range, scores decrease linearly as they move away from
these values.
 The Arab World Competitiveness Review 2010
Trade Competitiveness and Growth in the MENA Region
by Masood Ahmed, International Monetary Fund and Members of the Regional Agenda Council on the Future of the Middle East and North Africa*

Lack of competitiveness means that the Middle East
and North Africa (MENA) region is not realizing
the full benefits of globalization.
Countries in the MENA1 region on average score poorly
on most indicators of competitiveness and, therefore,
face difficulties competing in global export markets.
This is evidenced by their relatively low export market
shares: since 1990, the MENA region has only managed
to maintain its share of global exports on a per capita
basis, while other emerging and developing economies
have succeeded in almost doubling theirs (Figure 1). A
strong export performance is typically associated with
high economic growth because exporters are able to not
only tap domestic demand but also demand from other
countries. Thus, with a stagnant export share, real per capita
GDP growth in MENA has been lower than in emerging
Asia for the past two decades (Figure 2). And, while there
has been some pick up in growth since 2000 - prior to
the 2008-2009 crisis - MENA countries were not able to
create sufficient jobs for their growing populations, leaving
unemployment rates among the highest in the world. In
short, MENA’s lack of competitiveness has prevented the
region from realizing the full benefits of globalization for
its population in terms of income and employment gains.
MENA has failed to increase its global market share
in part because the region’s exports flow mainly
to Europe and are concentrated in traditional
products.
Europe has been the main destination for MENA exports,
reflecting proximity and long-standing linkages. Since the
1970s, the region’s exports to Europe have accounted for
close to 60% of total exports, while exports to Asia Pacific 23
and Latin America, respectively, have accounted for 15%
and 1% of total exports (Figure 3). Until the mid 1970s, the
focus on European markets linked the region to an engine
of global growth. But, more recently, this focus has implied
that MENA has not been benefiting from the high growth
rates achieved in emerging Asian and Latin American
powerhouses, including Brazil, India and China.

Figure 1: Non-oil exports per capita (percent of world average)

40

MENAP oil importers

35
Emerging and developing economies
30

25

20

15

10
1990 1995 2000 2005 2010

MENAP Oil Importers include Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Syria and Tunisia as well as Afghanistan and Pakistan

Source: IMF, World Economic Outlook; national authorities; and IMF staff calculations

*
Members of the Regional Agenda Council on the Future of the Middle East and North Africa are Masood Ahmed, Director, Middle East and Central Asia Department,
International Monetary Fund (IMF), Chair Regional Agenda Council on the Middle East and North Africa; Tarik Yousef, Dean, Dubai School of Government, United
Arab Emirates; Nejib Zaafrani, Secretary-General and Chief Executive Officer, Dubai Supreme Council of Energy, United Arab Emirates; Moncef Cheikh-Rouhou,
Professor, HEC School of Management, France; Henry Azzam, Chief Executive Officer, Middle East and North Africa, Deutsche Bank AG, United Arab Emirates;
Arslan Chikhaoui, Lecturer, Algerian Military Academy, Algeria; Mohammed J. Larijani, Director, Institute for Studies in Theoretical Physics and Mathematics (IPM),
Iran; Nemat Shafik, Permanent Secretary Department for International Development (DFID, United Kingdom
The Arab World Competitiveness Review 2010

Figure 2: Real GDP per capita growth (annual percentage change)

-2
Emerging Asia
-4 MENAP oil importers
-6

-8
1990 1995 2000 2005 2010

Source: IMF, World Economic Outlook; and IMF staff calculations

Looking ahead, there are some uncertainties over the
speed of the recovery in Europe. Moreover, there is broad
consensus that, over the medium term, growth in Europe
will lag behind that of emerging Asia and Latin America. As
such, it is even more important to redirect MENA’s exports
to these dynamic regions of the global economy to allow
MENA to link more closely to the new growth engines
24 and thus provide the basis for high and sustained growth in
MENA countries as well.
MENA exports have also been mainly concentrated in
primary and consumer goods, and less so in high value-
added, high technology, intermediate and capital goods,
which have seen the highest growth in recent years.
Consumer and primary goods currently account for 64%
of total exports in this region, compared to 41% for Asian
countries, 57% for Latin American countries and 66%
for African countries. Capital goods, on the other hand,
account for only 6% of MENA exports - similar to the 7%
in low-income countries - while they account for 37% of
Asian exports and 11% of Latin American exports. These
export patterns hold back MENA’s potential for trade and,
indeed, MENA countries trade less with the rest of the
world than could be expected: MENA’s total exports in
2009 amounted to only 28% of GDP, compared to 30% for
Asia Pacific (Figure 4) - 56% when excluding the three
largest economies, Japan, India and China, given that large
economies typically have lower export shares.
A country’s export volumes are partly driven by such
characteristics as proximity to markets, tariff rates, existence
of free trade agreements or cultural linkages with trading
partners. However, these characteristics do not explain
MENA’s low export-to-GDP ratio - quite the opposite.

Figure 3: MENAP oil importers’ export destinations 1970–2008 (percent of total exports)

100
90
80
70
60
50
40
30
20
10
0
1970-74 1975-79 1980-84 1985-89 1990-94 1994-99 2000-04 2004-08

MENAP oil exporters North America MENAP oil importers

Latin America Europe CCA

MENAP oil exporters comprise Algeria, Bahrain, Iran, Iraq, Kuwait, Libya, Oman, Qatar, Saudi Arabia, Sudan, the United Arab Emirates, and Yemen.
CCA countries comprise Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan.

Source: IMF, Direction of Trade Statistics; and IMF staff calculations

 The Arab World Competitiveness Review 2010
Figure 4: Trade openness, 1990-2007 average (Percent of GDP)

400
350
300
250
200
150
100
50
0

Korea, Rep
Hong Kong, SAR
Singapore

Malaysia
Emerging Asia

Jordan
Thailand
Vietnam
Taiwan
Tunisia
Mauritania

MENAPOIs

India
Philippines

Syria

Morocco
Indonesia
Egypt
China
Pakistan
Source: IMF, World Economic Outlook

If MENA had seized the opportunities offered by these performance (Figure 5). Moreover, graduates in MENA
characteristics to the same degree that other middle- do not have the skills that firms require to compete in
income countries do, its exports in 2008 would have been today’s global marketplace; unemployment is particularly
around 50% higher than they actually were. It is the lack high among graduates and the young, implying a mismatch
of competitiveness compared to many of its peers that between the types of skills supplied and demanded. This
explains MENA’s underperformance in trade. mismatch may, in part, be explained by the traditional role 25
of governments as employer of first choice in the region,
Poor education outcomes, unfavourable business offering job security and good wages but not requiring
environments and overbearing governments are key qualifications sought by the private sector.
reasons for MENA’s lack of competitiveness.
In addition, business environments are not sufficiently
As discussed in the previous chapter, education outcomes conducive to entrepreneurship or to fostering a dynamic
in MENA trail those of other countries, and workers do private sector that can identify and exploit new business
not have the skills that firms seek. Although enrolment opportunities. According to the World Bank’s “Ease of
rates in the region are not very different from those in Doing Business” survey, MENA countries rank far below
other regions, the quality of education in MENA appears emerging Asia (Figure 6) suggesting that, in MENA,
to be much lower than in regions with stronger export the regulatory and legal environment as well as basic

Figure 5: Education quality (latest ranking, 1 being the best)

140
120
100
80
60
40
20
0
Korea, Rep
Hong Kong, SAR
Singapore
Taiwan
Tunisia
Malaysia

Jordan
Emerging Asia

Indonesia
India

Philippines
China
Thailand
Vietnam
MENAPOIs
Syria
Pakistan
Morocco
Egypt
Mauritania

Source: The Global Competitiveness Report 2009-2010

The Arab World Competitiveness Review 2010

Figure 6: Ease of Doing Business (latest ranking, 1 being the best)

180

150

120

90

60

30

0
Korea, Rep
Singapore

Thailand

Malaysia

Emerging Asia

Tunisia

Pakistan

China

Vietnam

Jordan

MENAPOIs

Egypt

Indonesia

Morocco

India

Syria

Philippines

Mauritania
Source: World Bank, Ease of Doing Business

infrastructure, such as roads and utilities, have not kept up • Egypt has also attracted global IT investment from
with developments in other countries. In addition, MENA firms such as Microsoft, Oracle,Vodafone and IBM,
governments spend more resources on consumption, and Egypt’s IT exports have increased from US$ 250
including civil service wages and subsidies, and less million in 2005 to an anticipated US$ 1 billion by the
on investment as a percentage of GDP than do their end of 2010. Much of Egypt’s IT industry is housed in
counterparts in emerging Asia. the so-called “Smart Village” in Cairo, which currently
26 employs 22,000 workers. This success has been
Strengthening political cohesion and regional achieved, despite Egypt’s relatively low score on many
institutions would promote growth. competitiveness indicators, because of recent structural
reforms that have led to improvements in the business
Advances in political cooperation and a larger role for environment and targeted government investments in
regional institutions could impact economic activity in infrastructure and language skills in the context of the
the region through two main channels. First, MENA “Smart Village” project.
countries could do more to facilitate intra-regional trade
which would allow countries to specialize in their areas of Fostering trade competitiveness should boost
strengths and yield a positive growth dividend. Second, by growth and contribute to job creation.
reducing internal trade barriers, the region would become
a more integrated market and thus be more attractive to The MENA region faces the sizeable challenge of having
FDI which often seeks a large customer base. to create 18 million jobs for its growing labour force by
2020. High and sustained growth is a precondition for
But there are also success stories in the region. such large-scale job creation and for raising incomes.
This, in turn, can be achieved by strengthening trade
To pick just two examples: competitiveness so that the region can better benefit from
• Tunisia has become an “outsourcing hub” in the globalization and the dynamics of today’s high-growth
MENA region, having successfully attracted foreign regions. Improving education outcomes and ensuring
direct investment in textile production, car assembly that graduates acquire the skills needed by the private
and food processing over the past several years and, sector are key to attracting firms that can compete in the
more recently, in information technology (IT), global marketplace. These firms also seek business friendly
customer service and aeronautics. Tunisia’s car industry environments, calling for further streamlining of regulations
employs around 45,000 workers, and its aeronautical and additional investments in infrastructure - including
engineering industry is rapidly expanding, thanks in through public-private partnerships or by encouraging
part to a deal with Airbus, whose first Tunisian plant private sector investments - to increase the region’s
becomes operational this year. To the extent that cars competitiveness. In this, the region can build on successes
and airplanes, for which parts are produced in Tunisia, already achieved.
are exported to today’s dynamic economies, this has
allowed Tunisia to benefit from the growing demand
of these emerging markets. Simplified regulation, Endnote
modern infrastructure, government incentives and
commitment to a knowledge-based economy that
1
This note focuses on the MENA oil importers unless
generates well-trained, low-cost workers, have otherwise indicated. These include Djibouti, Egypt,
contributed to this success. It is therefore no surprise Jordan, Lebanon, Mauritania, Morocco, Syria and Tunisia.
that Tunisia scores better on competitiveness indicators
- including openness, the business environment and
education quality - than its MENA peers.
 The Arab World Competitiveness Review 2010
List of Country Profiles
Country Page

Algeria 28
Bahrain 30
Egypt 32
Jordan 34
Kuwait 36
Lebanon 38
Libya 40
Morocco 42
Oman 44
Qatar 46
Saudi Arabia 48
Syria 50
Tunisia 52
United Arab Emirates 54
27
The Arab World Competitiveness Review 2010

Algeria
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................34.9
GDP (US$ billions)...................................................140.8 Algeria Middle East and North Africa
10,000
GDP per capita (US$) .............................................4,027
8,000
GDP (PPP) as share (%) of world total .................0.35
6,000

4,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 2,000
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................86 ......4.0 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................83 ........3.9
GCI 2008–2009 (out of 134)..................................................99 ........3.7 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................80 ........4.3
1st pillar: Institutions ...........................................................98 ........3.5
2nd pillar: Infrastructure.....................................................87 ........3.5 Institutions
7
3rd pillar: Macroeconomic environment .........................57 ........4.8 Innovation Infrastructure
6
4th pillar: Health and primary education .........................77 ........5.6
5
Business Macroeconomic
Efficiency enhancers........................................................107 ........3.5 4 environment
sophistication
5th pillar: Higher education and training .........................98 ........3.6 3
28 6th pillar: Goods market efficiency.................................126 ........3.6 2 Health and
7th pillar: Labour market efficiency................................123 ........3.7 Market size 1 primary
education
8th pillar: Financial market development.......................135 ........2.8
9th pillar: Technological readiness.................................106 ........3.0
Technological Higher education
10th pillar: Market size........................................................50 ........4.3 readiness and training

Innovation and sophistication factors ..........................108 ........3.0 Financial market Goods market
11th pillar: Business sophistication................................108 ........3.3 development efficiency
12th pillar: Innovation........................................................107 ........2.8 Labour market efficiency

Algeria Economies in transition from 1 to 2

The most problematic factors for doing business

Inefficient government bureaucracy.........................21.1
Access to financing ......................................................16.4
Corruption.......................................................................13.8
Inadequately educated workforce.............................10.7
Policy instability...............................................................8.8
Inadequate supply of infrastructure ............................6.1
Poor work ethic in national labour force ....................5.3
Foreign currency regulations........................................4.4
Tax rates ...........................................................................3.7
Tax regulations ................................................................2.9
Crime and theft ................................................................2.0
Restrictive labour regulations.......................................1.8
Government instability/coups .......................................1.5
Inflation .............................................................................1.5
Poor public health ...........................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Algeria
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights .......................................................................106 6.01 Intensity of local competition ..................................................93
1.02 Intellectual property protection..............................................105 6.02 Extent of market dominance ...................................................55
1.03 Diversion of public funds.........................................................67 6.03 Effectiveness of anti-monopoly policy.....................................91
1.04 Public trust of politicians .........................................................85 6.04 Extent and effect of taxation ...................................................56
1.05 Irregular payments and bribes.................................................97 6.05 Total tax rate* ........................................................................128
1.06 Judicial independence............................................................112 6.06 Number of procedures required to start a business* ...........126
1.07 Favoritism in decisions of government officials ......................82 6.07 Time required to start a business* .........................................79
1.08 Wastefulness of government spending ..................................64 6.08 Agricultural policy costs .........................................................119
1.09 Burden of government regulation..........................................132 6.09 Prevalence of trade barriers.....................................................56
1.10 Efficiency of legal framework in settling disputes...................93 6.10 Trade tariffs* ..........................................................................121
1.11 Efficiency of legal framework in challenging regulations.......100 6.11 Prevalence of foreign ownership ...........................................123
1.12 Transparency of government policymaking ...........................121 6.12 Business impact of rules on FDI ...........................................125
1.13 Business costs of terrorism ..................................................128 6.13 Burden of customs procedures.............................................124
1.14 Business costs of crime and violence .....................................74 6.14 Degree of customer orientation ............................................108
1.15 Organized crime ......................................................................87 6.15 Buyer sophistication ..............................................................108
1.16 Reliability of police services ....................................................79
1.17 Ethical behavior of firms..........................................................98 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards........................104 7.01 Cooperation in labour-employer relations ................................93
1.19 Efficacy of corporate boards ..................................................110 7.02 Flexibility of wage determination...........................................105
1.20 Protection of minority shareholders’ interests ........................95 7.03 Rigidity of employment* .......................................................104
1.21 Strength of investor protection* .............................................59 7.04 Hiring and firing practices........................................................78
7.05 Redundancy costs* .................................................................29
2nd pillar: Infrastructure 7.06 Pay and productivity...............................................................105
2.01 Quality of overall infrastructure ...............................................86 7.07 Reliance on professional management .................................129
2.02 Quality of roads .......................................................................66 7.08 Brain drain..............................................................................125
2.03 Quality of railroad infrastructure ..............................................65 7.09 Female participation in labour force*.....................................120
2.04 Quality of port infrastructure..................................................115
2.05 Quality of air transport infrastructure ......................................98 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................70 8.01 Availability of financial services .............................................131
2.07 Quality of electricity supply .....................................................69 8.02 Affordability of financial services ...........................................136
29
2.08 Fixed telephone lines*...........................................................102 8.03 Financing through local equity market...................................127
2.09 Mobile telephone subscriptions* ............................................72 8.04 Ease of access to loans...........................................................67
8.05 Venture capital availability........................................................81
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows ...................................................136
3.01 Government budget balance* ...............................................120 8.07 Soundness of banks ..............................................................121
3.02 National savings rate* .............................................................26 8.08 Regulation of securities exchanges .......................................137
3.03 Inflation*..................................................................................99 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................81
3.05 Government debt*...................................................................10 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................59 9.01 Availability of latest technologies...........................................109
9.02 Firm-level technology absorption...........................................128
4th pillar: Health and primary education 9.03 FDI and technology transfer ..................................................129
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................96
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................82
4.03 Business impact of tuberculosis .............................................91 9.06 Internet bandwidth* ...............................................................n/a
4.04 Tuberculosis incidence* ..........................................................73
4.05 Business impact of HIV/AIDS..................................................63 10th pillar: Market size
4.06 HIV prevalence* ......................................................................22 10.01 Domestic market size index* ..................................................51
4.07 Infant mortality* ....................................................................104 10.02 Foreign market size index*......................................................41
4.08 Life expectancy* .....................................................................77
4.09 Quality of primary education ...................................................96 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................58 11.01 Local supplier quantity.............................................................59
11.02 Local supplier quality .............................................................105
5th pillar: Higher education and training 11.03 State of cluster development ................................................126
5.01 Secondary education enrollment rate* ...................................80 11.04 Nature of competitive advantage ..........................................129
5.02 Tertiary education enrollment rate*.........................................87 11.05 Value chain breadth................................................................123
5.03 Quality of the educational system .........................................117 11.06 Control of international distribution .......................................109
5.04 Quality of math and science education...................................84 11.07 Production process sophistication...........................................83
5.05 Quality of management schools..............................................91 11.08 Extent of marketing ...............................................................105
5.06 Internet access in schools .....................................................125 11.09 Willingness to delegate authority...........................................111
5.07 Local availability of research and training services ................105
5.08 Extent of staff training ...........................................................103 12th pillar: Innovation
12.01 Capacity for innovation ..........................................................125
12.02 Quality of scientific research institutions ................................96
12.03 Company spending on R&D ..................................................106
12.04 University-industry collabouration in R&D .............................119
12.05 Gov’t procurement of advanced tech products .....................123
12.06 Availability of scientists and engineers....................................43
12.07 Utility patents per million population*.....................................90

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Bahrain
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................0.8
GDP (US$ billions).....................................................20.2 Bahrain Middle East and North Africa
40,000
GDP per capita (US$) ...........................................19,455
30,000
GDP (PPP) as share (%) of world total .................0.04
20,000

10,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................37 ......4.5 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................38 ........4.5
GCI 2008–2009 (out of 134)..................................................37 ........4.6 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................21 ........5.5
1st pillar: Institutions ...........................................................27 ........5.0
2nd pillar: Infrastructure.....................................................27 ........5.1 Institutions
7
3rd pillar: Macroeconomic environment .........................11 ........5.7 Innovation Infrastructure
6
4th pillar: Health and primary education .........................36 ........6.2
5
Business Macroeconomic
Efficiency enhancers..........................................................33 ........4.5 4
environment
sophistication
5th pillar: Higher education and training .........................44 ........4.6 3
30 6th pillar: Goods market efficiency.....................................9 ........5.1 2
Health and
7th pillar: Labour market efficiency..................................28 ........4.8 Market size 1 primary
education
8th pillar: Financial market development.........................20 ........4.9
9th pillar: Technological readiness...................................27 ........4.9
Technological Higher education
10th pillar: Market size........................................................98 ........2.9 readiness and training

Innovation and sophistication factors ............................55 ........3.7 Financial market Goods market
11th pillar: Business sophistication..................................55 ........4.1 development efficiency
12th pillar: Innovation..........................................................59 ........3.2 Labour market efficiency

Bahrain Economies in transition from 2 to 3

The most problematic factors for doing business

Restrictive labour regulations.....................................16.9
Poor work ethic in national labour force ..................16.7
Inadequately educated workforce.............................13.1
Inefficient government bureaucracy.........................12.3
Access to financing ......................................................12.2
Inadequate supply of infrastructure ............................8.9
Inflation .............................................................................6.1
Policy instability...............................................................4.7
Corruption.........................................................................3.5
Foreign currency regulations........................................1.9
Poor public health ...........................................................1.7
Tax regulations ................................................................0.7
Crime and theft ................................................................0.6
Government instability/coups .......................................0.2
Tax rates ...........................................................................0.2
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Bahrain
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................21 6.01 Intensity of local competition ..................................................40
1.02 Intellectual property protection ...............................................22 6.02 Extent of market dominance ...................................................37
1.03 Diversion of public funds.........................................................22 6.03 Effectiveness of anti-monopoly policy.....................................27
1.04 Public trust of politicians .........................................................27 6.04 Extent and effect of taxation .....................................................1
1.05 Irregular payments and bribes.................................................23 6.05 Total tax rate*............................................................................6
1.06 Judicial independence .............................................................34 6.06 Number of procedures required to start a business* .............57
1.07 Favoritism in decisions of government officials ......................42 6.07 Time required to start a business* .........................................30
1.08 Wastefulness of government spending ....................................8 6.08 Agricultural policy costs...........................................................20
1.09 Burden of government regulation ...........................................19 6.09 Prevalence of trade barriers.....................................................11
1.10 Efficiency of legal framework in settling disputes...................58 6.10 Trade tariffs*............................................................................58
1.11 Efficiency of legal framework in challenging regulations ........45 6.11 Prevalence of foreign ownership.............................................14
1.12 Transparency of government policymaking .............................43 6.12 Business impact of rules on FDI ...............................................5
1.13 Business costs of terrorism ....................................................87 6.13 Burden of customs procedures ...............................................11
1.14 Business costs of crime and violence.....................................38 6.14 Degree of customer orientation ..............................................27
1.15 Organized crime ......................................................................30 6.15 Buyer sophistication ................................................................33
1.16 Reliability of police services ....................................................32
1.17 Ethical behavior of firms..........................................................26 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................20 7.01 Cooperation in labour-employer relations ................................57
1.19 Efficacy of corporate boards....................................................24 7.02 Flexibility of wage determination ..............................................8
1.20 Protection of minority shareholders’ interests ........................20 7.03 Rigidity of employment* .........................................................18
1.21 Strength of investor protection* .............................................45 7.04 Hiring and firing practices........................................................95
7.05 Redundancy costs* ...................................................................6
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................23
2.01 Quality of overall infrastructure ...............................................26 7.07 Reliance on professional management ...................................73
2.02 Quality of roads .......................................................................25 7.08 Brain drain ...............................................................................15
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force*.....................................127
2.04 Quality of port infrastructure ...................................................13
2.05 Quality of air transport infrastructure ......................................20 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................56 8.01 Availability of financial services ...............................................18
2.07 Quality of electricity supply .....................................................62 8.02 Affordability of financial services .............................................11
31
2.08 Fixed telephone lines* ............................................................43 8.03 Financing through local equity market ....................................51
2.09 Mobile telephone subscriptions* ..............................................3 8.04 Ease of access to loans.............................................................2
8.05 Venture capital availability........................................................18
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................12
3.01 Government budget balance* .................................................23 8.07 Soundness of banks ................................................................19
3.02 National savings rate* ...............................................................5 8.08 Regulation of securities exchanges.........................................13
3.03 Inflation*..................................................................................69 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................84
3.05 Government debt* ..................................................................64 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................43 9.01 Availability of latest technologies ............................................29
9.02 Firm-level technology absorption.............................................48
4th pillar: Health and primary education 9.03 FDI and technology transfer.....................................................11
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................11
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................30
4.03 Business impact of tuberculosis .............................................45 9.06 Internet bandwidth* ................................................................54
4.04 Tuberculosis incidence* ..........................................................65
4.05 Business impact of HIV/AIDS..................................................48 10th pillar: Market size
4.06 HIV prevalence* ......................................................................47 10.01 Domestic market size index* ................................................106
4.07 Infant mortality* ......................................................................51 10.02 Foreign market size index*......................................................77
4.08 Life expectancy* .....................................................................45
4.09 Quality of primary education ...................................................41 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................31 11.01 Local supplier quantity ...........................................................115
11.02 Local supplier quality ...............................................................71
5th pillar: Higher education and training 11.03 State of cluster development ..................................................14
5.01 Secondary education enrollment rate* ...................................36 11.04 Nature of competitive advantage ............................................80
5.02 Tertiary education enrollment rate* .........................................74 11.05 Value chain breadth .................................................................77
5.03 Quality of the educational system...........................................38 11.06 Control of international distribution .........................................38
5.04 Quality of math and science education...................................44 11.07 Production process sophistication...........................................47
5.05 Quality of management schools..............................................45 11.08 Extent of marketing.................................................................40
5.06 Internet access in schools.......................................................32 11.09 Willingness to delegate authority............................................29
5.07 Local availability of research and training services..................81
5.08 Extent of staff training.............................................................16 12th pillar: Innovation
12.01 Capacity for innovation ............................................................67
12.02 Quality of scientific research institutions ...............................117
12.03 Company spending on R&D ..................................................101
12.04 University-industry collabouration in R&D...............................88
12.05 Gov’t procurement of advanced tech products.......................22
12.06 Availability of scientists and engineers....................................41
12.07 Utility patents per million population*.....................................90

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Egypt
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................83.0
GDP (US$ billions)...................................................188.0 Egypt Middle East and North Africa
12,000
GDP per capita (US$) .............................................2,450
9,000
GDP (PPP) as share (%) of world total .................0.68
6,000

3,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................81 ......4.0 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................70 ........4.0
GCI 2008–2009 (out of 134)..................................................81 ........4.0 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................89 ........4.2
1st pillar: Institutions ...........................................................57 ........4.0
2nd pillar: Infrastructure.....................................................64 ........4.0 Institutions
7
3rd pillar: Macroeconomic environment .......................129 ........3.4 Innovation Infrastructure
6
4th pillar: Health and primary education .........................91 ........5.4
5
Business Macroeconomic
Efficiency enhancers..........................................................82 ........3.8 4 environment
sophistication
5th pillar: Higher education and training .........................97 ........3.6 3
32 6th pillar: Goods market efficiency...................................90 ........3.9 2 Health and
7th pillar: Labour market efficiency................................133 ........3.4 Market size 1 primary
education
8th pillar: Financial market development.........................82 ........4.0
9th pillar: Technological readiness...................................87 ........3.3
Technological Higher education
10th pillar: Market size........................................................26 ........4.8 readiness and training

Innovation and sophistication factors ............................68 ........3.5 Financial market Goods market
11th pillar: Business sophistication..................................63 ........4.0 development efficiency
12th pillar: Innovation..........................................................83 ........3.0 Labour market efficiency

Egypt Economies in transition from 1 to 2

The most problematic factors for doing business

Corruption.......................................................................19.0
Inflation ...........................................................................14.8
Inadequately educated workforce.............................10.1
Tax regulations ................................................................9.2
Access to financing ........................................................8.2
Inefficient government bureaucracy...........................6.1
Restrictive labour regulations.......................................5.9
Poor work ethic in national labour force ....................5.6
Tax rates ...........................................................................4.5
Policy instability...............................................................4.5
Inadequate supply of infrastructure ............................3.8
Crime and theft ................................................................3.5
Poor public health ...........................................................3.2
Foreign currency regulations........................................0.9
Government instability/coups .......................................0.6
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Egypt
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................56 6.01 Intensity of local competition ..................................................91
1.02 Intellectual property protection ...............................................67 6.02 Extent of market dominance ...................................................95
1.03 Diversion of public funds.........................................................83 6.03 Effectiveness of anti-monopoly policy ...................................106
1.04 Public trust of politicians .........................................................40 6.04 Extent and effect of taxation ...................................................75
1.05 Irregular payments and bribes.................................................64 6.05 Total tax rate*..........................................................................78
1.06 Judicial independence .............................................................63 6.06 Number of procedures required to start a business* .............34
1.07 Favoritism in decisions of government officials ......................95 6.07 Time required to start a business* .........................................21
1.08 Wastefulness of government spending ..................................51 6.08 Agricultural policy costs...........................................................84
1.09 Burden of government regulation ...........................................79 6.09 Prevalence of trade barriers ...................................................114
1.10 Efficiency of legal framework in settling disputes...................40 6.10 Trade tariffs* ..........................................................................123
1.11 Efficiency of legal framework in challenging regulations ........69 6.11 Prevalence of foreign ownership ...........................................100
1.12 Transparency of government policymaking .............................68 6.12 Business impact of rules on FDI .............................................75
1.13 Business costs of terrorism ..................................................132 6.13 Burden of customs procedures...............................................50
1.14 Business costs of crime and violence.....................................97 6.14 Degree of customer orientation ..............................................63
1.15 Organized crime ......................................................................14 6.15 Buyer sophistication ..............................................................126
1.16 Reliability of police services ....................................................81
1.17 Ethical behavior of firms..........................................................59 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................58 7.01 Cooperation in labour-employer relations ................................99
1.19 Efficacy of corporate boards....................................................82 7.02 Flexibility of wage determination ............................................60
1.20 Protection of minority shareholders’ interests ........................46 7.03 Rigidity of employment* .........................................................67
1.21 Strength of investor protection* .............................................59 7.04 Hiring and firing practices ........................................................76
7.05 Redundancy costs* ...............................................................128
2nd pillar: Infrastructure 7.06 Pay and productivity.................................................................76
2.01 Quality of overall infrastructure ...............................................68 7.07 Reliance on professional management ...................................86
2.02 Quality of roads .......................................................................75 7.08 Brain drain ..............................................................................114
2.03 Quality of railroad infrastructure ..............................................46 7.09 Female participation in labour force*.....................................130
2.04 Quality of port infrastructure ...................................................69
2.05 Quality of air transport infrastructure ......................................39 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................33 8.01 Availability of financial services ...............................................60
2.07 Quality of electricity supply .....................................................53 8.02 Affordability of financial services.............................................69
33
2.08 Fixed telephone lines* ............................................................87 8.03 Financing through local equity market ....................................29
2.09 Mobile telephone subscriptions* ..........................................102 8.04 Ease of access to loans...........................................................49
8.05 Venture capital availability........................................................41
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................84
3.01 Government budget balance* ...............................................107 8.07 Soundness of banks ................................................................61
3.02 National savings rate* ...........................................................108 8.08 Regulation of securities exchanges.........................................67
3.03 Inflation* ................................................................................135 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................69
3.05 Government debt* .................................................................119 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................69 9.01 Availability of latest technologies ............................................91
9.02 Firm-level technology absorption.............................................58
4th pillar: Health and primary education 9.03 FDI and technology transfer ....................................................53
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................90
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................91
4.03 Business impact of tuberculosis .............................................32 9.06 Internet bandwidth* ................................................................72
4.04 Tuberculosis incidence* ..........................................................44
4.05 Business impact of HIV/AIDS..................................................29 10th pillar: Market size
4.06 HIV prevalence* ........................................................................1 10.01 Domestic market size index* ..................................................27
4.07 Infant mortality* ......................................................................80 10.02 Foreign market size index*......................................................27
4.08 Life expectancy* .....................................................................94
4.09 Quality of primary education .................................................126 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................73 11.01 Local supplier quantity.............................................................36
11.02 Local supplier quality ...............................................................89
5th pillar: Higher education and training 11.03 State of cluster development ..................................................66
5.01 Secondary education enrollment rate* ...................................90 11.04 Nature of competitive advantage ............................................35
5.02 Tertiary education enrollment rate*.........................................78 11.05 Value chain breadth .................................................................67
5.03 Quality of the educational system.........................................131 11.06 Control of international distribution .........................................94
5.04 Quality of math and science education .................................125 11.07 Production process sophistication...........................................46
5.05 Quality of management schools............................................122 11.08 Extent of marketing.................................................................79
5.06 Internet access in schools.......................................................96 11.09 Willingness to delegate authority............................................57
5.07 Local availability of research and training services..................64
5.08 Extent of staff training ...........................................................112 12th pillar: Innovation
12.01 Capacity for innovation ..........................................................109
12.02 Quality of scientific research institutions ...............................110
12.03 Company spending on R&D ....................................................74
12.04 University-industry collabouration in R&D .............................120
12.05 Gov’t procurement of advanced tech products.......................86
12.06 Availability of scientists and engineers....................................25
12.07 Utility patents per million population*.....................................84

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Jordan
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................6.3
GDP (US$ billions).....................................................22.9 Jordan Middle East and North Africa
12,000
GDP per capita (US$) .............................................3,829
9,000
GDP (PPP) as share (%) of world total .................0.05
6,000

3,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................65 ......4.2 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................50 ........4.3
GCI 2008–2009 (out of 134)..................................................48 ........4.4 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................57 ........4.7
1st pillar: Institutions ...........................................................41 ........4.6
2nd pillar: Infrastructure.....................................................61 ........4.1 Institutions
7
3rd pillar: Macroeconomic environment .......................103 ........4.2 Innovation Infrastructure
6
4th pillar: Health and primary education .........................65 ........5.7
5
Business Macroeconomic
Efficiency enhancers..........................................................73 ........4.0 4
environment
sophistication
5th pillar: Higher education and training .........................57 ........4.3 3
34 6th pillar: Goods market efficiency...................................46 ........4.4 2
Health and
7th pillar: Labour market efficiency................................112 ........3.9 Market size 1 primary
education
8th pillar: Financial market development.........................54 ........4.3
9th pillar: Technological readiness...................................62 ........3.7
Technological Higher education
10th pillar: Market size........................................................84 ........3.3 readiness and training

Innovation and sophistication factors ............................65 ........3.5 Financial market Goods market
11th pillar: Business sophistication..................................66 ........3.9 development efficiency
12th pillar: Innovation..........................................................68 ........3.1 Labour market efficiency

Jordan Efficiency-driven economies

The most problematic factors for doing business

Tax regulations ..............................................................14.6
Tax rates .........................................................................13.2
Access to financing ......................................................12.6
Inadequately educated workforce.............................10.3
Restrictive labour regulations.......................................9.9
Inefficient government bureaucracy...........................9.9
Poor work ethic in national labour force ....................7.9
Inflation .............................................................................6.8
Corruption.........................................................................5.4
Inadequate supply of infrastructure ............................3.3
Policy instability...............................................................2.7
Government instability/coups .......................................1.5
Foreign currency regulations........................................1.0
Poor public health ...........................................................0.7
Crime and theft ................................................................0.2
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Jordan
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................30 6.01 Intensity of local competition ..................................................46
1.02 Intellectual property protection ...............................................38 6.02 Extent of market dominance ...................................................58
1.03 Diversion of public funds.........................................................41 6.03 Effectiveness of anti-monopoly policy.....................................51
1.04 Public trust of politicians .........................................................43 6.04 Extent and effect of taxation ...................................................92
1.05 Irregular payments and bribes.................................................47 6.05 Total tax rate*..........................................................................32
1.06 Judicial independence .............................................................48 6.06 Number of procedures required to start a business* .............73
1.07 Favoritism in decisions of government officials ......................44 6.07 Time required to start a business* .........................................45
1.08 Wastefulness of government spending ..................................42 6.08 Agricultural policy costs...........................................................65
1.09 Burden of government regulation ...........................................50 6.09 Prevalence of trade barriers.....................................................84
1.10 Efficiency of legal framework in settling disputes...................39 6.10 Trade tariffs*............................................................................98
1.11 Efficiency of legal framework in challenging regulations ........50 6.11 Prevalence of foreign ownership.............................................58
1.12 Transparency of government policymaking .............................55 6.12 Business impact of rules on FDI .............................................45
1.13 Business costs of terrorism ....................................................65 6.13 Burden of customs procedures...............................................53
1.14 Business costs of crime and violence.....................................21 6.14 Degree of customer orientation ..............................................65
1.15 Organized crime ......................................................................13 6.15 Buyer sophistication ................................................................85
1.16 Reliability of police services ....................................................24
1.17 Ethical behavior of firms..........................................................48 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................36 7.01 Cooperation in labour-employer relations ................................84
1.19 Efficacy of corporate boards....................................................81 7.02 Flexibility of wage determination ............................................36
1.20 Protection of minority shareholders’ interests ........................30 7.03 Rigidity of employment* .........................................................60
1.21 Strength of investor protection* .............................................99 7.04 Hiring and firing practices........................................................92
7.05 Redundancy costs* ...................................................................6
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................77
2.01 Quality of overall infrastructure ...............................................35 7.07 Reliance on professional management .................................100
2.02 Quality of roads .......................................................................44 7.08 Brain drain ...............................................................................66
2.03 Quality of railroad infrastructure ..............................................98 7.09 Female participation in labour force*.....................................139
2.04 Quality of port infrastructure ...................................................64
2.05 Quality of air transport infrastructure ......................................35 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................65 8.01 Availability of financial services ...............................................67
2.07 Quality of electricity supply .....................................................38 8.02 Affordability of financial services.............................................58
35
2.08 Fixed telephone lines*...........................................................100 8.03 Financing through local equity market ....................................33
2.09 Mobile telephone subscriptions* ............................................68 8.04 Ease of access to loans...........................................................52
8.05 Venture capital availability........................................................54
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................35
3.01 Government budget balance* ...............................................136 8.07 Soundness of banks ................................................................51
3.02 National savings rate* .............................................................23 8.08 Regulation of securities exchanges.........................................29
3.03 Inflation* ..................................................................................11 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................47
3.05 Government debt*.................................................................106 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................79 9.01 Availability of latest technologies ............................................49
9.02 Firm-level technology absorption.............................................29
4th pillar: Health and primary education 9.03 FDI and technology transfer ....................................................36
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................82
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions*..........................................76
4.03 Business impact of tuberculosis .............................................46 9.06 Internet bandwidth* ................................................................62
4.04 Tuberculosis incidence* ..........................................................15
4.05 Business impact of HIV/AIDS..................................................31 10th pillar: Market size
4.06 HIV prevalence* ......................................................................46 10.01 Domestic market size index* ..................................................85
4.07 Infant mortality*.......................................................................74 10.02 Foreign market size index*......................................................82
4.08 Life expectancy* .....................................................................73
4.09 Quality of primary education ...................................................63 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................98 11.01 Local supplier quantity.............................................................60
11.02 Local supplier quality ...............................................................86
5th pillar: Higher education and training 11.03 State of cluster development ..................................................71
5.01 Secondary education enrollment rate* ...................................68 11.04 Nature of competitive advantage ............................................51
5.02 Tertiary education enrollment rate*.........................................57 11.05 Value chain breadth .................................................................62
5.03 Quality of the educational system...........................................55 11.06 Control of international distribution .........................................51
5.04 Quality of math and science education...................................53 11.07 Production process sophistication...........................................65
5.05 Quality of management schools..............................................83 11.08 Extent of marketing.................................................................75
5.06 Internet access in schools.......................................................51 11.09 Willingness to delegate authority............................................72
5.07 Local availability of research and training services..................48
5.08 Extent of staff training ...........................................................101 12th pillar: Innovation
12.01 Capacity for innovation ............................................................96
12.02 Quality of scientific research institutions ................................98
12.03 Company spending on R&D...................................................116
12.04 University-industry collabouration in R&D...............................99
12.05 Gov’t procurement of advanced tech products.......................57
12.06 Availability of scientists and engineers....................................26
12.07 Utility patents per million population* .....................................76

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Kuwait
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................3.0
GDP (US$ billions)...................................................111.3 Kuwait Middle East and North Africa
50,000
GDP per capita (US$) ...........................................31,482 40,000
GDP (PPP) as share (%) of world total .................0.20
30,000

20,000

10,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................35 ......4.6 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................39 ........4.5
GCI 2008–2009 (out of 134)..................................................35 ........4.6 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................36 ........5.2
1st pillar: Institutions ...........................................................46 ........4.4
2nd pillar: Infrastructure.....................................................60 ........4.1 Institutions
7
3rd pillar: Macroeconomic environment ...........................2 ........6.4 Innovation Infrastructure
6
4th pillar: Health and primary education .........................68 ........5.7
5
Business Macroeconomic
Efficiency enhancers..........................................................68 ........4.0 4 environment
sophistication
5th pillar: Higher education and training .........................83 ........3.9 3
36 6th pillar: Goods market efficiency...................................54 ........4.3 2 Health and
7th pillar: Labour market efficiency..................................64 ........4.4 Market size 1 primary
education
8th pillar: Financial market development.........................63 ........4.2
9th pillar: Technological readiness...................................77 ........3.5
Technological Higher education
10th pillar: Market size........................................................59 ........3.9 readiness and training

Innovation and sophistication factors ............................60 ........3.6 Financial market Goods market
11th pillar: Business sophistication..................................58 ........4.1 development efficiency
12th pillar: Innovation..........................................................76 ........3.0 Labour market efficiency

Kuwait Economies in transition from 1 to 2

The most problematic factors for doing business

Inefficient government bureaucracy.........................21.5
Access to financing ......................................................17.4
Restrictive labour regulations.....................................17.3
Inadequately educated workforce...............................9.7
Inadequate supply of infrastructure ............................8.1
Corruption.........................................................................7.6
Poor work ethic in national labour force ....................6.4
Policy instability...............................................................4.9
Government instability/coups .......................................2.1
Inflation .............................................................................2.0
Foreign currency regulations........................................1.5
Poor public health ...........................................................1.3
Crime and theft ................................................................0.1
Tax regulations ................................................................0.0
Tax rates ...........................................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Kuwait
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................46 6.01 Intensity of local competition ..................................................60
1.02 Intellectual property protection ...............................................47 6.02 Extent of market dominance ...................................................60
1.03 Diversion of public funds.........................................................57 6.03 Effectiveness of anti-monopoly policy.....................................87
1.04 Public trust of politicians .........................................................46 6.04 Extent and effect of taxation .....................................................6
1.05 Irregular payments and bribes.................................................53 6.05 Total tax rate*............................................................................8
1.06 Judicial independence .............................................................36 6.06 Number of procedures required to start a business* ...........121
1.07 Favoritism in decisions of government officials ......................47 6.07 Time required to start a business*........................................106
1.08 Wastefulness of government spending ..................................66 6.08 Agricultural policy costs...........................................................44
1.09 Burden of government regulation ..........................................117 6.09 Prevalence of trade barriers.....................................................38
1.10 Efficiency of legal framework in settling disputes...................38 6.10 Trade tariffs*............................................................................53
1.11 Efficiency of legal framework in challenging regulations ........41 6.11 Prevalence of foreign ownership ...........................................136
1.12 Transparency of government policymaking............................118 6.12 Business impact of rules on FDI ...........................................130
1.13 Business costs of terrorism ....................................................50 6.13 Burden of customs procedures...............................................80
1.14 Business costs of crime and violence.......................................9 6.14 Degree of customer orientation ..............................................54
1.15 Organized crime ......................................................................27 6.15 Buyer sophistication ................................................................72
1.16 Reliability of police services ....................................................39
1.17 Ethical behavior of firms..........................................................51 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................65 7.01 Cooperation in labour-employer relations ................................45
1.19 Efficacy of corporate boards ..................................................114 7.02 Flexibility of wage determination ............................................17
1.20 Protection of minority shareholders’ interests ........................84 7.03 Rigidity of employment* ...........................................................1
1.21 Strength of investor protection* .............................................27 7.04 Hiring and firing practices........................................................65
7.05 Redundancy costs*................................................................101
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................57
2.01 Quality of overall infrastructure ...............................................45 7.07 Reliance on professional management..................................104
2.02 Quality of roads .......................................................................40 7.08 Brain drain ...............................................................................43
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force* .....................................118
2.04 Quality of port infrastructure ...................................................63
2.05 Quality of air transport infrastructure ......................................64 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................57 8.01 Availability of financial services ...............................................46
2.07 Quality of electricity supply .....................................................71 8.02 Affordability of financial services.............................................39
37
2.08 Fixed telephone lines* ............................................................69 8.03 Financing through local equity market ....................................42
2.09 Mobile telephone subscriptions* ............................................61 8.04 Ease of access to loans...........................................................26
8.05 Venture capital availability........................................................22
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................77
3.01 Government budget balance* ...................................................2 8.07 Soundness of banks ................................................................64
3.02 National savings rate* ...............................................................1 8.08 Regulation of securities exchanges.........................................77
3.03 Inflation*..................................................................................91 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................37
3.05 Government debt* ....................................................................6 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................34 9.01 Availability of latest technologies ............................................63
9.02 Firm-level technology absorption.............................................38
4th pillar: Health and primary education 9.03 FDI and technology transfer ..................................................134
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................61
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................86
4.03 Business impact of tuberculosis .............................................67 9.06 Internet bandwidth* ................................................................76
4.04 Tuberculosis incidence* ..........................................................61
4.05 Business impact of HIV/AIDS..................................................39 10th pillar: Market size
4.06 HIV prevalence* ......................................................................47 10.01 Domestic market size index* ..................................................61
4.07 Infant mortality* ......................................................................49 10.02 Foreign market size index*......................................................56
4.08 Life expectancy* .....................................................................35
4.09 Quality of primary education ...................................................79 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ......................................108 11.01 Local supplier quantity.............................................................32
11.02 Local supplier quality ...............................................................65
5th pillar: Higher education and training 11.03 State of cluster development ..................................................59
5.01 Secondary education enrollment rate* ...................................62 11.04 Nature of competitive advantage ............................................52
5.02 Tertiary education enrollment rate*.........................................92 11.05 Value chain breadth .................................................................71
5.03 Quality of the educational system...........................................88 11.06 Control of international distribution .........................................26
5.04 Quality of math and science education...................................89 11.07 Production process sophistication...........................................67
5.05 Quality of management schools..............................................95 11.08 Extent of marketing.................................................................62
5.06 Internet access in schools.......................................................67 11.09 Willingness to delegate authority............................................26
5.07 Local availability of research and training services..................75
5.08 Extent of staff training.............................................................96 12th pillar: Innovation
12.01 Capacity for innovation ............................................................97
12.02 Quality of scientific research institutions ................................75
12.03 Company spending on R&D ..................................................102
12.04 University-industry collabouration in R&D...............................96
12.05 Gov’t procurement of advanced tech products.......................90
12.06 Availability of scientists and engineers....................................57
12.07 Utility patents per million population*.....................................30

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Lebanon
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................4.2
GDP (US$ billions).....................................................33.6 Lebanon Middle East and North Africa
16,000
GDP per capita (US$) .............................................8,707
12,000
GDP (PPP) as share (%) of world total .................0.08
8,000

4,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................92 ......3.9 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)................................................n/a .......n/a
GCI 2008–2009 (out of 134)................................................n/a .......n/a Factor Efficiency Innovation
driven driven driven
Basic requirements...........................................................106 ........3.9
1st pillar: Institutions .........................................................113 ........3.3
2nd pillar: Infrastructure...................................................123 ........2.5 Institutions
7
3rd pillar: Macroeconomic environment .......................125 ........3.6 Innovation Infrastructure
6
4th pillar: Health and primary education .........................44 ........6.1
5
Business Macroeconomic
Efficiency enhancers..........................................................70 ........4.0 4 environment
sophistication
5th pillar: Higher education and training .........................48 ........4.6 3
38 6th pillar: Goods market efficiency...................................42 ........4.4 2 Health and
7th pillar: Labour market efficiency................................103 ........4.0 Market size 1 primary
education
8th pillar: Financial market development.........................53 ........4.3
9th pillar: Technological readiness...................................92 ........3.2
Technological Higher education
10th pillar: Market size........................................................80 ........3.4 readiness and training

Innovation and sophistication factors ............................74 ........3.4 Financial market Goods market
11th pillar: Business sophistication..................................53 ........4.2 development efficiency
12th pillar: Innovation........................................................112 ........2.7 Labour market efficiency

Lebanon Efficiency-driven economies

The most problematic factors for doing business

Inadequate supply of infrastructure ..........................18.5
Inefficient government bureaucracy.........................17.7
Government instability/coups .....................................15.9
Corruption.......................................................................12.3
Policy instability.............................................................11.4
Access to financing ........................................................6.7
Inadequately educated workforce...............................3.9
Restrictive labour regulations.......................................3.1
Poor work ethic in national labour force ....................3.1
Tax regulations ................................................................2.6
Inflation .............................................................................2.6
Tax rates ...........................................................................1.5
Poor public health ...........................................................0.6
Crime and theft ................................................................0.2
Foreign currency regulations........................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Lebanon
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................57 6.01 Intensity of local competition ..................................................21
1.02 Intellectual property protection ..............................................110 6.02 Extent of market dominance ...................................................71
1.03 Diversion of public funds .......................................................116 6.03 Effectiveness of anti-monopoly policy ...................................127
1.04 Public trust of politicians........................................................136 6.04 Extent and effect of taxation ...................................................22
1.05 Irregular payments and bribes ...............................................118 6.05 Total tax rate*..........................................................................29
1.06 Judicial independence............................................................113 6.06 Number of procedures required to start a business* .............23
1.07 Favoritism in decisions of government officials.....................136 6.07 Time required to start a business* .........................................30
1.08 Wastefulness of government spending.................................130 6.08 Agricultural policy costs...........................................................73
1.09 Burden of government regulation ...........................................82 6.09 Prevalence of trade barriers.....................................................63
1.10 Efficiency of legal framework in settling disputes .................107 6.10 Trade tariffs*............................................................................79
1.11 Efficiency of legal framework in challenging regulations.......133 6.11 Prevalence of foreign ownership.............................................98
1.12 Transparency of government policymaking ...........................104 6.12 Business impact of rules on FDI .............................................61
1.13 Business costs of terrorism ..................................................136 6.13 Burden of customs procedures .............................................110
1.14 Business costs of crime and violence.....................................62 6.14 Degree of customer orientation ..............................................43
1.15 Organized crime ......................................................................59 6.15 Buyer sophistication ................................................................28
1.16 Reliability of police services ..................................................108
1.17 Ethical behavior of firms ........................................................123 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................80 7.01 Cooperation in labour-employer relations ................................62
1.19 Efficacy of corporate boards....................................................96 7.02 Flexibility of wage determination ............................................14
1.20 Protection of minority shareholders’ interests ........................72 7.03 Rigidity of employment* .........................................................64
1.21 Strength of investor protection* .............................................77 7.04 Hiring and firing practices........................................................53
7.05 Redundancy costs* .................................................................29
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................79
2.01 Quality of overall infrastructure .............................................132 7.07 Reliance on professional management..................................108
2.02 Quality of roads......................................................................101 7.08 Brain drain ..............................................................................113
2.03 Quality of railroad infrastructure.............................................116 7.09 Female participation in labour force*.....................................134
2.04 Quality of port infrastructure ...................................................55
2.05 Quality of air transport infrastructure ......................................36 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................69 8.01 Availability of financial services ...............................................39
2.07 Quality of electricity supply ...................................................136 8.02 Affordability of financial services.............................................36
39
2.08 Fixed telephone lines* ............................................................71 8.03 Financing through local equity market ...................................115
2.09 Mobile telephone subscriptions* ..........................................123 8.04 Ease of access to loans...........................................................36
8.05 Venture capital availability........................................................67
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .......................................................5
3.01 Government budget balance* ...............................................137 8.07 Soundness of banks ..................................................................4
3.02 National savings rate* .............................................................42 8.08 Regulation of securities exchanges.........................................50
3.03 Inflation*..................................................................................38 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................19
3.05 Government debt*.................................................................135 9th pillar: Technological readiness
3.06 Country credit rating* ............................................................108 9.01 Availability of latest technologies ............................................75
9.02 Firm-level technology absorption.............................................68
4th pillar: Health and primary education 9.03 FDI and technology transfer...................................................117
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................88
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................67
4.03 Business impact of tuberculosis .............................................71 9.06 Internet bandwidth* ................................................................94
4.04 Tuberculosis incidence* ..........................................................33
4.05 Business impact of HIV/AIDS..................................................59 10th pillar: Market size
4.06 HIV prevalence* ......................................................................22 10.01 Domestic market size index* ..................................................76
4.07 Infant mortality* ......................................................................58 10.02 Foreign market size index*......................................................96
4.08 Life expectancy* .....................................................................80
4.09 Quality of primary education ...................................................12 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ......................................105 11.01 Local supplier quantity.............................................................24
11.02 Local supplier quality ...............................................................52
5th pillar: Higher education and training 11.03 State of cluster development ..................................................78
5.01 Secondary education enrollment rate* ...................................86 11.04 Nature of competitive advantage ............................................26
5.02 Tertiary education enrollment rate*.........................................45 11.05 Value chain breadth .................................................................35
5.03 Quality of the educational system...........................................16 11.06 Control of international distribution ...........................................9
5.04 Quality of math and science education.....................................7 11.07 Production process sophistication...........................................81
5.05 Quality of management schools..............................................20 11.08 Extent of marketing.................................................................37
5.06 Internet access in schools.......................................................79 11.09 Willingness to delegate authority ..........................................133
5.07 Local availability of research and training services..................53
5.08 Extent of staff training ...........................................................102 12th pillar: Innovation
12.01 Capacity for innovation ............................................................99
12.02 Quality of scientific research institutions...............................130
12.03 Company spending on R&D...................................................119
12.04 University-industry collabouration in R&D .............................109
12.05 Gov’t procurement of advanced tech products .....................139
12.06 Availability of scientists and engineers....................................36
12.07 Utility patents per million population*.....................................57

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Libya
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................6.4
GDP (US$ billions).....................................................60.4 Libya Middle East and North Africa
16,000
GDP per capita (US$) .............................................9,529
12,000
GDP (PPP) as share (%) of world total .................0.13
8,000

4,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.......................................................100 ......3.7 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................88 ........3.9
GCI 2008–2009 (out of 134)..................................................91 ........3.9 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................88 ........4.2
1st pillar: Institutions .........................................................111 ........3.3
2nd pillar: Infrastructure.....................................................95 ........3.2 Institutions
7
3rd pillar: Macroeconomic environment ...........................7 ........5.7 Innovation Infrastructure
6
4th pillar: Health and primary education .......................115 ........4.5
5
Business Macroeconomic
Efficiency enhancers........................................................127 ........3.2 4 environment
sophistication
5th pillar: Higher education and training .........................95 ........3.6 3
40 6th pillar: Goods market efficiency.................................134 ........3.2 2 Health and
7th pillar: Labour market efficiency................................139 ........2.8 Market size 1 primary
education
8th pillar: Financial market development.......................130 ........3.0
9th pillar: Technological readiness.................................114 ........2.9
Technological Higher education
10th pillar: Market size........................................................69 ........3.6 readiness and training

Innovation and sophistication factors ..........................135 ........2.6 Financial market Goods market
11th pillar: Business sophistication................................136 ........2.9 development efficiency
12th pillar: Innovation........................................................131 ........2.4 Labour market efficiency

Libya Economies in transition from 1 to 2

The most problematic factors for doing business

Corruption.......................................................................20.9
Inefficient government bureaucracy.........................16.4
Policy instability.............................................................12.3
Inadequately educated workforce.............................10.9
Inadequate supply of infrastructure ..........................10.4
Access to financing ........................................................8.8
Restrictive labour regulations.......................................7.1
Poor work ethic in national labour force ....................4.5
Government instability/coups .......................................3.3
Poor public health ...........................................................3.1
Tax regulations ................................................................1.2
Foreign currency regulations........................................0.9
Tax rates ...........................................................................0.2
Crime and theft ................................................................0.0
Inflation .............................................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Libya
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights........................................................................111 6.01 Intensity of local competition ................................................130
1.02 Intellectual property protection..............................................102 6.02 Extent of market dominance .................................................134
1.03 Diversion of public funds .......................................................123 6.03 Effectiveness of anti-monopoly policy ...................................136
1.04 Public trust of politicians .........................................................73 6.04 Extent and effect of taxation ...................................................34
1.05 Irregular payments and bribes ...............................................126 6.05 Total tax rate* .........................................................................n/a
1.06 Judicial independence .............................................................95 6.06 Number of procedures required to start a business* ............n/a
1.07 Favoritism in decisions of government officials.....................122 6.07 Time required to start a business*.........................................n/a
1.08 Wastefulness of government spending ..................................65 6.08 Agricultural policy costs ...........................................................74
1.09 Burden of government regulation..........................................109 6.09 Prevalence of trade barriers.....................................................92
1.10 Efficiency of legal framework in settling disputes...................70 6.10 Trade tariffs* ...........................................................................n/a
1.11 Efficiency of legal framework in challenging regulations ........68 6.11 Prevalence of foreign ownership ...........................................130
1.12 Transparency of government policymaking ...........................135 6.12 Business impact of rules on FDI ...........................................121
1.13 Business costs of terrorism ....................................................39 6.13 Burden of customs procedures .............................................109
1.14 Business costs of crime and violence.....................................24 6.14 Degree of customer orientation ............................................131
1.15 Organized crime ......................................................................48 6.15 Buyer sophistication ..............................................................121
1.16 Reliability of police services ..................................................100
1.17 Ethical behavior of firms ........................................................137 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards........................135 7.01 Cooperation in labour-employer relations...............................117
1.19 Efficacy of corporate boards..................................................139 7.02 Flexibility of wage determination...........................................123
1.20 Protection of minority shareholders’ interests.......................118 7.03 Rigidity of employment* ........................................................n/a
1.21 Strength of investor protection*.............................................n/a 7.04 Hiring and firing practices......................................................130
7.05 Redundancy costs* ................................................................n/a
2nd pillar: Infrastructure 7.06 Pay and productivity ..............................................................139
2.01 Quality of overall infrastructure ..............................................115 7.07 Reliance on professional management .................................139
2.02 Quality of roads .......................................................................97 7.08 Brain drain..............................................................................134
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force*.....................................133
2.04 Quality of port infrastructure..................................................116
2.05 Quality of air transport infrastructure ....................................133 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................77 8.01 Availability of financial services .............................................136
2.07 Quality of electricity supply .....................................................81 8.02 Affordability of financial services ...........................................139
41
2.08 Fixed telephone lines* .............................................................74 8.03 Financing through local equity market...................................122
2.09 Mobile telephone subscriptions* ............................................90 8.04 Ease of access to loans...........................................................87
8.05 Venture capital availability........................................................55
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows ...................................................134
3.01 Government budget balance* ...................................................3 8.07 Soundness of banks...............................................................116
3.02 National savings rate* .............................................................39 8.08 Regulation of securities exchanges .......................................135
3.03 Inflation*..................................................................................67 8.09 Legal rights index* .................................................................n/a
3.04 Interest rate spread* ...............................................................42
3.05 Government debt* ....................................................................2 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................70 9.01 Availability of latest technologies ............................................96
9.02 Firm-level technology absorption.............................................99
4th pillar: Health and primary education 9.03 FDI and technology transfer ..................................................127
4.01 Business impact of malaria .......................................................1 9.04 Internet users*.......................................................................116
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* ........................................110
4.03 Business impact of tuberculosis .............................................62 9.06 Internet bandwidth* ..............................................................109
4.04 Tuberculosis incidence* ..........................................................38
4.05 Business impact of HIV/AIDS..................................................89 10th pillar: Market size
4.06 HIV prevalence* ......................................................................47 10.01 Domestic market size index* ..................................................75
4.07 Infant mortality* ......................................................................69 10.02 Foreign market size index*......................................................63
4.08 Life expectancy* .....................................................................55
4.09 Quality of primary education .................................................128 11th pillar: Business sophistication
4.10 Primary education enrollment rate* .......................................n/a 11.01 Local supplier quantity...........................................................105
11.02 Local supplier quality .............................................................136
5th pillar: Higher education and training 11.03 State of cluster development ................................................136
5.01 Secondary education enrollment rate* ...................................48 11.04 Nature of competitive advantage ..........................................139
5.02 Tertiary education enrollment rate*.........................................37 11.05 Value chain breadth................................................................132
5.03 Quality of the educational system.........................................138 11.06 Control of international distribution........................................116
5.04 Quality of math and science education .................................113 11.07 Production process sophistication .........................................117
5.05 Quality of management schools............................................137 11.08 Extent of marketing ...............................................................129
5.06 Internet access in schools .....................................................129 11.09 Willingness to delegate authority ..........................................139
5.07 Local availability of research and training services ................134
5.08 Extent of staff training ...........................................................110 12th pillar: Innovation
12.01 Capacity for innovation ..........................................................136
12.02 Quality of scientific research institutions...............................125
12.03 Company spending on R&D ..................................................139
12.04 University-industry collabouration in R&D .............................131
12.05 Gov’t procurement of advanced tech products .....................126
12.06 Availability of scientists and engineers..................................104
12.07 Utility patents per million population*.....................................90

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Morocco
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................32.0
GDP (US$ billions).....................................................90.8 Morocco Middle East and North Africa
12,000
GDP per capita (US$) .............................................2,865
9,000
GDP (PPP) as share (%) of world total .................0.21
6,000

3,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................75 ......4.1 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................73 ........4.0
GCI 2008–2009 (out of 134)..................................................73 ........4.1 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................64 ........4.6
1st pillar: Institutions ...........................................................66 ........3.9
2nd pillar: Infrastructure.....................................................71 ........3.8 Institutions
7
3rd pillar: Macroeconomic environment .........................31 ........5.2 Innovation Infrastructure
6
4th pillar: Health and primary education .........................94 ........5.4
5
Business Macroeconomic
Efficiency enhancers..........................................................88 ........3.8 4 environment
sophistication
5th pillar: Higher education and training .......................102 ........3.5 3
42 6th pillar: Goods market efficiency...................................77 ........4.1 2 Health and
7th pillar: Labour market efficiency................................130 ........3.5 Market size 1 primary
education
8th pillar: Financial market development.........................74 ........4.1
9th pillar: Technological readiness...................................75 ........3.5
Technological Higher education
10th pillar: Market size........................................................57 ........4.0 readiness and training

Innovation and sophistication factors ............................79 ........3.4 Financial market Goods market
11th pillar: Business sophistication..................................78 ........3.7 development efficiency
12th pillar: Innovation..........................................................81 ........3.0 Labour market efficiency

Morocco Economies in transition from 1 to 2

The most problematic factors for doing business

Access to financing ......................................................18.6
Corruption.......................................................................17.7
Inadequate supply of infrastructure ..........................11.6
Inefficient government bureaucracy.........................10.0
Tax rates ...........................................................................9.4
Tax regulations ................................................................9.3
Inadequately educated workforce...............................5.7
Restrictive labour regulations.......................................4.7
Inflation .............................................................................3.8
Poor work ethic in national labour force ....................3.5
Crime and theft ................................................................1.6
Foreign currency regulations........................................1.3
Poor public health ...........................................................1.3
Policy instability...............................................................1.0
Government instability/coups .......................................0.6
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Morocco
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................63 6.01 Intensity of local competition ..................................................69
1.02 Intellectual property protection ...............................................72 6.02 Extent of market dominance ...................................................68
1.03 Diversion of public funds.........................................................63 6.03 Effectiveness of anti-monopoly policy.....................................71
1.04 Public trust of politicians .........................................................59 6.04 Extent and effect of taxation .................................................100
1.05 Irregular payments and bribes.................................................82 6.05 Total tax rate*..........................................................................73
1.06 Judicial independence .............................................................79 6.06 Number of procedures required to start a business* .............34
1.07 Favoritism in decisions of government officials ......................52 6.07 Time required to start a business* .........................................42
1.08 Wastefulness of government spending...................................74 6.08 Agricultural policy costs .........................................................108
1.09 Burden of government regulation ...........................................61 6.09 Prevalence of trade barriers...................................................104
1.10 Efficiency of legal framework in settling disputes...................57 6.10 Trade tariffs* ..........................................................................128
1.11 Efficiency of legal framework in challenging regulations ........53 6.11 Prevalence of foreign ownership .............................................74
1.12 Transparency of government policymaking .............................76 6.12 Business impact of rules on FDI..............................................74
1.13 Business costs of terrorism ....................................................84 6.13 Burden of customs procedures...............................................60
1.14 Business costs of crime and violence.....................................57 6.14 Degree of customer orientation ..............................................57
1.15 Organized crime ......................................................................58 6.15 Buyer sophistication ................................................................95
1.16 Reliability of police services ....................................................62
1.17 Ethical behavior of firms ..........................................................76 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards........................100 7.01 Cooperation in labour-employer relations ..............................120
1.19 Efficacy of corporate boards....................................................64 7.02 Flexibility of wage determination ............................................71
1.20 Protection of minority shareholders’ interests ........................58 7.03 Rigidity of employment* .......................................................132
1.21 Strength of investor protection*............................................127 7.04 Hiring and firing practices........................................................66
7.05 Redundancy costs* ...............................................................106
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................50
2.01 Quality of overall infrastructure ...............................................71 7.07 Reliance on professional management..................................105
2.02 Quality of roads .......................................................................88 7.08 Brain drain................................................................................76
2.03 Quality of railroad infrastructure ..............................................37 7.09 Female participation in labour force*.....................................135
2.04 Quality of port infrastructure ...................................................62
2.05 Quality of air transport infrastructure ......................................67 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................46 8.01 Availability of financial services ...............................................61
2.07 Quality of electricity supply .....................................................66 8.02 Affordability of financial services.............................................56
43
2.08 Fixed telephone lines* ............................................................91 8.03 Financing through local equity market ....................................31
2.09 Mobile telephone subscriptions* ............................................89 8.04 Ease of access to loans...........................................................44
8.05 Venture capital availability........................................................40
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows ...................................................105
3.01 Government budget balance* .................................................40 8.07 Soundness of banks ................................................................69
3.02 National savings rate* .............................................................21 8.08 Regulation of securities exchanges.........................................43
3.03 Inflation*..................................................................................33 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................21
3.05 Government debt* ..................................................................98 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................63 9.01 Availability of latest technologies ............................................68
9.02 Firm-level technology absorption .............................................74
4th pillar: Health and primary education 9.03 FDI and technology transfer ....................................................45
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................71
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................87
4.03 Business impact of tuberculosis .............................................99 9.06 Internet bandwidth* ................................................................64
4.04 Tuberculosis incidence* ..........................................................93
4.05 Business impact of HIV/AIDS ................................................105 10th pillar: Market size
4.06 HIV prevalence* ......................................................................22 10.01 Domestic market size index* ..................................................56
4.07 Infant mortality*.....................................................................101 10.02 Foreign market size index*......................................................68
4.08 Life expectancy* .....................................................................88
4.09 Quality of primary education .................................................100 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................99 11.01 Local supplier quantity.............................................................52
11.02 Local supplier quality ...............................................................78
5th pillar: Higher education and training 11.03 State of cluster development ..................................................69
5.01 Secondary education enrollment rate* ..................................110 11.04 Nature of competitive advantage ............................................73
5.02 Tertiary education enrollment rate*.......................................102 11.05 Value chain breadth .................................................................70
5.03 Quality of the educational system.........................................105 11.06 Control of international distribution .......................................103
5.04 Quality of math and science education...................................67 11.07 Production process sophistication...........................................71
5.05 Quality of management schools..............................................49 11.08 Extent of marketing .................................................................76
5.06 Internet access in schools.......................................................83 11.09 Willingness to delegate authority............................................96
5.07 Local availability of research and training services..................60
5.08 Extent of staff training.............................................................87 12th pillar: Innovation
12.01 Capacity for innovation ............................................................94
12.02 Quality of scientific research institutions ................................93
12.03 Company spending on R&D ....................................................97
12.04 University-industry collabouration in R&D .............................104
12.05 Gov’t procurement of advanced tech products.......................71
12.06 Availability of scientists and engineers....................................46
12.07 Utility patents per million population*.....................................86

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Oman
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................2.8
GDP (US$ billions).....................................................53.4 Oman Middle East and North Africa
30,000
GDP per capita (US$) ...........................................18,013
GDP (PPP) as share (%) of world total .................0.10 20,000

10,000

Sources: United Nations Population Fund, Economic Intelligence

Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................34 ......4.6 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................41 ........4.5
GCI 2008–2009 (out of 134)..................................................38 ........4.6 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................24 ........5.4
1st pillar: Institutions ...........................................................16 ........5.4
2nd pillar: Infrastructure.....................................................33 ........4.9 Institutions
7
3rd pillar: Macroeconomic environment ...........................3 ........6.1 Innovation Infrastructure
6
4th pillar: Health and primary education .........................99 ........5.2
5
Business Macroeconomic
Efficiency enhancers..........................................................48 ........4.3 4
environment
sophistication
5th pillar: Higher education and training .........................63 ........4.2 3
44 6th pillar: Goods market efficiency...................................25 ........4.8 2
Health and
7th pillar: Labour market efficiency..................................36 ........4.7 Market size 1 primary
education
8th pillar: Financial market development.........................30 ........4.7
9th pillar: Technological readiness...................................59 ........3.8
Technological Higher education
10th pillar: Market size........................................................73 ........3.6 readiness and training

Innovation and sophistication factors ............................47 ........3.9 Financial market Goods market
11th pillar: Business sophistication..................................45 ........4.3 development efficiency
12th pillar: Innovation..........................................................47 ........3.5 Labour market efficiency

Oman Economies in transition from 2 to 3

The most problematic factors for doing business

Restrictive labour regulations.....................................28.3
Inadequately educated workforce.............................15.6
Access to financing ......................................................13.5
Poor work ethic in national labour force ..................12.9
Inadequate supply of infrastructure ............................8.6
Foreign currency regulations........................................4.7
Inefficient government bureaucracy...........................4.5
Inflation .............................................................................3.7
Policy instability...............................................................3.3
Corruption.........................................................................1.6
Crime and theft ................................................................0.8
Government instability/coups .......................................0.8
Tax regulations ................................................................0.7
Poor public health ...........................................................0.6
Tax rates ...........................................................................0.3
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Oman
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................24 6.01 Intensity of local competition ..................................................53
1.02 Intellectual property protection ...............................................20 6.02 Extent of market dominance ...................................................72
1.03 Diversion of public funds.........................................................18 6.03 Effectiveness of anti-monopoly policy.....................................36
1.04 Public trust of politicians..........................................................11 6.04 Extent and effect of taxation .....................................................4
1.05 Irregular payments and bribes.................................................22 6.05 Total tax rate*..........................................................................14
1.06 Judicial independence .............................................................31 6.06 Number of procedures required to start a business* .............23
1.07 Favoritism in decisions of government officials ......................17 6.07 Time required to start a business* .........................................42
1.08 Wastefulness of government spending ....................................4 6.08 Agricultural policy costs...........................................................77
1.09 Burden of government regulation .............................................8 6.09 Prevalence of trade barriers.....................................................28
1.10 Efficiency of legal framework in settling disputes...................16 6.10 Trade tariffs*............................................................................59
1.11 Efficiency of legal framework in challenging regulations ........23 6.11 Prevalence of foreign ownership.............................................87
1.12 Transparency of government policymaking .............................32 6.12 Business impact of rules on FDI .............................................54
1.13 Business costs of terrorism.....................................................11 6.13 Burden of customs procedures...............................................19
1.14 Business costs of crime and violence.......................................2 6.14 Degree of customer orientation ..............................................29
1.15 Organized crime ......................................................................15 6.15 Buyer sophistication ................................................................42
1.16 Reliability of police services ....................................................20
1.17 Ethical behavior of firms..........................................................23 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................37 7.01 Cooperation in labour-employer relations ................................23
1.19 Efficacy of corporate boards....................................................32 7.02 Flexibility of wage determination ............................................37
1.20 Protection of minority shareholders’ interests ........................12 7.03 Rigidity of employment* .........................................................27
1.21 Strength of investor protection* .............................................77 7.04 Hiring and firing practices........................................................39
7.05 Redundancy costs* ...................................................................6
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................31
2.01 Quality of overall infrastructure ...............................................21 7.07 Reliance on professional management ...................................44
2.02 Quality of roads .......................................................................10 7.08 Brain drain ...............................................................................24
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force*.....................................132
2.04 Quality of port infrastructure ...................................................33
2.05 Quality of air transport infrastructure ......................................41 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................73 8.01 Availability of financial services ...............................................57
2.07 Quality of electricity supply .....................................................22 8.02 Affordability of financial services.............................................28
45
2.08 Fixed telephone lines* ............................................................92 8.03 Financing through local equity market ....................................18
2.09 Mobile telephone subscriptions* ............................................18 8.04 Ease of access to loans...........................................................13
8.05 Venture capital availability........................................................15
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................34
3.01 Government budget balance* ...................................................9 8.07 Soundness of banks ................................................................28
3.02 National savings rate* ...............................................................7 8.08 Regulation of securities exchanges.........................................16
3.03 Inflation*..................................................................................82 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................38
3.05 Government debt* ....................................................................3 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................42 9.01 Availability of latest technologies ............................................57
9.02 Firm-level technology absorption.............................................52
4th pillar: Health and primary education 9.03 FDI and technology transfer ....................................................52
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................51
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................89
4.03 Business impact of tuberculosis .............................................68 9.06 Internet bandwidth* ................................................................68
4.04 Tuberculosis incidence* ..........................................................35
4.05 Business impact of HIV/AIDS..................................................60 10th pillar: Market size
4.06 HIV prevalence* ........................................................................1 10.01 Domestic market size index* ..................................................77
4.07 Infant mortality* ......................................................................53 10.02 Foreign market size index*......................................................66
4.08 Life expectancy* .....................................................................43
4.09 Quality of primary education ...................................................48 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ......................................131 11.01 Local supplier quantity .............................................................74
11.02 Local supplier quality ...............................................................50
5th pillar: Higher education and training 11.03 State of cluster development ..................................................31
5.01 Secondary education enrollment rate* ...................................70 11.04 Nature of competitive advantage ............................................46
5.02 Tertiary education enrollment rate*.........................................81 11.05 Value chain breadth .................................................................56
5.03 Quality of the educational system...........................................43 11.06 Control of international distribution .........................................22
5.04 Quality of math and science education...................................58 11.07 Production process sophistication...........................................45
5.05 Quality of management schools..............................................81 11.08 Extent of marketing.................................................................64
5.06 Internet access in schools.......................................................46 11.09 Willingness to delegate authority............................................39
5.07 Local availability of research and training services..................85
5.08 Extent of staff training.............................................................45 12th pillar: Innovation
12.01 Capacity for innovation ............................................................61
12.02 Quality of scientific research institutions ................................57
12.03 Company spending on R&D ....................................................51
12.04 University-industry collabouration in R&D...............................50
12.05 Gov’t procurement of advanced tech products .......................11
12.06 Availability of scientists and engineers....................................87
12.07 Utility patents per million population*.....................................63

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Qatar
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................1.4
GDP (US$ billions).....................................................83.9 Qatar Middle East and North Africa
100,000
GDP per capita (US$) ...........................................68,872
75,000
GDP (PPP) as share (%) of world total .................0.15
50,000

25,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................17 ......5.1 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................22 ........4.9
GCI 2008–2009 (out of 134)..................................................26 ........4.8 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................13 ........5.7
1st pillar: Institutions ...........................................................10 ........5.6
2nd pillar: Infrastructure.....................................................25 ........5.2 Institutions
7
3rd pillar: Macroeconomic environment ...........................8 ........5.7 Innovation Infrastructure
6
4th pillar: Health and primary education .........................15 ........6.4
5
Business Macroeconomic
Efficiency enhancers..........................................................26 ........4.7 4 environment
sophistication
5th pillar: Higher education and training .........................32 ........4.8 3
46 6th pillar: Goods market efficiency...................................12 ........5.1 2 Health and
7th pillar: Labour market efficiency..................................14 ........5.0 Market size 1 primary
education
8th pillar: Financial market development.........................19 ........4.9
9th pillar: Technological readiness...................................36 ........4.4
Technological Higher education
10th pillar: Market size........................................................66 ........3.7 readiness and training

Innovation and sophistication factors ............................23 ........4.5 Financial market Goods market
11th pillar: Business sophistication..................................21 ........4.8 development efficiency
12th pillar: Innovation..........................................................23 ........4.1 Labour market efficiency

Qatar Economies in transition from 1 to 2

The most problematic factors for doing business

Restrictive labour regulations.....................................27.7
Access to financing ......................................................22.3
Inadequately educated workforce.............................10.6
Inadequate supply of infrastructure ............................8.2
Foreign currency regulations........................................7.0
Inflation .............................................................................6.8
Inefficient government bureaucracy...........................6.2
Poor public health ...........................................................4.8
Policy instability...............................................................3.0
Poor work ethic in national labour force ....................2.1
Tax regulations ................................................................0.6
Government instability/coups .......................................0.4
Tax rates ...........................................................................0.4
Crime and theft ................................................................0.0
Corruption.........................................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Qatar
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................25 6.01 Intensity of local competition ....................................................3
1.02 Intellectual property protection ...............................................28 6.02 Extent of market dominance .....................................................7
1.03 Diversion of public funds.........................................................12 6.03 Effectiveness of anti-monopoly policy.....................................30
1.04 Public trust of politicians ...........................................................2 6.04 Extent and effect of taxation ...................................................11
1.05 Irregular payments and bribes .................................................17 6.05 Total tax rate*............................................................................3
1.06 Judicial independence ...............................................................7 6.06 Number of procedures required to start a business* .............34
1.07 Favoritism in decisions of government officials ........................4 6.07 Time required to start a business* .........................................13
1.08 Wastefulness of government spending ....................................3 6.08 Agricultural policy costs...........................................................68
1.09 Burden of government regulation .............................................6 6.09 Prevalence of trade barriers.......................................................1
1.10 Efficiency of legal framework in settling disputes.....................6 6.10 Trade tariffs*............................................................................61
1.11 Efficiency of legal framework in challenging regulations ........32 6.11 Prevalence of foreign ownership.............................................25
1.12 Transparency of government policymaking .............................15 6.12 Business impact of rules on FDI .............................................10
1.13 Business costs of terrorism ....................................................38 6.13 Burden of customs procedures...............................................29
1.14 Business costs of crime and violence.......................................3 6.14 Degree of customer orientation ..............................................12
1.15 Organized crime ......................................................................26 6.15 Buyer sophistication ................................................................39
1.16 Reliability of police services ......................................................9
1.17 Ethical behavior of firms..........................................................28 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................12 7.01 Cooperation in labour-employer relations ................................20
1.19 Efficacy of corporate boards....................................................10 7.02 Flexibility of wage determination ..............................................2
1.20 Protection of minority shareholders’ interests ........................33 7.03 Rigidity of employment* .........................................................27
1.21 Strength of investor protection* .............................................77 7.04 Hiring and firing practices........................................................14
7.05 Redundancy costs* .................................................................98
2nd pillar: Infrastructure 7.06 Pay and productivity ..................................................................7
2.01 Quality of overall infrastructure ...............................................39 7.07 Reliance on professional management ...................................12
2.02 Quality of roads .......................................................................41 7.08 Brain drain .................................................................................2
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force*.....................................121
2.04 Quality of port infrastructure ...................................................27
2.05 Quality of air transport infrastructure ......................................16 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................30 8.01 Availability of financial services ...............................................26
2.07 Quality of electricity supply .....................................................21 8.02 Affordability of financial services...............................................8
47
2.08 Fixed telephone lines* ............................................................65 8.03 Financing through local equity market ......................................1
2.09 Mobile telephone subscriptions* ..............................................4 8.04 Ease of access to loans.............................................................1
8.05 Venture capital availability..........................................................6
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .......................................................9
3.01 Government budget balance* ...................................................5 8.07 Soundness of banks ................................................................46
3.02 National savings rate* .............................................................10 8.08 Regulation of securities exchanges...........................................6
3.03 Inflation*....................................................................................2 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................61
3.05 Government debt* ..................................................................16 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................29 9.01 Availability of latest technologies ............................................25
9.02 Firm-level technology absorption...............................................8
4th pillar: Health and primary education 9.03 FDI and technology transfer ......................................................2
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................79
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................49
4.03 Business impact of tuberculosis .............................................72 9.06 Internet bandwidth* ................................................................58
4.04 Tuberculosis incidence* ..........................................................72
4.05 Business impact of HIV/AIDS..................................................94 10th pillar: Market size
4.06 HIV prevalence* ......................................................................47 10.01 Domestic market size index* ..................................................66
4.07 Infant mortality* ......................................................................48 10.02 Foreign market size index*......................................................64
4.08 Life expectancy* .....................................................................42
4.09 Quality of primary education .....................................................5 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................69 11.01 Local supplier quantity...............................................................2
11.02 Local supplier quality .................................................................9
5th pillar: Higher education and training 11.03 State of cluster development ..................................................21
5.01 Secondary education enrollment rate* ...................................49 11.04 Nature of competitive advantage ............................................58
5.02 Tertiary education enrollment rate*.......................................106 11.05 Value chain breadth .................................................................85
5.03 Quality of the educational system.............................................4 11.06 Control of international distribution .........................................50
5.04 Quality of math and science education.....................................4 11.07 Production process sophistication.............................................8
5.05 Quality of management schools................................................1 11.08 Extent of marketing...................................................................6
5.06 Internet access in schools.........................................................4 11.09 Willingness to delegate authority............................................41
5.07 Local availability of research and training services..................71
5.08 Extent of staff training .............................................................19 12th pillar: Innovation
12.01 Capacity for innovation ............................................................45
12.02 Quality of scientific research institutions ................................22
12.03 Company spending on R&D ....................................................41
12.04 University-industry collabouration in R&D...............................27
12.05 Gov’t procurement of advanced tech products.........................1
12.06 Availability of scientists and engineers......................................9
12.07 Utility patents per million population*.....................................48

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Saudi Arabia
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................25.7
GDP (US$ billions)...................................................369.7 Saudi Arabia Middle East and North Africa
30,000
GDP per capita (US$) ...........................................14,486
GDP (PPP) as share (%) of world total .................0.86 20,000

10,000

Sources: United Nations Population Fund, Economic Intelligence

Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................21 ......4.9 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................28 ........4.7
GCI 2008–2009 (out of 134)..................................................27 ........4.7 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................28 ........5.3
1st pillar: Institutions ...........................................................21 ........5.2
2nd pillar: Infrastructure.....................................................28 ........5.1 Institutions
7
3rd pillar: Macroeconomic environment .........................22 ........5.3 Innovation Infrastructure
6
4th pillar: Health and primary education .........................74 ........5.6
5
Business Macroeconomic
Efficiency enhancers..........................................................27 ........4.7 4 environment
sophistication
5th pillar: Higher education and training .........................51 ........4.5 3
48 6th pillar: Goods market efficiency...................................10 ........5.1 2 Health and
7th pillar: Labour market efficiency..................................66 ........4.4 Market size 1 primary
education
8th pillar: Financial market development.........................22 ........4.8
9th pillar: Technological readiness...................................42 ........4.2
Technological Higher education
10th pillar: Market size........................................................22 ........5.0 readiness and training

Innovation and sophistication factors ............................26 ........4.4 Financial market Goods market
11th pillar: Business sophistication..................................19 ........4.9 development efficiency
12th pillar: Innovation..........................................................28 ........3.9 Labour market efficiency

Saudi Arabia Economies in transition from 1 to 2

The most problematic factors for doing business

Restrictive labour regulations.....................................22.0
Access to financing ......................................................18.9
Inadequately educated workforce.............................17.0
Inefficient government bureaucracy.........................10.2
Inadequate supply of infrastructure ............................8.8
Poor work ethic in national labour force ....................6.1
Tax rates ...........................................................................3.6
Foreign currency regulations........................................3.2
Tax regulations ................................................................3.1
Corruption.........................................................................2.5
Inflation .............................................................................1.9
Policy instability...............................................................1.2
Crime and theft ................................................................0.9
Poor public health ...........................................................0.6
Government instability/coups .......................................0.1
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Saudi Arabia
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................28 6.01 Intensity of local competition ..................................................24
1.02 Intellectual property protection ...............................................30 6.02 Extent of market dominance ...................................................25
1.03 Diversion of public funds.........................................................28 6.03 Effectiveness of anti-monopoly policy.....................................28
1.04 Public trust of politicians ...........................................................9 6.04 Extent and effect of taxation .....................................................9
1.05 Irregular payments and bribes.................................................26 6.05 Total tax rate*............................................................................5
1.06 Judicial independence .............................................................29 6.06 Number of procedures required to start a business* .............14
1.07 Favoritism in decisions of government officials ......................13 6.07 Time required to start a business* ...........................................9
1.08 Wastefulness of government spending ....................................6 6.08 Agricultural policy costs ...........................................................11
1.09 Burden of government regulation ...........................................18 6.09 Prevalence of trade barriers.....................................................23
1.10 Efficiency of legal framework in settling disputes...................37 6.10 Trade tariffs*............................................................................54
1.11 Efficiency of legal framework in challenging regulations ........29 6.11 Prevalence of foreign ownership.............................................84
1.12 Transparency of government policymaking .............................40 6.12 Business impact of rules on FDI .............................................35
1.13 Business costs of terrorism ....................................................57 6.13 Burden of customs procedures...............................................28
1.14 Business costs of crime and violence.....................................16 6.14 Degree of customer orientation ..............................................31
1.15 Organized crime ......................................................................16 6.15 Buyer sophistication ................................................................20
1.16 Reliability of police services ....................................................30
1.17 Ethical behavior of firms..........................................................31 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................35 7.01 Cooperation in labour-employer relations ................................30
1.19 Efficacy of corporate boards....................................................26 7.02 Flexibility of wage determination ............................................24
1.20 Protection of minority shareholders’ interests ........................19 7.03 Rigidity of employment* .........................................................27
1.21 Strength of investor protection* .............................................16 7.04 Hiring and firing practices........................................................22
7.05 Redundancy costs* ...............................................................102
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................14
2.01 Quality of overall infrastructure ...............................................29 7.07 Reliance on professional management ...................................37
2.02 Quality of roads .......................................................................26 7.08 Brain drain ...............................................................................14
2.03 Quality of railroad infrastructure ..............................................38 7.09 Female participation in labour force*.....................................138
2.04 Quality of port infrastructure ...................................................36
2.05 Quality of air transport infrastructure ......................................46 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................26 8.01 Availability of financial services ...............................................30
2.07 Quality of electricity supply .....................................................29 8.02 Affordability of financial services.............................................19
49
2.08 Fixed telephone lines* ............................................................78 8.03 Financing through local equity market ......................................3
2.09 Mobile telephone subscriptions* ..............................................5 8.04 Ease of access to loans.............................................................6
8.05 Venture capital availability........................................................14
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................24
3.01 Government budget balance* .................................................53 8.07 Soundness of banks ................................................................20
3.02 National savings rate* .............................................................13 8.08 Regulation of securities exchanges.........................................26
3.03 Inflation*..................................................................................94 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................77
3.05 Government debt* ..................................................................37 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................38 9.01 Availability of latest technologies ............................................39
9.02 Firm-level technology absorption.............................................26
4th pillar: Health and primary education 9.03 FDI and technology transfer ......................................................9
4.01 Business impact of malaria .....................................................75 9.04 Internet users* ........................................................................58
4.02 Malaria incidence*...................................................................78 9.05 Broadband Internet subscriptions* .........................................66
4.03 Business impact of tuberculosis .............................................38 9.06 Internet bandwidth* ................................................................61
4.04 Tuberculosis incidence* ..........................................................41
4.05 Business impact of HIV/AIDS..................................................30 10th pillar: Market size
4.06 HIV prevalence* ........................................................................1 10.01 Domestic market size index* ..................................................23
4.07 Infant mortality* ......................................................................78 10.02 Foreign market size index*......................................................20
4.08 Life expectancy* .....................................................................71
4.09 Quality of primary education ...................................................54 11th pillar: Business sophistication
4.10 Primary education enrollment rate*.......................................113 11.01 Local supplier quantity...............................................................5
11.02 Local supplier quality ...............................................................24
5th pillar: Higher education and training 11.03 State of cluster development ..................................................27
5.01 Secondary education enrollment rate* ...................................43 11.04 Nature of competitive advantage ............................................28
5.02 Tertiary education enrollment rate*.........................................75 11.05 Value chain breadth .................................................................21
5.03 Quality of the educational system...........................................41 11.06 Control of international distribution ...........................................7
5.04 Quality of math and science education...................................49 11.07 Production process sophistication...........................................25
5.05 Quality of management schools..............................................60 11.08 Extent of marketing.................................................................26
5.06 Internet access in schools.......................................................52 11.09 Willingness to delegate authority............................................19
5.07 Local availability of research and training services..................34
5.08 Extent of staff training.............................................................34 12th pillar: Innovation
12.01 Capacity for innovation ............................................................26
12.02 Quality of scientific research institutions ................................37
12.03 Company spending on R&D ....................................................24
12.04 University-industry collabouration in R&D...............................33
12.05 Gov’t procurement of advanced tech products .......................10
12.06 Availability of scientists and engineers....................................34
12.07 Utility patents per million population*.....................................56

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Syria
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................21.9
GDP (US$ billions).....................................................52.5 Syria Middle East and North Africa
12,000
GDP per capita (US$) .............................................2,579
9,000
GDP (PPP) as share (%) of world total .................0.14
6,000

3,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................97 ......3.8 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................94 ........3.8
GCI 2008–2009 (out of 134)..................................................78 ........4.0 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................84 ........4.3
1st pillar: Institutions ...........................................................78 ........3.8
2nd pillar: Infrastructure...................................................105 ........2.9 Institutions
7
3rd pillar: Macroeconomic environment .........................58 ........4.8 Innovation Infrastructure
6
4th pillar: Health and primary education .........................67 ........5.7
5
Business Macroeconomic
Efficiency enhancers........................................................117 ........3.4 4 environment
sophistication
5th pillar: Higher education and training .......................107 ........3.3 3
50 6th pillar: Goods market efficiency.................................115 ........3.7 2 Health and
7th pillar: Labour market efficiency................................132 ........3.4 Market size 1 primary
education
8th pillar: Financial market development.......................124 ........3.2
9th pillar: Technological readiness.................................111 ........2.9
Technological Higher education
10th pillar: Market size........................................................65 ........3.7 readiness and training

Innovation and sophistication factors ..........................115 ........3.0 Financial market Goods market
11th pillar: Business sophistication................................103 ........3.5 development efficiency
12th pillar: Innovation........................................................128 ........2.5 Labour market efficiency

Syria Economies in transition from 1 to 2

The most problematic factors for doing business

Inadequately educated workforce.............................16.2
Inefficient government bureaucracy.........................15.2
Restrictive labour regulations.....................................14.4
Access to financing ......................................................10.7
Corruption.........................................................................9.4
Poor work ethic in national labour force ....................9.0
Tax regulations ................................................................6.6
Inadequate supply of infrastructure ............................6.1
Tax rates ...........................................................................4.6
Foreign currency regulations........................................4.0
Inflation .............................................................................2.3
Policy instability...............................................................0.8
Poor public health ...........................................................0.8
Government instability/coups .......................................0.0
Crime and theft ................................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Syria
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................62 6.01 Intensity of local competition ..................................................70
1.02 Intellectual property protection ...............................................75 6.02 Extent of market dominance..................................................119
1.03 Diversion of public funds.........................................................93 6.03 Effectiveness of anti-monopoly policy....................................110
1.04 Public trust of politicians .........................................................50 6.04 Extent and effect of taxation ...................................................67
1.05 Irregular payments and bribes ...............................................116 6.05 Total tax rate* ..........................................................................76
1.06 Judicial independence ...........................................................107 6.06 Number of procedures required to start a business* .............57
1.07 Favoritism in decisions of government officials ......................91 6.07 Time required to start a business* .........................................63
1.08 Wastefulness of government spending ..................................73 6.08 Agricultural policy costs...........................................................59
1.09 Burden of government regulation..........................................130 6.09 Prevalence of trade barriers ...................................................118
1.10 Efficiency of legal framework in settling disputes .................118 6.10 Trade tariffs* ..........................................................................109
1.11 Efficiency of legal framework in challenging regulations.......121 6.11 Prevalence of foreign ownership ...........................................137
1.12 Transparency of government policymaking ...........................133 6.12 Business impact of rules on FDI............................................114
1.13 Business costs of terrorism ......................................................6 6.13 Burden of customs procedures.............................................134
1.14 Business costs of crime and violence.......................................1 6.14 Degree of customer orientation ............................................104
1.15 Organized crime ........................................................................6 6.15 Buyer sophistication ..............................................................127
1.16 Reliability of police services ....................................................94
1.17 Ethical behavior of firms..........................................................80 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards........................133 7.01 Cooperation in labour-employer relations ................................94
1.19 Efficacy of corporate boards ..................................................117 7.02 Flexibility of wage determination ............................................52
1.20 Protection of minority shareholders’ interests ........................56 7.03 Rigidity of employment* .........................................................48
1.21 Strength of investor protection* .............................................99 7.04 Hiring and firing practices........................................................99
7.05 Redundancy costs* ...............................................................102
2nd pillar: Infrastructure 7.06 Pay and productivity ..............................................................100
2.01 Quality of overall infrastructure ...............................................95 7.07 Reliance on professional management .................................133
2.02 Quality of roads .......................................................................85 7.08 Brain drain ..............................................................................118
2.03 Quality of railroad infrastructure ..............................................66 7.09 Female participation in labour force*.....................................136
2.04 Quality of port infrastructure..................................................117
2.05 Quality of air transport infrastructure ....................................126 8th pillar: Financial market development
2.06 Available airline seat kilometers* ............................................81 8.01 Availability of financial services .............................................130
2.07 Quality of electricity supply ...................................................107 8.02 Affordability of financial services ...........................................125
51
2.08 Fixed telephone lines* ............................................................73 8.03 Financing through local equity market...................................103
2.09 Mobile telephone subscriptions*...........................................116 8.04 Ease of access to loans.........................................................100
8.05 Venture capital availability ......................................................113
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows....................................................117
3.01 Government budget balance* .................................................99 8.07 Soundness of banks ................................................................63
3.02 National savings rate* .............................................................41 8.08 Regulation of securities exchanges .......................................102
3.03 Inflation*..................................................................................64 8.09 Legal rights index* ................................................................134
3.04 Interest rate spread* ...............................................................43
3.05 Government debt* ..................................................................54 9th pillar: Technological readiness
3.06 Country credit rating* ............................................................106 9.01 Availability of latest technologies...........................................126
9.02 Firm-level technology absorption .............................................76
4th pillar: Health and primary education 9.03 FDI and technology transfer ..................................................121
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................91
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions*........................................109
4.03 Business impact of tuberculosis .............................................49 9.06 Internet bandwidth* ................................................................90
4.04 Tuberculosis incidence* ..........................................................48
4.05 Business impact of HIV/AIDS..................................................33 10th pillar: Market size
4.06 HIV prevalence* ........................................................................1 10.01 Domestic market size index* ..................................................63
4.07 Infant mortality* ......................................................................65 10.02 Foreign market size index*......................................................73
4.08 Life expectancy* .....................................................................57
4.09 Quality of primary education ...................................................86 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................63 11.01 Local supplier quantity.............................................................67
11.02 Local supplier quality .............................................................124
5th pillar: Higher education and training 11.03 State of cluster development ................................................102
5.01 Secondary education enrollment rate* ...................................97 11.04 Nature of competitive advantage...........................................114
5.02 Tertiary education enrollment rate*.........................................79 11.05 Value chain breadth................................................................100
5.03 Quality of the educational system.........................................109 11.06 Control of international distribution .........................................35
5.04 Quality of math and science education...................................70 11.07 Production process sophistication...........................................85
5.05 Quality of management schools ............................................115 11.08 Extent of marketing ...............................................................123
5.06 Internet access in schools .....................................................131 11.09 Willingness to delegate authority............................................92
5.07 Local availability of research and training services ................114
5.08 Extent of staff training ...........................................................139 12th pillar: Innovation
12.01 Capacity for innovation ..........................................................134
12.02 Quality of scientific research institutions...............................127
12.03 Company spending on R&D ..................................................137
12.04 University-industry collabouration in R&D .............................137
12.05 Gov’t procurement of advanced tech products .....................119
12.06 Availability of scientists and engineers....................................62
12.07 Utility patents per million population*.....................................90

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

Tunisia
Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions).................................................10.3
GDP (US$ billions).....................................................40.2 Tunisia Middle East and North Africa
9,000
GDP per capita (US$) .............................................3,852
GDP (PPP) as share (%) of world total .................0.12 6,000

3,000

Sources: United Nations Population Fund, Economic Intelligence

Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................32 ......4.7 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................40 ........4.5
GCI 2008–2009 (out of 134)..................................................36 ........4.6 Factor Efficiency Innovation
driven driven driven
Basic requirements.............................................................31 ........5.3
1st pillar: Institutions ...........................................................23 ........5.2
2nd pillar: Infrastructure.....................................................46 ........4.5 Institutions
7
3rd pillar: Macroeconomic environment .........................38 ........5.1 Innovation Infrastructure
6
4th pillar: Health and primary education .........................31 ........6.2
5
Business Macroeconomic
Efficiency enhancers..........................................................50 ........4.3 4 environment
sophistication
5th pillar: Higher education and training .........................30 ........4.9 3
52 6th pillar: Goods market efficiency...................................33 ........4.7 2 Health and
7th pillar: Labour market efficiency..................................79 ........4.3 Market size 1 primary
education
8th pillar: Financial market development.........................58 ........4.3
9th pillar: Technological readiness...................................55 ........3.9
Technological Higher education
10th pillar: Market size........................................................67 ........3.7 readiness and training

Innovation and sophistication factors ............................34 ........4.1 Financial market Goods market
11th pillar: Business sophistication..................................42 ........4.3 development efficiency
12th pillar: Innovation..........................................................31 ........3.8 Labour market efficiency

Tunisia Efficiency-driven economies

The most problematic factors for doing business

Access to financing ......................................................17.7
Restrictive labour regulations.....................................11.7
Inefficient government bureaucracy.........................11.0
Foreign currency regulations......................................10.5
Inadequately educated workforce...............................8.6
Poor work ethic in national labour force ....................8.2
Inadequate supply of infrastructure ............................8.0
Tax rates ...........................................................................7.9
Tax regulations ................................................................7.8
Inflation .............................................................................4.4
Corruption.........................................................................3.0
Policy instability...............................................................0.9
Government instability/coups .......................................0.2
Crime and theft ................................................................0.2
Poor public health ...........................................................0.0
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
Tunisia
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................31 6.01 Intensity of local competition ..................................................34
1.02 Intellectual property protection ...............................................37 6.02 Extent of market dominance ...................................................17
1.03 Diversion of public funds.........................................................20 6.03 Effectiveness of anti-monopoly policy .....................................18
1.04 Public trust of politicians .........................................................15 6.04 Extent and effect of taxation ...................................................14
1.05 Irregular payments and bribes.................................................33 6.05 Total tax rate* ........................................................................119
1.06 Judicial independence .............................................................40 6.06 Number of procedures required to start a business* .............99
1.07 Favoritism in decisions of government officials ......................12 6.07 Time required to start a business* .........................................39
1.08 Wastefulness of government spending ....................................5 6.08 Agricultural policy costs.............................................................8
1.09 Burden of government regulation ...........................................15 6.09 Prevalence of trade barriers.....................................................57
1.10 Efficiency of legal framework in settling disputes...................17 6.10 Trade tariffs* ..........................................................................127
1.11 Efficiency of legal framework in challenging regulations.........19 6.11 Prevalence of foreign ownership.............................................45
1.12 Transparency of government policymaking .............................20 6.12 Business impact of rules on FDI ...............................................6
1.13 Business costs of terrorism ....................................................28 6.13 Burden of customs procedures...............................................38
1.14 Business costs of crime and violence.......................................5 6.14 Degree of customer orientation ..............................................36
1.15 Organized crime ......................................................................17 6.15 Buyer sophistication ................................................................40
1.16 Reliability of police services ....................................................29
1.17 Ethical behavior of firms..........................................................29 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................54 7.01 Cooperation in labour-employer relations ................................32
1.19 Efficacy of corporate boards....................................................33 7.02 Flexibility of wage determination ...........................................115
1.20 Protection of minority shareholders’ interests ........................11 7.03 Rigidity of employment* .......................................................100
1.21 Strength of investor protection* .............................................59 7.04 Hiring and firing practices........................................................52
7.05 Redundancy costs* .................................................................29
2nd pillar: Infrastructure 7.06 Pay and productivity ................................................................52
2.01 Quality of overall infrastructure ...............................................30 7.07 Reliance on professional management ...................................40
2.02 Quality of roads .......................................................................37 7.08 Brain drain ...............................................................................42
2.03 Quality of railroad infrastructure ..............................................29 7.09 Female participation in labour force*.....................................129
2.04 Quality of port infrastructure ...................................................41
2.05 Quality of air transport infrastructure ......................................38 8th pillar: Financial market development
2.06 Available airline seat kilometers*.............................................74 8.01 Availability of financial services ...............................................42
2.07 Quality of electricity supply .....................................................35 8.02 Affordability of financial services.............................................31
53
2.08 Fixed telephone lines* ............................................................86 8.03 Financing through local equity market ....................................25
2.09 Mobile telephone subscriptions* ............................................70 8.04 Ease of access to loans...........................................................30
8.05 Venture capital availability........................................................21
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................88
3.01 Government budget balance* .................................................46 8.07 Soundness of banks ................................................................59
3.02 National savings rate* .............................................................38 8.08 Regulation of securities exchanges.........................................38
3.03 Inflation*..................................................................................85 8.09 Legal rights index*.................................................................103
3.04 Interest rate spread* ...............................................................30
3.05 Government debt* ..................................................................94 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................53 9.01 Availability of latest technologies ............................................42
9.02 Firm-level technology absorption.............................................33
4th pillar: Health and primary education 9.03 FDI and technology transfer ....................................................13
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................67
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions*..........................................74
4.03 Business impact of tuberculosis .............................................33 9.06 Internet bandwidth* ................................................................52
4.04 Tuberculosis incidence* ..........................................................50
4.05 Business impact of HIV/AIDS..................................................16 10th pillar: Market size
4.06 HIV prevalence* ......................................................................22 10.01 Domestic market size index* ..................................................69
4.07 Infant mortality* ......................................................................76 10.02 Foreign market size index*......................................................67
4.08 Life expectancy* .....................................................................56
4.09 Quality of primary education ...................................................22 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................33 11.01 Local supplier quantity.............................................................14
11.02 Local supplier quality ...............................................................45
5th pillar: Higher education and training 11.03 State of cluster development ..................................................75
5.01 Secondary education enrollment rate* ...................................53 11.04 Nature of competitive advantage ............................................44
5.02 Tertiary education enrollment rate*.........................................69 11.05 Value chain breadth .................................................................24
5.03 Quality of the educational system...........................................20 11.06 Control of international distribution .........................................29
5.04 Quality of math and science education.....................................8 11.07 Production process sophistication...........................................49
5.05 Quality of management schools..............................................22 11.08 Extent of marketing.................................................................55
5.06 Internet access in schools.......................................................47 11.09 Willingness to delegate authority............................................60
5.07 Local availability of research and training services..................27
5.08 Extent of staff training.............................................................18 12th pillar: Innovation
12.01 Capacity for innovation ............................................................36
12.02 Quality of scientific research institutions ................................38
12.03 Company spending on R&D ....................................................35
12.04 University-industry collabouration in R&D...............................41
12.05 Gov’t procurement of advanced tech products.......................14
12.06 Availability of scientists and engineers......................................7
12.07 Utility patents per million population*.....................................90

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
The Arab World Competitiveness Review 2010

United Arab Emirates

Key indicators, 2009
GDP (PPP) per capita (int'l $), 1980–2009
Population (millions)...................................................4.6
GDP (US$ billions)...................................................230.0 United Arab Emirates Middle East and North Africa
40,000
GDP per capita (US$) ...........................................46,857
30,000
GDP (PPP) as share (%) of world total .................0.27
20,000

10,000
Sources: United Nations Population Fund, Economic Intelligence
Unit, International Monetary Fund and World Bank. 0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Global Competitiveness Index

Rank Score Stage of development
(out of 139) (1–7)
GCI 2010–2011.........................................................25 ......4.9 Transition Transition
1 1–2 2 2–3 3
GCI 2009–2010 (out of 133)..................................................23 ........4.9
GCI 2008–2009 (out of 134)..................................................31 ........4.7 Factor Efficiency Innovation
driven driven driven
Basic requirements...............................................................8 ........5.8
1st pillar: Institutions ...........................................................20 ........5.3
2nd pillar: Infrastructure.......................................................3 ........6.3 Institutions
7
3rd pillar: Macroeconomic environment .........................12 ........5.6 Innovation Infrastructure
6
4th pillar: Health and primary education .........................38 ........6.1
5
Business Macroeconomic
Efficiency enhancers..........................................................21 ........4.8 4 environment
sophistication
5th pillar: Higher education and training .........................36 ........4.8 3
54 6th pillar: Goods market efficiency.....................................6 ........5.2 2 Health and
7th pillar: Labour market efficiency..................................26 ........4.8 Market size 1 primary
education
8th pillar: Financial market development.........................33 ........4.7
9th pillar: Technological readiness...................................14 ........5.2
Technological Higher education
10th pillar: Market size........................................................51 ........4.3 readiness and training

Innovation and sophistication factors ............................27 ........4.4 Financial market Goods market
11th pillar: Business sophistication..................................22 ........4.8 development efficiency
12th pillar: Innovation..........................................................30 ........3.9 Labour market efficiency

United Arab Emirates Innovation-driven economies

The most problematic factors for doing business

Access to financing ......................................................20.0
Inadequately educated workforce.............................14.8
Restrictive labour regulations.....................................14.6
Inflation ...........................................................................12.1
Inefficient government bureaucracy.........................11.0
Policy instability...............................................................8.0
Poor work ethic in national labour force ....................7.7
Inadequate supply of infrastructure ............................5.2
Poor public health ...........................................................1.7
Foreign currency regulations........................................1.4
Government instability/coups .......................................1.2
Tax regulations ................................................................0.8
Corruption.........................................................................0.5
Crime and theft ................................................................0.4
Tax rates ...........................................................................0.4
0 5 10 15 20 25 30
Percent of responses

Note: From a list of 15 factors, respondents were asked to select the five most problematic for doing business in their country and to rank them between
1 (most problematic) and 5. The bars in the figure show the responses weighted according to their rankings.
 The Arab World Competitiveness Review 2010
United Arab Emirates
The Global Competitiveness Index in detail
INDICATOR RANK/139 INDICATOR RANK/139
1st pillar: Institutions 6th pillar: Goods market efficiency
1.01 Property rights.........................................................................43 6.01 Intensity of local competition ..................................................13
1.02 Intellectual property protection ...............................................19 6.02 Extent of market dominance ...................................................21
1.03 Diversion of public funds.........................................................26 6.03 Effectiveness of anti-monopoly policy.....................................24
1.04 Public trust of politicians ...........................................................7 6.04 Extent and effect of taxation .....................................................5
1.05 Irregular payments and bribes.................................................19 6.05 Total tax rate*............................................................................4
1.06 Judicial independence .............................................................37 6.06 Number of procedures required to start a business* .............73
1.07 Favoritism in decisions of government officials ......................15 6.07 Time required to start a business* .........................................56
1.08 Wastefulness of government spending ....................................7 6.08 Agricultural policy costs...........................................................38
1.09 Burden of government regulation............................................11 6.09 Prevalence of trade barriers.....................................................10
1.10 Efficiency of legal framework in settling disputes...................22 6.10 Trade tariffs*............................................................................57
1.11 Efficiency of legal framework in challenging regulations ........25 6.11 Prevalence of foreign ownership.............................................49
1.12 Transparency of government policymaking .............................35 6.12 Business impact of rules on FDI .............................................16
1.13 Business costs of terrorism ....................................................43 6.13 Burden of customs procedures.................................................5
1.14 Business costs of crime and violence.......................................4 6.14 Degree of customer orientation ..............................................16
1.15 Organized crime ........................................................................7 6.15 Buyer sophistication ................................................................22
1.16 Reliability of police services ....................................................11
1.17 Ethical behavior of firms..........................................................22 7th pillar: Labour market efficiency
1.18 Strength of auditing and reporting standards..........................34 7.01 Cooperation in labour-employer relations ................................17
1.19 Efficacy of corporate boards....................................................45 7.02 Flexibility of wage determination ..............................................7
1.20 Protection of minority shareholders’ interests ........................24 7.03 Rigidity of employment* .........................................................10
1.21 Strength of investor protection* .............................................99 7.04 Hiring and firing practices........................................................17
7.05 Redundancy costs* ...............................................................104
2nd pillar: Infrastructure 7.06 Pay and productivity.................................................................11
2.01 Quality of overall infrastructure................................................11 7.07 Reliance on professional management ...................................34
2.02 Quality of roads .........................................................................6 7.08 Brain drain .................................................................................5
2.03 Quality of railroad infrastructure .............................................n/a 7.09 Female participation in labour force*.....................................125
2.04 Quality of port infrastructure .....................................................8
2.05 Quality of air transport infrastructure ........................................4 8th pillar: Financial market development
2.06 Available airline seat kilometers*.............................................11 8.01 Availability of financial services ...............................................32
2.07 Quality of electricity supply .....................................................17 8.02 Affordability of financial services.............................................34
55
2.08 Fixed telephone lines* ............................................................37 8.03 Financing through local equity market ....................................27
2.09 Mobile telephone subscriptions* ..............................................1 8.04 Ease of access to loans.............................................................8
8.05 Venture capital availability........................................................16
3rd pillar: Macroeconomic environment 8.06 Restriction on capital flows .....................................................16
3.01 Government budget balance* .................................................11 8.07 Soundness of banks ................................................................50
3.02 National savings rate* .............................................................24 8.08 Regulation of securities exchanges.........................................27
3.03 Inflation*..................................................................................35 8.09 Legal rights index* ..................................................................86
3.04 Interest rate spread* ...............................................................17
3.05 Government debt* .................................................................101 9th pillar: Technological readiness
3.06 Country credit rating*..............................................................30 9.01 Availability of latest technologies.............................................11
9.02 Firm-level technology absorption...............................................5
4th pillar: Health and primary education 9.03 FDI and technology transfer ......................................................6
4.01 Business impact of malaria .......................................................1 9.04 Internet users* ........................................................................10
4.02 Malaria incidence*.....................................................................1 9.05 Broadband Internet subscriptions* .........................................39
4.03 Business impact of tuberculosis .............................................69 9.06 Internet bandwidth* ................................................................25
4.04 Tuberculosis incidence* ..........................................................12
4.05 Business impact of HIV/AIDS..................................................50 10th pillar: Market size
4.06 HIV prevalence* ......................................................................47 10.01 Domestic market size index* ..................................................52
4.07 Infant mortality* ......................................................................43 10.02 Foreign market size index*......................................................38
4.08 Life expectancy* .....................................................................36
4.09 Quality of primary education ...................................................29 11th pillar: Business sophistication
4.10 Primary education enrollment rate* ........................................83 11.01 Local supplier quantity.............................................................21
11.02 Local supplier quality ...............................................................38
5th pillar: Higher education and training 11.03 State of cluster development ..................................................28
5.01 Secondary education enrollment rate* ...................................46 11.04 Nature of competitive advantage ............................................24
5.02 Tertiary education enrollment rate*.........................................84 11.05 Value chain breadth .................................................................22
5.03 Quality of the educational system...........................................27 11.06 Control of international distribution .........................................12
5.04 Quality of math and science education...................................26 11.07 Production process sophistication...........................................28
5.05 Quality of management schools..............................................28 11.08 Extent of marketing .................................................................19
5.06 Internet access in schools.......................................................29 11.09 Willingness to delegate authority............................................20
5.07 Local availability of research and training services..................23
5.08 Extent of staff training.............................................................29 12th pillar: Innovation
12.01 Capacity for innovation ............................................................35
12.02 Quality of scientific research institutions ................................45
12.03 Company spending on R&D ....................................................28
12.04 University-industry collabouration in R&D...............................43
12.05 Gov’t procurement of advanced tech products.........................3
12.06 Availability of scientists and engineers....................................20
12.07 Utility patents per million population*.....................................42

Notes: Ranks of notable competitive advantages are highlighted. An asterisk (*) indicates that data are from sources other than the World Economic Forum.
For further details and explanation, please refer to the section “How to Read the Country/Economy Profiles” in The Global Competitiveness Report 2010-2011.
 The Arab World Competitiveness Review 2010
About the authors
Masood Ahmed Regional Agenda Council on the Middle East and
Masood Ahmed is Director of the Middle East and Central North Africa
Asia Department at the International Monetary Fund. He The Regional Agenda Council on the Middle East and
started his career as a member of the economics faculty North Africa (MENA) is a group of experts formed by
at the London School of Economics before moving on the World Economic Forum to address critical challenges
to the World Bank where, among other posts, he was for the future of the region. The council, which is in
Vice-President in charge of Poverty Reduction and operation since August 2010, will focus its 2010-2011
Economic Management. Other positions held include work programme on three critical issues: the imperative of
Deputy Director of the Policy Development and Review sustainable competitiveness, women-powered economic
Department as well as Director of the External Relations growth and student-centred learning. The council will
Department at the International Monetary Fund. He also not only be a platform to include the MENA perspective
served as Director-General for Policy and International on the latest research developed by the Forum but will
Development at the United Kingdom Department for also provide an opportunity for council members to be
International Development. key contributors in the World Economic Forum on the
Middle East and North Africa (Marrakech, Morocco 26-28
Margareta Drzeniek Hanouz October 2010).
Margareta Drzeniek Hanouz is Director and Senior
Economist with the Global Competitiveness Network
at the World Economic Forum where she researches and
writes on issues of national competitiveness, in particular
related to the Arab world, Eastern Europe and international
trade. She is lead author or editor of a number of
regional and topical reports and papers, including The
Global Enabling Trade Report. Previously, she oversaw the
economic modelling for some of the Forum’s scenario
projects and was charged with developing the economics 57
section of the programme for the World Economic Forum
Annual Meeting in Davos. Before joining the Global
Competitiveness Network, she worked for several years
with the International Trade Centre in Geneva, where
she was in charge of relations with Central and Eastern
European countries. She received a Diploma in Economics
from the University of Münster and holds a PhD in
International Economics from the University of Bochum,
both in Germany.

Sofiane Khatib
Sofiane Khatib is Associate Director of the Middle East
and North Africa at the World Economic Forum and is
responsible for engaging business and government leaders
from the region in a broad array of global activities. He
also leads key regional initiatives of the World Economic
Forum such as the Regional Agenda Council on the
Middle East and North Africa and the scenarios for the
Mediterranean Region. Before joining the Forum, he
was a Senior Consultant at Booz & Co. and advised the
Spanish government on finance for development issues. He
holds a BS/MS in Business Administration from ICADE
Business School (Spain), a Master’s in Political Economy
from Stanford University, and graduated from the Global
Leadership Fellows Programme of the World Economic
Forum.
The World Economic Forum is an independent
international organization committed to improving
the state of the world by engaging business,
political, academic and other leaders of society
to shape global, regional and industry agendas.

Incorporated as a foundation in 1971, and

headquartered in Geneva, Switzerland, the
World Economic Forum is a not-for-profit
foundation, tied to no political or partisan interests.
(www.weforum.org)