The Arab World Competitiveness Review 2010

Margareta Drzeniek Hanouz, World Economic ForumSofiane Khatib, World Economic Forum

World Economic Forum91-93 route de la CapiteCH-1223 Cologny/GenevaSwitzerlandTel.: +41 (0)22 869 1212Fax: +41 (0)22 786 2744E-mail: contact@weforum.orgwww.weforum.org

© 2010 World Economic ForumAll rights reservedNo part of this publication maybe reproduced or transmitted inany form or by any means, including photocopying or recording, or by any information storage and retrieval system.

ISBN 10 - 92-95044-90-8ISBN 13 - 978-92-95044-90-6

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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

3

Preface

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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 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 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 SchwabFounder and Executive ChairmanWorld Economic Forum

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5

Strengthening Recovery in the Arab World: Findings from the Global Competitiveness Index 2010-2011By 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 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.

GDP (US$ billion)

Real GDP growth (%)

GDP per capita (US$)

Current account balance

(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

Table 1: Selected economic indicators for the Arab world countries

Source : IMF 2010a

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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 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.

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7It 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.

Figure 1: The 12 Pillars of competitiveness

Table 2: Arab countries according to stages of development

Basic requirements• Institutions• Infrastructure• Macroeconomic environment• Health and primary education

Efficiency enhancers• Higher education and training• Goods market efficiency• Labor market efficiency• Financial market development• Technological readiness• Market size

Innovation and sophistication factors• Business sophistication• Innovation

Key for

factor-driveneconomies

Key for

efficiency-driveneconomies

Key for

innovation-driveneconomies

Source: The Global Competitiveness Report 2010-2011

Over the past decade, the GCI coverage of Arab countries has been increasing steadily. The 2010-2011 edition of the 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.

Arab countries Other countries in this stage of development

Important areas for competitiveness

Stage 1 (factor-driven)GDP per capita (US$) < 2,000

Bangladesh, Bolivia, Kenya, Pakistan, Vietnam

Basic requirements (60%) and efficiency enhancers (35%)

Transition from 1 to 22,000 < GDP per capita (US$) < 3,000

Algeria, Egypt, Kuwait, Libya, Morocco, Qatar, Saudi Arabia, Syria

Azerbaijan, Brunei Darussalam, Indonesia, Iran, Islamic Rep., Ukraine, Venezuela

Basic requirements (between 40% and 60%) and efficiency enhancers (between 35% and 50%)*

Stage 2 (efficiency-driven)3,000 < GDP per capita (US$) < 9,000

Jordan, Lebanon, Tunisia Argentina, Brazil, China, Malaysia, Mexico, Russian Federation, South Africa, Turkey

Basic requirements (40%) and efficiency enhancers (50%)

Transition from 2 to 39,000 < GDP per capita (US$) < 17,000

Bahrain, Oman Chile, Croatia, Poland, Trinidad and Tobago

Basic requirements (between 20% and 40%), efficiency enhancers (50%), and innovation factors (10% to 30%)*

Stage 3 (innovation-driven)GDP per capita (US$) > 17,000

United Arab Emirates Germany, Israel, Korea, Rep, Norway, Spain, United Kingdom, United States

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.

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How competitive is the Arab world as a region?

GCI 2010-2011 GCI 2009-2010

Economy RankRank

(out of 139) Score

Rank in constant

2009 sampleRank

(out of 133)

Brunei Darussalam 1 28 4.75 28 32

Kuwait 2 35 4.59 35 39

Indonesia 3 44 4.43 44 54

India 4 51 4.33 51 49

Azerbaijan 5 57 4.29 57 51

Vietnam 6 59 4.27 59 75

Sri Lanka 7 62 4.25 62 79

Botswana 8 76 4.05 75 66

Rwanda 9 80 4.00 n/a n/a

Egypt 10 81 4.00 79 70

Philippines 11 85 3.96 83 87

Algeria 12 86 3.96 84 83

Gambia, The 13 90 3.90 88 81

Honduras 14 91 3.89 89 89

Georgia 15 93 3.86 90 90

Moldova 16 94 3.86 n/a n/a

Mongolia 17 99 3.75 95 117

Libya 18 100 3.74 96 88

Benin 19 103 3.69 99 103

Senegal 20 104 3.67 100 92

Kenya 21 106 3.65 102 98

Bangladesh 22 107 3.64 103 106

Bolivia 23 108 3.64 104 120

Cambodia 24 109 3.63 105 110

Cameroon 25 111 3.58 107 111

Nicaragua 26 112 3.57 108 115

Tanzania 27 113 3.56 109 100

Ghana 28 114 3.56 110 114

Zambia 29 115 3.55 111 112

Tajikistan 30 116 3.53 112 122

Uganda 31 118 3.51 113 108

Ethiopia 32 119 3.51 114 118

Paraguay 33 120 3.49 115 124

Kyrgyz Republic 34 121 3.49 116 123

Venezuela 35 122 3.48 117 113

Pakistan 36 123 3.48 118 101

Madagascar 37 124 3.46 119 121

Malawi 38 125 3.45 120 119

Nigeria 39 127 3.38 121 99

Lesotho 40 128 3.36 122 107

Côte d’Ivoire 41 129 3.35 123 116

Nepal 42 130 3.34 124 125

Mozambique 43 131 3.32 125 129

Mali 44 132 3.28 126 130

Timor-Leste 45 133 3.23 127 126

Burkina Faso 46 134 3.20 128 128

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

Table 3: GCI ranking for factor-driven economies

The Arab world is composed of highly diverse economies in terms of size, geography, stage of development and economic structure. It is therefore not surprising that countries from the region span across all three stages of development as defined by the GCI. To take this diversity into account and enable meaningful comparisons, we benchmark countries’ competitiveness against their peers, i.e. economies at the same level of development.4 Along those lines, Tables 3 to 5 show how Arab countries place among all countries included in their respective stages of development. Countries in transition between stages are attributed to the closest stage of development. In the group of factor-driven economies, led by Brunei Darussalam and including 51 countries, Kuwait stands out in a very good second ranking in terms of competitiveness. Egypt and Algeria also achieve fairly good places in comparison with their peers appearing towards the top of the ranking at 10th and 12th, respectively, while Libya occupies a somewhat lower 18th position. In the efficiency-driven group of countries, Qatar and Saudi Arabia occupy the top positions among 41 countries, showing their strong leadership in terms of competitiveness not only at the regional, but also at the global level. They are followed closely by Tunisia and Oman at sixth and seventh places, respectively. Further down the ranking we see Jordan at 21st, still in the top half of the league table, while Morocco (31st), Lebanon (38th) and Syria (41st) fall into the lower half. Only two Arab countries are among the 40 innovation-driven economies, the United Arab Emirates and Bahrain. Both trail their peers in this assessment, occupying the 23rd and 28th positions, respectively, lagging behind top-placed Switzerland, Sweden and Singapore by a wide margin.

In addition to the diverging performance of Arab countries in the GCI sample, we also observe very different results among the geographic sub-regions, reflecting common features of countries within these groupings. Figure 3 shows how the three sub-regions, Gulf Cooperation Council (GCC) members, North Africa and the Levant fare against the average scores of members of the Organization of Economic Cooperation and Development (OECD).

It is striking that GCC members outperform North Africa and the Levant on almost all measures except market size and reach, or exceed OECD levels in some categories. The Gulf region has made great strides in improving its competitiveness over the past years, addressing many challenges. Institutions were upgraded to levels above those of OECD member countries. By and large, governments are considered efficient and transparent, physical security is ensured and corporate governance complies with high standards. During the pre-crisis years, much of the oil windfall and, in some countries, also a large share of stimulus spending in 2009 and 2010 (e.g. in Saudi Arabia) have been invested in upgrading transport infrastructure, which presently also reaches OECD levels, both for transport as well as electricity and telephony facilities. The

high commodity prices of the pre-crisis period enabled many countries to put their macroeconomic environments on a sounder footing, reflecting better macroeconomic management than during previous oil booms. Indeed, the macroeconomic environment is among the world’s best. Going forward, GCC countries will need to continue to diversify their economies away from the hydrocarbon

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Table 4: GCI ranking for efficiency-driven economies Table 5: GCI ranking for innovation-driven economies

GCI 2010-2011 GCI 2009-2010

Economy RankRank

(out of 139) Score

Rank in constant

2009 sample

Rank(out of 133)

Qatar 1 17 5.10 17 22

Saudi Arabia 2 21 4.95 21 28

Malaysia 3 26 4.88 26 24

China 4 27 4.84 27 29

Chile 5 30 4.69 30 30

Tunisia 6 32 4.65 32 40

Oman 7 34 4.61 34 41

Thailand 8 38 4.51 38 36

Poland 9 39 4.51 39 46

Lithuania 10 47 4.38 47 53

Montenegro 11 49 4.36 49 62

Hungary 12 52 4.33 52 58

Panama 13 53 4.33 53 59

South Africa 14 54 4.32 54 45

Mauritius 15 55 4.32 55 57

Costa Rica 16 56 4.31 56 55

Brazil 17 58 4.28 58 56

Turkey 18 61 4.25 61 61

Russian Federation 19 63 4.24 63 63

Uruguay 20 64 4.23 64 65

Jordan 21 65 4.21 65 50

Mexico 22 66 4.19 66 60

Romania 23 67 4.16 67 64

Colombia 24 68 4.14 68 69

Iran, Islamic Rep. 25 69 4.14 n/a n/a

Latvia 26 70 4.14 69 68

Bulgaria 27 71 4.13 70 76

Kazakhstan 28 72 4.12 71 67

Peru 29 73 4.11 72 78

Namibia 30 74 4.09 73 74

Morocco 31 75 4.08 74 73

Guatemala 32 78 4.04 77 80

Macedonia, FYR 33 79 4.02 78 84

El Salvador 34 82 3.99 80 77

Argentina 35 87 3.95 85 85

Albania 36 88 3.94 86 96

Ukraine 37 89 3.90 87 82

Lebanon 38 92 3.89 n/a n/a

Jamaica 39 95 3.85 91 91

Serbia 40 96 3.84 92 93

Syria 41 97 3.79 93 94

Armenia 42 98 3.76 94 97

Dominican Republic 43 101 3.72 97 95

Bosnia and Herzegovina 44 102 3.70 98 109

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

GCI 2010-2011 GCI 2009-2010

Economy RankRank

(out of 139) Score

Rank in constant

2009 sample

Rank(out of 133)

Switzerland 1 1 5.63 1 1

Sweden 2 2 5.56 2 4

Singapore 3 3 5.48 3 3

United States 4 4 5.43 4 2

Germany 5 5 5.39 5 7

Japan 6 6 5.37 6 8

Finland 7 7 5.37 7 6

Netherlands 8 8 5.33 8 10

Denmark 9 9 5.32 9 5

Canada 10 10 5.301 10 9

Hong Kong SAR 11 11 5.271 11 11

United Kingdom 12 12 5.25 12 13

Taiwan, China 13 13 5.21 13 12

Norway 14 14 5.14 14 14

France 15 15 5.13 15 16

Australia 16 16 5.11 16 15

Austria 17 18 5.09 18 17

Belgium 18 19 5.07 19 18

Luxembourg 19 20 5.05 20 21

Korea, Rep. 20 22 4.93 22 19

New Zealand 21 23 4.92 23 20

Israel 22 24 4.91 24 27

United Arab Emirates

23 25 4.89 25 23

Ireland 24 29 4.74 29 25

Iceland 25 31 4.68 31 26

Estonia 26 33 4.61 33 35

Czech Republic 27 36 4.57 36 31

Bahrain 28 37 4.54 37 38

Cyprus 29 40 4.50 40 34

Puerto Rico 30 41 4.49 41 42

Spain 31 42 4.49 42 33

Barbados 32 43 4.45 43 44

Slovenia 33 45 4.42 45 37

Portugal 34 46 4.38 46 43

Italy 35 48 4.37 48 48

Malta 36 50 4.34 50 52

Slovak Republic 37 60 4.25 60 47

Croatia 38 77 4.04 76 72

Greece 39 83 3.99 81 71

Trinidad and Tobago 40 84 3.97 82 86

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

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.

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One important precondition for developing commercial innovation is a highly educated population. However, despite numerous efforts to attract international schools 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

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

Figure 2: Competitiveness performance in Gulf countries, North Africa, Levant and OECD

Goods market efficiency

Institutions

Infrastructure

Macroeconomic environment

Health and primaryeducation

Hight education andtraining

Labor market efficiency

GCC Levant North Africa OECD

Financial marketdevelopment

Technological readiness

Market size

Business sophistication

Innovation7

6

5

4

3

2

GCC members covered here include: Bahrain, Oman, Kuwait, Qatar, Saudi Arabia, and the United Arab EmiratesThe Levant region comprises Syria, Jordan and Lebanon.North Africa includes Algeria, Egypt, Libya, Morocco, and Tunisia.

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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 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.

Figure 3: Evolution of rankings of Arab countries from 2005 to 2010 by decile

Qatar

Saud

i Arab

ia

UAE Tunis

ia

OmanKu

wait

Bahrai

n

Jorda

n

Morocc

o

Egyp

tAlg

eria

Leba

non

Syria

Libya

17 21 25 32 34 35 37 65 75 81 86 92 97 100

High 123456789

Low 10

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

GCI 2010-2011 rank >

Deci

le ra

nk

NEW

12

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 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.

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

Ratio female to male in enrolment in education by level

Primary Secondary Tertiary

Algeria 0.98 1.06 1.40

Bahrain 1.00 1.05 2.46

Egypt 0.96 0.94 ▬-

Jordan 1.02 1.01 1.10

Kuwait 0.97 1.01 2.32

Lebanon ▬- ▬- ▬-

Libya ▬- ▬- ▬-

Morocco 0.95 0.85 0.89

Oman 1.02 1.01 1.18

Qatar 1.00 0.98 2.87

Saudi Arabia 0.99 1.08 1.50

Syria 0.95 0.97 -▬

Tunisia 1.01 1.10 1.51

United Arab Emirates 0.99 1.03 2.32

Table 1: Enrolment in education by gender

Source : UNESCO, Institute for Statistics, Education Indicators and World Bank, World Development Indicators, Online Database

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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 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

Science Reading Math

Finland 563 547 548

Turkey 424 447 424

Jordan 422 401 384

Qatar 349 312 318

Tunisia 386 380 365

Table 2: PISA 2006 scores in science, reading and math

Figure 2: Quality of the educational system in selected Arab countries 2004 - 2010

Source: OECD

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,

1

2

3

4

5

6

7 Score*

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 EOS 2008 EOS 2009 EOS 2010

* 7 always corresponds to the best possible scoreSource: World Economic Forum, Executive Opinion Survey Note: For more information about the Survey and aggregation methods please consult The Global Competitiveness Report 2010-2011.

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Figure 3: Male-female differences in PISA scores

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 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 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.

-75 -50 -25 0 25

Qatar

Tunisia

Jordan

Turkey

Finland

Math

Reading

Science

Note: A negative sign indicates that female students perform better

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.

Endnotes

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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 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

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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

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 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

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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 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.

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References

Browne, Ciara, and Thierry Geiger. 2010. The Executive Opinion Survey: The Business Executives’ Insight into their Operating Environment. In: World Economic Forum, The Global Competitiveness Report 2010-2011. Geneva, Switzerland

Financial Times. 2010. A trade to ply. Roula Khalaf and Simeon Kerr. 5 July

International Labour Organization. 2010. Laborsta database. Retrieved on 30 August 2010

International Monetary Fund. 2010a. Regional Economic Outlook Middle East and Central Asia. Washington. May

International Monetary Fund. 2010b. Kuwait: 2010 Article IV Consultation Staff Report and Public Information Notice on the Executive Board Discussion. Washington DC. 29 July

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

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.

Endnotes

1 See IMF 2010a for a more detailed discussion of resilience in the Middle East.

2 For a more detailed discussion of the 12 pillars and their contributions to competitiveness, see Sala-i-Martin et al. 2010. The Appendix shows the detailed structure of the GCI.

3 This is proxied by the share of exports of mineral products as share of total exports.

4 Although the rankings in this part of the text refer to the position within the stage of development, we use overall rankings in the remaining text of this article.

5 For more material on education reform in the region, see World Bank 2008.

6 See IMF 2010b.7 IMF 2010c.8 ILO 2010.9 Algeria’s performance in the market size pillar remains

stable. 10 IMF 2010d.

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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, 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 rights1.02 Intellectual property protection 1/2

2. Ethics and corruption................................................................20%1.03 Diversion of public funds1.04 Public trust of politicians1.05 Irregular payments and bribes

3. Undue influence.........................................................................20%1.06 Judicial independence1.07 Favoritism in decisions of government officials

4. Government inefficiency..........................................................20%1.08 Wastefulness of government spending1.09 Burden of government regulation1.10 Efficiency of legal framework in settling disputes1.11 Efficiency of legal framework in challenging regulations1.12 Transparency of government policy-making

5. Security........................................................................................20%1.13 Business costs of terrorism1.14 Business costs of crime and violence1.15 Organized crime1.16 Reliability of police services

B. Private institutions.......................................................................25%1. Corporate ethics........................................................................50%

1.17 Ethical behaviour of firms2. Accountability.............................................................................50%

1.18 Strength of auditing and reporting standards1.19 Efficacy of corporate boards1.20 Protection of minority shareholders’ interests1.21 Strength of investor protection*

Pillar 2: Infrastructure...........................................................25%A. Transport infrastructure...............................................................50%

2.01 Quality of overall infrastructure2.02 Quality of roads2.03 Quality of railroad infrastructure2.04 Quality of port infrastructure2.05 Quality of air transport infrastructure2.06 Available seat kilometres*

B. Energy and telephony infrastructure........................................50%2.07 Quality of electricity supply2.08 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*

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Pillar 4: Health and primary education.............................25%A. Health.............................................................................................50%

4.01 Business impact of malaria f

4.02 Malaria incidence* f

4.03 Business impact of tuberculosis f

4.04 Tuberculosis incidence* f

4.05 Business impact of HIV/AIDS f

4.06 HIV prevalence* f

4.07 Infant mortality*4.08 Life expectancy*

B. Primary education........................................................................50%4.09 Quality of primary education4.10 Primary education enrollment rate* g

EFFICIENCY ENHANCERS

Pillar 5: Higher education and training.............................17%A. Quantity of education...................................................................33%

5.01 Secondary education enrolment rate*5.02 Tertiary education enrolment rate*

B. Quality of education.....................................................................33%5.03 Quality of the educational system5.04 Quality of math and science education5.05 Quality of management schools5.06 Internet access in schools

C. On-the-job training.......................................................................33%5.07 Local availability of specialized research and training services5.08 Extent of staff training

Pillar 6: Goods market efficiency.......................................17%A. Competition....................................................................................67%

1. Domestic competition.....................................................variable h

6.01 Intensity of local competition6.02 Extent of market dominance6.03 Effectiveness of anti-monopoly policy6.04 Extent and effect of taxation 1/2

6.05 Total tax rate*6.06 Number of procedures required to start a business* i

6.07 Time required to start a business* i

6.08 Agricultural policy costs2. Foreign competition........................................................variable h

6.09 Prevalence of trade barriers6.10 Trade tariffs*6.11 Prevalence of foreign ownership6.12 Business impact of rules on FDI6.13 Burden of customs procedures10.04 Imports as a percentage of GDP* g

B. Quality of demand condition......................................................33%6.14 Degree of customer orientation6.15 Buyer sophistication

Pillar 7: Labour market efficiency......................................17%A. Flexibility........................................................................................50%

7.01 Cooperation in labour-employer relations7.02 Flexibility of wage determination7.03 Rigidity of employment*7.04 Hiring and firing practices7.05 Redundancy costs*6.04 Extent and effect of taxation 1/2

B. Efficient use of talent...................................................................50%7.06 Pay and productivity7.07 Reliance on professional management 1/2

7.08 Brain drain7.09 Female participation in labour force*

Pillar 8: Financial market development............................17%A. Efficiency........................................................................................50%

8.01 Availability of financial services8.02 Affordability of financial services8.03 Financing through local equity market8.04 Ease of access to loans8.05 Venture capital availability8.06 Restriction on capital flows

B. Trustworthiness and confidence...............................................50%8.07 Soundness of banks8.08 Regulation of securities exchanges8.09 Legal rights index*

Pillar 9: Technological readiness.......................................17%A. Technological adoption...............................................................50%

9.01 Availability of latest technologies9.02 Firm-level technology absorption9.03 FDI and technology transfer

B. ICT use...........................................................................................50%9.04 Internet users*9.05 Broadband Internet subscriptions*9.06 Internet bandwidth*2.08 Fixed telephone lines* 1/2

2.09 Mobile telephone subscriptions* 1/2

Pillar 10: Market size...........................................................17%A. Domestic market size..................................................................75%

10.01 Domestic market size index* j

B. Foreign market size.....................................................................25%10.02 Foreign market size index* k

INNOVATION AND SOPHISTICATION FACTORS

Pillar 11: Business sophistication......................................50%11.01 Local supplier quantity11.02 Local supplier quality11.03 State of cluster development11.04 Nature of competitive advantage11.05 Value chain breadth11.06 Control of international distribution11.07 Production process sophistication11.08 Extent of marketing11.09 Willingness to delegate authority7.07 Reliance on professional management 1/2

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Pillar 12: Innovation..............................................................50%12.01 Capacity for innovation12.02 Quality of scientific research institutions12.03 Company spending on R&D12.04 University-industry collaboration in R&D12.05 Government procurement of advanced technology products12.06 Availability of scientists and engineers12.07 Utility patents*1.02 Intellectual property protection 1/2

Notesa. Formally, for a category i composed of K indicators, we have:

b. As described in the article, the weights are the following:

Weights

Factor-driven stage

(%)

Efficiency-driven stage

(%)

Innovation-driven stage

(%)

Basic requirements 60 40 20

Efficiency enhancers 35 50 50

Innovation and sophistication factors 5 10 30

c. Formally, we have:

-6

6

x

x

+

+

+

—

—

x

x

+

7

1

(country score – sample minimum)

(sum of scores on full-weight variables)

(count of full-weight variables)

1

1 2

2

(sum of scores on half-weight variables)

(count of half-weight variables)

(country score – sample minimum)

(sample maximum – sample minimum)

(sample maximum – sample minimum)

The sample minimum and sample maximum are, respectively, the lowest and highest country scores in the sample of economies covered by the GCI. In some instances, adjustments were made to account for extreme outliers. For those indicators for which a higher value indicates a worse outcome (e.g. disease incidence, government debt) the transformation formula takes the following form, thus ensuring that 1 and 7 still corresponds to the worst and best possible outcomes, respectively:

d. For those categories that contain one or several half-weight variables, country scores for those groups are computed as follows:

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.

f. The impact of malaria, tuberculosis, and HIV/AIDS on competitiveness depends not only on their respective incidence rates but also on how costly they are for business. Therefore, to estimate the impact of each of the three diseases, we combine its incidence rate with the survey question on its perceived cost to businesses. To combine these data we first take the ratio of each country’s disease incidence rate relative to the highest incidence rate in the whole sample. The inverse of this ratio is then multiplied by each country’s score on the related survey question. 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 min-max transformation.

h. The competition sub-pillar is the weighted average of two components: domestic competition and foreign competition. In both components, the included variables provide an indication of the extent to which competition is distorted. 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 market is captured by the way we determine the weights of the two components. Domestic competition is the sum of consumption (C), investment (I), government spending (G) and exports (X), while foreign competition is equal to imports (M). 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) to foreign competition.

i. Variables 6.06 and 6.07 combine to form one single variable.

j. The size of the domestic market is constructed by taking the natural log of the sum of the gross domestic product valued at purchased power parity (PPP) plus the total value (PPP estimates) of imports of goods and services, minus the total value (PPP estimates) of exports of goods and services. Data are then normalized on a 1-to-7 scale. PPP estimates of imports and exports are obtained by taking the product of exports as a percentage of GDP and GDP valued at PPP. The underlying data are reported in the data tables section (see Tables 10.03, 10.04, and 10.05).

k. The size of the foreign market is estimated as the natural log of the total value (PPP estimates) of exports of goods and services, normalized on a 1-to-7 scale. PPP estimates of exports are obtained by taking the product of exports as a percentage of GDP and GDP valued at PPP. The underlying data are reported in the data tables.

categoryi =ΣK

k=1indicatork

K

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Trade Competitiveness and Growth in the MENA Regionby 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 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.

* 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

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

10

15

20

25

30

35

40

1990 1995 2000 2005 2010

MENAP oil importers

Emerging and developing economies

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

-8

-6

-4

-2

0

2

4

6

8

1990 1995 2000 2005 2010

Emerging Asia

MENAP oil importers

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0 10 20 30 40 50 60 70 80 90

100

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

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 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)

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

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

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

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Figure 4: Trade openness, 1990-2007 average (Percent of GDP)

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100

150

200

250

300

350

400

Sin

gapo

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Hon

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ong,

SA

R

Mal

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a

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an

Thai

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Viet

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Taiw

an

Tuni

sia

Mau

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ia

Phi

lippi

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ME

NA

PO

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ia

Kor

ea, R

ep

Mor

occo

Indo

nesi

a

Egy

pt

Chi

na

Pak

ista

n

Indi

a

Source: IMF, World Economic Outlook

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

0

20

40

60

80

100

120

140

Sin

gapo

re

Taiw

an

Tuni

sia

Mal

aysi

a

Hon

g K

ong,

SA

R

Jord

an

Em

ergi

ng A

sia

Indo

nesi

a

Indi

a

Kor

ea, R

ep

Phi

lippi

nes

Chi

na

Thai

land

Viet

nam

ME

NA

PO

Is

Syr

ia

Pak

ista

n

Mor

occo

Egy

pt

Mau

ritan

ia

Source: The Global Competitiveness Report 2009-2010

If MENA had seized the opportunities offered by these characteristics to the same degree that other middle-income countries do, its exports in 2008 would have been around 50% higher than they actually were. It is the lack of competitiveness compared to many of its peers that explains MENA’s underperformance in trade.

Poor education outcomes, unfavourable business environments and overbearing governments are key reasons for MENA’s lack of competitiveness.

As discussed in the previous chapter, education outcomes in MENA trail those of other countries, and workers do not have the skills that firms seek. Although enrolment rates in the region are not very different from those in other regions, the quality of education in MENA appears to be much lower than in regions with stronger export

performance (Figure 5). Moreover, graduates in MENA do not have the skills that firms require to compete in today’s global marketplace; unemployment is particularly high among graduates and the young, implying a mismatch between the types of skills supplied and demanded. This mismatch may, in part, be explained by the traditional role of governments as employer of first choice in the region, offering job security and good wages but not requiring qualifications sought by the private sector.

In addition, business environments are not sufficiently conducive to entrepreneurship or to fostering a dynamic private sector that can identify and exploit new business opportunities. According to the World Bank’s “Ease of Doing Business” survey, MENA countries rank far below emerging Asia (Figure 6) suggesting that, in MENA, the regulatory and legal environment as well as basic

infrastructure, such as roads and utilities, have not kept up with developments in other countries. In addition, MENA governments spend more resources on consumption, including civil service wages and subsidies, and less on investment as a percentage of GDP than do their counterparts in emerging Asia.

Strengthening political cohesion and regional institutions would promote growth.

Advances in political cooperation and a larger role for regional institutions could impact economic activity in the region through two main channels. First, MENA countries could do more to facilitate intra-regional trade which would allow countries to specialize in their areas of strengths and yield a positive growth dividend. Second, by reducing internal trade barriers, the region would become a more integrated market and thus be more attractive to FDI which often seeks a large customer base.

But there are also success stories in the region.

To pick just two examples:• Tunisia has become an “outsourcing hub” in the

MENA region, having successfully attracted foreign direct investment in textile production, car assembly and food processing over the past several years and, more recently, in information technology (IT), customer service and aeronautics. Tunisia’s car industry employs around 45,000 workers, and its aeronautical engineering industry is rapidly expanding, thanks in part to a deal with Airbus, whose first Tunisian plant becomes operational this year. To the extent that cars and airplanes, for which parts are produced in Tunisia, are exported to today’s dynamic economies, this has allowed Tunisia to benefit from the growing demand of these emerging markets. Simplified regulation, modern infrastructure, government incentives and commitment to a knowledge-based economy that generates well-trained, low-cost workers, have contributed to this success. It is therefore no surprise that Tunisia scores better on competitiveness indicators - including openness, the business environment and education quality - than its MENA peers.

• Egypt has also attracted global IT investment from firms such as Microsoft, Oracle, Vodafone and IBM, and Egypt’s IT exports have increased from US$ 250 million in 2005 to an anticipated US$ 1 billion by the end of 2010. Much of Egypt’s IT industry is housed in the so-called “Smart Village” in Cairo, which currently employs 22,000 workers. This success has been achieved, despite Egypt’s relatively low score on many competitiveness indicators, because of recent structural reforms that have led to improvements in the business environment and targeted government investments in infrastructure and language skills in the context of the “Smart Village” project.

Fostering trade competitiveness should boost growth and contribute to job creation.

The MENA region faces the sizeable challenge of having to create 18 million jobs for its growing labour force by 2020. High and sustained growth is a precondition for such large-scale job creation and for raising incomes. This, in turn, can be achieved by strengthening trade competitiveness so that the region can better benefit from globalization and the dynamics of today’s high-growth regions. Improving education outcomes and ensuring that graduates acquire the skills needed by the private sector are key to attracting firms that can compete in the global marketplace. These firms also seek business friendly environments, calling for further streamlining of regulations and additional investments in infrastructure - including through public-private partnerships or by encouraging private sector investments - to increase the region’s competitiveness. In this, the region can build on successes already achieved.

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

0

30

60

90

120

150

180

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Viet

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Jord

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Mor

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Indi

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Syr

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Phi

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Endnote

1 This note focuses on the MENA oil importers unless otherwise indicated. These include Djibouti, Egypt, Jordan, Lebanon, Mauritania, Morocco, Syria and Tunisia.

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Source: World Bank, Ease of Doing Business

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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

AlgeriaKey indicators, 2009

Population (millions).................................................34.9GDP (US$ billions)...................................................140.8GDP per capita (US$) .............................................4,027GDP (PPP) as share (%) of world total .................0.35

Global Competitiveness Index

GCI 2010–2011.........................................................86 ......4.0GCI 2009–2010 (out of 133)..................................................83 ........3.9GCI 2008–2009 (out of 134)..................................................99 ........3.7

Basic requirements.............................................................80 ........4.31st pillar: Institutions ...........................................................98 ........3.52nd pillar: Infrastructure.....................................................87 ........3.53rd pillar: Macroeconomic environment .........................57 ........4.84th pillar: Health and primary education .........................77 ........5.6

Efficiency enhancers........................................................107 ........3.55th pillar: Higher education and training .........................98 ........3.66th pillar: Goods market efficiency.................................126 ........3.67th pillar: Labour market efficiency................................123 ........3.78th pillar: Financial market development.......................135 ........2.89th pillar: Technological readiness.................................106 ........3.010th pillar: Market size........................................................50 ........4.3

Innovation and sophistication factors ..........................108 ........3.011th pillar: Business sophistication................................108 ........3.312th pillar: Innovation........................................................107 ........2.8

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

Rank Score(out of 139) (1–7)

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GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Algeria Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

2,000

4,000

6,000

8,000

10,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Algeria Middle East and North Africa

Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

29

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The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights .......................................................................1061.02 Intellectual property protection..............................................1051.03 Diversion of public funds.........................................................671.04 Public trust of politicians .........................................................851.05 Irregular payments and bribes.................................................971.06 Judicial independence............................................................1121.07 Favoritism in decisions of government officials ......................821.08 Wastefulness of government spending ..................................641.09 Burden of government regulation..........................................1321.10 Efficiency of legal framework in settling disputes...................931.11 Efficiency of legal framework in challenging regulations.......1001.12 Transparency of government policymaking ...........................1211.13 Business costs of terrorism ..................................................1281.14 Business costs of crime and violence .....................................741.15 Organized crime ......................................................................871.16 Reliability of police services ....................................................791.17 Ethical behavior of firms..........................................................981.18 Strength of auditing and reporting standards........................1041.19 Efficacy of corporate boards ..................................................1101.20 Protection of minority shareholders’ interests ........................951.21 Strength of investor protection* .............................................59

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................862.02 Quality of roads .......................................................................662.03 Quality of railroad infrastructure ..............................................652.04 Quality of port infrastructure..................................................1152.05 Quality of air transport infrastructure ......................................982.06 Available airline seat kilometers* ............................................702.07 Quality of electricity supply .....................................................692.08 Fixed telephone lines*...........................................................1022.09 Mobile telephone subscriptions* ............................................72

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...............................................1203.02 National savings rate* .............................................................263.03 Inflation*..................................................................................993.04 Interest rate spread* ...............................................................813.05 Government debt*...................................................................103.06 Country credit rating*..............................................................59

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................914.04 Tuberculosis incidence* ..........................................................734.05 Business impact of HIV/AIDS..................................................634.06 HIV prevalence* ......................................................................224.07 Infant mortality* ....................................................................1044.08 Life expectancy* .....................................................................774.09 Quality of primary education ...................................................964.10 Primary education enrollment rate* ........................................58

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................805.02 Tertiary education enrollment rate*.........................................875.03 Quality of the educational system .........................................1175.04 Quality of math and science education...................................845.05 Quality of management schools..............................................915.06 Internet access in schools .....................................................1255.07 Local availability of research and training services ................1055.08 Extent of staff training ...........................................................103

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................936.02 Extent of market dominance...................................................556.03 Effectiveness of anti-monopoly policy.....................................916.04 Extent and effect of taxation ...................................................566.05 Total tax rate* ........................................................................1286.06 Number of procedures required to start a business* ...........1266.07 Time required to start a business* .........................................796.08 Agricultural policy costs .........................................................1196.09 Prevalence of trade barriers.....................................................566.10 Trade tariffs* ..........................................................................1216.11 Prevalence of foreign ownership ...........................................1236.12 Business impact of rules on FDI ...........................................1256.13 Burden of customs procedures.............................................1246.14 Degree of customer orientation ............................................1086.15 Buyer sophistication ..............................................................108

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................937.02 Flexibility of wage determination...........................................1057.03 Rigidity of employment* .......................................................1047.04 Hiring and firing practices........................................................787.05 Redundancy costs* .................................................................297.06 Pay and productivity...............................................................1057.07 Reliance on professional management .................................1297.08 Brain drain..............................................................................1257.09 Female participation in labour force*.....................................120

8th pillar: Financial market development8.01 Availability of financial services .............................................1318.02 Affordability of financial services...........................................1368.03 Financing through local equity market...................................1278.04 Ease of access to loans...........................................................678.05 Venture capital availability........................................................818.06 Restriction on capital flows ...................................................1368.07 Soundness of banks ..............................................................1218.08 Regulation of securities exchanges .......................................1378.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies...........................................1099.02 Firm-level technology absorption...........................................1289.03 FDI and technology transfer ..................................................1299.04 Internet users* ........................................................................969.05 Broadband Internet subscriptions* .........................................829.06 Internet bandwidth* ...............................................................n/a

10th pillar: Market size10.01 Domestic market size index* ..................................................5110.02 Foreign market size index*......................................................41

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................5911.02 Local supplier quality .............................................................10511.03 State of cluster development ................................................12611.04 Nature of competitive advantage ..........................................12911.05 Value chain breadth................................................................12311.06 Control of international distribution .......................................10911.07 Production process sophistication...........................................8311.08 Extent of marketing ...............................................................10511.09 Willingness to delegate authority...........................................111

12th pillar: Innovation12.01 Capacity for innovation ..........................................................12512.02 Quality of scientific research institutions ................................9612.03 Company spending on R&D ..................................................10612.04 University-industry collabouration in R&D .............................11912.05 Gov’t procurement of advanced tech products .....................12312.06 Availability of scientists and engineers....................................4312.07 Utility patents per million population*.....................................90

Algeria

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.

BahrainKey indicators, 2009

Population (millions)...................................................0.8GDP (US$ billions).....................................................20.2GDP per capita (US$) ...........................................19,455GDP (PPP) as share (%) of world total .................0.04

Global Competitiveness Index

GCI 2010–2011.........................................................37 ......4.5GCI 2009–2010 (out of 133)..................................................38 ........4.5GCI 2008–2009 (out of 134)..................................................37 ........4.6

Basic requirements.............................................................21 ........5.51st pillar: Institutions ...........................................................27 ........5.02nd pillar: Infrastructure.....................................................27 ........5.13rd pillar: Macroeconomic environment .........................11 ........5.74th pillar: Health and primary education .........................36 ........6.2

Efficiency enhancers..........................................................33 ........4.55th pillar: Higher education and training .........................44 ........4.66th pillar: Goods market efficiency.....................................9 ........5.17th pillar: Labour market efficiency..................................28 ........4.88th pillar: Financial market development.........................20 ........4.99th pillar: Technological readiness...................................27 ........4.910th pillar: Market size........................................................98 ........2.9

Innovation and sophistication factors ............................55 ........3.711th pillar: Business sophistication..................................55 ........4.112th pillar: Innovation..........................................................59 ........3.2

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

Rank Score(out of 139) (1–7)

30

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

10,000

20,000

30,000

40,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Bahrain Economies in transition from 2 to 3

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

Bahrain Middle East and North Africa

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

31

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................211.02 Intellectual property protection ...............................................221.03 Diversion of public funds.........................................................221.04 Public trust of politicians .........................................................271.05 Irregular payments and bribes.................................................231.06 Judicial independence .............................................................341.07 Favoritism in decisions of government officials ......................421.08 Wastefulness of government spending ....................................81.09 Burden of government regulation ...........................................191.10 Efficiency of legal framework in settling disputes...................581.11 Efficiency of legal framework in challenging regulations ........451.12 Transparency of government policymaking .............................431.13 Business costs of terrorism ....................................................871.14 Business costs of crime and violence.....................................381.15 Organized crime ......................................................................301.16 Reliability of police services ....................................................321.17 Ethical behavior of firms..........................................................261.18 Strength of auditing and reporting standards..........................201.19 Efficacy of corporate boards....................................................241.20 Protection of minority shareholders’ interests ........................201.21 Strength of investor protection* .............................................45

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................262.02 Quality of roads .......................................................................252.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure ...................................................132.05 Quality of air transport infrastructure ......................................202.06 Available airline seat kilometers* ............................................562.07 Quality of electricity supply .....................................................622.08 Fixed telephone lines* ............................................................432.09 Mobile telephone subscriptions* ..............................................3

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................233.02 National savings rate* ...............................................................53.03 Inflation*..................................................................................693.04 Interest rate spread* ...............................................................843.05 Government debt* ..................................................................643.06 Country credit rating*..............................................................43

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................454.04 Tuberculosis incidence* ..........................................................654.05 Business impact of HIV/AIDS..................................................484.06 HIV prevalence* ......................................................................474.07 Infant mortality* ......................................................................514.08 Life expectancy* .....................................................................454.09 Quality of primary education ...................................................414.10 Primary education enrollment rate* ........................................31

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................365.02 Tertiary education enrollment rate* .........................................745.03 Quality of the educational system...........................................385.04 Quality of math and science education...................................445.05 Quality of management schools..............................................455.06 Internet access in schools.......................................................325.07 Local availability of research and training services..................815.08 Extent of staff training.............................................................16

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................406.02 Extent of market dominance...................................................376.03 Effectiveness of anti-monopoly policy.....................................276.04 Extent and effect of taxation .....................................................16.05 Total tax rate*............................................................................66.06 Number of procedures required to start a business* .............576.07 Time required to start a business* .........................................306.08 Agricultural policy costs...........................................................206.09 Prevalence of trade barriers.....................................................116.10 Trade tariffs*............................................................................586.11 Prevalence of foreign ownership.............................................146.12 Business impact of rules on FDI ...............................................56.13 Burden of customs procedures ...............................................116.14 Degree of customer orientation ..............................................276.15 Buyer sophistication ................................................................33

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................577.02 Flexibility of wage determination ..............................................87.03 Rigidity of employment* .........................................................187.04 Hiring and firing practices........................................................957.05 Redundancy costs* ...................................................................67.06 Pay and productivity ................................................................237.07 Reliance on professional management ...................................737.08 Brain drain ...............................................................................157.09 Female participation in labour force*.....................................127

8th pillar: Financial market development8.01 Availability of financial services ...............................................188.02 Affordability of financial services .............................................118.03 Financing through local equity market ....................................518.04 Ease of access to loans.............................................................28.05 Venture capital availability........................................................188.06 Restriction on capital flows .....................................................128.07 Soundness of banks ................................................................198.08 Regulation of securities exchanges.........................................138.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................299.02 Firm-level technology absorption.............................................489.03 FDI and technology transfer.....................................................119.04 Internet users* ........................................................................119.05 Broadband Internet subscriptions* .........................................309.06 Internet bandwidth* ................................................................54

10th pillar: Market size10.01 Domestic market size index* ................................................10610.02 Foreign market size index*......................................................77

11th pillar: Business sophistication11.01 Local supplier quantity ...........................................................11511.02 Local supplier quality ...............................................................7111.03 State of cluster development ..................................................1411.04 Nature of competitive advantage ............................................8011.05 Value chain breadth .................................................................7711.06 Control of international distribution .........................................3811.07 Production process sophistication...........................................4711.08 Extent of marketing.................................................................4011.09 Willingness to delegate authority............................................29

12th pillar: Innovation12.01 Capacity for innovation ............................................................6712.02 Quality of scientific research institutions ...............................11712.03 Company spending on R&D ..................................................10112.04 University-industry collabouration in R&D...............................8812.05 Gov’t procurement of advanced tech products.......................2212.06 Availability of scientists and engineers....................................4112.07 Utility patents per million population*.....................................90

Bahrain

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.

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EgyptKey indicators, 2009

Population (millions).................................................83.0GDP (US$ billions)...................................................188.0GDP per capita (US$) .............................................2,450GDP (PPP) as share (%) of world total .................0.68

Global Competitiveness Index

GCI 2010–2011.........................................................81 ......4.0GCI 2009–2010 (out of 133)..................................................70 ........4.0GCI 2008–2009 (out of 134)..................................................81 ........4.0

Basic requirements.............................................................89 ........4.21st pillar: Institutions ...........................................................57 ........4.02nd pillar: Infrastructure.....................................................64 ........4.03rd pillar: Macroeconomic environment .......................129 ........3.44th pillar: Health and primary education .........................91 ........5.4

Efficiency enhancers..........................................................82 ........3.85th pillar: Higher education and training .........................97 ........3.66th pillar: Goods market efficiency...................................90 ........3.97th pillar: Labour market efficiency................................133 ........3.48th pillar: Financial market development.........................82 ........4.09th pillar: Technological readiness...................................87 ........3.310th pillar: Market size........................................................26 ........4.8

Innovation and sophistication factors ............................68 ........3.511th pillar: Business sophistication..................................63 ........4.012th pillar: Innovation..........................................................83 ........3.0

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

Rank Score(out of 139) (1–7)

32

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Egypt Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

3,000

6,000

9,000

12,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Egypt Middle East and North Africa

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The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................561.02 Intellectual property protection ...............................................671.03 Diversion of public funds.........................................................831.04 Public trust of politicians .........................................................401.05 Irregular payments and bribes.................................................641.06 Judicial independence .............................................................631.07 Favoritism in decisions of government officials ......................951.08 Wastefulness of government spending ..................................511.09 Burden of government regulation ...........................................791.10 Efficiency of legal framework in settling disputes...................401.11 Efficiency of legal framework in challenging regulations ........691.12 Transparency of government policymaking .............................681.13 Business costs of terrorism ..................................................1321.14 Business costs of crime and violence.....................................971.15 Organized crime ......................................................................141.16 Reliability of police services ....................................................811.17 Ethical behavior of firms..........................................................591.18 Strength of auditing and reporting standards..........................581.19 Efficacy of corporate boards....................................................821.20 Protection of minority shareholders’ interests ........................461.21 Strength of investor protection* .............................................59

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................682.02 Quality of roads .......................................................................752.03 Quality of railroad infrastructure ..............................................462.04 Quality of port infrastructure ...................................................692.05 Quality of air transport infrastructure ......................................392.06 Available airline seat kilometers* ............................................332.07 Quality of electricity supply .....................................................532.08 Fixed telephone lines* ............................................................872.09 Mobile telephone subscriptions* ..........................................102

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...............................................1073.02 National savings rate* ...........................................................1083.03 Inflation*................................................................................1353.04 Interest rate spread* ...............................................................693.05 Government debt* .................................................................1193.06 Country credit rating*..............................................................69

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................324.04 Tuberculosis incidence* ..........................................................444.05 Business impact of HIV/AIDS..................................................294.06 HIV prevalence* ........................................................................14.07 Infant mortality* ......................................................................804.08 Life expectancy* .....................................................................944.09 Quality of primary education .................................................1264.10 Primary education enrollment rate* ........................................73

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................905.02 Tertiary education enrollment rate*.........................................785.03 Quality of the educational system.........................................1315.04 Quality of math and science education .................................1255.05 Quality of management schools............................................1225.06 Internet access in schools.......................................................965.07 Local availability of research and training services..................645.08 Extent of staff training ...........................................................112

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................916.02 Extent of market dominance...................................................956.03 Effectiveness of anti-monopoly policy ...................................1066.04 Extent and effect of taxation ...................................................756.05 Total tax rate*..........................................................................786.06 Number of procedures required to start a business* .............346.07 Time required to start a business* .........................................216.08 Agricultural policy costs...........................................................846.09 Prevalence of trade barriers ...................................................1146.10 Trade tariffs* ..........................................................................1236.11 Prevalence of foreign ownership ...........................................1006.12 Business impact of rules on FDI .............................................756.13 Burden of customs procedures...............................................506.14 Degree of customer orientation ..............................................636.15 Buyer sophistication ..............................................................126

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................997.02 Flexibility of wage determination ............................................607.03 Rigidity of employment* .........................................................677.04 Hiring and firing practices ........................................................767.05 Redundancy costs* ...............................................................1287.06 Pay and productivity.................................................................767.07 Reliance on professional management ...................................867.08 Brain drain ..............................................................................1147.09 Female participation in labour force*.....................................130

8th pillar: Financial market development8.01 Availability of financial services ...............................................608.02 Affordability of financial services.............................................698.03 Financing through local equity market ....................................298.04 Ease of access to loans...........................................................498.05 Venture capital availability........................................................418.06 Restriction on capital flows .....................................................848.07 Soundness of banks ................................................................618.08 Regulation of securities exchanges.........................................678.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................919.02 Firm-level technology absorption.............................................589.03 FDI and technology transfer ....................................................539.04 Internet users* ........................................................................909.05 Broadband Internet subscriptions* .........................................919.06 Internet bandwidth* ................................................................72

10th pillar: Market size10.01 Domestic market size index* ..................................................2710.02 Foreign market size index*......................................................27

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................3611.02 Local supplier quality ...............................................................8911.03 State of cluster development ..................................................6611.04 Nature of competitive advantage ............................................3511.05 Value chain breadth .................................................................6711.06 Control of international distribution .........................................9411.07 Production process sophistication...........................................4611.08 Extent of marketing.................................................................7911.09 Willingness to delegate authority............................................57

12th pillar: Innovation12.01 Capacity for innovation ..........................................................10912.02 Quality of scientific research institutions ...............................11012.03 Company spending on R&D ....................................................7412.04 University-industry collabouration in R&D.............................12012.05 Gov’t procurement of advanced tech products.......................8612.06 Availability of scientists and engineers....................................2512.07 Utility patents per million population*.....................................84

Egypt

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.

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JordanKey indicators, 2009

Population (millions)...................................................6.3GDP (US$ billions).....................................................22.9GDP per capita (US$) .............................................3,829GDP (PPP) as share (%) of world total .................0.05

Global Competitiveness Index

GCI 2010–2011.........................................................65 ......4.2GCI 2009–2010 (out of 133)..................................................50 ........4.3GCI 2008–2009 (out of 134)..................................................48 ........4.4

Basic requirements.............................................................57 ........4.71st pillar: Institutions ...........................................................41 ........4.62nd pillar: Infrastructure.....................................................61 ........4.13rd pillar: Macroeconomic environment .......................103 ........4.24th pillar: Health and primary education .........................65 ........5.7

Efficiency enhancers..........................................................73 ........4.05th pillar: Higher education and training .........................57 ........4.36th pillar: Goods market efficiency...................................46 ........4.47th pillar: Labour market efficiency................................112 ........3.98th pillar: Financial market development.........................54 ........4.39th pillar: Technological readiness...................................62 ........3.710th pillar: Market size........................................................84 ........3.3

Innovation and sophistication factors ............................65 ........3.511th pillar: Business sophistication..................................66 ........3.912th pillar: Innovation..........................................................68 ........3.1

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

Rank Score(out of 139) (1–7)

34

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

3,000

6,000

9,000

12,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Jordan Middle East and North Africa

Jordan Efficiency-driven economies

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

35

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................301.02 Intellectual property protection ...............................................381.03 Diversion of public funds.........................................................411.04 Public trust of politicians .........................................................431.05 Irregular payments and bribes.................................................471.06 Judicial independence .............................................................481.07 Favoritism in decisions of government officials ......................441.08 Wastefulness of government spending ..................................421.09 Burden of government regulation ...........................................501.10 Efficiency of legal framework in settling disputes...................391.11 Efficiency of legal framework in challenging regulations ........501.12 Transparency of government policymaking .............................551.13 Business costs of terrorism ....................................................651.14 Business costs of crime and violence.....................................211.15 Organized crime ......................................................................131.16 Reliability of police services ....................................................241.17 Ethical behavior of firms..........................................................481.18 Strength of auditing and reporting standards..........................361.19 Efficacy of corporate boards....................................................811.20 Protection of minority shareholders’ interests ........................301.21 Strength of investor protection* .............................................99

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................352.02 Quality of roads .......................................................................442.03 Quality of railroad infrastructure ..............................................982.04 Quality of port infrastructure ...................................................642.05 Quality of air transport infrastructure ......................................352.06 Available airline seat kilometers* ............................................652.07 Quality of electricity supply .....................................................382.08 Fixed telephone lines*...........................................................1002.09 Mobile telephone subscriptions* ............................................68

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...............................................1363.02 National savings rate* .............................................................233.03 Inflation* ..................................................................................113.04 Interest rate spread* ...............................................................473.05 Government debt*.................................................................1063.06 Country credit rating*..............................................................79

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................464.04 Tuberculosis incidence* ..........................................................154.05 Business impact of HIV/AIDS..................................................314.06 HIV prevalence* ......................................................................464.07 Infant mortality*.......................................................................744.08 Life expectancy* .....................................................................734.09 Quality of primary education ...................................................634.10 Primary education enrollment rate* ........................................98

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................685.02 Tertiary education enrollment rate*.........................................575.03 Quality of the educational system...........................................555.04 Quality of math and science education...................................535.05 Quality of management schools..............................................835.06 Internet access in schools.......................................................515.07 Local availability of research and training services..................485.08 Extent of staff training ...........................................................101

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................466.02 Extent of market dominance...................................................586.03 Effectiveness of anti-monopoly policy.....................................516.04 Extent and effect of taxation ...................................................926.05 Total tax rate*..........................................................................326.06 Number of procedures required to start a business* .............736.07 Time required to start a business* .........................................456.08 Agricultural policy costs...........................................................656.09 Prevalence of trade barriers.....................................................846.10 Trade tariffs*............................................................................986.11 Prevalence of foreign ownership.............................................586.12 Business impact of rules on FDI .............................................456.13 Burden of customs procedures...............................................536.14 Degree of customer orientation ..............................................656.15 Buyer sophistication ................................................................85

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................847.02 Flexibility of wage determination ............................................367.03 Rigidity of employment* .........................................................607.04 Hiring and firing practices........................................................927.05 Redundancy costs* ...................................................................67.06 Pay and productivity ................................................................777.07 Reliance on professional management .................................1007.08 Brain drain ...............................................................................667.09 Female participation in labour force*.....................................139

8th pillar: Financial market development8.01 Availability of financial services ...............................................678.02 Affordability of financial services.............................................588.03 Financing through local equity market ....................................338.04 Ease of access to loans...........................................................528.05 Venture capital availability........................................................548.06 Restriction on capital flows .....................................................358.07 Soundness of banks ................................................................518.08 Regulation of securities exchanges.........................................298.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................499.02 Firm-level technology absorption.............................................299.03 FDI and technology transfer ....................................................369.04 Internet users* ........................................................................829.05 Broadband Internet subscriptions*..........................................769.06 Internet bandwidth* ................................................................62

10th pillar: Market size10.01 Domestic market size index* ..................................................8510.02 Foreign market size index*......................................................82

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................6011.02 Local supplier quality ...............................................................8611.03 State of cluster development ..................................................7111.04 Nature of competitive advantage ............................................5111.05 Value chain breadth .................................................................6211.06 Control of international distribution .........................................5111.07 Production process sophistication...........................................6511.08 Extent of marketing.................................................................7511.09 Willingness to delegate authority............................................72

12th pillar: Innovation12.01 Capacity for innovation ............................................................9612.02 Quality of scientific research institutions ................................9812.03 Company spending on R&D...................................................11612.04 University-industry collabouration in R&D...............................9912.05 Gov’t procurement of advanced tech products.......................5712.06 Availability of scientists and engineers....................................2612.07 Utility patents per million population* .....................................76

Jordan

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.

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KuwaitKey indicators, 2009

Population (millions)...................................................3.0GDP (US$ billions)...................................................111.3GDP per capita (US$) ...........................................31,482GDP (PPP) as share (%) of world total .................0.20

Global Competitiveness Index

GCI 2010–2011.........................................................35 ......4.6GCI 2009–2010 (out of 133)..................................................39 ........4.5GCI 2008–2009 (out of 134)..................................................35 ........4.6

Basic requirements.............................................................36 ........5.21st pillar: Institutions ...........................................................46 ........4.42nd pillar: Infrastructure.....................................................60 ........4.13rd pillar: Macroeconomic environment ...........................2 ........6.44th pillar: Health and primary education .........................68 ........5.7

Efficiency enhancers..........................................................68 ........4.05th pillar: Higher education and training .........................83 ........3.96th pillar: Goods market efficiency...................................54 ........4.37th pillar: Labour market efficiency..................................64 ........4.48th pillar: Financial market development.........................63 ........4.29th pillar: Technological readiness...................................77 ........3.510th pillar: Market size........................................................59 ........3.9

Innovation and sophistication factors ............................60 ........3.611th pillar: Business sophistication..................................58 ........4.112th pillar: Innovation..........................................................76 ........3.0

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

Rank Score(out of 139) (1–7)

36

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Kuwait Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

10,000

20,000

30,000

40,000

50,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Kuwait Middle East and North Africa

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

37

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................461.02 Intellectual property protection ...............................................471.03 Diversion of public funds.........................................................571.04 Public trust of politicians .........................................................461.05 Irregular payments and bribes.................................................531.06 Judicial independence .............................................................361.07 Favoritism in decisions of government officials ......................471.08 Wastefulness of government spending ..................................661.09 Burden of government regulation ..........................................1171.10 Efficiency of legal framework in settling disputes...................381.11 Efficiency of legal framework in challenging regulations ........411.12 Transparency of government policymaking............................1181.13 Business costs of terrorism ....................................................501.14 Business costs of crime and violence.......................................91.15 Organized crime ......................................................................271.16 Reliability of police services ....................................................391.17 Ethical behavior of firms..........................................................511.18 Strength of auditing and reporting standards..........................651.19 Efficacy of corporate boards ..................................................1141.20 Protection of minority shareholders’ interests ........................841.21 Strength of investor protection* .............................................27

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................452.02 Quality of roads .......................................................................402.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure ...................................................632.05 Quality of air transport infrastructure ......................................642.06 Available airline seat kilometers* ............................................572.07 Quality of electricity supply .....................................................712.08 Fixed telephone lines* ............................................................692.09 Mobile telephone subscriptions* ............................................61

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...................................................23.02 National savings rate* ...............................................................13.03 Inflation*..................................................................................913.04 Interest rate spread* ...............................................................373.05 Government debt* ....................................................................63.06 Country credit rating*..............................................................34

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................674.04 Tuberculosis incidence* ..........................................................614.05 Business impact of HIV/AIDS..................................................394.06 HIV prevalence* ......................................................................474.07 Infant mortality* ......................................................................494.08 Life expectancy* .....................................................................354.09 Quality of primary education ...................................................794.10 Primary education enrollment rate* ......................................108

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................625.02 Tertiary education enrollment rate*.........................................925.03 Quality of the educational system...........................................885.04 Quality of math and science education...................................895.05 Quality of management schools..............................................955.06 Internet access in schools.......................................................675.07 Local availability of research and training services..................755.08 Extent of staff training.............................................................96

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................606.02 Extent of market dominance...................................................606.03 Effectiveness of anti-monopoly policy.....................................876.04 Extent and effect of taxation .....................................................66.05 Total tax rate*............................................................................86.06 Number of procedures required to start a business* ...........1216.07 Time required to start a business*........................................1066.08 Agricultural policy costs...........................................................446.09 Prevalence of trade barriers.....................................................386.10 Trade tariffs*............................................................................536.11 Prevalence of foreign ownership ...........................................1366.12 Business impact of rules on FDI ...........................................1306.13 Burden of customs procedures...............................................806.14 Degree of customer orientation ..............................................546.15 Buyer sophistication ................................................................72

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................457.02 Flexibility of wage determination ............................................177.03 Rigidity of employment* ...........................................................17.04 Hiring and firing practices........................................................657.05 Redundancy costs*................................................................1017.06 Pay and productivity ................................................................577.07 Reliance on professional management..................................1047.08 Brain drain ...............................................................................437.09 Female participation in labour force*.....................................118

8th pillar: Financial market development8.01 Availability of financial services ...............................................468.02 Affordability of financial services.............................................398.03 Financing through local equity market ....................................428.04 Ease of access to loans...........................................................268.05 Venture capital availability........................................................228.06 Restriction on capital flows .....................................................778.07 Soundness of banks ................................................................648.08 Regulation of securities exchanges.........................................778.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................639.02 Firm-level technology absorption.............................................389.03 FDI and technology transfer ..................................................1349.04 Internet users* ........................................................................619.05 Broadband Internet subscriptions* .........................................869.06 Internet bandwidth* ................................................................76

10th pillar: Market size10.01 Domestic market size index* ..................................................6110.02 Foreign market size index*......................................................56

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................3211.02 Local supplier quality ...............................................................6511.03 State of cluster development ..................................................5911.04 Nature of competitive advantage ............................................5211.05 Value chain breadth .................................................................7111.06 Control of international distribution .........................................2611.07 Production process sophistication...........................................6711.08 Extent of marketing.................................................................6211.09 Willingness to delegate authority............................................26

12th pillar: Innovation12.01 Capacity for innovation ............................................................9712.02 Quality of scientific research institutions ................................7512.03 Company spending on R&D ..................................................10212.04 University-industry collabouration in R&D...............................9612.05 Gov’t procurement of advanced tech products.......................9012.06 Availability of scientists and engineers....................................5712.07 Utility patents per million population*.....................................30

Kuwait

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.

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LebanonKey indicators, 2009

Population (millions)...................................................4.2GDP (US$ billions).....................................................33.6GDP per capita (US$) .............................................8,707GDP (PPP) as share (%) of world total .................0.08

Global Competitiveness Index

GCI 2010–2011.........................................................92 ......3.9GCI 2009–2010 (out of 133)................................................n/a .......n/aGCI 2008–2009 (out of 134)................................................n/a .......n/a

Basic requirements...........................................................106 ........3.91st pillar: Institutions .........................................................113 ........3.32nd pillar: Infrastructure...................................................123 ........2.53rd pillar: Macroeconomic environment .......................125 ........3.64th pillar: Health and primary education .........................44 ........6.1

Efficiency enhancers..........................................................70 ........4.05th pillar: Higher education and training .........................48 ........4.66th pillar: Goods market efficiency...................................42 ........4.47th pillar: Labour market efficiency................................103 ........4.08th pillar: Financial market development.........................53 ........4.39th pillar: Technological readiness...................................92 ........3.210th pillar: Market size........................................................80 ........3.4

Innovation and sophistication factors ............................74 ........3.411th pillar: Business sophistication..................................53 ........4.212th pillar: Innovation........................................................112 ........2.7

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

Rank Score(out of 139) (1–7)

38

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

4,000

8,000

12,000

16,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Lebanon Middle East and North Africa

Lebanon Efficiency-driven economies

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

39

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................571.02 Intellectual property protection ..............................................1101.03 Diversion of public funds .......................................................1161.04 Public trust of politicians........................................................1361.05 Irregular payments and bribes ...............................................1181.06 Judicial independence............................................................1131.07 Favoritism in decisions of government officials.....................1361.08 Wastefulness of government spending.................................1301.09 Burden of government regulation ...........................................821.10 Efficiency of legal framework in settling disputes .................1071.11 Efficiency of legal framework in challenging regulations.......1331.12 Transparency of government policymaking ...........................1041.13 Business costs of terrorism ..................................................1361.14 Business costs of crime and violence.....................................621.15 Organized crime ......................................................................591.16 Reliability of police services ..................................................1081.17 Ethical behavior of firms........................................................1231.18 Strength of auditing and reporting standards..........................801.19 Efficacy of corporate boards....................................................961.20 Protection of minority shareholders’ interests ........................721.21 Strength of investor protection* .............................................77

2nd pillar: Infrastructure2.01 Quality of overall infrastructure .............................................1322.02 Quality of roads......................................................................1012.03 Quality of railroad infrastructure.............................................1162.04 Quality of port infrastructure ...................................................552.05 Quality of air transport infrastructure ......................................362.06 Available airline seat kilometers* ............................................692.07 Quality of electricity supply ...................................................1362.08 Fixed telephone lines* ............................................................712.09 Mobile telephone subscriptions* ..........................................123

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...............................................1373.02 National savings rate* .............................................................423.03 Inflation*..................................................................................383.04 Interest rate spread* ...............................................................193.05 Government debt*.................................................................1353.06 Country credit rating*............................................................108

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................714.04 Tuberculosis incidence* ..........................................................334.05 Business impact of HIV/AIDS..................................................594.06 HIV prevalence* ......................................................................224.07 Infant mortality* ......................................................................584.08 Life expectancy* .....................................................................804.09 Quality of primary education ...................................................124.10 Primary education enrollment rate* ......................................105

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................865.02 Tertiary education enrollment rate*.........................................455.03 Quality of the educational system...........................................165.04 Quality of math and science education.....................................75.05 Quality of management schools..............................................205.06 Internet access in schools.......................................................795.07 Local availability of research and training services..................535.08 Extent of staff training ...........................................................102

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................216.02 Extent of market dominance...................................................716.03 Effectiveness of anti-monopoly policy ...................................1276.04 Extent and effect of taxation ...................................................226.05 Total tax rate*..........................................................................296.06 Number of procedures required to start a business* .............236.07 Time required to start a business* .........................................306.08 Agricultural policy costs...........................................................736.09 Prevalence of trade barriers.....................................................636.10 Trade tariffs*............................................................................796.11 Prevalence of foreign ownership.............................................986.12 Business impact of rules on FDI .............................................616.13 Burden of customs procedures .............................................1106.14 Degree of customer orientation ..............................................436.15 Buyer sophistication ................................................................28

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................627.02 Flexibility of wage determination ............................................147.03 Rigidity of employment* .........................................................647.04 Hiring and firing practices........................................................537.05 Redundancy costs* .................................................................297.06 Pay and productivity ................................................................797.07 Reliance on professional management..................................1087.08 Brain drain ..............................................................................1137.09 Female participation in labour force*.....................................134

8th pillar: Financial market development8.01 Availability of financial services ...............................................398.02 Affordability of financial services.............................................368.03 Financing through local equity market ...................................1158.04 Ease of access to loans...........................................................368.05 Venture capital availability........................................................678.06 Restriction on capital flows .......................................................58.07 Soundness of banks ..................................................................48.08 Regulation of securities exchanges.........................................508.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................759.02 Firm-level technology absorption.............................................689.03 FDI and technology transfer...................................................1179.04 Internet users* ........................................................................889.05 Broadband Internet subscriptions* .........................................679.06 Internet bandwidth* ................................................................94

10th pillar: Market size10.01 Domestic market size index* ..................................................7610.02 Foreign market size index*......................................................96

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................2411.02 Local supplier quality ...............................................................5211.03 State of cluster development ..................................................7811.04 Nature of competitive advantage ............................................2611.05 Value chain breadth .................................................................3511.06 Control of international distribution ...........................................911.07 Production process sophistication...........................................8111.08 Extent of marketing.................................................................3711.09 Willingness to delegate authority ..........................................133

12th pillar: Innovation12.01 Capacity for innovation ............................................................9912.02 Quality of scientific research institutions...............................13012.03 Company spending on R&D...................................................11912.04 University-industry collabouration in R&D .............................10912.05 Gov’t procurement of advanced tech products .....................13912.06 Availability of scientists and engineers....................................3612.07 Utility patents per million population*.....................................57

Lebanon

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.

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LibyaKey indicators, 2009

Population (millions)...................................................6.4GDP (US$ billions).....................................................60.4GDP per capita (US$) .............................................9,529GDP (PPP) as share (%) of world total .................0.13

Global Competitiveness Index

GCI 2010–2011.......................................................100 ......3.7GCI 2009–2010 (out of 133)..................................................88 ........3.9GCI 2008–2009 (out of 134)..................................................91 ........3.9

Basic requirements.............................................................88 ........4.21st pillar: Institutions .........................................................111 ........3.32nd pillar: Infrastructure.....................................................95 ........3.23rd pillar: Macroeconomic environment ...........................7 ........5.74th pillar: Health and primary education .......................115 ........4.5

Efficiency enhancers........................................................127 ........3.25th pillar: Higher education and training .........................95 ........3.66th pillar: Goods market efficiency.................................134 ........3.27th pillar: Labour market efficiency................................139 ........2.88th pillar: Financial market development.......................130 ........3.09th pillar: Technological readiness.................................114 ........2.910th pillar: Market size........................................................69 ........3.6

Innovation and sophistication factors ..........................135 ........2.611th pillar: Business sophistication................................136 ........2.912th pillar: Innovation........................................................131 ........2.4

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

Rank Score(out of 139) (1–7)

40

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Libya Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

4,000

8,000

12,000

16,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Libya Middle East and North Africa

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

41

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights........................................................................1111.02 Intellectual property protection..............................................1021.03 Diversion of public funds.......................................................1231.04 Public trust of politicians .........................................................731.05 Irregular payments and bribes ...............................................1261.06 Judicial independence .............................................................951.07 Favoritism in decisions of government officials.....................1221.08 Wastefulness of government spending ..................................651.09 Burden of government regulation..........................................1091.10 Efficiency of legal framework in settling disputes...................701.11 Efficiency of legal framework in challenging regulations ........681.12 Transparency of government policymaking ...........................1351.13 Business costs of terrorism ....................................................391.14 Business costs of crime and violence.....................................241.15 Organized crime ......................................................................481.16 Reliability of police services ..................................................1001.17 Ethical behavior of firms........................................................1371.18 Strength of auditing and reporting standards........................1351.19 Efficacy of corporate boards..................................................1391.20 Protection of minority shareholders’ interests.......................1181.21 Strength of investor protection*.............................................n/a

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ..............................................1152.02 Quality of roads .......................................................................972.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure..................................................1162.05 Quality of air transport infrastructure ....................................1332.06 Available airline seat kilometers* ............................................772.07 Quality of electricity supply .....................................................812.08 Fixed telephone lines*.............................................................742.09 Mobile telephone subscriptions* ............................................90

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...................................................33.02 National savings rate* .............................................................393.03 Inflation*..................................................................................673.04 Interest rate spread* ...............................................................423.05 Government debt* ....................................................................23.06 Country credit rating*..............................................................70

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................624.04 Tuberculosis incidence* ..........................................................384.05 Business impact of HIV/AIDS..................................................894.06 HIV prevalence* ......................................................................474.07 Infant mortality* ......................................................................694.08 Life expectancy* .....................................................................554.09 Quality of primary education .................................................1284.10 Primary education enrollment rate* .......................................n/a

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................485.02 Tertiary education enrollment rate*.........................................375.03 Quality of the educational system.........................................1385.04 Quality of math and science education .................................1135.05 Quality of management schools............................................1375.06 Internet access in schools .....................................................1295.07 Local availability of research and training services ................1345.08 Extent of staff training ...........................................................110

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ................................................1306.02 Extent of market dominance .................................................1346.03 Effectiveness of anti-monopoly policy ...................................1366.04 Extent and effect of taxation ...................................................346.05 Total tax rate* .........................................................................n/a6.06 Number of procedures required to start a business* ............n/a6.07 Time required to start a business*.........................................n/a6.08 Agricultural policy costs ...........................................................746.09 Prevalence of trade barriers.....................................................926.10 Trade tariffs* ...........................................................................n/a6.11 Prevalence of foreign ownership ...........................................1306.12 Business impact of rules on FDI ...........................................1216.13 Burden of customs procedures.............................................1096.14 Degree of customer orientation ............................................1316.15 Buyer sophistication ..............................................................121

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations...............................1177.02 Flexibility of wage determination...........................................1237.03 Rigidity of employment* ........................................................n/a7.04 Hiring and firing practices......................................................1307.05 Redundancy costs* ................................................................n/a7.06 Pay and productivity ..............................................................1397.07 Reliance on professional management .................................1397.08 Brain drain..............................................................................1347.09 Female participation in labour force*.....................................133

8th pillar: Financial market development8.01 Availability of financial services .............................................1368.02 Affordability of financial services...........................................1398.03 Financing through local equity market...................................1228.04 Ease of access to loans...........................................................878.05 Venture capital availability........................................................558.06 Restriction on capital flows ...................................................1348.07 Soundness of banks...............................................................1168.08 Regulation of securities exchanges .......................................1358.09 Legal rights index* .................................................................n/a

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................969.02 Firm-level technology absorption.............................................999.03 FDI and technology transfer ..................................................1279.04 Internet users*.......................................................................1169.05 Broadband Internet subscriptions* ........................................1109.06 Internet bandwidth* ..............................................................109

10th pillar: Market size10.01 Domestic market size index* ..................................................7510.02 Foreign market size index*......................................................63

11th pillar: Business sophistication11.01 Local supplier quantity...........................................................10511.02 Local supplier quality .............................................................13611.03 State of cluster development ................................................13611.04 Nature of competitive advantage ..........................................13911.05 Value chain breadth................................................................13211.06 Control of international distribution........................................11611.07 Production process sophistication .........................................11711.08 Extent of marketing ...............................................................12911.09 Willingness to delegate authority ..........................................139

12th pillar: Innovation12.01 Capacity for innovation ..........................................................13612.02 Quality of scientific research institutions...............................12512.03 Company spending on R&D ..................................................13912.04 University-industry collabouration in R&D.............................13112.05 Gov’t procurement of advanced tech products .....................12612.06 Availability of scientists and engineers..................................10412.07 Utility patents per million population*.....................................90

Libya

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.

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MoroccoKey indicators, 2009

Population (millions).................................................32.0GDP (US$ billions).....................................................90.8GDP per capita (US$) .............................................2,865GDP (PPP) as share (%) of world total .................0.21

Global Competitiveness Index

GCI 2010–2011.........................................................75 ......4.1GCI 2009–2010 (out of 133)..................................................73 ........4.0GCI 2008–2009 (out of 134)..................................................73 ........4.1

Basic requirements.............................................................64 ........4.61st pillar: Institutions ...........................................................66 ........3.92nd pillar: Infrastructure.....................................................71 ........3.83rd pillar: Macroeconomic environment .........................31 ........5.24th pillar: Health and primary education .........................94 ........5.4

Efficiency enhancers..........................................................88 ........3.85th pillar: Higher education and training .......................102 ........3.56th pillar: Goods market efficiency...................................77 ........4.17th pillar: Labour market efficiency................................130 ........3.58th pillar: Financial market development.........................74 ........4.19th pillar: Technological readiness...................................75 ........3.510th pillar: Market size........................................................57 ........4.0

Innovation and sophistication factors ............................79 ........3.411th pillar: Business sophistication..................................78 ........3.712th pillar: Innovation..........................................................81 ........3.0

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

Rank Score(out of 139) (1–7)

42

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Morocco Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

3,000

6,000

9,000

12,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Morocco Middle East and North Africa

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

43

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................631.02 Intellectual property protection ...............................................721.03 Diversion of public funds.........................................................631.04 Public trust of politicians .........................................................591.05 Irregular payments and bribes.................................................821.06 Judicial independence .............................................................791.07 Favoritism in decisions of government officials ......................521.08 Wastefulness of government spending...................................741.09 Burden of government regulation ...........................................611.10 Efficiency of legal framework in settling disputes...................571.11 Efficiency of legal framework in challenging regulations ........531.12 Transparency of government policymaking .............................761.13 Business costs of terrorism ....................................................841.14 Business costs of crime and violence.....................................571.15 Organized crime ......................................................................581.16 Reliability of police services ....................................................621.17 Ethical behavior of firms ..........................................................761.18 Strength of auditing and reporting standards........................1001.19 Efficacy of corporate boards....................................................641.20 Protection of minority shareholders’ interests ........................581.21 Strength of investor protection*............................................127

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................712.02 Quality of roads .......................................................................882.03 Quality of railroad infrastructure ..............................................372.04 Quality of port infrastructure ...................................................622.05 Quality of air transport infrastructure ......................................672.06 Available airline seat kilometers* ............................................462.07 Quality of electricity supply .....................................................662.08 Fixed telephone lines* ............................................................912.09 Mobile telephone subscriptions* ............................................89

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................403.02 National savings rate* .............................................................213.03 Inflation*..................................................................................333.04 Interest rate spread* ...............................................................213.05 Government debt* ..................................................................983.06 Country credit rating*..............................................................63

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................994.04 Tuberculosis incidence* ..........................................................934.05 Business impact of HIV/AIDS................................................1054.06 HIV prevalence* ......................................................................224.07 Infant mortality*.....................................................................1014.08 Life expectancy* .....................................................................884.09 Quality of primary education .................................................1004.10 Primary education enrollment rate* ........................................99

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ..................................1105.02 Tertiary education enrollment rate*.......................................1025.03 Quality of the educational system.........................................1055.04 Quality of math and science education...................................675.05 Quality of management schools..............................................495.06 Internet access in schools.......................................................835.07 Local availability of research and training services..................605.08 Extent of staff training.............................................................87

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................696.02 Extent of market dominance...................................................686.03 Effectiveness of anti-monopoly policy.....................................716.04 Extent and effect of taxation .................................................1006.05 Total tax rate*..........................................................................736.06 Number of procedures required to start a business* .............346.07 Time required to start a business* .........................................426.08 Agricultural policy costs .........................................................1086.09 Prevalence of trade barriers...................................................1046.10 Trade tariffs* ..........................................................................1286.11 Prevalence of foreign ownership .............................................746.12 Business impact of rules on FDI..............................................746.13 Burden of customs procedures...............................................606.14 Degree of customer orientation ..............................................576.15 Buyer sophistication ................................................................95

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ..............................1207.02 Flexibility of wage determination ............................................717.03 Rigidity of employment* .......................................................1327.04 Hiring and firing practices........................................................667.05 Redundancy costs* ...............................................................1067.06 Pay and productivity ................................................................507.07 Reliance on professional management..................................1057.08 Brain drain................................................................................767.09 Female participation in labour force*.....................................135

8th pillar: Financial market development8.01 Availability of financial services ...............................................618.02 Affordability of financial services.............................................568.03 Financing through local equity market ....................................318.04 Ease of access to loans...........................................................448.05 Venture capital availability........................................................408.06 Restriction on capital flows ...................................................1058.07 Soundness of banks ................................................................698.08 Regulation of securities exchanges.........................................438.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................689.02 Firm-level technology absorption .............................................749.03 FDI and technology transfer ....................................................459.04 Internet users* ........................................................................719.05 Broadband Internet subscriptions* .........................................879.06 Internet bandwidth* ................................................................64

10th pillar: Market size10.01 Domestic market size index* ..................................................5610.02 Foreign market size index*......................................................68

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................5211.02 Local supplier quality ...............................................................7811.03 State of cluster development ..................................................6911.04 Nature of competitive advantage ............................................7311.05 Value chain breadth .................................................................7011.06 Control of international distribution .......................................10311.07 Production process sophistication...........................................7111.08 Extent of marketing .................................................................7611.09 Willingness to delegate authority............................................96

12th pillar: Innovation12.01 Capacity for innovation ............................................................9412.02 Quality of scientific research institutions ................................9312.03 Company spending on R&D....................................................9712.04 University-industry collabouration in R&D .............................10412.05 Gov’t procurement of advanced tech products.......................7112.06 Availability of scientists and engineers....................................4612.07 Utility patents per million population*.....................................86

Morocco

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.

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OmanKey indicators, 2009

Population (millions)...................................................2.8GDP (US$ billions).....................................................53.4GDP per capita (US$) ...........................................18,013GDP (PPP) as share (%) of world total .................0.10

Global Competitiveness Index

GCI 2010–2011.........................................................34 ......4.6GCI 2009–2010 (out of 133)..................................................41 ........4.5GCI 2008–2009 (out of 134)..................................................38 ........4.6

Basic requirements.............................................................24 ........5.41st pillar: Institutions ...........................................................16 ........5.42nd pillar: Infrastructure.....................................................33 ........4.93rd pillar: Macroeconomic environment ...........................3 ........6.14th pillar: Health and primary education .........................99 ........5.2

Efficiency enhancers..........................................................48 ........4.35th pillar: Higher education and training .........................63 ........4.26th pillar: Goods market efficiency...................................25 ........4.87th pillar: Labour market efficiency..................................36 ........4.78th pillar: Financial market development.........................30 ........4.79th pillar: Technological readiness...................................59 ........3.810th pillar: Market size........................................................73 ........3.6

Innovation and sophistication factors ............................47 ........3.911th pillar: Business sophistication..................................45 ........4.312th pillar: Innovation..........................................................47 ........3.5

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

Rank Score(out of 139) (1–7)

44

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

10,000

20,000

30,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Oman Middle East and North Africa

Oman Economies in transition from 2 to 3

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

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201

0

Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

45

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................241.02 Intellectual property protection ...............................................201.03 Diversion of public funds.........................................................181.04 Public trust of politicians..........................................................111.05 Irregular payments and bribes.................................................221.06 Judicial independence .............................................................311.07 Favoritism in decisions of government officials ......................171.08 Wastefulness of government spending ....................................41.09 Burden of government regulation .............................................81.10 Efficiency of legal framework in settling disputes...................161.11 Efficiency of legal framework in challenging regulations ........231.12 Transparency of government policymaking .............................321.13 Business costs of terrorism.....................................................111.14 Business costs of crime and violence.......................................21.15 Organized crime ......................................................................151.16 Reliability of police services ....................................................201.17 Ethical behavior of firms..........................................................231.18 Strength of auditing and reporting standards..........................371.19 Efficacy of corporate boards....................................................321.20 Protection of minority shareholders’ interests ........................121.21 Strength of investor protection* .............................................77

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................212.02 Quality of roads .......................................................................102.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure ...................................................332.05 Quality of air transport infrastructure ......................................412.06 Available airline seat kilometers* ............................................732.07 Quality of electricity supply .....................................................222.08 Fixed telephone lines* ............................................................922.09 Mobile telephone subscriptions* ............................................18

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...................................................93.02 National savings rate* ...............................................................73.03 Inflation*..................................................................................823.04 Interest rate spread* ...............................................................383.05 Government debt* ....................................................................33.06 Country credit rating*..............................................................42

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................684.04 Tuberculosis incidence* ..........................................................354.05 Business impact of HIV/AIDS..................................................604.06 HIV prevalence* ........................................................................14.07 Infant mortality* ......................................................................534.08 Life expectancy* .....................................................................434.09 Quality of primary education ...................................................484.10 Primary education enrollment rate* ......................................131

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................705.02 Tertiary education enrollment rate*.........................................815.03 Quality of the educational system...........................................435.04 Quality of math and science education...................................585.05 Quality of management schools..............................................815.06 Internet access in schools.......................................................465.07 Local availability of research and training services..................855.08 Extent of staff training.............................................................45

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................536.02 Extent of market dominance...................................................726.03 Effectiveness of anti-monopoly policy.....................................366.04 Extent and effect of taxation .....................................................46.05 Total tax rate*..........................................................................146.06 Number of procedures required to start a business* .............236.07 Time required to start a business* .........................................426.08 Agricultural policy costs...........................................................776.09 Prevalence of trade barriers.....................................................286.10 Trade tariffs*............................................................................596.11 Prevalence of foreign ownership.............................................876.12 Business impact of rules on FDI .............................................546.13 Burden of customs procedures...............................................196.14 Degree of customer orientation ..............................................296.15 Buyer sophistication ................................................................42

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................237.02 Flexibility of wage determination ............................................377.03 Rigidity of employment* .........................................................277.04 Hiring and firing practices........................................................397.05 Redundancy costs* ...................................................................67.06 Pay and productivity ................................................................317.07 Reliance on professional management ...................................447.08 Brain drain ...............................................................................247.09 Female participation in labour force*.....................................132

8th pillar: Financial market development8.01 Availability of financial services ...............................................578.02 Affordability of financial services.............................................288.03 Financing through local equity market ....................................188.04 Ease of access to loans...........................................................138.05 Venture capital availability........................................................158.06 Restriction on capital flows .....................................................348.07 Soundness of banks ................................................................288.08 Regulation of securities exchanges.........................................168.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................579.02 Firm-level technology absorption.............................................529.03 FDI and technology transfer ....................................................529.04 Internet users* ........................................................................519.05 Broadband Internet subscriptions* .........................................899.06 Internet bandwidth* ................................................................68

10th pillar: Market size10.01 Domestic market size index* ..................................................7710.02 Foreign market size index*......................................................66

11th pillar: Business sophistication11.01 Local supplier quantity .............................................................7411.02 Local supplier quality ...............................................................5011.03 State of cluster development ..................................................3111.04 Nature of competitive advantage ............................................4611.05 Value chain breadth .................................................................5611.06 Control of international distribution .........................................2211.07 Production process sophistication...........................................4511.08 Extent of marketing.................................................................6411.09 Willingness to delegate authority............................................39

12th pillar: Innovation12.01 Capacity for innovation ............................................................6112.02 Quality of scientific research institutions ................................5712.03 Company spending on R&D....................................................5112.04 University-industry collabouration in R&D...............................5012.05 Gov’t procurement of advanced tech products .......................1112.06 Availability of scientists and engineers....................................8712.07 Utility patents per million population*.....................................63

Oman

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.

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QatarKey indicators, 2009

Population (millions)...................................................1.4GDP (US$ billions).....................................................83.9GDP per capita (US$) ...........................................68,872GDP (PPP) as share (%) of world total .................0.15

Global Competitiveness Index

GCI 2010–2011.........................................................17 ......5.1GCI 2009–2010 (out of 133)..................................................22 ........4.9GCI 2008–2009 (out of 134)..................................................26 ........4.8

Basic requirements.............................................................13 ........5.71st pillar: Institutions ...........................................................10 ........5.62nd pillar: Infrastructure.....................................................25 ........5.23rd pillar: Macroeconomic environment ...........................8 ........5.74th pillar: Health and primary education .........................15 ........6.4

Efficiency enhancers..........................................................26 ........4.75th pillar: Higher education and training .........................32 ........4.86th pillar: Goods market efficiency...................................12 ........5.17th pillar: Labour market efficiency..................................14 ........5.08th pillar: Financial market development.........................19 ........4.99th pillar: Technological readiness...................................36 ........4.410th pillar: Market size........................................................66 ........3.7

Innovation and sophistication factors ............................23 ........4.511th pillar: Business sophistication..................................21 ........4.812th pillar: Innovation..........................................................23 ........4.1

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

Rank Score(out of 139) (1–7)

46

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Qatar Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

25,000

50,000

75,000

100,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Qatar Middle East and North Africa

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201

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

47

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................251.02 Intellectual property protection ...............................................281.03 Diversion of public funds.........................................................121.04 Public trust of politicians ...........................................................21.05 Irregular payments and bribes .................................................171.06 Judicial independence ...............................................................71.07 Favoritism in decisions of government officials ........................41.08 Wastefulness of government spending ....................................31.09 Burden of government regulation .............................................61.10 Efficiency of legal framework in settling disputes.....................61.11 Efficiency of legal framework in challenging regulations ........321.12 Transparency of government policymaking .............................151.13 Business costs of terrorism ....................................................381.14 Business costs of crime and violence.......................................31.15 Organized crime ......................................................................261.16 Reliability of police services ......................................................91.17 Ethical behavior of firms..........................................................281.18 Strength of auditing and reporting standards..........................121.19 Efficacy of corporate boards....................................................101.20 Protection of minority shareholders’ interests ........................331.21 Strength of investor protection* .............................................77

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................392.02 Quality of roads .......................................................................412.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure ...................................................272.05 Quality of air transport infrastructure ......................................162.06 Available airline seat kilometers* ............................................302.07 Quality of electricity supply .....................................................212.08 Fixed telephone lines* ............................................................652.09 Mobile telephone subscriptions* ..............................................4

3rd pillar: Macroeconomic environment3.01 Government budget balance* ...................................................53.02 National savings rate* .............................................................103.03 Inflation*....................................................................................23.04 Interest rate spread* ...............................................................613.05 Government debt* ..................................................................163.06 Country credit rating*..............................................................29

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................724.04 Tuberculosis incidence* ..........................................................724.05 Business impact of HIV/AIDS..................................................944.06 HIV prevalence* ......................................................................474.07 Infant mortality* ......................................................................484.08 Life expectancy* .....................................................................424.09 Quality of primary education .....................................................54.10 Primary education enrollment rate* ........................................69

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................495.02 Tertiary education enrollment rate*.......................................1065.03 Quality of the educational system.............................................45.04 Quality of math and science education.....................................45.05 Quality of management schools................................................15.06 Internet access in schools.........................................................45.07 Local availability of research and training services..................715.08 Extent of staff training .............................................................19

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ....................................................36.02 Extent of market dominance.....................................................76.03 Effectiveness of anti-monopoly policy.....................................306.04 Extent and effect of taxation ...................................................116.05 Total tax rate*............................................................................36.06 Number of procedures required to start a business* .............346.07 Time required to start a business* .........................................136.08 Agricultural policy costs...........................................................686.09 Prevalence of trade barriers.......................................................16.10 Trade tariffs*............................................................................616.11 Prevalence of foreign ownership.............................................256.12 Business impact of rules on FDI .............................................106.13 Burden of customs procedures...............................................296.14 Degree of customer orientation ..............................................126.15 Buyer sophistication ................................................................39

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................207.02 Flexibility of wage determination ..............................................27.03 Rigidity of employment* .........................................................277.04 Hiring and firing practices........................................................147.05 Redundancy costs* .................................................................987.06 Pay and productivity ..................................................................77.07 Reliance on professional management ...................................127.08 Brain drain .................................................................................27.09 Female participation in labour force*.....................................121

8th pillar: Financial market development8.01 Availability of financial services ...............................................268.02 Affordability of financial services...............................................88.03 Financing through local equity market ......................................18.04 Ease of access to loans.............................................................18.05 Venture capital availability..........................................................68.06 Restriction on capital flows .......................................................98.07 Soundness of banks ................................................................468.08 Regulation of securities exchanges...........................................68.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................259.02 Firm-level technology absorption...............................................89.03 FDI and technology transfer ......................................................29.04 Internet users* ........................................................................799.05 Broadband Internet subscriptions* .........................................499.06 Internet bandwidth* ................................................................58

10th pillar: Market size10.01 Domestic market size index* ..................................................6610.02 Foreign market size index*......................................................64

11th pillar: Business sophistication11.01 Local supplier quantity...............................................................211.02 Local supplier quality .................................................................911.03 State of cluster development ..................................................2111.04 Nature of competitive advantage ............................................5811.05 Value chain breadth .................................................................8511.06 Control of international distribution .........................................5011.07 Production process sophistication.............................................811.08 Extent of marketing...................................................................611.09 Willingness to delegate authority............................................41

12th pillar: Innovation12.01 Capacity for innovation ............................................................4512.02 Quality of scientific research institutions ................................2212.03 Company spending on R&D....................................................4112.04 University-industry collabouration in R&D...............................2712.05 Gov’t procurement of advanced tech products.........................112.06 Availability of scientists and engineers......................................912.07 Utility patents per million population*.....................................48

Qatar

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.

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Saudi ArabiaKey indicators, 2009

Population (millions).................................................25.7GDP (US$ billions)...................................................369.7GDP per capita (US$) ...........................................14,486GDP (PPP) as share (%) of world total .................0.86

Global Competitiveness Index

GCI 2010–2011.........................................................21 ......4.9GCI 2009–2010 (out of 133)..................................................28 ........4.7GCI 2008–2009 (out of 134)..................................................27 ........4.7

Basic requirements.............................................................28 ........5.31st pillar: Institutions ...........................................................21 ........5.22nd pillar: Infrastructure.....................................................28 ........5.13rd pillar: Macroeconomic environment .........................22 ........5.34th pillar: Health and primary education .........................74 ........5.6

Efficiency enhancers..........................................................27 ........4.75th pillar: Higher education and training .........................51 ........4.56th pillar: Goods market efficiency...................................10 ........5.17th pillar: Labour market efficiency..................................66 ........4.48th pillar: Financial market development.........................22 ........4.89th pillar: Technological readiness...................................42 ........4.210th pillar: Market size........................................................22 ........5.0

Innovation and sophistication factors ............................26 ........4.411th pillar: Business sophistication..................................19 ........4.912th pillar: Innovation..........................................................28 ........3.9

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

Rank Score(out of 139) (1–7)

48

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Saudi Arabia Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

10,000

20,000

30,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Saudi Arabia Middle East and North Africa

The

Arab

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201

0

Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

49

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................281.02 Intellectual property protection ...............................................301.03 Diversion of public funds.........................................................281.04 Public trust of politicians ...........................................................91.05 Irregular payments and bribes.................................................261.06 Judicial independence .............................................................291.07 Favoritism in decisions of government officials ......................131.08 Wastefulness of government spending ....................................61.09 Burden of government regulation ...........................................181.10 Efficiency of legal framework in settling disputes...................371.11 Efficiency of legal framework in challenging regulations ........291.12 Transparency of government policymaking .............................401.13 Business costs of terrorism ....................................................571.14 Business costs of crime and violence.....................................161.15 Organized crime ......................................................................161.16 Reliability of police services ....................................................301.17 Ethical behavior of firms..........................................................311.18 Strength of auditing and reporting standards..........................351.19 Efficacy of corporate boards....................................................261.20 Protection of minority shareholders’ interests ........................191.21 Strength of investor protection* .............................................16

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................292.02 Quality of roads .......................................................................262.03 Quality of railroad infrastructure ..............................................382.04 Quality of port infrastructure ...................................................362.05 Quality of air transport infrastructure ......................................462.06 Available airline seat kilometers* ............................................262.07 Quality of electricity supply .....................................................292.08 Fixed telephone lines* ............................................................782.09 Mobile telephone subscriptions* ..............................................5

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................533.02 National savings rate* .............................................................133.03 Inflation*..................................................................................943.04 Interest rate spread* ...............................................................773.05 Government debt* ..................................................................373.06 Country credit rating*..............................................................38

4th pillar: Health and primary education4.01 Business impact of malaria .....................................................754.02 Malaria incidence*...................................................................784.03 Business impact of tuberculosis .............................................384.04 Tuberculosis incidence* ..........................................................414.05 Business impact of HIV/AIDS..................................................304.06 HIV prevalence* ........................................................................14.07 Infant mortality* ......................................................................784.08 Life expectancy* .....................................................................714.09 Quality of primary education ...................................................544.10 Primary education enrollment rate*.......................................113

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................435.02 Tertiary education enrollment rate*.........................................755.03 Quality of the educational system...........................................415.04 Quality of math and science education...................................495.05 Quality of management schools..............................................605.06 Internet access in schools.......................................................525.07 Local availability of research and training services..................345.08 Extent of staff training.............................................................34

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................246.02 Extent of market dominance...................................................256.03 Effectiveness of anti-monopoly policy.....................................286.04 Extent and effect of taxation .....................................................96.05 Total tax rate*............................................................................56.06 Number of procedures required to start a business* .............146.07 Time required to start a business* ...........................................96.08 Agricultural policy costs ...........................................................116.09 Prevalence of trade barriers.....................................................236.10 Trade tariffs*............................................................................546.11 Prevalence of foreign ownership.............................................846.12 Business impact of rules on FDI .............................................356.13 Burden of customs procedures...............................................286.14 Degree of customer orientation ..............................................316.15 Buyer sophistication ................................................................20

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................307.02 Flexibility of wage determination ............................................247.03 Rigidity of employment* .........................................................277.04 Hiring and firing practices........................................................227.05 Redundancy costs* ...............................................................1027.06 Pay and productivity ................................................................147.07 Reliance on professional management ...................................377.08 Brain drain ...............................................................................147.09 Female participation in labour force*.....................................138

8th pillar: Financial market development8.01 Availability of financial services ...............................................308.02 Affordability of financial services.............................................198.03 Financing through local equity market ......................................38.04 Ease of access to loans.............................................................68.05 Venture capital availability........................................................148.06 Restriction on capital flows .....................................................248.07 Soundness of banks ................................................................208.08 Regulation of securities exchanges.........................................268.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................399.02 Firm-level technology absorption.............................................269.03 FDI and technology transfer ......................................................99.04 Internet users* ........................................................................589.05 Broadband Internet subscriptions* .........................................669.06 Internet bandwidth* ................................................................61

10th pillar: Market size10.01 Domestic market size index* ..................................................2310.02 Foreign market size index*......................................................20

11th pillar: Business sophistication11.01 Local supplier quantity...............................................................511.02 Local supplier quality ...............................................................2411.03 State of cluster development ..................................................2711.04 Nature of competitive advantage ............................................2811.05 Value chain breadth .................................................................2111.06 Control of international distribution ...........................................711.07 Production process sophistication...........................................2511.08 Extent of marketing.................................................................2611.09 Willingness to delegate authority............................................19

12th pillar: Innovation12.01 Capacity for innovation ............................................................2612.02 Quality of scientific research institutions ................................3712.03 Company spending on R&D....................................................2412.04 University-industry collabouration in R&D...............................3312.05 Gov’t procurement of advanced tech products .......................1012.06 Availability of scientists and engineers....................................3412.07 Utility patents per million population*.....................................56

Saudi Arabia

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.

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SyriaKey indicators, 2009

Population (millions).................................................21.9GDP (US$ billions).....................................................52.5GDP per capita (US$) .............................................2,579GDP (PPP) as share (%) of world total .................0.14

Global Competitiveness Index

GCI 2010–2011.........................................................97 ......3.8GCI 2009–2010 (out of 133)..................................................94 ........3.8GCI 2008–2009 (out of 134)..................................................78 ........4.0

Basic requirements.............................................................84 ........4.31st pillar: Institutions ...........................................................78 ........3.82nd pillar: Infrastructure...................................................105 ........2.93rd pillar: Macroeconomic environment .........................58 ........4.84th pillar: Health and primary education .........................67 ........5.7

Efficiency enhancers........................................................117 ........3.45th pillar: Higher education and training .......................107 ........3.36th pillar: Goods market efficiency.................................115 ........3.77th pillar: Labour market efficiency................................132 ........3.48th pillar: Financial market development.......................124 ........3.29th pillar: Technological readiness.................................111 ........2.910th pillar: Market size........................................................65 ........3.7

Innovation and sophistication factors ..........................115 ........3.011th pillar: Business sophistication................................103 ........3.512th pillar: Innovation........................................................128 ........2.5

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

Rank Score(out of 139) (1–7)

50

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

Syria Economies in transition from 1 to 2

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

0

3,000

6,000

9,000

12,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Syria Middle East and North Africa

The

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view

201

0

Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

51

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................621.02 Intellectual property protection ...............................................751.03 Diversion of public funds.........................................................931.04 Public trust of politicians .........................................................501.05 Irregular payments and bribes ...............................................1161.06 Judicial independence ...........................................................1071.07 Favoritism in decisions of government officials ......................911.08 Wastefulness of government spending ..................................731.09 Burden of government regulation..........................................1301.10 Efficiency of legal framework in settling disputes .................1181.11 Efficiency of legal framework in challenging regulations.......1211.12 Transparency of government policymaking ...........................1331.13 Business costs of terrorism ......................................................61.14 Business costs of crime and violence.......................................11.15 Organized crime ........................................................................61.16 Reliability of police services ....................................................941.17 Ethical behavior of firms..........................................................801.18 Strength of auditing and reporting standards........................1331.19 Efficacy of corporate boards ..................................................1171.20 Protection of minority shareholders’ interests ........................561.21 Strength of investor protection* .............................................99

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................952.02 Quality of roads .......................................................................852.03 Quality of railroad infrastructure ..............................................662.04 Quality of port infrastructure..................................................1172.05 Quality of air transport infrastructure ....................................1262.06 Available airline seat kilometers* ............................................812.07 Quality of electricity supply ...................................................1072.08 Fixed telephone lines* ............................................................732.09 Mobile telephone subscriptions*...........................................116

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................993.02 National savings rate* .............................................................413.03 Inflation*..................................................................................643.04 Interest rate spread* ...............................................................433.05 Government debt* ..................................................................543.06 Country credit rating*............................................................106

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................494.04 Tuberculosis incidence* ..........................................................484.05 Business impact of HIV/AIDS..................................................334.06 HIV prevalence* ........................................................................14.07 Infant mortality* ......................................................................654.08 Life expectancy* .....................................................................574.09 Quality of primary education ...................................................864.10 Primary education enrollment rate* ........................................63

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................975.02 Tertiary education enrollment rate*.........................................795.03 Quality of the educational system.........................................1095.04 Quality of math and science education...................................705.05 Quality of management schools ............................................1155.06 Internet access in schools .....................................................1315.07 Local availability of research and training services ................1145.08 Extent of staff training ...........................................................139

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................706.02 Extent of market dominance..................................................1196.03 Effectiveness of anti-monopoly policy....................................1106.04 Extent and effect of taxation ...................................................676.05 Total tax rate* ..........................................................................766.06 Number of procedures required to start a business* .............576.07 Time required to start a business* .........................................636.08 Agricultural policy costs...........................................................596.09 Prevalence of trade barriers ...................................................1186.10 Trade tariffs* ..........................................................................1096.11 Prevalence of foreign ownership ...........................................1376.12 Business impact of rules on FDI............................................1146.13 Burden of customs procedures.............................................1346.14 Degree of customer orientation ............................................1046.15 Buyer sophistication ..............................................................127

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................947.02 Flexibility of wage determination ............................................527.03 Rigidity of employment* .........................................................487.04 Hiring and firing practices........................................................997.05 Redundancy costs* ...............................................................1027.06 Pay and productivity ..............................................................1007.07 Reliance on professional management .................................1337.08 Brain drain ..............................................................................1187.09 Female participation in labour force*.....................................136

8th pillar: Financial market development8.01 Availability of financial services .............................................1308.02 Affordability of financial services...........................................1258.03 Financing through local equity market...................................1038.04 Ease of access to loans.........................................................1008.05 Venture capital availability ......................................................1138.06 Restriction on capital flows....................................................1178.07 Soundness of banks ................................................................638.08 Regulation of securities exchanges .......................................1028.09 Legal rights index* ................................................................134

9th pillar: Technological readiness9.01 Availability of latest technologies...........................................1269.02 Firm-level technology absorption .............................................769.03 FDI and technology transfer ..................................................1219.04 Internet users* ........................................................................919.05 Broadband Internet subscriptions*........................................1099.06 Internet bandwidth* ................................................................90

10th pillar: Market size10.01 Domestic market size index* ..................................................6310.02 Foreign market size index*......................................................73

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................6711.02 Local supplier quality .............................................................12411.03 State of cluster development ................................................10211.04 Nature of competitive advantage...........................................11411.05 Value chain breadth................................................................10011.06 Control of international distribution .........................................3511.07 Production process sophistication...........................................8511.08 Extent of marketing ...............................................................12311.09 Willingness to delegate authority............................................92

12th pillar: Innovation12.01 Capacity for innovation ..........................................................13412.02 Quality of scientific research institutions...............................12712.03 Company spending on R&D ..................................................13712.04 University-industry collabouration in R&D.............................13712.05 Gov’t procurement of advanced tech products .....................11912.06 Availability of scientists and engineers....................................6212.07 Utility patents per million population*.....................................90

Syria

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.

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TunisiaKey indicators, 2009

Population (millions).................................................10.3GDP (US$ billions).....................................................40.2GDP per capita (US$) .............................................3,852GDP (PPP) as share (%) of world total .................0.12

Global Competitiveness Index

GCI 2010–2011.........................................................32 ......4.7GCI 2009–2010 (out of 133)..................................................40 ........4.5GCI 2008–2009 (out of 134)..................................................36 ........4.6

Basic requirements.............................................................31 ........5.31st pillar: Institutions ...........................................................23 ........5.22nd pillar: Infrastructure.....................................................46 ........4.53rd pillar: Macroeconomic environment .........................38 ........5.14th pillar: Health and primary education .........................31 ........6.2

Efficiency enhancers..........................................................50 ........4.35th pillar: Higher education and training .........................30 ........4.96th pillar: Goods market efficiency...................................33 ........4.77th pillar: Labour market efficiency..................................79 ........4.38th pillar: Financial market development.........................58 ........4.39th pillar: Technological readiness...................................55 ........3.910th pillar: Market size........................................................67 ........3.7

Innovation and sophistication factors ............................34 ........4.111th pillar: Business sophistication..................................42 ........4.312th pillar: Innovation..........................................................31 ........3.8

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

Rank Score(out of 139) (1–7)

52

GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

3,000

6,000

9,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Tunisia Middle East and North Africa

Tunisia Efficiency-driven economies

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

The

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201

0

Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

53

The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................311.02 Intellectual property protection ...............................................371.03 Diversion of public funds.........................................................201.04 Public trust of politicians .........................................................151.05 Irregular payments and bribes.................................................331.06 Judicial independence .............................................................401.07 Favoritism in decisions of government officials ......................121.08 Wastefulness of government spending ....................................51.09 Burden of government regulation ...........................................151.10 Efficiency of legal framework in settling disputes...................171.11 Efficiency of legal framework in challenging regulations.........191.12 Transparency of government policymaking .............................201.13 Business costs of terrorism ....................................................281.14 Business costs of crime and violence.......................................51.15 Organized crime ......................................................................171.16 Reliability of police services ....................................................291.17 Ethical behavior of firms..........................................................291.18 Strength of auditing and reporting standards..........................541.19 Efficacy of corporate boards....................................................331.20 Protection of minority shareholders’ interests ........................111.21 Strength of investor protection* .............................................59

2nd pillar: Infrastructure2.01 Quality of overall infrastructure ...............................................302.02 Quality of roads .......................................................................372.03 Quality of railroad infrastructure ..............................................292.04 Quality of port infrastructure ...................................................412.05 Quality of air transport infrastructure ......................................382.06 Available airline seat kilometers*.............................................742.07 Quality of electricity supply .....................................................352.08 Fixed telephone lines* ............................................................862.09 Mobile telephone subscriptions* ............................................70

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................463.02 National savings rate* .............................................................383.03 Inflation*..................................................................................853.04 Interest rate spread* ...............................................................303.05 Government debt* ..................................................................943.06 Country credit rating*..............................................................53

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................334.04 Tuberculosis incidence* ..........................................................504.05 Business impact of HIV/AIDS..................................................164.06 HIV prevalence* ......................................................................224.07 Infant mortality* ......................................................................764.08 Life expectancy* .....................................................................564.09 Quality of primary education ...................................................224.10 Primary education enrollment rate* ........................................33

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................535.02 Tertiary education enrollment rate*.........................................695.03 Quality of the educational system...........................................205.04 Quality of math and science education.....................................85.05 Quality of management schools..............................................225.06 Internet access in schools.......................................................475.07 Local availability of research and training services..................275.08 Extent of staff training.............................................................18

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................346.02 Extent of market dominance ...................................................176.03 Effectiveness of anti-monopoly policy .....................................186.04 Extent and effect of taxation ...................................................146.05 Total tax rate* ........................................................................1196.06 Number of procedures required to start a business* .............996.07 Time required to start a business* .........................................396.08 Agricultural policy costs.............................................................86.09 Prevalence of trade barriers.....................................................576.10 Trade tariffs* ..........................................................................1276.11 Prevalence of foreign ownership.............................................456.12 Business impact of rules on FDI ...............................................66.13 Burden of customs procedures...............................................386.14 Degree of customer orientation ..............................................366.15 Buyer sophistication ................................................................40

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................327.02 Flexibility of wage determination ...........................................1157.03 Rigidity of employment* .......................................................1007.04 Hiring and firing practices........................................................527.05 Redundancy costs* .................................................................297.06 Pay and productivity ................................................................527.07 Reliance on professional management ...................................407.08 Brain drain ...............................................................................427.09 Female participation in labour force*.....................................129

8th pillar: Financial market development8.01 Availability of financial services ...............................................428.02 Affordability of financial services.............................................318.03 Financing through local equity market ....................................258.04 Ease of access to loans...........................................................308.05 Venture capital availability........................................................218.06 Restriction on capital flows .....................................................888.07 Soundness of banks ................................................................598.08 Regulation of securities exchanges.........................................388.09 Legal rights index*.................................................................103

9th pillar: Technological readiness9.01 Availability of latest technologies ............................................429.02 Firm-level technology absorption.............................................339.03 FDI and technology transfer ....................................................139.04 Internet users* ........................................................................679.05 Broadband Internet subscriptions*..........................................749.06 Internet bandwidth* ................................................................52

10th pillar: Market size10.01 Domestic market size index* ..................................................6910.02 Foreign market size index*......................................................67

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................1411.02 Local supplier quality ...............................................................4511.03 State of cluster development ..................................................7511.04 Nature of competitive advantage ............................................4411.05 Value chain breadth .................................................................2411.06 Control of international distribution .........................................2911.07 Production process sophistication...........................................4911.08 Extent of marketing.................................................................5511.09 Willingness to delegate authority............................................60

12th pillar: Innovation12.01 Capacity for innovation ............................................................3612.02 Quality of scientific research institutions ................................3812.03 Company spending on R&D....................................................3512.04 University-industry collabouration in R&D...............................4112.05 Gov’t procurement of advanced tech products.......................1412.06 Availability of scientists and engineers......................................712.07 Utility patents per million population*.....................................90

Tunisia

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.

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United Arab EmiratesKey indicators, 2009

Population (millions)...................................................4.6GDP (US$ billions)...................................................230.0GDP per capita (US$) ...........................................46,857GDP (PPP) as share (%) of world total .................0.27

Global Competitiveness Index

GCI 2010–2011.........................................................25 ......4.9GCI 2009–2010 (out of 133)..................................................23 ........4.9GCI 2008–2009 (out of 134)..................................................31 ........4.7

Basic requirements...............................................................8 ........5.81st pillar: Institutions ...........................................................20 ........5.32nd pillar: Infrastructure.......................................................3 ........6.33rd pillar: Macroeconomic environment .........................12 ........5.64th pillar: Health and primary education .........................38 ........6.1

Efficiency enhancers..........................................................21 ........4.85th pillar: Higher education and training .........................36 ........4.86th pillar: Goods market efficiency.....................................6 ........5.27th pillar: Labour market efficiency..................................26 ........4.88th pillar: Financial market development.........................33 ........4.79th pillar: Technological readiness...................................14 ........5.210th pillar: Market size........................................................51 ........4.3

Innovation and sophistication factors ............................27 ........4.411th pillar: Business sophistication..................................22 ........4.812th pillar: Innovation..........................................................30 ........3.9

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

Rank Score(out of 139) (1–7)

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GDP (PPP) per capita (int'l $), 1980–2009

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.

1 Transition1–2 2 Transition

2 –3

Factordriven

Efficiencydriven

Innovationdriven

3

Stage of development

0

10,000

20,000

30,000

40,000

1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

United Arab Emirates Middle East and North Africa

United Arab Emirates Innovation-driven economies

Institutions

Infrastructure

Macroeconomic environment

Health and primary

education

Higher education and training

Goods market efficiency

Labour market efficiency

Financial market development

Technological readiness

Market size

Business sophistication

Innovation

1

2

3

4

5

6

7

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Sources: United Nations Population Fund, Economic IntelligenceUnit, International Monetary Fund and World Bank.

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The Global Competitiveness Index in detailINDICATOR RANK/139

1st pillar: Institutions1.01 Property rights.........................................................................431.02 Intellectual property protection ...............................................191.03 Diversion of public funds.........................................................261.04 Public trust of politicians ...........................................................71.05 Irregular payments and bribes.................................................191.06 Judicial independence .............................................................371.07 Favoritism in decisions of government officials ......................151.08 Wastefulness of government spending ....................................71.09 Burden of government regulation............................................111.10 Efficiency of legal framework in settling disputes...................221.11 Efficiency of legal framework in challenging regulations ........251.12 Transparency of government policymaking .............................351.13 Business costs of terrorism ....................................................431.14 Business costs of crime and violence.......................................41.15 Organized crime ........................................................................71.16 Reliability of police services ....................................................111.17 Ethical behavior of firms..........................................................221.18 Strength of auditing and reporting standards..........................341.19 Efficacy of corporate boards....................................................451.20 Protection of minority shareholders’ interests ........................241.21 Strength of investor protection* .............................................99

2nd pillar: Infrastructure2.01 Quality of overall infrastructure................................................112.02 Quality of roads .........................................................................62.03 Quality of railroad infrastructure .............................................n/a2.04 Quality of port infrastructure .....................................................82.05 Quality of air transport infrastructure ........................................42.06 Available airline seat kilometers*.............................................112.07 Quality of electricity supply .....................................................172.08 Fixed telephone lines* ............................................................372.09 Mobile telephone subscriptions* ..............................................1

3rd pillar: Macroeconomic environment3.01 Government budget balance* .................................................113.02 National savings rate* .............................................................243.03 Inflation*..................................................................................353.04 Interest rate spread* ...............................................................173.05 Government debt* .................................................................1013.06 Country credit rating*..............................................................30

4th pillar: Health and primary education4.01 Business impact of malaria .......................................................14.02 Malaria incidence*.....................................................................14.03 Business impact of tuberculosis .............................................694.04 Tuberculosis incidence* ..........................................................124.05 Business impact of HIV/AIDS..................................................504.06 HIV prevalence* ......................................................................474.07 Infant mortality* ......................................................................434.08 Life expectancy* .....................................................................364.09 Quality of primary education ...................................................294.10 Primary education enrollment rate* ........................................83

5th pillar: Higher education and training5.01 Secondary education enrollment rate* ...................................465.02 Tertiary education enrollment rate*.........................................845.03 Quality of the educational system...........................................275.04 Quality of math and science education...................................265.05 Quality of management schools..............................................285.06 Internet access in schools.......................................................295.07 Local availability of research and training services..................235.08 Extent of staff training.............................................................29

INDICATOR RANK/139

6th pillar: Goods market efficiency6.01 Intensity of local competition ..................................................136.02 Extent of market dominance...................................................216.03 Effectiveness of anti-monopoly policy.....................................246.04 Extent and effect of taxation .....................................................56.05 Total tax rate*............................................................................46.06 Number of procedures required to start a business* .............736.07 Time required to start a business* .........................................566.08 Agricultural policy costs...........................................................386.09 Prevalence of trade barriers.....................................................106.10 Trade tariffs*............................................................................576.11 Prevalence of foreign ownership.............................................496.12 Business impact of rules on FDI .............................................166.13 Burden of customs procedures.................................................56.14 Degree of customer orientation ..............................................166.15 Buyer sophistication ................................................................22

7th pillar: Labour market efficiency7.01 Cooperation in labour-employer relations ................................177.02 Flexibility of wage determination ..............................................77.03 Rigidity of employment* .........................................................107.04 Hiring and firing practices........................................................177.05 Redundancy costs* ...............................................................1047.06 Pay and productivity.................................................................117.07 Reliance on professional management ...................................347.08 Brain drain .................................................................................57.09 Female participation in labour force*.....................................125

8th pillar: Financial market development8.01 Availability of financial services ...............................................328.02 Affordability of financial services.............................................348.03 Financing through local equity market ....................................278.04 Ease of access to loans.............................................................88.05 Venture capital availability........................................................168.06 Restriction on capital flows .....................................................168.07 Soundness of banks ................................................................508.08 Regulation of securities exchanges.........................................278.09 Legal rights index* ..................................................................86

9th pillar: Technological readiness9.01 Availability of latest technologies.............................................119.02 Firm-level technology absorption...............................................59.03 FDI and technology transfer ......................................................69.04 Internet users* ........................................................................109.05 Broadband Internet subscriptions* .........................................399.06 Internet bandwidth* ................................................................25

10th pillar: Market size10.01 Domestic market size index* ..................................................5210.02 Foreign market size index*......................................................38

11th pillar: Business sophistication11.01 Local supplier quantity.............................................................2111.02 Local supplier quality ...............................................................3811.03 State of cluster development ..................................................2811.04 Nature of competitive advantage ............................................2411.05 Value chain breadth .................................................................2211.06 Control of international distribution .........................................1211.07 Production process sophistication...........................................2811.08 Extent of marketing.................................................................1911.09 Willingness to delegate authority............................................20

12th pillar: Innovation12.01 Capacity for innovation ............................................................3512.02 Quality of scientific research institutions ................................4512.03 Company spending on R&D....................................................2812.04 University-industry collabouration in R&D...............................4312.05 Gov’t procurement of advanced tech products.........................312.06 Availability of scientists and engineers....................................2012.07 Utility patents per million population*.....................................42

United Arab Emirates

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.

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About the authorsMasood AhmedMasood Ahmed is Director of the Middle East and Central Asia Department at the International Monetary Fund. He started his career as a member of the economics faculty at the London School of Economics before moving on to the World Bank where, among other posts, he was Vice-President in charge of Poverty Reduction and Economic Management. Other positions held include Deputy Director of the Policy Development and Review Department as well as Director of the External Relations Department at the International Monetary Fund. He also served as Director-General for Policy and International Development at the United Kingdom Department for International Development.

Margareta Drzeniek HanouzMargareta 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 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 KhatibSofiane 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.

Regional Agenda Council on the Middle East and North AfricaThe Regional Agenda Council on the Middle East and North Africa (MENA) is a group of experts formed by the World Economic Forum to address critical challenges for the future of the region. The council, which is in operation since August 2010, will focus its 2010-2011 work programme on three critical issues: the imperative of sustainable competitiveness, women-powered economic growth and student-centred learning. The council will not only be a platform to include the MENA perspective on the latest research developed by the Forum but will also provide an opportunity for council members to be key contributors in the World Economic Forum on the Middle East and North Africa (Marrakech, Morocco 26-28 October 2010).

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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)