Gulf nations have made “significant improvement” in the diversification of their economies and have hastened their economic transformation policies after the onset of Covid-19, a study has shown.
The UAE and Saudi Arabia led the region over the past two decades, thanks to policy measures to develop their non-oil sectors, the latest global Economic Diversification Index (EDI) report released by the Mohammed bin Rashid School of Government said on Tuesday.
Since the start of the pandemic, which affected non-oil sectors ranging from tourism to infrastructure, GCC nations introduced policies to drive economic transformation.
The policies include the development of the digital economy, the privatisation of state-owned assets, the introduction of new taxes to increase non-oil revenue and other structural reforms, the report said.
While commodity-dependent nations have benefitted from the recent increase in commodity prices, the pandemic reinforced the efforts of GCC countries to diversify into new sectors, the report found.
This has ranged from a shift in manufacturing to produce more high-tech products, a growing focus on FinTech, artificial intelligence and virtual assets, as well as opening up markets to new investors — as characterised by the recent spate of initial public offerings in the GCC, in both the oil and non-oil sectors.
Meanwhile, International Monetary Fund managing director Kristalina Georgieva said on Monday that Gulf economies were performing well due to the “relentless” pursuit of reforms.
“There is this impression that the only reason the Gulf countries are doing well is high oil and gas prices — this is not true,” Ms Georgieva said at the World Government Summit in Dubai.
“They have been opening up more space for private investments and for jobs being generated by competitive businesses.”
The Mohammed bin Rashid School of Government released the study at the World Government Summit in Dubai.
The index, now in its second year of publication, has expanded to cover 105 countries in 2023, up from 83 last year. It covers all regions, resource and non-resource-based economies over a period of 22 years.
The index quantifies the economic diversification process of different countries by focusing on three aspects — output diversification, trade diversification and government revenue diversification.
The UAE's EDI score, measured out of 100, jumped to 94.6 in 2021, from 90.9 in 2000, while Saudi Arabia's score climbed to 89.9, from 81.8, in the same periods under review.
The Emirates has introduced a series of policies, from allowing 100 per cent foreign ownership of companies to more flexible visa programmes, to attract more capital and talent to the country.
Tracking the progress of economic diversification in commodity-dependent nations, the report found that while the Mena region had a relatively low score, its EDI score had increased at the fastest pace on the index.
The region's EDI score rose to 97.4 to 2021, from 92.3 in 2000.
“In the Mena region, the uptick has picked up pace in the last few years (2016 to 2019), not surprising since a conscious effort has been placed on increasing private sector non-oil share in GDP (plus the introduction of revenue enhancing measures like the introduction of value-added tax and excise taxes),” the report said.
The Mena region's improved score in the latter part of the past decade was attributed to efforts by oil-exporting countries to hasten their diversification plans, it said.
Around the world, North America topped the list, despite being the most affected by the pandemic in 2020 and 2021, when its score fell by 3.8 points to 130.5.
It was followed by Western Europe and the East Asia-Pacific region on the list of top performers.
Countries in sub-Saharan Africa were ranked at the bottom of the index, even though their score declined by only 0.1 points during the pandemic to 89.4.
While the region’s average scores mostly improved over time, Covid-19 negatively affected the 2020-2021 scores.
The most diversified economies globally were the US, China and Germany, which held on to their ranks for the second year, the report showed.
The research also examined how the pandemic had affected the economic diversification efforts of countries around the world.
Developing nations are taking longer to recover from the pandemic and remain more vulnerable to external shocks than developed nations, the report found.
The agriculture and services sectors suffered from the initial lockdowns, but the rebound in agriculture was faster, thanks to government support, increased global production of major commodities, trade recovery and higher food prices, it said.
The manufacturing sector was more resilient than services, with countries that had a strong production base having lower projected output losses, it found.
Trade in goods recovered to almost pre-crisis levels one year after the pandemic hit, suggesting some resilience in global value chains, while services trade continued to be sluggish, it said.
“The pandemic has underscored the need for trade diversification [both products and partners] and the enhancement of supply chains. It also highlighted that a country needs a broader tax base to have the necessary fiscal space to roll out emergency assistance,” it said.
The future of economic diversification
The report highlighted the importance of services in supporting diversification efforts and said overly restrictive government policies would hamper the growth of the services economy and the adoption of new technology.
A strategy of “servicification”, which is the focus on the role of trade in services, is also gaining ground, it said.
“It would be beneficial to develop new, deep trade agreements, including the broad category of services, and digital services [e-services, e-commerce, etc],” the report said.
“Such services trade policies can lead to higher labour and overall productivity, and increase diversification.”
With the pandemic having accelerated efforts to develop a digital economy, policymakers must now focus on the digital divide and work on narrowing the gap, the report said.
THE DETAILS
Director: Milan Jhaveri
Producer: Emmay Entertainment and T-Series
Cast: John Abraham, Manoj Bajpayee
Rating: 2/5
COMPANY%20PROFILE
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Killing of Qassem Suleimani
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10 tips for entry-level job seekers
- Have an up-to-date, professional LinkedIn profile. If you don’t have a LinkedIn account, set one up today. Avoid poor-quality profile pictures with distracting backgrounds. Include a professional summary and begin to grow your network.
- Keep track of the job trends in your sector through the news. Apply for job alerts at your dream organisations and the types of jobs you want – LinkedIn uses AI to share similar relevant jobs based on your selections.
- Double check that you’ve highlighted relevant skills on your resume and LinkedIn profile.
- For most entry-level jobs, your resume will first be filtered by an applicant tracking system for keywords. Look closely at the description of the job you are applying for and mirror the language as much as possible (while being honest and accurate about your skills and experience).
- Keep your CV professional and in a simple format – make sure you tailor your cover letter and application to the company and role.
- Go online and look for details on job specifications for your target position. Make a list of skills required and set yourself some learning goals to tick off all the necessary skills one by one.
- Don’t be afraid to reach outside your immediate friends and family to other acquaintances and let them know you are looking for new opportunities.
- Make sure you’ve set your LinkedIn profile to signal that you are “open to opportunities”. Also be sure to use LinkedIn to search for people who are still actively hiring by searching for those that have the headline “I’m hiring” or “We’re hiring” in their profile.
- Prepare for online interviews using mock interview tools. Even before landing interviews, it can be useful to start practising.
- Be professional and patient. Always be professional with whoever you are interacting with throughout your search process, this will be remembered. You need to be patient, dedicated and not give up on your search. Candidates need to make sure they are following up appropriately for roles they have applied.
Arda Atalay, head of Mena private sector at LinkedIn Talent Solutions, Rudy Bier, managing partner of Kinetic Business Solutions and Ben Kinerman Daltrey, co-founder of KinFitz
SPECS
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Wednesday's results
Finland 3-0 Armenia
Faroes Islands 1-0 Malta
Sweden 1-1 Spain
Gibraltar 2-3 Georgia
Romania 1-1 Norway
Greece 2-1 Bosnia and Herzegovina
Liechtenstein 0-5 Italy
Switzerland 2-0 Rep of Ireland
Israel 3-1 Latvia
Quick%20facts
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Global state-owned investor ranking by size
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Our legal advisor
Rasmi Ragy is a senior counsel at Charles Russell Speechlys, a law firm headquartered in London with offices in Europe, the Middle East and Hong Kong.
Experience: Prosecutor in Egypt with more than 40 years experience across the GCC.
Education: Ain Shams University, Egypt, in 1978.
Company profile
Date started: 2015
Founder: John Tsioris and Ioanna Angelidaki
Based: Dubai
Sector: Online grocery delivery
Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
UAE currency: the story behind the money in your pockets
Fifa Club World Cup:
When: December 6-16
Where: Games to take place at Zayed Sports City in Abu Dhabi and Hazza bin Zayed Stadium in Al Ain
Defending champions: Real Madrid
COMPANY%20PROFILE
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Wales 20-19 France
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France: T: Vahaamahina, Ollivon, Vakatawa Cons: Ntamack (2)
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
ADCC AFC Women’s Champions League Group A fixtures
October 3: v Wuhan Jiangda Women’s FC
October 6: v Hyundai Steel Red Angels Women’s FC
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How to tell if your child is being bullied at school
Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
About Seez
Company name/date started: Seez, set up in September 2015 and the app was released in August 2017
Founder/CEO name(s): Tarek Kabrit, co-founder and chief executive, and Andrew Kabrit, co-founder and chief operating officer
Based in: Dubai, with operations also in Kuwait, Saudi Arabia and Lebanon
Sector: Search engine for car buying, selling and leasing
Size: (employees/revenue): 11; undisclosed
Stage of funding: $1.8 million in seed funding; followed by another $1.5m bridge round - in the process of closing Series A
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Tesalam Aleik
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(Rotana)
UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
The currency conundrum
Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”
Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.
This is a race to the bottom, and everybody wants to be a winner.
Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
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Rating: 4/5
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
The team
Videographer: Jear Velasquez
Photography: Romeo Perez
Fashion director: Sarah Maisey
Make-up: Gulum Erzincan at Art Factory
Models: Meti and Clinton at MMG
Video assistant: Zanong Maget
Social media: Fatima Al Mahmoud
UAE currency: the story behind the money in your pockets
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
The%20specs
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UAE currency: the story behind the money in your pockets
