UEA Makes Mark on Global Athletics; Ranked Top

The United Arab Emirates has improved its standing in the IMD World Competitiveness Ranking, driven by high scores in government efficiency and business infrastructure. According to the IMD World Competitiveness Center, the UAE’s climb reflects its ongoing economic diversification and digital transformation efforts to reduce reliance on oil revenues.

The UAE moved to 16th place globally in the 2024 rankings, according to data released by the IMD World Competitiveness Center. This position places the country among the top 20 most competitive economies worldwide, following a trajectory of steady improvement over the last several reporting cycles.

What factors drove the UAE’s competitiveness?

The IMD ranking evaluates countries based on four main pillars: economic performance, government efficiency, business efficiency, and infrastructure. The UAE’s advancement is primarily linked to the government efficiency and infrastructure categories.

Government efficiency scores were bolstered by the UAE’s aggressive implementation of digital government services. The administration has shifted most public transactions to digital platforms, reducing bureaucratic delays and increasing transparency for both citizens and foreign investors.

Infrastructure remains a core strength. The UAE’s investment in world-class ports, airports, and telecommunications networks provides a competitive advantage for logistics and trade. The IMD report highlights that the country’s physical and technological infrastructure supports high levels of business productivity.

Business efficiency also contributed to the rise. The UAE has introduced updated corporate tax laws and expanded “golden visa” programs to attract global talent and long-term investment. These policy changes aim to stabilize the workforce and encourage the growth of the non-oil private sector.

How does the UAE compare to regional peers?

The UAE continues to lead many of its Gulf Cooperation Council (GCC) neighbors in overall competitiveness rankings. While Saudi Arabia has also seen significant jumps in recent years due to its Vision 2030 reforms, the UAE maintains a lead in business agility and government digitization.

A comparison of regional performance shows a general trend of ascent across the GCC. According to IMD data, the region is increasingly recognized for its ability to attract foreign direct investment (FDI) and its capacity to implement large-scale infrastructure projects rapidly.

However, the UAE’s specific focus on creating “free zones” with 100% foreign ownership has given it a distinct edge in business efficiency compared to countries that have only recently opened their markets to foreign entities.

Why does this ranking matter for the UAE economy?

The rise in global competitiveness is a key metric for the “We the UAE 2031” vision. This national strategy aims to position the UAE as a global hub for innovation, investment, and talent. By improving its competitiveness rank, the UAE signals to international markets that it is a low-risk, high-efficiency environment for capital.

The ranking serves as a benchmark for the country’s transition away from a hydrocarbon-based economy. High scores in business and government efficiency are necessary to attract the technology, finance, and tourism sectors that the UAE intends to grow as primary economic drivers.

Economists note that competitiveness rankings often correlate with the ability to attract high-skilled labor. The UAE’s climb in the index coincides with its efforts to pivot from a labor-intensive economy to a knowledge-based economy.

What are the remaining challenges?

Despite the overall climb, the IMD report indicates areas where the UAE can still improve to reach the top 10. These include further enhancing labor market flexibility and increasing the contribution of small and medium enterprises (SMEs) to the total GDP.

While government efficiency is high, the report suggests that continuing to streamline regulatory frameworks will be necessary to maintain this momentum. The UAE government has responded by creating specialized committees to review and remove outdated regulations that hinder business growth.

The country’s current strategy involves integrating artificial intelligence (AI) into government operations. This move is intended to further boost the government efficiency score in future IMD assessments by automating routine administrative tasks and enhancing data-driven decision-making.