November 01, 2015

The Most Competitive Economies in North Africa and the Middle East

Geopolitical conflict and turbulence continue to affect many parts of the Middle East and North Africa. But according to the World Economic Forum’s Global Competitiveness Report 2014-15, some North African economies are starting to slowly stabilize and focus on economic reform.

A recent report by the World Economic Forum ranks the top markets in the region based on different measures that influence competitiveness, including infrastructure, education, and innovation.

The United Arab Emirates

The United Arab Emirates (UAE) is ranked 12th in the world this year. The country’s strong drive towards reforms has led to many initiatives aimed at enhancing its competiveness. The UAE’s institutional framework, infrastructure, and macroeconomic stability have all improved recently. Additionally, the country has a highly efficient goods market, strong macroeconomic environment, and high government efficiency.


Qatar enjoys high levels of macroeconomic stability and efficient goods and financial markets. However, to achieve a more diversified economy, it needs to improve educational outcomes and reduce administrative barriers on setting up new businesses.

 Saudi Arabia

Saudi Arabia has high levels of macroeconomic stability, a comfortable budget surplus, and the largest market size of the Gulf Cooperation Council (GCC) economies. However, health and education lag behind other countries with similar income levels, and in the interest of creating jobs for a growing workforce, more emphasis needs to be placed on education and labor market reforms.


Israel’s main strength is it’s world-class capacity for innovation. Innovative businesses throughout Israel benefit from the presence of some of the world’s best research institutions and a favorable environment for start-up companies. However, the country requires continued improvement in education, particularly mathematics and science, to sustain its innovation-driven competitive strategy in the future.


Bahrain’s GDP per capita has been outperforming the regional average for a few years now. Though the market is small compared to many neighboring economies, its strengths include good infrastructure and technological readiness. The largest barriers to business development are its inefficient government bureaucracy and restrictive labor regulations.


While Kuwait has a steady macroeconomic environment, it is struggling to foster innovation. Businesses in the country report their biggest challenges as inefficient government bureaucracy, restrictive labor regulations, and corruption.


Oman has a stable macroeconomic environment, good infrastructure, and stable and strong institutions. The population enjoys a high GDP per capita and efficient markets. The significant barrier to doing business in Oman is restrictive labor regulations.


Morocco has reduced its budget deficit recently and made improvements in primary education and innovation. The country has become relatively more stable socially and politically in recent years, and efforts are being made to modernize its business environment.


The country’s most important competitive strength is its macroeconomic environment, which has seen steady improvement over the past year. In order to sustain growth, Algeria will need to focus on overhauling its institutional framework, and on increasing the efficiency of the goods, labor, and financial markets.