Governance

The mechanisms, processes and institutions through which resources are managed and delivered largely affect the outcome of national sustainable development plans at many levels. It is difficult to offer an overall assessment of the status of good governance for the Arab region, but different measurement initiatives by various credible institutions contribute to shedding light on economic and corporate governance.

 

With regards to economic governance, some Arab countries have made significant strides in making their economies more open and competitive and in adopting economic policies that contribute to stronger economies, whilst boosting investments.

 

Most notably, the Gulf Cooperation Council (GCC) countries have taken the lead at the regional level to enhance economic competitiveness. According to the Global Competitiveness Index (GCI), which assessed the competitiveness landscape of 140 economies in 2018, the United Arab Emirates, Qatar and Saudi Arabia ranked 27, 30 and 39, respectively, the highest at the regional level.[1] Despite the progress the region has made over the past decade in terms of infrastructure and technological readiness, due to heavy investments in transport and information and communication technologies (ICT), the region still lags behind advanced economies in terms of innovation, technological readiness, higher education and training and labor market efficiency.[2][3]

 

The United Arab Emirates and Qatar also outperform the Arab countries on the Index of Economic Freedom (2019), which is based on 4 pillars of economic freedom, namely the rule of law, government size, regulatory efficiency and open markets, scoring 77.6 and 72.6, respectively, out of 100 (most free). Remarkably, 15 out of 16 Arab countries scored above 70 on the tax burden, one of the 12 indicators of the index, indicating that these countries are free or mostly free from taxes usually imposed by governments.[4]

 

Meanwhile, as measured by the Ease of Doing Business Index (EODB), 20 Arab countries have witnessed an enhancement in their overall business environment between 2017 and 2018, except for Oman and Yemen. Among the doing business indicators, the Arab region performs best (scoring 80.66 out of 100) in starting a business, measured through the number of procedures, time, cost and paid-in minimum capital requirement for a small to medium sized company to start up and formally operate.[5]

 

A high ease of doing business ranking implies a regulatory environment that is more conducive to starting and operating a local firm. Here, the United Arab Emirates tops the region’s list, ranking 11 among 190 economies, followed by Morocco (ranks 60) and Bahrain (ranks 62), while Somalia (ranks 190), Yemen (ranks 187), Libya (ranks 186) and Syria (ranks 179) remained at the bottom. Among the top 10 worldwide improvers in terms of doing business stands Djibouti (ranks 99), which implemented a total of six reforms and moved up in the global ranking by more than 50 positions between 2017 and 2018.[6]

 

In the Arab Maghreb Union countries, Morocco stood first in 2017 in terms of a free business environment on the Ibrahim Index of African Governance, scoring 57.3 out of 100 (best), and which assesses the level of market-based competition, investment climate, the absence of bureaucracy and red tape and efficiency of customs procedures, among others.[7]

 

In light of the multifaceted challenges that the region faces, aside conflicts, and that include oil price volatility and lack of economic diversification, increasing the competitiveness of the Arab region’s economies necessitates diversifying their structures, developing more entrepreneurial private sectors and start-ups, and ensuring more job opportunities for the youth.[4] On the down side, scores related to government effectiveness in implementing policies and delivery of public services dropped in 16 Arab countries between 2010 and 2017[8], and the efforts to combat corruption have remained elusive.

 

This overview has been published in March 2019. When official data are not available or very outdated, ADP used the latest available statistics published by international organizations.


[1] In the Arab World Competitiveness report 2018, the performance is assessed for 12 Arab countries, including the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, Kuwait, Oman, Jordan, Morocco, Algeria, Tunisia, Egypt and Lebanon.

[2] World Economic Forum and World Bank Group 2018. The Arab World Competitiveness Report. [ONLINE] Available at: http://www3.weforum.org/docs/Arab-World-Competitiveness-Report-2018/AWCR%202018.0724_1342.pdf. [Accessed 14 March 2019].

[3] World Economic Forum 2018. The Global Competitiveness Report. [ONLINE] Available at: http://www3.weforum.org/docs/GCR2018/05FullReport/TheGlobalCompetitivenessReport2018.pdf. [Accessed 14 March 2019].

[4] Heritage Foundation 2019. Index of Economic Freedom. [ONLINE] Available at: https://www.heritage.org/index/explore. [Accessed 14 March 2019].

[5] The World Bank Group 2019. Doing Business, Training for Reform: Regional Profile Arab World. [ONLINE] Available at: http://www.doingbusiness.org/content/dam/doingBusiness/media/Profiles/Regional/DB2019/Arab-World.pdf. [Accessed 14 March 2019].

[6] The World Bank Group 2019. Doing Business, Training for Reform. [ONLINE] Available at: http://www.worldbank.org/content/dam/doingBusiness/media/Annual-Reports/English/DB2019-report_web-version.pdf [Accessed 14 March 2019].

[7] Mo Ibrahim Foundation 2018. Ibrahim Index of African Governance. [ONLINE] Available at: http://iiag.online/.[Accessed 14 March 2019].

[8] The World Bank Group 2019. Worldwide Governance Indicators. [ONLINE] Available at: http://info.worldbank.org/governance/wgi/#reports. [Accessed 14 March 2019].

 



view all

Data Highlighted

view all

Publications