Arab States Working on Economic Freedoms
Of the (Persian) Gulf Cooperation Council ((P)GCC) countries, the UAE made the strongest stride in the 2015 Index of Economic Freedom. The report, brought out by Heritage Foundation and Wall Street Journal stresses the importance of the private sector and investors in an economy.
The Index relies on a diverse number of variables related to the level of economic freedom, compromising in the main of the rule of law, property rights and freedom from corruption. The others relate to regulatory efficiency, specifically business, labor and monetary freedom; the extent of government role; and trade, investment and financial freedoms. In turn, each variable carries 10 points on the 100-point maximum scale, Gulfnews reported.
Notably, the 2015 Index classifies three (P)GCC economies — Bahrain, the UAE and Qatar — as being mostly free. Among other things, the three economies share fiscal and monetary policies reflecting the near absence of taxation.
Imperfectly, not a single (P)GCC member state is among the exclusive free category, which comprises Hong Kong, Singapore, New Zealand, Australia and Switzerland in that same order.
Ranked 18th worldwide, Bahrain leads the (P)GCC with regard to economic freedom, but has seen it concede five rankings in a single year. The Persian Gulf state had enjoyed global rankings of 13 and 12 in 2014 and 2013, respectively.
The UAE saw its ranking rise by three notches, therefore securing the 25th place worldwide and the second best within the Mena region. The progress recognizes the steady evolution of economic reforms culminating in it emerging as the leading regional hub for numerous economic activities, including financial services, trade and aviation.
Some 70.5 million passed through Dubai International Airport last year, second to none in the world.
Qatar’s ranking experienced a further slide, this time by two notches and securing the 32nd spot. The country lost three notches in the earlier report, ostensibly having to do with stronger state involvement in development projects as Qatar prepares to host the World Cup 2022.
Oman’s ranking was down eight positions, the biggest drop for any (P)GCC economy on the Index and 56th worldwide.
Kuwait saw its position up by two notches, therefore securing the 76th place. It had dropped 10 spots a year ago.
Saudi Arabia maintained its 77th ranking among the 178 economies ranked in the report. It would be unfair to consider the Saudi economy as the least free within the (P)GCC. The country boasts a thriving private sector, as is the case in the dairy industry.
Subjectively, the Index of Economic Freedom continues to regard Oman, Kuwait and Saudi Arabia as moderately free economies. In reality, (P)GCC economies are exceptionally free by international standards, as evidenced by the presence of workers from all over the world.