UAE tops MENA in new global business rankings

The UAE has been ranked the top country in the MENA region in the latest World Economic Forum's Financial Development Report 2009.

The report, which rated 55 of the world’s leading financial systems and capital markets, put the UAE in 20th position, a fall of four places on the previous year's list.

It found that the financial crisis had been "acutely felt" in most global financial systems and caused most countries’ scores to drop significantly compared to 2008.

However, despite the fall of four places, the UAE registered a small increase in its score - Australia was the only other top 20 ranked country to achieve this.

The rankings were based on more than 120 variables spanning institutional and business environments, financial stability, and size and depth of capital markets, among other factors.

The UAE came top for its "highly stable" banking system but this contrasted with a ranking of 41st for sovereign debt risk, the report said.

The favourable tax regime (2nd) was seen as a key component of its business environment, although this was partly offset by its high cost of doing business (41st).

The UAE’s banks were judged to be efficient (18th), although financial information disclosure was considered poor.

The overall rankings saw Saudi Arabia in 24th position in the global list, with Bahrain (27) and Kuwait (30). The UK sat on top of the list while Venezuela came bottom.

The report added that the financial system of Saudi Arabia mirrored that of the UAE in several respects. Its banks were highly profitable according to the measures captured in the report, yet they are not very big when scaled by GDP (42nd).

The country’s highly stable banking system (5th) and fairly stable currency (15th) contributed to high stability in the overall financial system (6th), the report added.

The report said that Bahrain showed competitive advantages in the quality of its institutional environment, including a substantially liberalised financial sector (16th) and solid corporate governance (20th).

The country’s business environment features a fairly low cost of doing business (12th) as well as a favorable tax regime (4th).

Kuwait (30th) and Egypt (36th) were the lowest placed countries in the region, with both being diminished by "poor contract enforcement and less-effective corporate governance".

The report said Kuwait’s financial system was stable (8th) and, as an oil producing country, it added that it exhibited a low risk of sovereign debt crisis and a stable currency.

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