The advance is a considerable achievement.
Within the Middle East, Kuwait, Oman and the UAE are ranked below Saudi Arabia.
Current world rankings place Singapore in top place followed by New Zealand, the US and Hong Kong.
The measures used to determine the rankings are primarily the ‘Ease of Doing Business’ index prepared by the International Finance Corporation (IFC) and the ‘Global Competitiveness Index’ published by the Davos-based World Economic Forum (WEF).
While the IFC focuses on procedures and regulations affecting businesses, including starting a new venture, employment laws and enforcement of contracts, the WEF takes a wider view looking at areas such as a country’s quality of education, healthcare, and the condition of infrastructure as well as the level of technological advancement.
Amr Al-Dabbagh, governor of the Saudi Arabian General Investment Authority (Sagia) believes that improvement in the performance of government departments and agencies has contributed to the country’s improved ranking.
The Kingdom’s ambitious economic development and reform programme calls for Saudi Arabia to be among the world’s top ten economies in terms of ease of doing business by 2010. The government recognises this can only be achieved by ongoing reforms and encouraging diversification of the economy.
For sustainable employment growth, new jobs must also emerge from new business undertakings.
Sagia believes that many of these issues can be addressed by improving the Kingdom’s competitiveness. By stimulating growth in business formation, streamlining regulation to make it easier for these businesses to operate and boosting productivity in the non-oil sectors of the economy.
Saudi Arabia’s National Competitiveness Centre says that the most significant improvement has been a streamlining of regulations concerning the start up of a business and the removal of minimum capital requirements.
Previously new companies in the Kingdom had to show proven capital of SR500,000 ($133,000), one of the highest levels in the world. When France abolished its minimum capital requirements, for example, new businesses increased by more than 25%.
The time taken and the number of procedures needed to start up a business in Saudi Arabia have also been reduced with the result that costs of setting up a new enterprise have been reduced by one third.
However, further advance in the Kingdom’s international competitiveness rating will be a considerable challenge involving a speeding up of legal processes and making these more equitable and transparent for litigants.
There is also the controversial issue of increasing female employment to be addressed and a need to maintain and increase productivity as the number of foreign workers is lowered and the number of Saudis in the country’s workforce increases.
Sunday, September 28- 2008 @ 16:39 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.