In the World Bank’s latest country rankings of business efficiency, the top 10 improvers, based on reforms undertaken, were Brunei Darussalam; Kazakhstan; Kenya; Belarus; Indonesia; Serbia; Georgia; Pakistan; the UAE; and Bahrain. The Doing Business report cites research that demonstrates that better performance in the rankings is associated with lower levels of income inequality, thereby reducing poverty and boosting shared prosperity.
In the past year, according to the report, the Middle East and North Africa countries implemented the most reforms of any year since 2009, with 35 reforms across 15 of the region’s 20 economies. As the region’s macroeconomic headwinds continue owing to low oil prices and slower investment activity, business environment improvements are essential to maintain competitiveness.
Improvement in business efficiency is also related to the reduction of gender disparities. For example, Saudi Arabia’s unemployment target set out in Vision 2030 is to reduce unemployment from 11.6 per cent to 7 per cent. This is attainable only if more women enter the labour force over the coming decade and a half. Entrepreneurship is key to having more women in the economy. According to the report 70 per cent of Mena economies are creating barriers for women entrepreneurs. Despite these barriers most Mena countries improved their rankings, with obvious exceptions such as Libya, Yemen, and Syria.
Commonly found among most regional oil-dependent economies this year is their drive to reforms to diversify away from oil. The measures include eliminating fuel subsidies, reducing public sector jobs and wage bills, privatising state-owned enterprises and diversifying fiscal revenues away from oil through higher direct and indirect taxes. These reforms are expected to transform at least part of the old social contract and enhance economic efficiency over the coming years.
The UAE was ranked 26th overall, up from 34th place last year. The report highlights three important reforms in the UAE over the past year: a) made it easier to start a business by streamlining name reservation and articles of association notarisation; b) eased construction permits by implementing risk-based inspections; and c) protected minority investors by increasing shareholder rights and role in major corporate decisions.
Bahrain rose to 63rd from 66th. Among other things Bahrain’s ranking improved due to: a) the enhancement of its infrastructure; b) facilitation of procedures at the King Fahd Causeway; c) reduction of the minimum capital requirement for starting a business; and last but not least d) reduction of the minimum capital requirement for starting a business. Bahrain’s initiative to ensure easy procedures at the King Fahd Causeway has improved links with Saudi Arabia, the largest economy in the region which will boost the logistics sector, as well as the industrial sector.
Oman came in 66th, up from 69th the previous year. The country was first in the GCC in the category Starting a Business, ahead of the UAE (ranked 4), Bahrain (5), Qatar (6), Saudi Arabia (14) and Kuwait (20). Oman made starting a business easier by removing the requirement to pay the minimum capital within three months of incorporation and by streamlining the registration of employees.
Tunisia and Qatar are ranked 77th and 83rd respectively. Tunisia dropped two places, while Qatar fell 15. Qatar’s drop in ranking is the widest drop within Mena. This drop can possibly be attributed to its decision to weaken minority investor protections by decreasing the rights of shareholders in major decisions and by diminishing ownership and control structures, as per the report.
The Middle East’s largest economy, Saudi Arabia, improved its ranking by two notches to 94. Saudi Arabia is ranked 15th in dealing with construction permits, 28th in getting electricity and 32nd in registering property. However, starting a business is still a hurdle (147th) and resolving insolvency is equally inhibiting (169th).
Despite Egypt’s economic crisis, its ranking rose four places in the index for 2017 compared to last year’s 122nd. Egypt took fifth place among economies in the Mena region in terms of the ease of doing business, scoring 56.64 points and was preceded by the UAE, Turkey, Saudi Arabia and Jordan. Egypt was among the report’s top countries that have improved in the category of Starting a Business, rising 31 spots from the year before to register rank 39th.
The Mena region is faced with an exceptionally challenging environment because of low oil prices, conflict and fiscal imbalances. Fiscal consolidation in a difficult sociopolitical environment and spillover from conflicts is also creating challenges. Policymakers in the region should not become complacent about the need to enhance business efficiency via entrepreneurship and steps that help create a better environment in which to do business.
As all regional economies face a “new normal” in their economies, they will be required to maintain their business friendliness and competitiveness while making some hard policy choices for their citizens.
John Sfakianakis is the director of economic research at the Gulf Research Centre in Riyadh
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School counsellors on mental well-being
Schools counsellors in Abu Dhabi have put a number of provisions in place to help support pupils returning to the classroom next week.
Many children will resume in-person lessons for the first time in 10 months and parents previously raised concerns about the long-term effects of distance learning.
Schools leaders and counsellors said extra support will be offered to anyone that needs it. Additionally, heads of years will be on hand to offer advice or coping mechanisms to ease any concerns.
“Anxiety this time round has really spiralled, more so than from the first lockdown at the beginning of the pandemic,” said Priya Mitchell, counsellor at The British School Al Khubairat in Abu Dhabi.
“Some have got used to being at home don’t want to go back, while others are desperate to get back.
“We have seen an increase in depressive symptoms, especially with older pupils, and self-harm is starting younger.
“It is worrying and has taught us how important it is that we prioritise mental well-being.”
Ms Mitchell said she was liaising more with heads of year so they can support and offer advice to pupils if the demand is there.
The school will also carry out mental well-being checks so they can pick up on any behavioural patterns and put interventions in place to help pupils.
At Raha International School, the well-being team has provided parents with assessment surveys to see how they can support students at home to transition back to school.
“They have created a Well-being Resource Bank that parents have access to on information on various domains of mental health for students and families,” a team member said.
“Our pastoral team have been working with students to help ease the transition and reduce anxiety that [pupils] may experience after some have been nearly a year off campus.
"Special secondary tutorial classes have also focused on preparing students for their return; going over new guidelines, expectations and daily schedules.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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%3Cp%3EChris%20Jordan%20insists%20Sanchit%20Sharma%20will%20make%20an%20impact%20on%20the%20ILT20%2C%20despite%20him%20starting%20the%20campaign%20on%20Gulf%20Giants'%20bench.%3Cbr%3EThe%20young%20UAE%20seamer%20was%20an%20instant%20success%20for%20the%20side%20last%20season%2C%20and%20remained%20part%20of%20the%20XI%20as%20they%20claimed%20the%20title.%3Cbr%3EHe%20has%20yet%20to%20feature%20this%20term%20as%20the%20Giants%20have%20preferred%20Aayan%20Khan%20and%20Usman%20Khan%20as%20their%20two%20UAE%20players%20so%20far.%3Cbr%3EHowever%2C%20England%20quick%20Jordan%20is%20sure%20his%20young%20colleague%20will%20have%20a%20role%20to%20play%20at%20some%20point.%3Cbr%3E%22Me%20and%20Sanchit%20have%20a%20great%20relationship%20from%20last%20season%2C%22%20Jordan%20said.%3Cbr%3E%22Whenever%20I%20am%20working%20with%20more%20inexperienced%20guys%2C%20I%20take%20pleasure%20in%20sharing%20as%20much%20as%20possible.%3Cbr%3E%22I%20know%20what%20it%20was%20like%20when%20I%20was%20younger%20and%20learning%20off%20senior%20players.%3Cbr%3E%22Last%20season%20Sanchit%20kick-started%20our%20season%20in%20Abu%20Dhabi%20with%20a%20brilliant%20man-of-the-match%20performance.%3Cbr%3E%22Coming%20into%20this%20one%2C%20I%20have%20seen%20a%20lot%20of%20improvement.%20The%20focus%20he%20is%20showing%20will%20only%20stand%20him%20in%20good%20stead.%22%3C%2Fp%3E%0A
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