UAE, Saudi Arabia, and Qatar rank among top 6 emerging markets globally: Kearney report
The presence of the three Middle Eastern countries in Kearney’s 2003 FDI Confidence Index indicates strong investor confidence in the region’s economic reform agenda.
The United Arab Emirates, Saudi Arabia, and Qatar have been ranked among the top six emerging markets in the world by global management consulting firm Kearney.
The UAE has bagged the third position after China and India, followed by Qatar and Saudi Arabia in the fourth and sixth positions, respectively, in Kearney’s ‘2023 FDI Confidence Index’ report. Thailand is in the fifth position in the rankings.
This is the first time Kearney has listed the rankings of 25 emerging markets in the world in its FDI Confidence Index report. This, the firm believes, will give investors an insight into the emerging markets of the present and for the next three years.
The three Middle Eastern countries have received the highest optimism from investors among the emerging markets, indicating the growing trust in the economic reforms of these countries (as per the report’s Investor Optimism Index).
Emerging markets classification
Emerging markets are classified based on the World Bank’s country classification, which calculates the gross national income (GNI) of a country in US dollars using the Atlas conversion method.
As per the 2022 updated classification, countries have been classified into low income (below $1,045 GNI), lower-middle income ($1,086-$4,255 GNI), upper-middle income ($4,256-$13,205 GNI), and high income (over $13,205 GNI). According to this classification, the UAE, Qatar, and Saudi Arabia are high-income countries.
While Kearney classifies any market falling below the high-income level as an ‘emerging market’, the three Middle Eastern countries have been considered among the emerging markets in the FDI Confidence Index report.
Kearney has also placed the three countries among the top 25 developed markets in the world. In this index, the UAE has bagged the 18th position, followed by Qatar in the 21st place and Saudi Arabia with the 24th rank.
The importance of Middle East economies
The Middle East’s arrival on the index is a result of several factors, including economic reforms, Dubai’s new economic agenda, and the FIFA World Cup in Qatar.
Saudi Arabia achieved an 8.7% growth in GDP in 2022, as per the General Authority for Statistics. The country also witnessed pro-business reforms, a sharp rise in oil prices, and a recovery of production capacity.
Qatar has also been gaining the confidence of investors, especially when the country’s GDP grew by more than 4% in 2022, after hosting the FIFA World Cup, as per a report by Cushman and Wakefield.
According to reports, the World Cup was estimated to contribute over $20 billion to the country’s economy. It is also important to note that the Qatar Stock Exchange Index showed strong growth in the run-up to the World Cup.
Dubai’s new economic agenda, called D33, has also managed to grab the attention of investors. As per the agenda, Dubai is pushing the pedal on foreign trade in goods and services—D33 aims to double the Emirate’s foreign trade to $6.97 trillion (AED25.6 trillion) in the next decade. It is also boosting the private sector with the launch of a scale-up programme, a sandbox, and more.
The Kearney report indicates that these petroleum-based economies continue to grow in importance in the global energy market.
The Gulf is steadily gaining importance in the world economy. The World Economic Forum notes that the region’s post-pandemic recovery, combined with its topnotch infrastructure, globally competitive regulations, openness and economic diversification, will place it in a strategic position in the evolving global economic order.
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Edited by Swetha Kannan