How the UAE and Dubai can move up international indices and rankings

The forward-facing outlook the UAE government takes has allowed it to put multiple strategies in place to meet current and future challenges such as diversifying the economy and also ensuring it is at the forefront of adopting new technologies.

Important laws have been implemented pertaining to property rights, all in an effort to attract and protect investment. Meanwhile strides have also been made in the field of ICT adoption, supported by an 98.5 per cent internet penetration rate, one of the highest in the world.

In such an enabling environment, the country should be able to garner greater human capital – especially with support from positive market forces and an innovative and dynamic ecosystem.

Some of those strategies have paid off over the years, and the evidence can be seen in multiple reports, the latest being The Global Competitiveness Report issued by the World Economic Forum, in which Dubai ranked 25th.

However, where important improvements still need to be made are within the research and development sector as well as achieving some key metrics when it comes to the labour market.

In the World Bank’s Ease of Doing Business Report, the UAE moved up 12 spots between 2017 and 2019 to reach 11th place overall. A current pain point is the insolvency recovery rate for stakeholders, which currently provides about 30 cents on every dollar, whereas stakeholders in the US can expect to recover 85 cents on the dollar.

Increasing this rate is crucial for encouraging investors to fund entrepreneurs to work on new ideas. Longer-term strategies are already in place. Dubai’s Plan 2021, which is based on six pillars namely – people, society, experience, place, economy and government, aims to develop “a city that enjoys sustainable economic growth and that is resilient to disruptive shocks as it is under-pinned by a diversified base of economic activity, innovation in business models and increasing productivity of labour and capital.”

It also seeks to ensure that the city has the best housing services, which is qualified by “offering high-quality housing that is accessible for each socio-economic segment of society and a globally competitive cost of living.”

Rankings in the Mercer Quality of Living Index are important markers as are other qualifiers such as the proportion of individuals who recommend Dubai as a place to live and the proportion of households who are living comfortably with their current income.

Dubai ranked 74th in the 2019 version of the index, the same ranking it held in 2018 and 2017 and up one place from 75th in 2016. The highest ranking Dubai has achieved in this index was 73rd place in 2014.

Meanwhile Dubai ranked as the 21st most expensive city to live in for 2019 in Mercer’s Cost of Living Index. The emirate’s 2018 ranking was 26th place, meaning that despite price declines in property, a household’s largest cost, Dubai actually became more expensive instead of more affordable. Ultimately this can be attributed to declining wages rather than rising costs.

Dubai also ranked 21st in 2016, meaning there has not been a steady improvement in recent years. There are a variety of factors that play into a city’s cost of living and one of the most important measurements of achieving cost of living equilibrium is ensuring the public and private sectors are paying a wage that is on par with a household’s costs.

Over time, the aim would be to fall farther down the list as incomes rise, living expenses lessen and ultimately the population reaches an equilibrium between its wages and expenses.

In line with Dubai’s aim to achieve a happy society and continue to improve its standing in numerous indices, improving the cost of living, enhancing the offering to entrepreneurs and investors as well as continuing to foster knowledge and innovation are all crucial pieces to the puzzle.

Carla Maria Issa is a senior research analyst at Property Finder, UAE.