Arab Knowledge Report 2009: Towards Productive

have realised a degree of progress withregard to economic freedoms as comparedwith five non-oil-producing countries(Egypt, Lebanon, Yemen, Syria, and Jordan)(Figure 2-6). The figure also makes clearthe absence of any positive conditionalrelationship between increased oil andgas revenues and support for economicfreedoms. Some Arab countries depend onoil economically and have benefited fromthe third oil boom, yet have recorded noimprovement on the Heritage economicfreedom index. In contrast, certainnon-oil-producing Arab countries enjoymore economic freedoms than the oilproducingcountries when freedom ismeasured against size of population,and in addition may enjoy lower ratesof inflation and slightly better rates ofboth employment and income (HeritageFoundation, 2009).The index of the Fraser Institute forInternational Research points out thatmost Arab countries studied, whethernon-petroleum producers, such as Egypt,Tunisia, Jordan, Algeria, and Syria, orpetroleum producers, like Kuwait, 13 Oman,and the UAE, made acceptable progressin economic freedoms between 2003 and2006 (Figure 2-7). This index relies on fortytwovariables in five areas of economicfreedom: size of government (spending,taxes, and commercial enterprises); legalstructure and security of property rights;access to sound money; freedom to tradeinternationally, and the regulation of credit,labor, and business. Overall evaluation isbased on the combined average of the fivecategories on a scale of 0-10 (Mu’assasatal-Buhuth al-Dawliyya, 2005, in Arabic). 14According to the competitivenessindex published by the World EconomicForum, the countries of the Arab Gulf,and in particular Qatar, Saudi Arabia, theUAE, and Kuwait, lead Arab countries andoccupy a leading position among countriesaround the world (Figure 2-8). This indexis constructed on the basis of twelvecritical pillars of competitiveness andpresents a comprehensive picture of thecompetitive arena in the various countriesat all phases of development. Thesepillars include institutions, infrastructure,macroeconomic stability, health, primaryeducation, higher education and training,goods market efficiency, labor marketefficiency, financial market sophistication,technological readiness, market size,Certain non-oilproducingArabcountries enjoy moreeconomic freedomsthan the oilproducingcountrieswhen freedom ismeasured againstsize of populationMost Arab countriesstudied madeacceptable progressin economicfreedoms between2003 and 2006FIGURE 2-6Heritage economic freedom index for 2009, Arab countries-comparison countries908070605040302010020092003BahrainOmanQatarKuwaitJordanUAESaudi ArabiaLebanonEgyptTunisiaMoroccoYemenAlgeriaMauritaniaDjiboutiSyriaLibyaMalaysiaSouth AfricaTurkeyBrazilIndiaChinaOn a scale of 0 (least free) to 100 (most free)Source: Heritage Foundation, 2009ARAB KNOWLEDGE PERFORMANCE ENVIRONMENTS71