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DEC study identifies trade, competitiveness, knowledge relationship

Dubai - On the economic front, the strategy is articulated along the development of world-class business centers for trade, logistics, finance, and tourism.

Dubai Economic Council, or DEC, has prepared a study on the relationship between trade, competitiveness and knowledge.
This study is part of a research effort undertaken by the Economic Policy Research Center, the operational arm of the Council, which addresses various issues of interest to the present and future of Dubai's economy. Dubai's authorities issued a new strategic plan for sustainable development in the emirate entitled Dubai Plan 2021. It identifies a number of policy goals in six areas: society development, quality of life, urban planning, human capital, economic development, and government management.
On the economic front, the strategy is articulated along the development of world-class business centers for trade, logistics, finance, and tourism. Sustainable economic growth is expected to be driven by the diversification of the productive base and the expansion of value-added activities to be achieved as the result of policies destined to further innovation and increase productivity. These policies are anticipated to enhance the local economy resilience and allow it to better absorb internal and external shocks. While the quest for efficiency and international competitiveness is an important goal in most economies, the observed rate of success is appallingly low.
The cases of Hong Kong and Singapore are the exception and not the norm. Empirical evidence indicates that the first stage of economic development tends to be a smooth ride in most small open economies: as a result of the exploitation of their resource base and the progressive integration to the global economy -both in trade and financial markets-emerging economies are able to reap the benefits of catching up with more developed economies.
However, once countries reach the "middle-income status", achieving higher productivity levels becomes increasingly difficult. Few countries are able to keep the edge of their international competitiveness and continue to grow on a sustainable basis (e.g., Republic of Korea). Most middle-income countries do not follow this pattern. Instead, they have bursts of growth followed by periods of stagnation or even decline, or are stuck at low growth rates. Instead of steadily moving up over time, they fall into "the middle-income trap" whereby they subsequently stagnate and fail to grow to advanced-country levels.
- abdulbasit@khaleejtimes.com

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