UAE economy proves mettle again, ranked most resilient in region

The index measures three categories –— economy, risk quality and the supply chain.

The UAE has been rated the most resilient economy in the region in 2021, higher than some of the world’s bigger economies such as Italy, South Korea, Israel Malaysia, Saudi Arabia, China and India, says a new study.

The UAE has been ranked 32nd worldwide in the list of 130 countries in the FM Global Resilience Index 2021, ahead of Qatar (34th), Israel (37th), Bahrain (49th), Saudi Arabia (55th), Turkey (60th), India (62nd), Oman (69th), China (77th) and Kuwait (86th).

The index measures three categories –— economy, risk quality and the supply chain.

The strong resilience and confidence in the UAE’s economy during the year of pandemic reflects its effective government measures, investor-friendly policies, innovative approach towards new challenges and success against Covid-19.

Global ratings agency Moody’s Investors Service has also stated that the UAE economy’s resilience to shocks is above the average when compared to other sovereigns that it rates, thanks to its relatively large nominal GDP, which stands at $354 billion (Dh1.3 trillion).

Moody’s said the UAE’s economic resilience to shocks demonstrates its effective policy measures. It said Abu Dhabi’s stable outlook also reflects that its fiscal strength will remain resilient to risks related to pandemic, particularly given the world-leading vaccination efforts by the UAE capital.

Also, Abu Dhabi demonstrated fiscal resilience during previous period of lower oil prices, Moody’s said.

Anish Mehta, immediate past chairman of the Institute of Chartered Accountants of India – Dubai chapter, said the UAE has shown resilience time and again, thanks to strong leadership and innovative investor-friendly policies that strengthens foreign investors’ confidence in the local economy.

“The manner in which the UAE has handled the challenges around Covid-19 shows the ability of UAE’s Rulers and its administration. Because of the appropriate and timely measures, including vaccination, the UAE’s economy is on growth trajectory. All the key sectors of UAE such as real estate, hospitality, consumer goods are performing well,” Mehta said, adding that with the easing of rules for businesses will expedite the recovery and improve its resilience.

A recent survey conducted by PwC has revealed that that Middle East organisations shows strong resilience and had less of a negative impact as a result of the pandemic, with 41 per cent responding that it had a positive impact, compared to only 20 per cent globally. Around 73 per cent of those surveyed in the Middle East believe they are well-positioned to assess long-term business threats.

Globally, FM Global Resilience Index 2021 rated Denmark as the most resilient economy, followed by Norway, Luxembourg, Germany, Switzerland, Finland, Sweden, Austria, the US and the UK. Haiti, Venezuela, Iran, Chad, Ethiopia, Lebanon, Mali, Mozambique, Nicaragua and Nepal have been rated as the least resilient.

Ukraine is the index’s biggest riser, soaring from 84th to 63rd, while the biggest decliner is Oman, sinking from 57th to 69th because of steep drops in economic productivity and oil intensity.

“Over the years, leanness, speed and short-term profit have often reigned as primary concerns of global businesses. But the historic events of 2020 reminded the world that these qualities are subordinate to the ability to resist, rebound from or operate through lockdowns, demonstrations and climate-related disruptions,” said Eric Jones, a vice-president at FM Global.

waheedabbas@khaleejtimes.com