UAE. According to a new report by The Boston Consulting Group (BCG), the UAE outperforms the GCC and the rest of the world in most dimensions – including income, employment, health, education, infrastructure, income equality, civil society, governance, and environment – when it comes to its current-level Sustainable Economic Development Assessment (SEDA) scores.
Across these dimensions, the UAE topped the average scores of both the GCC and the rest of the world.
The only dimension in which the UAE lags behind is economic stability. Interestingly, compared to the GCC region and the rest of the world, the UAE showed the strongest recent-progress score in governance among the ten dimensions.
These findings were revealed by BCG in the consulting firm’s latest SEDA study. The fact-based, comprehensive analysis measured the relative well-being of 149 countries – including the UAE, Kuwait, Qatar, Bahrain, Oman, and the Kingdom of Saudi Arabia – and their performance in converting wealth to well-being along social and economic indicators.
This year’s results highlight a new global divide and point to the fact that more than half of the world’s population lives in countries that are falling behind in sustainable development. They also challenge the conventional wisdom regarding the expected growth patterns for middle-income countries.
SEDA defines well-being through three elements – economics, investments, and sustainability – that cover ten key areas, or dimensions, including economic stability, health, governance, and environment.
In total, the assessment draws on nearly 50,000 data points. SEDA scores countries in two ways: as a snapshot – the current level of well-being – and as the amount of recent progress gained in well-being during the period of 2006 to 2013.
THE UAE IN FOCUS
The UAE outperforms the average of the GCC and the rest of the world in both current-level and recent-progress scores in governance. The fact is, in the governance dimension, the UAE is higher and moving further ahead compared to the rest of the world.
In other dimensions such as employment, infrastructure, income, income equality, and education, the UAE is higher but losing ground. Based on BCG’s SEDA analysis, the UAE is lower but improving in health and lower and falling further behind in economic stability – when stacked up against the average of the GCC.
“The UAE must focus on reversing the recent backward trend on a number of its dimensions or risk falling behind other GCC states,” said Douglas Beal, a Partner & Managing Director at BCG Middle East and a coauthor of the report.
“The UAE’s strong and improving governance score serves as a basis to support future progress and advancements. Overall SEDA provides a powerful diagnostic foundation which can be used to help identify policy priorities.”
A GLOBAL PERSPECTIVE
Highlights of the study’s key global findings include:
• Poland has the best record of converting economic growth into gains in well-being.
• Singapore and Northern European countries are the top scorers in terms of current levels of well-being.
• Germany outstrips the U.S. when it comes to converting both wealth and growth into well-being.
• Rwanda and Ethiopia hold the top spots when it comes to improvements in well-being, and countries in sub-Saharan Africa – as a group – are making strong advances in health.
WARNING SIGNS AND THE MIDDLE-INCOME TRAP
The Environment. BCG’s results reveal a tension between economic growth and the environment, making it clear that fast-growing nations frequently drive economic growth at the expense of the environment.
A Global Divide in Sustainability. The sustainability element includes four dimensions: income equality, civil society, governance, and environment. Countries that have high current-level scores in sustainability – such as Denmark, Finland, Iceland, Norway, and Sweden – are also making the most progress. Meanwhile, weaker performers, such as Pakistan, are falling further behind. This widening gap raises questions about what is required to drive further sustainability improvements and what can be done to help those lagging performers catch up.
Middle-Income Countries. By 2013, middle-income countries – those withgross national incomes of $1,000 to $6,000in 2006 – had made greater progress in well-being than countries with lower incomes.
This finding serves as a warning sign for the lack of improvement among low-income countries and raises the possibility that the often-discussed “middle-income trap”– the notion that countries plateau once they hit some middle range in terms of income – does not apply when a country’s trajectory is viewed through the lens of well-being.
SEDA also demonstrates that nations with comparable growth can nevertheless achieve very different levels of progress when it comes to well-being.
Beal noted: “As the world finally emerges from the global recession, policymakers are focusing on how to sustain and accelerate their country’s growth rates. Leaders must now embark upon a new era and actively pursue well-being – not just GDP – as the primary goal. They can and should measure well-being, and hold themselves against it. Our assessment shows that you don’t necessarily need high GDP growth to improve the lives of citizens, and the countries that focus on well-being seem to succeed on more fronts.”
Enrique Rueda-Sabater – a BCG senior economic adviser, a coauthor of the report, and a former strategy director at the World Bank – also added, “Looking at growth through the lens of well-being that we have proposed sheds new light on a number of global patterns beyond what can be seen by looking at GDP alone .Some of these patterns raise fundamental global questions about what needs to be done so that we can make the most of wealth and economic growth to achieve sustainable development that is inclusive within and across countries.”
A copy of the report can be downloaded at www.bcgperspectives.com.
Follow the discussion on Twitter at @bcgperspectives #wealth2wellbeing.
Photo Caption: Douglas Beal, a Partner & Managing Director at BCG Middle East and a coauthor of the report
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world’s leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises.
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