With many of its member countries having vast oil reserves and flourishing economies, the MENA region continues to be a popular destination for foreign investors and entrepreneurs. Further economic growth is expected to speed up in this region in the coming years and, as such, the outlook for investing in the countries here is optimistic and fruitful.
At present, there are 19 countries officially under the roster of MENA, with 18 other nations and territories sometimes included in this region.
Although many of the member countries have promising business and investment outlooks, there are five nations that have standout economic qualities. These countries offer more opportunities and have a friendly business environment ideal for foreign investors.
According to the Legatum Prosperity Index, an annual ranking of the prosperous nations in the world, the MENA countries with the top-ranked economic qualities are:
This small Middle Eastern country has the highest ranking in the MENA region in terms of economic quality.
The country has an open economy and is regarded as one of the freest economies in the MENA region. Its main natural resources are petroleum and natural gas. The country is also known as the “business capital of the Gulf” since it has numerous large multinational financial institutions operating from within.
Bahrain is also a popular tourist destination in the Gulf area. Because of this, tourism is also one of the country’s main economic drivers.
2. United Arab Emirates
The UAE ranks second in terms of economic quality among the MENA countries.
As a country with an open economy and free-trade zones, the UAE has the second largest economy in the GCC. Although its economy still greatly relies on petroleum and natural gas, tourism is also booming, particularly in Dubai. Because of this, the country has a diversified economic policy.
The UAE has consistently been included in the list of the best countries in the world for doing business. This further proves that the UAE is among the excellent destinations for foreign investors and entrepreneurs.
Although Qatar is currently experiencing a diplomatic and economic embargo from four of its neighboring countries, the country still managed to rank third in terms of economic quality.
Qatar is one of the biggest exporters of petroleum in the world. At present, it is the leading exporter of liquefied natural gas. Their petroleum and natural gas products literally fuel the country’s economy.
Its financial sector remains one of the most stable and efficient in the GCC for several years now.
Israel is regarded by many business analysts as one of the most advanced countries in the Middle East in terms of economic and industrial development.
The country has the second biggest number of startups, second only to the USA. This is due to the government’s consistent support and investment in science and technology.
Religious tourism is also popular in Israel and, as such, also one of the cornerstones of its thriving economy.
Rounding off the top five of the MENA countries with excellent economic quality is Kuwait.
Petroleum is its main export and, thus, its economy’s primary driving force. There has also been a considerable increase in SMEs due to the sudden boom of Instagram and businesses found on social media platforms.
Kuwait has one of the most influential positions in the GCC financial industry. The country is also one of the biggest sources of foreign economic assistance to other nations in MENA and across the world.
Economic Quality as a Pillar of Prosperity
Economic quality is one of the main pillars the Legatum Institute studies and considers in ranking the prosperity of the different countries included in their annual list.
This pillar measures the following variables:
- Openness to Trade – This refers to how countries welcome domestic and international trade.
- Trade Competitiveness – This variable looks into how diverse a country is in terms of producing a wide range of valuable goods and services in an internationally competitive manner with their foreign trading partners.
- Economic Inclusiveness – This pertains to the degree to which the citizens have the resources and opportunities to participate in their community.
- Anti-Monopoly Policy – This pertains to the free competition in the market among producers. It also takes into account the extent of the choices and the purchasing power of consumers.
- Labour Force Participation – This measures the total number of locals and foreign workers belonging in the workforce.
- Standard of Living – This refers to the accessibility of affordable goods and services for all citizens.
For investors and entrepreneurs looking to invest in MENA, it is worth looking into these countries when deciding to expand or bring their businesses in this part of the world.