Saudi Arabia climbs to 16th place in World Competitiveness Index
Updated 18 June 2024
Nirmal Narayanan
RIYADH: Saudi Arabia’s ongoing economic diversification efforts have propelled the country to the 16th spot in the World Competitiveness Index 2024, up one place from the previous year.
According to a report from the Switzerland-based International Institute for Management Development, the Kingdom was ranked 24th in 2022 and 32nd in 2021.
The ascent, supported by Saudi Arabia’s Vision 2030 program, is attributed to significant progress in economic performance, government efficiency, and a business-friendly environment.
The report also highlighted that Saudi Arabia ranked higher than several of its G20 peers, including India, the UK, and Japan, as well as other countries like Italy, Argentina, Indonesia, and Brazil and Turkiye.
Majid bin Abdullah Al-Qasabi, Saudi Arabia’s minister of commerce, said that the nation’s growth in the ranking is a testament to the Kingdom’s ongoing economic transformation process, which is being implemented in accordance with the directives of Crown Prince Mohammed bin Salman, according to a press statement.
Saudi Arabia leading several subindicators in the ranking
The Kingdom also grabbed top spots in several subindicators in the ranking, garnering the first position in cybersecurity and long-term employment growth.
Saudi Arabia was also ranked first in other subindicators, including long-term labor market growth and the number of internet users per thousand people.
The report revealed that the Kingdom was ranked 12th in business efficiency globally, while it secured second place in stock market capitalization and digital transformation implemented in companies.
Saudi Arabia was also ranked second in indicators such as the availability of venture capital, the development and application of technology, and the availability of financing in technical development.
Similarly, the nation was ranked third in total early-stage entrepreneurial activity and unemployment legislation.
The Kingdom also grabbed the 34th spot in the list for infrastructure growth, unchanged from the previous two years. In 2020 and 2021, the country’s ranking in this subsection was 36.
However, in terms of economic performance, Saudi Arabia slipped to the 15th spot, down from the sixth position in the previous year but much higher than the 31st and 48th place it procured in 2022 and 2021, respectively.
When it comes to challenges facing the Kingdom, the report flagged up the need to continue efforts to promote renewable energy and reduce carbon emissions.
It also highlighted how Saudi Arabia must keep enhancing its business environment to increase the private sector’s economic participation, as well as continuing to invest in human capital development across all sectors.
Singapore leads the list
Singapore secured first place in the World Competitiveness Index 2024, climbing three spots from the previous year.
“The data shows a particularly robust performance for the island nation (Singapore) across the areas of government efficiency and business efficiency,” said the report.
It added: “In the case of Singapore, potential headwinds to maintaining its position include seizing opportunities and managing disruptions from new technologies, such as AI, by supporting workers in reskilling and businesses in transformation.”
The release further pointed out that Singapore’s small size and maritime setting have also helped it to top the list.
Arturo Bris, director of the IMD World Competitiveness Center, said that the ranking, which is published annually, will help nations achieve their economic goals and ensure sustainability.
“It serves as a benchmark for these countries to measure their progress and identify areas for improvement, offering a clear path toward their economic development but also supporting global goals such as the social development goals,” said Bris.
He added: “The best-performing economies balance productivity and prosperity, meaning they can generate elevated levels of income and quality of life for their citizens while preserving the environment and social cohesion.”
Singapore was followed by Switzerland and Denmark in the second and third spots, respectively.
Ireland was ranked fourth on the list, while Hong Kong and Sweden grabbed the fifth and sixth spots, respectively.
Climbing three positions compared to 2023, the UAE came in seventh place, followed by Taiwan and the Netherlands in eighth and ninth, respectively.
On the other hand, Norway climbed four spots from the previous year to 10th place, while Qatar improved its ranking from 12th to 11th this year.
The US, however, slipped by three positions from 2023 to secure the13th rank, followed by Australia, China, and Finland in the next three spots.
Bahrain was ranked 21st on the list from the Middle East region, while Kuwait secured the 37th spot.
The promises and challenges offered by artificial intelligence
According to the report, the widespread adoption of AI seems like a honey pot to economies seeking productivity boosts.
“At the micro level, the recent surge in AI-based technologies could boost efficiency and productivity significantly,” said World Competitiveness Center Senior Economist Jose Caballero.
He further noted that the rise of AI is also posing significant challenges, with several companies seeming less proficient in implementing this advanced technology.
“One of the key challenges for companies is how to implement AI systems that improve efficiency without disrupting business activities. Another is ensuring a chosen AI system’s accuracy; inaccurate systems lead to inefficiencies and reduced productivity,” said Caballero.
He added: “Furthermore, there is a cost-related challenge given that initial investments in AI technology can be substantial while the ongoing costs of maintenance and upgrades to the systems can be significant.”
The study further pointed out that AI is the top concern for executives from Western Europe, Western Asia and Africa, and Central Asia, as well as, Southern Asia and the Pacific, North America, and South America.
On the other hand, executives from Eastern Asia and Eastern Europe are most concerned about a global recession, while most participants across the board deprioritize environmental risks.
“With executives under pressure to balance short-term and long-term priorities, environmental risks are being pushed to the back of the queue,” said the report.
RIYADH: Global investors can find a “safe harbor” in the Gulf Cooperation Council as the bloc’s public-private partnerships pipeline offers “compelling” opportunities, according to a new report.
The latest document from the Future Investment Initiative Institute highlights how economies in the region are currently driving the next wave of PPP growth.
It cites findings from Partnerships Bulletin, which ranks Saudi Arabia as second in the global emerging markets pipeline for PPP projects up to July 2025, and also places Dubai in the top 10.
While that analysis claims the Kingdom has 98 PPP projects either formally published or announced, FII says Saudi Arabia has a further 200 currently awaiting approval.
The findings align with the goals outlined in the Kingdom’s National Privatization Strategy, launched in January, which aims to raise satisfaction levels with public services across 18 target sectors, create tens of thousands of specialized jobs, and exceed 220 PPP contracts by 2030.
The strategy also aims to increase private sector capital investments to more than SR240 billion ($63.99 billion) by 2030.
The FII report says that around 90 percent of FDI into Saudi Arabia now flows into non-oil sectors, from advanced manufacturing and tourism to green energy and digital infrastructure.
“That shift reflects deliberate policy choices to open markets, standardize regulatory frameworks and use public capital to de-risk new value chains,” says the document, adding: “The result is a kind of safe harbor in an otherwise low-growth, high-uncertainty world.”
It continues: “While global FDI has stagnated or declined in many regions, the GCC’s pipeline of planned infrastructure and industrial projects now exceeds $2.5 trillion, according to Boston Consulting Group data, with PPPs playing a central role in structuring and financing them. For global investors searching for yield, diversification and inflation-linked income, this represents a compelling proposition.”
Commenting on the FII Institute report, Sally Menassa, partner at international management consulting firm Arthur D. Little, said PPPs are a strategic necessity for delivering infrastructure at speed and scale, and described Saudi Arabia’s pipeline as a “powerful execution and financing tool.”
She added: “The Kingdom’s PPP momentum must remain focused on impact, value creation and execution excellence. PPPs should not be viewed merely as a funding mechanism, but as a structural tool to enhance infrastructure performance, attract investment and support sustainable economic growth in line with Vision 2030.”
Menassa said that Saudi Arabia’s National Privitization Strategy marks a shift from a project-by-project approach to institutionalization of efforts and value creation.
“By clarifying sector priorities, strengthening project selection criteria, and formalizing governance and investor pathways, the Strategy reduces uncertainty. This clarity enhances investor confidence and improves pipeline quality,” said the Arthur D. Little official.
Sally Menassa, partner at international management consulting firm Arthur D. Little. Supplied.
She added: “PPP and privatization efforts in Saudi Arabia are not about divestment or the state shifting execution to the private sector, it is really about becoming more productive as a nation. It enhances efficiency, raises service standards, mobilizes private and SME participation, and attracts capital.”
Menassa further said that the strategy could help the Kingdom achieve stronger fiscal sustainability and higher private sector GDP contribution, both of which are critical components to accelerate the Kingdom’s economic transformation under Vision 2030.
Vijay Valecha, chief investment officer at Century Financial, believes input from the private sector across all stages, from design to construction and operations, improves the efficiency of project delivery and long-term operations in Saudi Arabia.
“Tighter governance through centralized management at the National Center for Privatization and PPP and a more streamlined process, including template contracts, a clearer regulatory environment, and a transparent pipeline, is likely to improve delivery speed,” said Valecha.
He added: “This means faster delivery of big projects like Red Sea resorts or Neom, with private firms handling operations to drive innovation. Ultimately, the strategy supercharges diversification by making the private sector the main engine of growth, aligning perfectly with Saudi Arabia’s push for a vibrant, non-oil economy.”
The FII Institute added that the global flow of FDI is increasingly concentrated in the Gulf Cooperation Council region, driven by ambitious national transformation agendas and deep pools of sovereign wealth.
Tony Hallside, CEO of STP Partners, outlined several factors that are boosting the PPP landscape in the region, which include large infrastructure demand from Vision-level programs and urbanization.
“Government frameworks that standardise PPP procurement are making projects bankable. Strong regional capital pools and sovereign support will mitigate risk and attract global players. In the GCC, Saudi Arabia’s pipeline itself is one of the largest in the Middle East, indicating strong investor interest,” added Hallside.
Underscoring the role of growing PPP in Saudi Arabia, the FII report said: “A decade ago, the Kingdom’s solar capacity was negligible, despite its vast solar resource. Through early anchor investments, long-term power purchase agreements and support for national champions, the state seeded a competitive renewables market that now attracts global players on purely commercial terms.”
Valecha said that clearer PPP laws, standardised contracts and dedicated PPP units have reduced execution risks and made projects more bankable for global infrastructure funds and developers in the GCC region.
He added that rapid urbanization, a young and growing population, rising data center power demand and energy transition projects create predictable, long-duration cash flows in the region.
“This combination of policy support, fiscal necessity and structural growth is why the GCC is emerging as one of the fastest-growing PPP markets globally,” said Valecha.
Vijay Valecha, chief investment officer at Century Financial. Supplied
Key Saudi PPP projects
Yanbu 4 Independent Water Project - supplying water to Medina and Makkah
Location Yanbu, Red Sea coast
Companies involved: Engie, Mowah, Nesma, Saudi Water Partnership Co.
Cost: $826.5 million
Expected delivery date: Operational as of 2024
Hadda Independent Sewage Treatment Plant
Location: Makkah Province
Companies involved: Metito Utilities, Etihad Water and Electricity, SkyBridge Limited Co., Saudi Water Partnership Co.
Expected delivery date: 2028
As Sufun Solar PV Independent Power Project
Location: Hail region
Companies involved: TotalEnergies, Aljomaih Energy & Water, Saudi Power Procurement Co.
Expected delivery date: Expected to connect to the grid in 2027
Construction of greenfield international airports
Location: Taif, Abha, Qassim, and Hail
Companies involved: Currently in the planning stage; investors are being sought
One-Stop Station Project
Location: Intercity road network across the Kingdom
Companies involved: Saudi Arabia’s Roads General Authority and National Center for Privatization & Public-Private Partnership announced a full list of qualified bidders in February.
King Salman Park
Location: Riyadh
Companies involved: King Salman Park Foundation, Ajdan Real Estate, Sedco Capital
Cost: $1 billion
Project: Madinah-3, Buraydah-2, and Tabuk-2 Independent Sewage Treatment Plants
Location: Madinah, Buraydah, and Tabuk
Companies involved: Acciona Agua, Tawzea, Tamasuk, Saudi Water Partnership Co.
Cost: $627 million combined
Riyadh Metro Line 2 Extension
Location: Riyadh
Companies involved: Royal Commission for Riyadh City, Arriyadh New Mobility Consortium, led by Webuild. Riyadh Metro Transit Consultants (JV between US Parsons and France’s Egis and Systra) as project management and construction supervision consultant.
Cost: Up to $900 million
Expected delivery date: 2032
The crucial role of emerging markets
According to the FII Institute report, the ability to deliver resilient infrastructure, expand digital connectivity and accelerate the energy transition will increasingly depend on the strength and legitimacy of PPPs, as fiscal space tightens and investment needs rise.
FII estimates a $5 trillion global infrastructure financing gap by 2040. It also points to significant regional shortfalls, including an estimated $3.7 trillion gap in the US and an annual $130 billion to $170 billion gap across Africa. In this context, PPPs are moving from a transactional procurement route to a central model for financing and delivery.
The report highlighted that emerging markets, including Saudi Arabia, are currently driving the next wave of PPP growth, with spending across low-and middle-income countries reaching $100.7 billion in 2024, up 16 percent year on year, according to figures from the World Bank.
Moreover, emerging markets now represent around 61 percent of global PPP activity by gross domestic product share.
According to Partnerships Bulletin’s findings up to July 31 2025, the Philippines leads the emerging-market pipeline with 230 projects, followed by Saudi Arabia with 98, Kyrgyzstan with 80, Bangladesh with 71, and Peru with 54 projects.
Greece has 42 projects in the pipeline, followed by Dubai at 28, Kenya at 25, Colombia at 24, and Pakistan at 14.
PPP: An engine of growth
When capital was cheap, PPPs were often treated as an optional extra – a way to shift specific projects off the public balance sheet, or to import private-sector efficiency into construction and operations, the FII report said.
However, now, nations consider PPPs as a central hub of their economic strategy, as they enable the state to stretch every dollar of public investment using private capital, while retaining strategic control over what gets built, where and to what standard.
“The real differentiator is complexity. When a project presents significant financial uncertainty or unpredictable demand, or if there’s a high level of climate exposure or technological risk, a PPP can give leaders the tools to manage those issues without slowing things down,” said Bob Willen, global managing partner and chairman of Kearney, said in the FII report.
Erik Ringvold, chief business development officer at Regional Voluntary Carbon Market Co., was quoted in the report as saying that carbon markets will benefit through PPPs, as deepened public-private partnerships could help achieve progress toward national emissions targets, while simultaneously creating economic opportunity and catalyzing new green industries.
“Saudi Arabia has made large strides toward an emissions compliance system, with an operational carbon standard in place, and an emissions trading system announced to be launched over the coming few years,” said Ringvold.
He added: “At VCM, we see a clear future carbon vision for Saudi Arabia. One ecosystem. One marketplace. One iconic collaboration – with the PPP model at the heart of its success.”
PPPs for investors and citizens
For investors, infrastructure-backed PPPs offer long-duration, often inflation-linked cash flows at a time when public markets are volatile and dominated by a narrow set of mega-cap technology stocks.
For citizens, well-designed PPPs can mean better services, more resilient infrastructure and faster progress toward climate and development goals, without unsustainable tax rises or austerity.
FII, however, cautioned that public consent is becoming decisive. Across seven countries, only 23 percent of citizens agree that PPPs “equally benefit everyone”, compared with 41 percent of business and government leaders.
Tony Hallside, CEO of STP Partners. Supplied
Hallside said that public consent hinges on transparency, accountability, and visible service outcomes.
He added that governments should publish clear procurement frameworks, communicate cost-benefit and performance expectations in plain language, and measure user satisfaction and service quality over time — “reinforcing that PPPs deliver tangible improvements in infrastructure and services.”
Menassa echoed similar views and said that communication with the public is not sufficient, but the performance and execution phase holds the key to PPP projects.
“Winning public opinion for PPPs is rather a marathon not a race. It starts with building awareness and trust by providing transparency and demonstrating value for money, ensuring affordability and service quality of public services is maintained through strong regulatory oversight, and ensuring competitive, transparent procurement processes,” added Menassa.
According to the Arthur D. Little official, the public must see tangible improvements in service reliability, efficiency and accountability, and acceptance will follow.
“The world can’t afford to delay the infrastructure and energy transition investments that will determine prosperity – and planetary stability – for decades to come. Nor can it fund them through public budgets alone. Financing the future is, by definition, a joint endeavour,” added the FII report.
