What is a Growth Promise Indicator?
KPMG’s Growth Promise Indicators (GPI) index has found that Qatar is in the top 20 percent of countries world-wide, and within the top 5 percent of countries within the Middle East and Africa (ranking third), based on productivity potential. The index assigns a GPI rating (from zero to 10), based on information taken from global data sources, on 15 individual categories including education, transport quality, tech-readiness, and financial services.
According to the study, wider trends in the analysis suggest that the real strides made by countries have been driven by improvements in infrastructure, and in particular in tech-readiness – both of which have featured prominently in Qatar’s development in recent years.
On the ranking, Ahmed Abu-Sharkh, Country Senior Partner at KPMG in Qatar said: “The GPI report explores how individual countries can grow sustainably and fulfil their potential. I was delighted to see that Qatar ranks 34th of 181 countries in the report, placing it within the top 20 percent world-wide for potential growth, representing Qatar’s standing on the world’s economic stage and commitment to developing a sustainable future for the country’s citizens and residents.”
The report shows that a number of countries are accelerating development through smarter investments in technology or infrastructure. However, it is important that countries also invest in the right education and training to equip future generations with the skills they need to thrive in the future. On this Abu-Sharkh continued: “Qatar’s National Vision 2030 makes it clear that the government is committed to the country’s future and addresses many of the critical success factors raised in the GPI including education, infrastructure, health and trade.”
The study found institutional strength, which covers performance in areas such as government effectiveness, regulatory quality, and business rights, to be the most important category amongst the GPI components and this is the category which Qatar scored highest on. Latest data shows high scores on institutional strength are not dependent on income level, with lower income countries like Rwanda and Bhutan having higher scores than higher income peers.
Western European countries top the GPI league table, with the Netherlands ranking 1st, Switzerland 2nd, Luxembourg 3rd and Norway 5th. Hong Kong (S.A.R) (4th), a jurisdiction added to the report as a comparator, and Singapore (7th) were the only non-European countries and jurisdictions to make the top 10. Despite Brexit, the UK ranking remains unchanged at 13th, just behind Canada, which is up two places to 12th as a result of institutional and infrastructure improvements. However, through policies such as the Industrial
Strategy there is everything to play for to move the UK higher up the rankings.
Many of the larger global economies rank outside the top 10, including Germany (14th), Japan (20th), United States (23rd) and France (24th). Meanwhile India rose three places in the ranking helped by a rise in business rights.
Yael Selfin, Chief Economist at KPMG in the UK and author of the report, said:
“Institutional reforms that raise government effectiveness and regulatory quality do not require the size of investment needed to improve infrastructure, yet they can bring about major improvement to countries’ growth potential.
“While Western Europe continues to dominate the top ranking, this year’s GPI results saw big improvements across all regions, with countries like Indonesia, Serbia, Argentina, and Algeria seeing significant increases in their ranking, and large emerging economies like India also on the rise. It is encouraging to see better policies to support increased prosperity disseminate around the world.”
The study has looked at two decades of data retrospectively. All regions experienced a positive improvement in scores with the exception of Africa. Eastern Europe, Developing Asia and the Middle East saw the strongest rises. Looking ahead, KPMG analysis points at the following potential themes to drive GPI performance and countries’ prosperity over the next decade:
• Technology readiness to accelerate across a broader range of countries, including lower income countries;
• Transparency in policymaking to rise, thanks in part to governments using online platforms to share data and insights with citizens, improving accountability and the overall quality of governance;
• Debt and macrostability are to improve a decade after the Great Recession and its turbulent aftermath, with many countries in a better position to further repair their finances.
To learn more, please read the full article attached.