Egypt advances in Global Competitiveness Index, still in bottom quintile

Egypt advanced three places from last year to rank 116 out of 140 countries tracked in the World Economic Forum’s 2015-16 Global Competitiveness Index. 

This year marks the first time Egypt’s ranking has improved since it began to slide after the 2011 uprising.

Egypt still remains in the bottom 20 percent of countries included in the report, which ranks countries' business environments based on metrics including innovation, efficiency, institutions and infrastructure.

Some aspects of the index rely on quantitative data, such as government statistics on school enrollment. More subjective scores, such as quality of education, are based on a survey of business executives. For the 2015/16 index, just 49 people were surveyed, compared to 100 last year.

The improvement in Egypt’s score this year is largely due to better institutions (ranked 87), physical security (up 7 places, but at 133rd place still “an important hindrance to economic growth”) and improved efficiency in the resolution of business disputes (up by 23 places).

Egypt also received better marks for its macro economic environment and the development of its financial markets. These improvements reflect subsidy and tax reforms as well as political stability, the report notes.

Egypt remains near the bottom for education, with the overall quality of the system, primary education, management schools and staff training all ranked at 139 out of 140.

The country earned relatively high marks in categories including favoritism in official decisions (ranked 25), judicial independence (ranked 45), the number of days required to start a business (ranked 42) and domestic market size (ranked 20).

“Continued reforms are needed to create favorable conditions for private-sector growth, which will be crucial for job creation and hence social cohesion,” the report concluded. Among the suggested reforms are greater openness to trade and investment, a more favorable environment for foreign direct investment, and investment in skills and education.