Business & Money | Wednesday 28 September, 2016 5:23 pm |

A new report by The Boston Consulting Group (BCG) reveals that, when it comes to its current-level Sustainable Economic Development Assessment (SEDA) scores, Oman outperforms the GCC and the rest of the world in dimensions such as economic stability, health, civil society, governance and environment. Across these dimensions, Oman topped the average scores of both the GCC and the rest of the world.

 

The dimensions in which Oman lags behind other GCC countries are income, employment, education, infrastructure, and income equality. Interestingly, while Oman showed the strongest recent progress scores in employment and infrastructure—compared to the GCC region and the rest of the world—it is losing ground across other dimensions.

 

In addition, the analysis shows that Oman is not effectively converting its wealth into well-being—in fact, on this particular front, the nation’s performance is below par globally. On the other hand, the data from BCG’s study demonstrates that Oman is able to translate its economic growth into well-being improvements for its citizens at an above-average rate.

 

The report also discusses the need for the private sector to contribute to improving a country’s wellbeing, and specifically looks at the role of the banking sector at creating financial inclusion.  

 

“We have found a clear and measurable association between financial inclusion—access to basic financial services such as a bank account—and national well-being,” said Douglas Beal, BCG's Director of Social Impact and an author of the report. “Today, in the UAE, private sector innovation can play a significant role in improving living standards. But to make meaningful progress in this area, banks must pursue financial inclusion using their core business, and not just pursue typical corporate social responsibility strategies.”

 

The findings are based on BCG’s latest study of worldwide economic growth trends using the firm’s Sustainable Economic Development Assessment (SEDA). The fact-based, comprehensive analysis measures the relative well-being of 163 countries—including Oman—through ten key areas, including economic stability, health, governance, and environment. SEDA scores countries in two ways: the current level of well-being and recent progress in well-being from 2006 to 2014. It also assesses how countries convert wealth and growth into well-being. [1]

 

The report, titled The Private-Sector Opportunity to Improve Well-Being: The 2016 Sustainable Economic Development Assessment, was released in July.

 

SPOTLIGHT ON OMAN

Overall, when looking at Oman’s current level of well-being as well as its recent progress in that measure, the nation finds itself in the ‘good and improving’ category.

 

From a regional perspective, Oman’s current-level scores are significantly above par in dimensions like economic stability and environment. In terms of recent-progress scores, when stacked up against the average of the GCC, the nation shows strong gains in areas such as infrastructure and employment. However, there is no denying that it is falling further behind in dimensions such as income and governance.

 

All in all, when assessing Oman’s performance versus the rest of the world, it is clear that across various dimensions—such as income, employment, infrastructure, civil society, economic stability, and health—the nation is higher and moving further ahead. 

 

Based on BCG’s SEDA analysis, Oman is lower but catching up in education—when pitted against the rest of the world.

 

BCG’s report also reveals that, on a global level, Oman trails behind other countries in converting wealth into well-being.

 

THE IMPORTANCE OF FINANCIAL INCLUSION

The 2016 SEDA report took a close look at the issue of financial inclusion. The analysis found that the strong link between well-being, as measured by SEDA, and financial inclusion existed even when controlling for income. 

 

“This means that among countries with the same income (GDP per capita) level, those with higher levels of financial inclusion are likely to have higher well-being levels,” added Beal. “Our study finds that two factors are critical to improving financial inclusion: a regulatory structure that provides safeguards but allows innovation and a solid infrastructure, including communications networks and payment systems. With those two elements in place, private-sector innovation in Oman can flourish.”

 

GLOBAL RESULTS

Highlights of the study’s key global findings include:

 

·         The United States’ performance in converting both wealth and growth into well-being is below par globally, while Germany's performance is above par on both counts. The UK's strong performance in converting wealth into well-being is being threatened by its recent subpar conversion of economic growth into well-being improvements.

·         A  European divide: Among countries in Western Europe, those with high current levels of well-being (Austria, Denmark, Finland, Germany, the Netherlands, and Norway) are making greater progress than those with low current-level scores (Cyprus, France, Greece, Italy, Malta, Portugal, and Spain), particularly in employment and education. These countries, concentrated in southwest Europe, are performing particularly poorly in employment and are falling further behind the rest of the world in that area.

·         Central and Eastern European countries that have recently joined or are in the process of joining the EU have made strong gains in sustainability measures, which include income equality, civil society, governance, and the environment

·         China is converting wealth into well-being at a rate slightly above par and—remarkably, given its very high growth rate—is converting growth into well-being at par. China continues to score low on the environment, however. India also produced strong recent progress improvements but converted its strong growth into well-being at a rate slightly below average. India also leads the pack in progress on financial inclusion, as nearly 200 million people have gained access to financial services.

·         Peru has outstripped Brazil’s recent progress in well-being with strong gains in employment and education.

·         Ethiopia holds the top spot when it comes to recent progress in well-being. Ethiopia’s performance is emblematic of gains in sub-Saharan Africa as a whole.