Published on: March 2022
Author: Fadi Salem |Salma Refass
Non-Resident Authors: Aathira Prasad, Nasser Saidi, Ben Shepherd
Category: Economic Policy
The world economies are shifting dramatically, driven by systemic transformations and fueled by rapid digitization, geopolitical realignments, environmental pressures, the implications of the COVID-19 pandemic, the dynamics of the fourth industrial revolution, and in response to the Sustainable Development Goals. Government leaders and global policy makers are pressed to diversify their economies and produce innovative policy responses fast.
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The Global Economic Diversification Index (EDI) by the Mohammed Bin Rashid School of Government is a pioneering project seeking to capture the multi-dimensional facets of economic diversification and ranks countries based on their level of economic diversification. It aims to understand the nature of economic diversification and the factors that directly or indirectly impact a country’s overall level of diversification. The Index, based solely on quantitative measures with no perception indicators, provides a quantitative benchmark and ranking of economic diversification efforts of countries from across the globe.
As a composite index, the core of the EDI consists of a single, summary measure of a country’s economic diversification performance, thereby providing a basis for cross-country comparison. The EDI helps identify the level and breadth of economic diversification of a given country by combining and aggregating three dimensions of economic diversification: Production & Output Diversification, Trade Diversification and Government Revenue Diversification.
The annual Index and Report are published for the first time in 2022 and will be reviewed and updated on an annual basis, helping track, overtime, the results yielded by countries’ diversification efforts. We envision that this timely effort, in light of the growing economic pressures triggered by the sharp decline in oil and commodity prices on commodity producers and exporters and the challenges brought on by the recent Covid-19 pandemic.