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.
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 to be published for the first time in 2020 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.
For more information, please contact: EDI@mbrsg.ac.ae
Why the EDI? A Data-driven Contribution to Economic Diversification Policies
Given the global consensus that concentration of economic activity on the exploitation of natural resources and primary commodities has generally resulted in less sustainable growth, as production and exports remain concentrated in sectors characterized by low technology spillovers and limited opportunities for productivity growth. Integrating economic diversification into national strategies can help increase a nation’s resilience to external economic shocks and drive longer-term economic growth.
However, measuring the level of diversification of a country’s economy remains a challenge. The EDI aims to fill this gap in the academic and policy literature. It does so by advancing a broader definition of economic diversification, encompassing three related dimensions: production, trade and government revenue.
While economic diversification has been embedded as a key element of economic development policy discourse for most countries, it remains a challenge to enact for a majority of developing countries. As such, economic diversification efforts are and should be inextricably tied to structural transformations of these countries’ economies. To this end, the scope of indicators and sub-indicators used in the EDI sheds new light on the structural gaps that hinder ongoing economic diversification efforts of developing and commodity-dependent countries.
The EDI’s impact on Policy
The EDI is designed to become an essential global data and informational tool to assist policymakers in formulating more adequate diversification strategies. Its objective is to support countries in developing policies aimed at the promotion of greater macroeconomic stability, job creation, sustainable growth and the re-orientation of economies towards more knowledge-based activities.
The component indicators yield additional insights into areas in need of critical policy intervention. They can help shape policy planning efforts to overcome structural weaknesses resulting in high levels of economic concentration. Finally, the EDI provides valuable insight specifically for commodity-dependent countries on factors that can either foster or impede their ongoing diversification efforts.
Partner and Contribute to the EDI
The EDI is intended to be an open public resource aimed to advance the understanding of economic diversification efforts globally.
For Thought-Leaders and Experts: The MBRSG is looking to build and sustain a diverse network of collaborators from around the world with expertise in economic diversification that can support the ongoing efforts around the EDI.
For Companies and Organizations: The EDI project welcomes contributions in kind and in cash (through sponsorship and partnerships) to support the sustainability of the project and expanding its global footprint and impact.
To contact the MBRSG EDI Research team for collaboration, partnership or sponsorship enquiries, please email: EDI@mbrsg.ac.ae
The MBRSG Policy Research Think Tank
The Policy Research Department is the Policy Think Tank arm of the Mohammed Bin Rashid School of Government. The MBRSG’s Policy Research department is well-positioned as a regional think tank spanning the 22 states of the Arab world. Furthermore, over 15 years, it built a deep and solid knowledge foundation and pool of expertise with specific focus on the UAE. Unlike other global or national programs, this unique regional positioning, global connections and local depth have facilitated conducting regional research and providing policy advisory projects and activities for local and global thought leaders to evaluate and review present government policies and advise on future directions on governance and innovation on local and regional levels.
The mission and objectives of the Policy Research Department are aligned with UAE National agenda 2021, the UAE centennial national plans, regional reform objectives, and global norms and developmental agendas. It ultimately aims to nurture a culture of innovation in society, informing future government models; advancing the quality of government, and enabling responsive and efficient government services and policies.
Toward this goal, the Mohammed Bin Rashid School of Government also collaborates with regional and global institutions in delivering its research and training programs. In addition, the School organizes policy forums and international conferences to facilitate the exchange of ideas and promote critical debate on public policy in the Arab world. The School is committed to the creation of knowledge, the dissemination of best practice and the training of policy makers in the Arab world. To achieve this mission, the School is developing strong capabilities to support research and teaching programs, including:
• Applied research in public policy and management;
• Master’s degrees in public policy and public administration;
• Executive education for senior officials and executives; and,
• Knowledge forums for scholars and policy makers.
For more information on research at the Mohammed Bin Rashid School of Government, please visit: https://www.mbrsg.ae/home/research.aspx
About The Mohammed bin Rashid School of Government
The Mohammed Bin Rashid School of Government (formerly Dubai School of Government) is a research and teaching institution focusing on public policy in the Arab world. Established in 2005 under the patronage of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the
United Arab Emirates and Ruler of Dubai, in cooperation with the Harvard Kennedy School, MBRSG aims to promote good governance through enhancing the region’s capacity for effective public policy.
For more information on the MBRSG, find us on https://www.mbrsg.ae