High energy prices mask serious weaknesses in competitiveness, says Porter

"Truly sustainable prosperity is created, not inherited. The reliance of Middle Eastern countries on inherited wealth has supported policies and practices that hold back productivity and retard economic development," said Porter, a professor at Harvard Business School. "A clear sign is the low growth of total factor productivity in the region, a measure of the effectiveness with which an economy uses its resources and technology. According to World Bank data, the Middle East lags all other World regions on this metric, including Sub-Saharan Africa."

"In economies heavily reliant on natural resource extraction government is too dominant as a force in the economy. The private sector fails to develop, and faces numerous constraints on efficiency and productivity," Porter stated, citing research at his Institute for Strategy and Competitiveness. "While many countries in the region are attempting to lessen their dependence on oil, then, these efforts have not borne full fruit. Also, too many young people in the region lack economic opportunities in the private sector."

"The political situation in the region also makes economic development harder. Regional economic cooperation is still modest, and low levels of internal trade within the region give up powerful opportunities to spur economic efficiency and growth."

Porter will debate his views on competitiveness and the necessary policy changes required to upgrade it at the "Leaders in Dubai" conference at the Dubai International Convention Centre on November 29-30 alongside global leaders such as Rudy Guliani, former mayor of New York.

Porter has served as an advisor to many governments and leading international companies, including Credit Suisse, First Boston, DuPont, Procter & Gamble, Royal Dutch Shell, and Taiwan Semiconductors.

He continued: "This new agenda for competitiveness in the region requires not only governments to change. Domestic and foreign companies need to get more involved as well; higher economic growth rates will only occur when the business environment is improved and competitive success is based on merit rather than personal relationships."

Appearing at 'Leaders In Dubai' alongside Porter are six of the world's most influential business leaders, including Jack Welch, former CEO of General Electric, who will appear via satellite, Tom Peters, the management ur-guru; best-selling author Frank Maguire; MIT's Professor of Management and Economics, Lester Thurow; and the influential futurist, Alvin Toffler.

Jessica Sutherland, General Manager of IIR Exhibitions and Conferences, which has organised the event through its LEADING MINDS brand, said: "Michael Porter's thoughts on strategy have been used by governments and multinational corporations alike.

"At 'Leaders in Dubai', he will debate why listening to financial analysts doesn't work, as well as ways of making company strategy sustainable."

Up to 2,500 delegates are expected to attend 'Leaders in Dubai'. It will be the biggest business conference at the Dubai International Convention Centre since the Annual Meetings of the World Bank and International Monetary Fund in September 2003.

'Leaders in Dubai' is sponsored by Saudi Basic Industries Corporation (SABIC), Ferrometal Group, Citigroup, Shell, Nokia and Visa International.