UAE home to GCC region's most diversified economy, reveals Global Economic Diversification Index 2025

Zawya

13-02-2025

DUBAI: The Mohammed Bin Rashid School of Government (MBRSG) has unveiled the fourth edition of the Global Economic Diversification Index (EDI) during an expert-led panel discussion at the 2025 World Governments Summit (WGS), which is held under the theme 'Shaping Future Governments'.
The session, held on Day 2 of the Summit, featured a keynote speech by Dr. Abdallah Al Dardari, Assistant Secretary-General and Director of the United Nations Development Programme (UNDP) Regional Bureau for Arab States, and was moderated by Dr. Fadi Salem, Director of the Policy Research Department at MBRSG.
Dr. Al Dardari said, 'According to the Economic Diversification Index 2025 (EDI 2025) report, economic diversification helps mitigate vulnerabilities to economic and geopolitical disruptions by expanding the economic base. This approach strengthens resilience, promotes sustainable growth, and enables countries to navigate global transitions, including the shift to a green economy and digital transformation. By investing in a variety of sectors and encouraging innovation, we can cultivate robust economies that drive prosperity and create opportunities for all.'
Dr. Ali bin Sebaa Al Marri, Executive President of MBRSG, stated, 'Economic diversification remains a key catalyst for sustained development and a pillar of global recovery and stability. The Global Economic Diversification Index is designed to provide governments with in-depth analysis and understanding of the leading factors that contribute to successful diversification efforts, offer a blueprint for diversification strategies, and inform targeted policy reforms.'
'This aligns with our role at the MBRSG to support the UAE's vision for a sustainable future, which prioritises economic diversification,' Al Marri added. 'Our mission is not only to empower the leaders of tomorrow, but also to develop the tools they need to make informed, evidence-based decisions.'
First published in 2022, the Index provides a comprehensive measure of economic diversification across countries, filling a critical gap in terms of data, thought-leadership, and evidence-based policy instruments to track economic diversification. It calculates the scores of three sub-indices: Government Revenue, Output, and Trade, allowing countries to assess the state and evolution of their economic diversification, compare with peers, and identify factors that foster or impede diversification.
The 2025 edition expands coverage to measure 115 countries' performance over 24 years, using publicly available indicators to ensure transparency and allow reproducibility of the results. In 2024, the report introduced a new digital trade augmented index (EDI+), to account for the growing role digitalisation plays in driving economic diversification in post-pandemic years. The 2025 report continues to assess the impact of digital trade.
Key findings from the 2025 report reveal that the US, China, and Germany have held on to their top three positions. Meanwhile, among Gulf Cooperation Council (GCC) countries, the UAE outperformed the rest in the trade sub-index, with the Emirates and Bahrain both scoring high in the output sub-index in recent years, maintaining their lead as the two most diversified economies in the region over time.
Among commodity-dependent countries more broadly, Mexico and Malaysia retain the top ranks, but other notable cases include Saudi Arabia, going up by more than 30 ranks between 2000 and 2023, while the UAE rose 24 ranks, Kazakhstan 17, Qatar 12, and Oman 10 ranks during the same period.
The findings of the EDI 2025 emphasise the need for commodity-dependent nations, particularly those reliant on oil and gas, to adopt policies that prevent the natural resource curse and promote sustainable economic growth.
As with EDI 2024, the 2025 report continued to explore the impact of digital trade on economic diversification, confirming that multiple countries in the top quintile of the ranking rise even higher with the inclusion of digital indicators in the trade sub-index (Trade+).
The Global Economic Diversification Index provides a timely and universal measure of economic diversification trajectories since the year 2000, while accounting for global economic shifts in the digital era. Insights from the latest EDI scores point to a set of policy directions.
MBRSG is also the host of the annual Global Conference on Economic Diversification, convening thought leaders from renowned universities, policymaking institutions, and international organisations, to explore policy, thought leadership, methodological, and theoretical research related to economic diversification. The first edition of the conference has welcomed more than 150 experts and participants from 30 countries and over 130 local, regional, and international organisations, including government and academic institutions. The 2nd edition of the global conference will be hosted by MBRSG in 2025.
Through its Policy Research Department, the Mohammed Bin Rashid School of Government strives to enrich government decision-making locally and internationally with datasets and evidence-based recommendations in diverse areas of public policies.