Bahrain ranks among the top GCC nations in physical capital productivity, according to the second edition of the Productivity Potential Index (PPI) unveiled at the World Governments Summit in the UAE.

The PPI, created in collaboration with Strategy& Middle East, part of the PwC network, expands its scope this year to include 60 countries, up from 25. It offers a comprehensive analysis of productivity drivers, incorporating dimensions like environmental sustainability, well-being, innovation, and institutional quality.

The report estimates the untapped potential of GCC economies, suggesting that improving their weakest productivity determinants could accelerate regional GDP growth from 3.5 to 6 per cent, adding $2.8 trillion to the region’s GDP over the next decade. Globally, improving all countries’ weakest productivity indicator to match the best performers could boost the global economy by $87 trillion.

Among GCC countries, Saudi Arabia leads with a PPI score of $69.3 per hour worked, followed by Kuwait ($60.8), Qatar ($57.2), and Bahrain ($56.9). The UAE scored $48.7 per hour worked.

Bahrain, along with Qatar, Saudi Arabia, and the UAE, ranks among the global Top 10 in the ‘physical capital’ pillar, adding $22-24 per hour worked to their productivity potential.

Physical capital encompasses reliable infrastructure, well-maintained equipment, and appropriate technologies. The report highlights the GCC’s success in this area, demonstrating how targeted policies and investments in manufacturing, logistics, and internet infrastructure can drive rapid growth.

The PPI redefines productivity measurement, moving beyond traditional metrics to include social capital, natural capital, and institutional quality. It provides a forward-looking tool for nations to understand their true productivity potential and identify key drivers for unlocking it.

Dima Sayess, partner at Strategy& Middle East and director of the Ideation Centre, emphasised the importance of non-traditional productivity measures, stating, “Our analysis shows that non-traditional measures of productivity are shaping the direction of change regionally and globally. Social trust, the quality of institutions and environmental indicators all play a role in driving, or hindering, economic growth.”

The PPI offers actionable insights by pinpointing strengths and weaknesses, highlighting game-changing levers for productivity, and providing clear roadmaps for improvement. It uses a machine-learning model combined with advanced analytics and academic insights.

Chadi Moujaes, partner with Strategy& Middle East, noted: “The Productivity Potential Index offers policymakers critical insights and a practical tool to identify and focus on the areas with the greatest potential to boost productivity, and subsequently their economic growth.”

The report highlights the alignment of the PPI with the ‘Beyond GDP’ movement, emphasising the intersection of growth, innovation, decarbonisation, and social cohesion. It also underscores the importance of effective governance, STEM fields, and the shift towards knowledge-driven growth.

An online policy simulator accompanying the report allows users to compare 60 countries across 19 indicators, providing actionable insights into potential productivity levels.

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