The World Economic Forum's global competitiveness report ranked the UAE 17th and singled out the country's economy as significantly more diversified than other GCC states.

"The UAE's excellent macroeconomic environment highly developed infrastructure and strong institutions provide a solid base" the report for 2015 said.

"The UAE has benefited from high levels of openness to trade and investment which ensure intense competition and high levels of innovation. Its business environment is welcoming to investment and characterised by regulations that are easy to comply with a fairly efficient labour market and the presence of sophisticated businesses" the think tank said its Global Competitiveness Report 2015-2016 /reports.weforum.org/global-competitiveness-report-2015-2016/>.

However in the latest ranking the UAE slipped five positions from last year's 12th. The drop is due to the new availability of an indicator on tertiary education which led to a significant drop in the assessment of higher education and training the WEF said.

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The WEF noted that the tertiary education indicator was likely to underestimate the real number of UAE students at university level courses because it did not include those studying abroad. "The country will have to continue its gradual path of fiscal consolidation to ensure that its fiscal position remains strong despite the drop in oil prices; the recent decision to abolish energy subsidies is a step in the right direction" the WEF said.

The UAE will also need to strengthen its capacity for innovation by upgrading scientific research the report said.

The Geneva-based WEF study releasedon Wednesday assesses 140 countries on the basis of factors driving their productivity and prosperity.

Switzerland topped the ranking for a seventh consecutive year while Singapore and the US came second and third on the index of the world's most competitive economies. Others in the top ten are Germany the Netherlands Japan Hong Kong Finland Sweden and the UK.

Saudi Arabia was ranked 25th Kuwait 34 Bahrain 39 and Oman 62.

India has moved up 16 positions to rank 55th. The jump in India's position underlines the country's recent economic recovery improvement in the competitiveness of the country's institutions and its macroeconomic environment and a "slight improvement" in infrastructure the WEF said. While India has ended five years of decline South Africa is ranked higher and it has re-entered the top 50 progressing seven places to 49th.

Elsewhere macroeconomic instability and loss of trust in public institutions has dragged down Turkey (51st) as well as Brazil (75th) which posted one of the largest falls.

China holding steady at 28 remains by far the most competitive among large emerging economies although its lack of progress moving up the ranking shows the challenges it faces in transitioning its economy the WEF said.

While no member of the South Asian Association for Regional Cooperation (SAARC) features in the top 50 India leads in this group at 55th place. All others are ranked 100th or below while India is followed by Sri Lanka (68th up five) Nepal (100th up two) Bhutan (105th down two) Bangladesh (107th up two) and Pakistan (126th up three). Although last year all SAARC countries except Bhutan posted small gains since 2007 only Nepal has managed to progress significantly (14 places gained) Pakistan lost 34 places during that period and India despite leapfrogging 16 places this year still ranks seven notches lower than it did in 2007.

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In terms of movement the top three remained in place but there were some larger moves elsewhere on the full list of 140. The Netherlands was the biggest gainer in the top 10 moving up to No.5 from No. 8 in the previous report. Brazil saw the biggest fall tumbling 18 spots to No. 75 and taking the title of the worst performer among BRICS countries.