Residents of the Emirates and other oil-producing Gulf countries enjoy high purchasing power thanks to their high per capita income, which is among the highest in the world. According to the UN report, the UAE provides the highest level of material well-being for its residents in the Arab region, followed by Kuwait and Qatar.
According to the UN Economic and Social Commission for Western Asia (ESCWA), other Arab countries that made it to the list of leaders in material well-being were Saudi Arabia, Bahrain, Oman, Egypt and Tunisia, based on purchasing power parity (PPP) based on GDP per capita and actual individual consumption per capita (AIC).
Material well-being
While GDP per capita is often used to depict the average standard of living in a country, AIC per capita provides a better reflection of the material well-being of people in the economy. Material well-being takes into account the physical, mental and financial health of its residents. Although Qatar is the richest Arab country, it ranks only third in terms of the level of material well-being of its residents, as measured by actual individual consumption per capita (AIC).
The UAE had the highest level of material well-being in the Arab region, ranking 24th in the global ranking, followed by Kuwait at 37th and Qatar at 38th. While GDP per capita is often used to depict the average standard of living in a country, AIC per capita is a widely used indicator to assess the average material well-being of people in an economy.
Level of protection for people
AIC per capita shows purchasing power standards (PPP) and includes all goods and services enjoyed by households, whether purchased and paid for by households directly, by government or by non-profit organizations. It can be seen as an indicator of the material well-being of households.
The UAE’s high material well-being ranking can be attributed to many factors, including mandatory health insurance across the country, an involuntary redundancy scheme that provides some level of protection for people, and post-employment benefit initiatives introduced for private sector workers in Dubai to secure their financial future. According to the UN ESCWA report, the Arab economy accounts for almost 5 percent of the world’s global gross domestic product (GDP).