The Gulf Arab countries may be rich, but when it comes to exploiting technology to be more competitive, they're falling behind rivals in Asia, Europe and Africa.
Three of the four Gulf Arab countries ranked by the World Economic Forum's "networked readiness index" lost ground over the past year, even as sky-high energy prices brought them enormous wealth.
The index, which was released last month, measures the range of factors that affect a country's ability to harness information technologies for economic development and competitiveness.
The United Arab Emirates led the way in adoption of information and communications technology, ranking 29th among 122 countries worldwide. Nearby Qatar was No. 36, Bahrain No. 50 and Kuwait No. 54.
But data from previous reports show the Emirates fell six places in two years. Kuwait dropped eight places in a year and Bahrain, plagued by poor education and innovation, plummeted 17 places in two years.
Only Qatar managed to buck the trend by overtaking three rival countries in the last year.
The Arab technological slide sends worrying signals about the future of the currently booming economies, which include Dubai, now considered the fastest-growing city in the world.
Adoption of the latest technology is critical for fast-developing countries like those in the Persian Gulf, where leaders are trying to diversify beyond oil and gas exports.
Gulf investors are too interested in a quick profit, and they're not building institutions that allow technology to flourish, said Eesa Mohammed Bastaki, director of education and technology at the Dubai Silicon Oasis business park.
"The problem with innovation is that every business venture expects quick returns," Bastaki said. "New inventions need a long time. It's like food: cook it on a low fire and you get a very nice dish."
The technological slide has allowed poorer countries to leapfrog the wealthy Gulf states. For instance, in 2006 Mexico and Jamaica jumped ahead of Kuwait and Bahrain, both of which are far wealthier on a per-capita basis.
In 2005 Malaysia, Portugal and Estonia burst through the ranks to pass the Emirates, the Arab world's highest-ranking member. Malta climbed past the Emirates last year.
The Gulf countries consume a lot of technology: Internet and mobile phone penetration is high. But several factors pull down their scores, including poor educational systems. There's also a shortage of scientists and engineers. And bureaucracy is suffocating while judicial independence is lacking.
"We need to change from takers to makers," Bastaki said.
Kuwait's poor performance stems from its handouts of government jobs to Kuwaitis. The practice has diverted money from education and infrastructure, said Kuwaiti economist Jassem al-Saadoun.
The result is a bloated public sector with young Kuwaitis willing to wait years for a government job rather than work in the faster-moving private sector that offers fewer benefits.
"In such an environment, I would be surprised if there was any (technological) progress," al-Saadoun said.
Kuwait's emir, Sheik Sabah Al Ahmed Al Sabah, wants to turn the oil-rich country into a financial center. But that would require drastic reforms such as introducing income taxes and cutting subsidies, al-Saadoun said.
In Bahrain, where a huge Shiite Muslim underclass is dominated by a wealthy ruling Sunni minority, 80 percent of the government budget is consumed by about 50 families that own most of the businesses in the tiny island country, said Mukhtar al-Hashimi, dean of the School of Information and Technology at University College of Bahrain.
Bahrain has plummeted in the rankings since 2005 because of slipping education, research and development and judicial independence.
"In the Gulf, none of the universities really have a research center, where they bring their talented people to innovate," al-Hashimi said. "The rich are becoming richer, the middle class is earning less."
Associated Press reporter Diana Elias in Kuwait contributed to this report.