Singapore overtakes US, Hong Kong to be world’s most competitive economy

Singapore overtakes US, Hong Kong to be world’s most competitive economy

Singapore night skyline
File photo of Singapore skyline. (Photo: TODAY)

SINGAPORE: Singapore is the world’s most competitive economy in a yearly ranking of 63 economies released on Wednesday (May 29) by Switzerland-based research group IMD World Competitiveness Centre.

Singapore’s return to the top spot – its first time since 2010 – was due to an advanced technological infrastructure, the availability of skilled labour, favourable immigration laws and efficient ways to set up new businesses, the report said.

Out of the four key categories that were assessed, Singapore made it to the top five for three of them, namely economic performance (5th), government efficiency (3rd) and business efficiency (5th). For the final category of infrastructure, it was ranked sixth.

Hong Kong – the only other Asian economy in the overall top 10 – held on to the second spot due to a benign tax and business policy environment, as well as access to business finance. 

The United States, which was last year’s leader, slipped to the third position. 

The report, which has been released every year since 1989, said the initial confidence boost from US President Donald Trump’s first wave of tax policies “appears to have faded”. 

The competitiveness of the world’s biggest economy was also hit by higher fuel prices, weaker high-tech exports and fluctuations in the value of the US dollar, researchers added. 

Rounding up the top five were Switzerland and the United Arab Emirates. The former moved up one spot due to economic growth, currency stability and high-quality infrastructure, while the latter climbed two positions to be ranked fifth due to strong performances in the areas of business and government efficiency. 

ASIAN ECONOMIES PERFORM WELL

For this year’s ranking of 63 countries, ranked using 235 indicators, Asian economies “emerged as a beacon for competitiveness” with 11 out of 14 economies either moving up the charts or holding on to their positions, the report said.

For instance, Indonesia (32nd) leapfrogged 11 spots – the region’s biggest mover – thanks to increased efficiency in the government sector, as well as better infrastructure and business conditions.

Thailand (25th) advanced five places, propelled by an increase in foreign direct investments and productivity.

Among the rest, Taiwan (16th), India (43rd) and the Philippines (46th) saw improvements, while China (14th) and South Korea (28th) slid down one spot.

The biggest underperformer is Japan (30th), which fell five places on the back of a sluggish economy, government debt and a weakening business environment. 

On the other hand, competitiveness in Europe, with the exception of Switzerland and Ireland, took a hit amid economic uncertainty.

The Nordic nations, traditionally a powerhouse region for competitiveness, have failed to make significant progress this year, the report said.

Ongoing uncertainty over Brexit saw the United Kingdom fall three spots to 23rd, while Portugal posted the biggest fall in the region with a drop of six places to the 39th spot.

SINGAPORE MUST GET FUNDAMENTALS RIGHT: CHAN CHUN SING

Commenting on the report, Trade and Industry Minister Chan Chun Sing said in a Facebook post on Wednesday: “This is encouraging news, but we must persevere with our efforts to create opportunities for our people and businesses.” 

For Singapore to stay ahead amid intensifying competition globally, the country must continue to get its fundamentals right.

Singapore cannot afford to compete on cost or size, but should focus on its connectivity, quality and creativity, he said. The country will also need to leverage on its brand of trust and standards, and continue to be a safe harbor for partnerships and collaboration, added Mr Chan. 

In addition, Singapore has to continue to diversify its linkages with more markets, stay open and be plugged into talent, technology, data and finance flows. 

“We must also enable our enterprises to boost their capabilities and scale up, while ensuring our workers are equipped with the skills – not just for today’s jobs, but the jobs of tomorrow too,” he wrote. 

“The economic outlook may be uncertain, given the tensions over trade and protectionist sentiments, but there are still opportunities for us to seize together, so long as we continue to build upon what we have achieved and stay true to our fundamentals,” said Mr Chan.


Source: CNA/sk(hm)

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