By The Nation
Singapore ranked as the world’s most competitive economy for the first time since 2010, according to the IMD research, as the United States slipped from the top spot, while economic uncertainty took its toll on conditions in Europe.
Singapore’s rise to the top was driven by its advanced technological infrastructure, the availability of skilled labour, favourable immigration laws, and the efficient processes to set up new businesses.
Hong Kong held on to second place, helped by a benign tax and business policy environment and access to business finance.
“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity.
“A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” said Arturo Bris, IMD professor and director of IMD World Competitiveness Centre which compiles the ranking.
Economists regard competitiveness as vital for the long-term health of a country’s economy as it empowers businesses to achieve sustainable growth, generate jobs and, ultimately, enhance the welfare of citizens.
The IMD World Competitiveness Rankings, established in 1989, incorporate 235 indicators from each of the 63 ranked economies. The ranking takes into account a wide range of “hard” statistics such as unemployment, GDP and government spending on health and education, as well as “soft” data from an executive opinion survey covering topics such as social cohesion, globalisation and corruption.
The Asia-Pacific region emerged as a beacon for competitiveness, with 11 out of 14 economies either improving or holding their ground, led by Singapore and Hong Kong at the apex of the global chart.
Indonesia leapt 11 places to 32nd, enjoying the region’s biggest improvement, thanks to increased efficiency in the government sector as well as improvement in infrastructure and business conditions. The southern Asian country is characterised by the lowest cost for labour across the 63 economies studied.
Japan fell five places to 30th hampered by a sluggish economy, government debt and a weakening business environment.