It pips US to top spot but lags in areas such as skills of the future, ease of hiring foreigners. In a difficult year for global trade and investors, Singapore has emerged as the world's most competitive economy, according to an updated global league table.
It scored 84.8 out of a possible 100, beating the United States to the top spot in the ranking of 141 economies. The last time Singapore took the top spot was in 1999. Amid the trade war it is embroiled in, the US scored 83.7, falling from last year's top spot and score of 85.6. Singapore scored 83.5 last year.
"Singapore improves from an already high base," the World Economic Forum said yesterday, adding that the country ranked first for infrastructure - one of the index's 12 assessment pillars.
Singapore was also No. 1 for two of the index's other pillars - citizens' healthy life expectancy years and labour markets. Minister for Trade and Industry Chan Chun Sing said on Facebook yesterday that the ranking reflected how economic fundamentals here continue to distinguish Singapore from its competitors. "Nevertheless, as a small and open economy, we cannot afford to take things for granted," he added.
Singapore must persevere to stay ahead, given the current economic uncertainties, and equip its workers with the right skills, he said. The report said Singapore came in third for the skill sets of the current workforce, but 28th for the skills of its future workforce. Singapore also scored well because of its financial system, market efficiency and macroeconomic stability.
"Singapore ranks second for the quality of public institutions, behind Finland, but its performance is undermined by limited checks and balances," the report said. "Singapore notably ranks 124th on the Freedom of the Press Index," added the report, which also said the country lacked commitment to sustainability. CIMB Private Banking economist Song Seng Wun said the latest ranking showed policymakers' strong will in making Singapore the preferred economy to do business in. But it is also a reminder of the constraints that Singapore has to learn to work with, he added.
An example is the relatively small population of 5.6 million, Mr Song pointed out. Singapore has drawn some of the world's top technology companies, such as Google, Facebook and LinkedIn, to set up offices here, but the local talent pool may not offer the necessary expertise these companies need, he said.
The gap between the skills of its current and future workforce underscores the need for lifelong learning, he added. National University of Singapore Business School's Associate Professor Lawrence Loh said the ranking reinforces Singapore's standing as a global investment hub - a factor that could help the economy.
Singapore's rise was partly propelled by the slide in the performance of the US, which fared better in trade openness last year. The report said Singapore will need to promote entrepreneurship to become a global innovation hub. The difficulties of hiring foreign labour were also highlighted in the report, with Singapore ranked 93rd.
The report noted: "Despite an overall weaker performance this year, the US remains one of the most competitive economies in the world. It is still an innovation powerhouse, ranking second on the innovation capability pillar and first in terms of business dynamism."
Hong Kong rose four spots to third place. The report - which gathers responses in the first quarter of the year, before the city's latest political turmoil began in June - lauded Hong Kong's financial system and macroeconomic stability. The Netherlands, which jumped two spots to fourth place, and Switzerland, which fell one spot, round off the top five most competitive economies.
The Global Competitiveness Report series was launched in 1979 to provide an annual assessment of the drivers of productivity and long-term economic growth.
Adapted From The Straits Times, Oct 10 2019