Singapore maintains world’s 3rd most viable economy

Singapore has held on to its spot as the world’s third-most competitive economy in an annual ranking released on Thursday (May 24) by Switzerland-based research group IMD World Competitiveness Centre.

The United States took the top spot, propelled by high rankings in the economic performance and infrastructure categories. It leapfrogged from last year’s fourth position to displace Hong Kong – last year’s leader – which slipped to the second spot.

Rounding up the top five were the Netherlands and Switzerland. The former moved up one spot due to a “balanced” performance in all categories, while the latter fell three positions to be ranked fifth with an export slowdown among contributing factors.

Professor Arturo Bris, director of the IMD World Competitiveness Centre, described the high-ranking economies as having “an above-the-average performance across all competitiveness factors” though their competitiveness mix varies.

“One economy, for example, may build its competitiveness strategy around a particular aspect such as its tangible and intangible infrastructure. Another may approach competitiveness through their governmental efficiency,” he added.

In the case of Singapore, strong government efficiency remained its biggest asset.

However, the city-state continues to be challenged by high levels of private debt in the economy and high prices. Contributed mainly by the real estate sector, the latter hampers quality of life and talent attraction.

“When we talk about competitiveness, we are also talking about the quality of life. With real estate prices being a very important component, Singapore remains an expensive country,” said Professor Bris.

The report also cited other challenges, which included strengthening the capability of enterprises to innovate, raise productivity and internationalise, as well as equipping its workforce with relevant skills to ride on new opportunities.

Across Asia, the economies saw a mixed bag of results in this year’s ranking of 63 countries benchmarked against 258 indicators.

While China (13th), Japan (25th), South Korea (27th), Malaysia (22nd) and India (44th) saw improvements, Taiwan (17th), Thailand (30th) and Indonesia (43rd) slipped down the charts.

The Philippines posted the biggest decline compared to its regional peers, moving down nine places to be in the 50th position. This is due to a decline in tourism and employment, worsening of public finances and a surge in concerns about the education system.

Despite that, Professor Bris said: “This does not mean that Asia is less competitive, (it’s) just that some countries have moved faster.”

For instance, a majority of Eastern European economies, such as Poland (34th), Slovenia (37th) and Hungary (47th) have advanced by least four positions in this year’s rankings.

In the Middle East, almost all the countries showed progress despite an increase in political tensions. The United Arab Emirates, for one, moved up three spots to be the world’s seventh most competitive economy.