Singapore was ranked as the third most competitive economy in the world, and the most competitive economy in Asia last week, in the World Competitiveness Yearbook 2014. The report, which was compiled by the IMD World Competitiveness Center, found that Singapore rose to the third position, up two spots from last year, after the U.S. and Switzerland. Hong Kong slipped to fourth position and Sweden to the fifth.
The Methodology
The World Competitiveness Yearbook ranks and analyzes the ability of nations to create and maintain an environment in which enterprises can compete. It assumes that countries enhance or hinder the ability of enterprises to compete effectively domestically or internationally. Based on this premise, the national environment is measured across four main factors namely economic performance, government efficiency, business efficiency and infrastructure.
Singapore’s strengths
Robust growth in exports, business efficiency and innovation were cited as the factors that contributed to Singapore’s position this year. In addition, IMD’s Executive Opinion Survey, conducted with a pool of 4,300 executives across the 60 ranked economies, found that Singapore’s executives perceived their country as most encouraging of business development. The city-state supersedes Germany, Ireland, United Arab Emirates, Canada and Switzerland.
Singapore’s business efficiency policies are due to the government staying attuned to the needs of businesses and their ambitions to expand domestically and regionally. This includes exploring new markets, signing free trade agreements and DTAs as well as maintaining an attractive corporate and personal tax framework. At governance level, Singapore offers a politically stable environment as well as pragmatic work visa and immigration policies.
To support trade and exports, the government provides efficient transport infrastructure and implements fewer customs procedures. In addition, Singapore is Asia’s major international transit hub and is positioned on many sea and air trade routes.
According to the Singapore Economic Development Board, Singapore is home to one of the world’s busiest port, and connects to about 600 ports in 123 countries.
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“The rise of Singapore to the third position in the IMD yearbook reinforces how the city-state enables businesses with capabilities to compete and succeed. High efficiency at the government and business level as well as the state-of-the-art infrastructure enables seamless flow of goods to markets and reduces time-to-market. A stable and efficient political system enhances confidence of foreign investors to set up base in the country. Procedures for business registration in Singapore are simple and the city-state fosters a culture of innovation for businesses to expand rapidly across international boundaries,” commented Ms. Cheryl Lee, Operations Manager at Singapore Company Incorporation.
“In line with the ongoing restructuring efforts, we are confident that Singapore will maintain its competitiveness and attractiveness to businesses. Its increasing focus on innovation as well as the government’s emphasis on productivity and quality growth could make it the most competitive nation in the years to come,” added Ms Lee.
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