Singapore is still the world’s second most competitive economy, showed the latest Global Competitiveness Index (GCI) by the World Economic Forum (WEF) and reported in the media.
The city-state has held on to the spot for four consecutive years, trumped only by Switzerland, which has occupied the first place for six year running.
The report uses 12 pillars, which include macroeconomic environment, health and primary education, and infrastructure to rank the competitiveness of 144 economies.
Notably, Singapore emerged as the only economy to be included in the top three in seven out of 12 indicators. It placed third on institutional frameworks, came in second in terms of labour market efficiency and financial market development, while topping the goods market efficiency pillar.
Despite the city-state’s strong performance, economists warn that a further tightening of labour policies could affect the country’s ratings.
“There’s a real risk of Singapore moving down if policy missteps occur – for instance, if the government meets populist calls to tighten the foreign labour population further,” noted CIMB economist Song Seng Wun.
DBS economist Irvin Seah added, “The only reason we’ve not taken a hit (on the GCI) is because it’s a much broader index that measures other things. But if it measured export competitiveness alone, the drop would have been glaring. The impact of (foreign labour) tightening has already been felt in the economy and by businesses.”
The idea seems to be supported by WEF’s survey of business leaders. In tandem with the GCI, WEF polled 14,000 top executives globally to rank and select the five most challenging factors for doing business in their country.
Out of the 163 business leaders polled in Singapore, 28.2 percent cited “restrictive labour regulations” as the biggest complaint, followed by 20.5 percent who cited inflation as area of concern.
Image by Muneerah Bee
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
