SINGAPORE (June 16): Singapore has retained its number one position as the world’s most competitive economy for the second year in a row, according to a long-running ranking.
However, Prime Minister Lee Hsien Loong, while calling this a “spot of good news”, warns that Singapore should not be carried away. He warns that tough challenges remain as the economy grapples with the Covid-19 fallout.
“They do give some confirmation that we are on the right track,” says Lee.
“The factors that set us apart, such as our open economy, technological infrastructure and skilled labour force, will serve us well as we re-open our economy and rebuild after COVID-19. This will be a challenge like no other and we must draw on all our strengths in order to overcome this crisis,” he adds.
The ranking was done by Swiss business school the Institute for Management Development, better known as IMD.
According to IMD, factors where Singapore rates highly include strong economic performance which stems from robust international trade and investment, employment and labour market measures.
Stable performances in both its education system and technological infrastructure – telecommunications, internet bandwidth speed and high-tech exports – are key positive factors as well.
This year’s top scorers are dominated by small economies. The runner-up is Denmark, followed by Switzerland, the Netherlands and Hong Kong.
“The benefit of small economies in the current crisis comes from their ability to fight a pandemic and from their economic competitiveness,” says Arturo Bris, Director of the IMD World Competitiveness Center and Professor of Finance.
“In part these may be fed by the fact it is easy to find social consensus,” he adds.
USA, which was the top ranked economy two years ago, dropped to the 10th position this year. It was 3rd last year.
China, on the other hand, dropped from 14th to 20th position.
“Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories,” says IMD.
