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Singapore overtakes US as world's most competitive economy this year

SINGAPORE (May 29): Singapore has reclaimed its position as the world’s most competitive economy for the first time since 2010, according to the International Institute for Management Development's (IMD) 2019 World Competitiveness Report released today.

Based on the annual rankings which score the 63 economies studied by IMD on over 230 indicators, Singapore rose from its No.3 global ranking in 2018 to overtake the United States’ top spot, while economic uncertainty took its toll on conditions in Europe such that the UK fell from 20th to 23rd place this year.

In a press release on Wednesday, IMD attributes Singapore’s rise to the top to the city state’s advanced technological infrastructure; its availability of skilled labour and favourable immigration laws; as well as efficient ways to set up new businesses.

Meanwhile, Hong Kong SAR continued to hold on to second place, which the business school says is due to a benign tax and business policy environment on top of access to business finance.

Both cities’ performance on IMD’s global rankings this year reflects that of the broader Asia Pacific region, which the institute has highlighted as a “beacon for competitiveness” given that 11 out of 14 economies have either improved or held their ground in the 2019 list.

Aside from Singapore and Hong Kong SAR topping the global chart, Indonesia has notably leapt eleven places this year to No. 32 to mark the region’s biggest improvement yet, thanks to increased government sector efficiency as well as improved infrastructure and business conditions.

Thailand also advanced five places to the 25th position this year, driven by an increase in foreign direct investments and productivity.

On the other end of the spectrum, IMD notes that competitiveness across Europe is struggling to gain ground as most of its countries’ economies continue to decline or remain at a standstill.

One such example is the UK, which has fallen three spots to No. 23 this year on the global rankings on the back of ongoing uncertainty over Brexit. Portugal also reversed from its gains made in the previous year to post the biggest fall in the region by declining six places to No. 39.

The institute also notes that the initial confidence boost by president Donald Trumps’ first wave of tax policies appears to have faded in the US.

While the country continues to rank highest in terms of infrastructure and economic performance, its overall global competitiveness has been hit by higher fuel prices, weaker hi-tech exports, and currency fluctuations.

“In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity. A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens,” comments Arturo Bris, IMD professor and director of IMD World Competitiveness Center, the research centre which compiles the ranking.

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