Republic edges past Hong Kong and United States in 'photo finish'
SINGAPORE has jumped ahead of Hong Kong and the United States to snatch the top spot in a closely watched global ranking of economic competitiveness.
The Republic edged ahead of its rivals to assume pole position for the first time in what the compiler of the annual rankings, Swiss business school IMD, is calling a photo finish.
The gap between the three in this latest assessment of the world's economies - which places Hong Kong second and the US third - is less than 1 per cent.
This year's rankings are an upset to what has become the traditional pecking order and mark the first time since 1994 that the US has failed to trounce the competition.
For most of the 1990s and early 2000s Singapore has ranked second, but in recent years it has alternated with Hong Kong for second and third place.
IMD said Singapore and Hong Kong 'displayed great resilience through the crisis... and are now taking full advantage of strong expansion in the surrounding Asian region'. It was particularly impressed with Singapore's 13 per cent growth in the first quarter of this year.
While 'it's a tango between Hong Kong and Singapore at the top' of the rankings, Singapore's ability to utilise its competitive advantages and improve on its weaknesses was what gave it the edge over Hong Kong this year, according to Ms Suzanne Rosselet-McCauley, deputy director of the IMD World Competitiveness Centre.
Business chambers and associations believe Singapore's clinching of the elusive top spot could be partly down to the Government's swift and business-friendly response to the downturn last year.
British Chamber of Commerce president Steve Puckett said: 'The handling of the financial crisis here was exemplary and a model example of what planning, good sense and cooperation can achieve.'
Singapore International Chamber of Commerce chief executive Phillip Overmyer agreed: 'During the downturn, the Government stepped in with very effective programmes that enabled companies here to retain their skilled people and send them on to learn new things during the slow time of the recession.'
Another key factor contributing to Singapore's triumph is thought to be the loss of competitiveness in the US relative to other countries.
The study suggests that developed economies are all suffering from a 'debt curse' of soaring budget deficits, which, in the worst case of Japan, will take up to 2084 to pay off.
The IMD World Competitiveness Yearbook, released last night, shows that Singapore eclipsed Hong Kong and the US in areas such as employment, education, health and environment, business legislation and institutional frameworks.
For most of the 20 criteria used to draw up the rankings, Singapore appeared in the top 10. But it was placed 22nd in terms of economic indicators - which include the economy's percentage share of global gross domestic product (GDP) - and fared poorly in prices, coming 47th out of the 58 economies ranked.
The cost of living and doing business here remains a cause for concern for business chambers.
Citigroup economist Kit Wei Zheng said recent policy moves that effectively raise labour costs may weigh on Singapore's cost competitiveness in the short term, until the drive for higher productivity catches up.
Source: Straits Times, 20 May 2010