Singapore: World’s most competitive economy

Singapore – Singapore has climbed one notch to become the world’s most competitive economy, according to the World Economic Forum (WEF), overtaking the United States.

Singapore scored 84.8 out of a 100 on WEF’s scale, beating other countries especially in terms of infrastructure quality and the openness of its economy, the organisation said in a report released by the WEF.

The average global score was 60.7.

In the US, uncertainty among business leaders, lower domestic competition and reduced trade openness were among the factors that set the country behind in 2019, WEF said.

But it added: “The US may have lost out to Singapore overall, but it remains an innovation powerhouse, ranking first on the business dynamism pillar, second on innovation capability, and first for finding skilled employees.”

Apart from having high-quality road infrastructure and efficient air and sea connectivity, Singapore also stood out in terms of its high life expectancy and labour market, and scored highly in worker protection.

Led by Singapore, the East Asia and the Pacific region is the most competitive in the world, followed by Europe and North America.

Notable economies in the region are Hong Kong and Japan, which also feature in the top 10, and Vietnam, which saw its score rise the most globally.

“Some of this year’s better performers appear to be benefitting from global trade tensions through trade diversion, including Singapore and Vietnam,” WEF said.

However, the region is also home to economies with significant competitiveness deficits, such as Cambodia and Laos, WEF said.

At the other end of the spectrum, sub-Saharan Africa was the least competitive region. But it is also improving at one of the fastest rates of any region apart from the Middle East and North Africa.

But the report says a major source of concern for the global economy is the low rate of growth in productivity, defined as the amount of goods and services produced for a given amount of inputs such as labour, capital or other resources.

Despite multiple attempts by governments and central banks to boost productivity rates, factors such as growing business uncertainty and lower demand have squeezed productivity growth.

“The injection of cash by the world’s four major central banks may have even contributed to divert more capital towards the financial market rather than to productivity-enhancing investments,” WEF said.

The world is not on track to meet any of the Sustainable Development Goals agreed to under the United Nations in 2015, it added.

That being said, the WEF maintains that greater technological integration and complementary social policies could help governments support growth in their economies.

The report says East Asia, Europe and North America have the highest levels of technological adoption, which measures penetration rates for mobile phone and internet usage, and broadband fibre installation among others.

But Sub-Saharan Africa is growing more rapidly in this respect than anywhere else. (Aljazeera)