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Singapore overtakes the US as world’s most competitive economy

Written by Nikkei Asia Published on   2 mins read

World Economic Forum lowers rating on India and Indonesia.

The World Economic Forum rates Singapore as the world’s most economically competitive country, while Asia’s big economies, including India and Indonesia, fell in the annual ranking.

The “Global Competitiveness Report 2019,” published on Wednesday, had the Southeast Asian city-state overtaking the U.S. to reach the top spot among 141 countries and regions. Singapore headed the list in infrastructure, including road quality and the efficiency of its ports and airports.

Geopolitical and trade tensions are fueling uncertainty, and could precipitate a slowdown. However, some of this year’s better performers appear to be benefiting from the trade feud between China and the U.S., including Singapore and Vietnam, the report finds.

Singapore’s financial system and macroeconomic stability also raised its rating, while the report pointed out that “in order to become a global innovation hub, Singapore will need to promote entrepreneurship and further improve its skills base,” it says.

Vietnam showed the greatest improvement among countries and regions, ranking 67th and rising 10 places, helped by the trade war that has pushed manufacturers out of China.

Image: Nikkei Asian Review.

Indonesia fell to 50th place, down five spots from the previous year. The report calls on ASEAN’s biggest economy to improve people’s access to technology, which has become more widely available in recent years. The country stood in fourth place in ASEAN — trailing Singapore, Malaysia and Thailand — thanks to its market size and macroeconomic stability. Improvements are also visible in Indonesia’s financial system.

India fell to 68th, down 10 places from last year, as a result of insufficient trade openness and protection of workers’ rights. India and Japan saw their ratings dragged lower by having few women in the workforce.

In addition to problems tapping into the potential of female workers, the report pointed to Japan’s diversity challenge in the workplace. The world’s third-largest economy slipped one place to sixth globally, but the report praised the country as “one of the world’s top innovators.”

Hong Kong was the third most competitive economy worldwide, rising four places from last year, driven by improvements in its health sector and financial system. But the future of the Chinese territory is murky, given the ongoing pro-democracy protests there.

This article first appeared on Nikkei Asian Review. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei. 36Kr is KrASIA’s parent company.


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