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 is nothing surprising that Singapore has come to grab this title and if you look at the political stability aspect and what is currently happening around the neighbouring regions like Thailand, political instability affects the nation's business and foreign investors will move away from countries eventually if the MNCs are not in the comfort zone. It will affect the MNCs bottom line and it is not in their business plan to take on such risk to invest in places that leave uncertainty in their day to day operations.
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.
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 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 cost of living and doing business here remains a cause for concern for business chambers.
Citigroup economist 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.
No comments:
Post a Comment