Singapore has retained its number one position for the second year in a row, in the Institute for Management Development’s analysis of global economies and their ability to generate prosperity.
Coming in behind Singapore and making up the Top 5 were, in order, Denmark, Switzerland, the Netherlands and Hong Kong SAR. As a group they show the current strength of many small economies.
However, the ranking results are the combined fruit of (a) responses in Q1 2020 from business executives on questions about how they perceive their country’s economy and (b) hard data from 2019.
Factors behind Singapore’s success are its strong economic performance which stems from robust international trade and investment, employment and labor market measures. Stable performances in both its education system and technological infrastructure – telecommunications, internet bandwidth speed and high-tech exports – also play key roles.
For the second year in a row, the USA failed to fight back having been toppled from its number one spot last year by Singapore, and coming in at 10th (3rd in 2019). Trade wars have damaged both China and the USA’s economies, reversing their positive growth trajectories. China this year dropped to 20th position from 14th last year.
Elsewhere in the Americas, Canada moved up to 8th from 13th, whilst a quick pan-Asian check sees Hong Kong SAR tumble from 2nd in 2019 to 5th. This can be attributed to a relatively deficient performance of its economy, employment and societal framework. The underlying strengths of the economy, however, remain in place. Taiwan, China rises to 11th (16th in 2019).
Denmark, in 2nd, can credit a strong economy, labor market, and health and education systems for its position. In addition, the country performs strongly in international investment and productivity, and was the European flag carrier in terms of business efficiency.
Switzerland continues to edge its way to the front, from 5th to 4th to 3rd year-on-year. Robust international trade fuels strong economic performance, whilst its scientific infrastructure and health and education systems show steadfast displays.
The UK climbed from 23rd to 19th, as neighbour France lost its foothold on 31st, having to settle this year for 32nd. One interpretation is that Brexit may have created the perception of a business-friendly environment.
Economies showing noteworthy year-on-year consistency include Germany (17th), Australia (18th) and India (43rd). An eye-catching rebound came for Greece, up to 49th from 58th with government efficiency to thank.
Economies are ranked on economic performance, government efficiency, business efficiency and infrastructure, with various sub-markers within each of these four categories. A spotlight on economic performance shows a stellar performance by both North America and Eastern Asia in the sub-areas of international investment and employment.
In terms of infrastructure, while Western Europe tops the regional rankings in the health and environment and education subfactors, Eastern Asia takes the lead in technological and scientific infrastructures.
Seen through a sub-regional lens, Eastern Asia remains at the top even though the average competitiveness position decreased from about 17th to 18th, reversing a trend that had been in place since 2016. Conversely, Western Europe had steadily decreased from 20th position to 23rd in 2019, only to hover around 20th this year.
As a group, the Nordics improved: Sweden up to 6th from 9th, Norway to 7th from 11th and Finland to 13th from 15th.
The Middle East struggled, reflecting the oil crisis, with the UAE leading the region of Western Asia and Africa in 9th, although it was 5th in 2019. Whilst Qatar (14th) and Jordan (58th) dropped marginally, Saudi Arabia proved the exception climbing up two spots to 24th.
In Latin America, a distrust of institutions may be reflected by minimal changes. Chile (38th) remains the highest-ranked country in the sub-region and Venezuela the lowest. All sitting somewhere in the 50s and 60s, Peru and Brazil fair slightly better while the tale of Colombia and Argentina is the reverse. ■