The Republic closes in on HK and comes out tops in business and labour freedom
SINGAPORE has closed the gap on long-time rival Hong Kong in a ranking of the world's freest economies - a key indicator of a business-friendly environment.
The Republic came second in the ranking, finishing behind Hong Kong for the 14th straight year.
Singapore scored 87.4 on the Index of Economic Freedom, which is published annually by The Wall Street Journal and American conservative think-tank The Heritage Foundation. This was a 0.2 percentage point gain over its score last year and narrows the gap with Hong Kong to 2.9 percentage points. The gap last year had widened to 3.4 percentage points, due partly to Singapore's lower scores on the degree of freedom in its financial sector and taxation.
This year, the editors of the index lauded Singapore as the top scorer in terms of business and labour freedom.
Besides those two factors, the index takes into consideration eight other types of freedom, including trade and monetary, as well as the size of the government and freedom from corruption.
Scores between zero and 100 are given, and the ratings in each category are averaged to produce an overall score. A total of 157 economies were surveyed.
Publishers of the index say that economic freedom has long been related to good economic performance. Hong Kong scored the highest in four of the 10 categories to top the rankings.
And while it may be easy to dismiss the latest index as one of many disparate economic rankings that use a wide range of measure, experts say that it has special significance for Singapore.
Action Economics economist David Cohen said: 'It is a reflection of the attractiveness of a location to conduct business in. It indicates little government interference and a low tax rate, among other factors.'
CIMB-GK economist Song Seng Wun agreed, saying: 'With two small open economies like Singapore and Hong Kong, which are dependent on external investment for growth, it's no surprise that they are at the top.
'The two economies share much of the same mindset, which is to be open, transparent, flexible and accommodating in order to attract more business and investment. It is a reminder of some of the factors and foundation of Singapore's success and progress.'
With Australia coming in fourth, the Asia-Pacific has three of the world's five freest economies.
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Singapore finishes behind Hong Kong for the 14th straight year in a ranking of the world's freest economies.
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