Originally posted by lionnoisy:
[b]Sg
has been 2nd most free economy in the world,after Hong
Kong
Sg
hold
this position for long time
2.The freedom of economy is not related to the living standard of
the country.
Country....Rank (Score)
Hong Kong 1 [1.28]
Singapore 2 [1.56]
Ireland 3 [1.58]
Luxembourg 4 [1.60]
United Kingdom 5 [1.74]
Iceland 5 [1.74]
Estonia 7 [1.75]
Denmark 8 [1.78]
United States 9 [1.84]
Australia 9 [1.84]
New Zealand 9 [1.84]
Canada 12 [1.85]
Finland 12 [1.85]
Chile 14 [1.88]
Switzerland 15 [1.89]
Cyprus 16 [1.90]
Netherlands 16 [1.90]
Austria 18 [1.95]
Sweden 19 [1.96]
Germany 19 [1.96]
Czech Republic 21 [2.10]
Belgium 22 [2.11)
3.Dunt trust this ranking too seriously.Do u think people in
Estonia and Chile will be enjoy more freedom in economy and
enjoy
higher living standard than people in Switzerland?
4.I think economy of Sg is well balanced than HK which
concentrates
too much in real estate.[/b]
Singapore - Second most free economy in the world? Think
again:
Economic freedom? It depends where you stand
Philip Bowring
SUNDAY, JANUARY 8, 2006
HONG KONG National league tables make good journalistic copy, which
is devoured especially avidly in nations that happen to score near
the top of this or that list. But they can equally tell some very
tall tales that reflect better the biases of their assessment
criteria than facts on the ground.
One of the more widely disseminated is the Index of
Economic Freedom, published by the Washington-based Heritage
Foundation for the past 12 years. This year, as in
numerous past years, it has declared Hong Kong the world's
freest economy, closely followed by Singapore, with Iceland,
Ireland and Luxembourg close behind. (The United States is
ninth.)
It is clear is that the rankings of Hong Kong and Singapore
are based to a significant degree on ignorance of their domestic
economies. In its 10-point assessment, the Heritage
Foundation puts a high premium on freedoms for foreigners to trade
and invest and enjoy low taxes, and remarkably little on the
freedoms of the local inhabitants.
Both places rightly score highly on free trade. City states
that owe their existence to entrepot trade naturally avoid import
tariffs or pesky currency regulations. Equally, they both give a
more or less free hand to foreign investors in externally oriented
industries.
A closer look at both economies, however, calls into question the
description of their trading and ownership environments as
"free."
In Hong Kong, a handful of private groups operate domestic
monopolies or oligopolies in power, retailing and transport, all
linked to a few major property development companies, which also
own media and other major domestic enterprises. Foreigners who have
tried to enter - as the French group Carrefour did into retailing -
have been squeezed out by anti-competitive cartels. The government,
meanwhile, in the name of being business-friendly, resists
competition or anti-trust laws that might open up these
markets.
n Singapore, it is the government itself that stands in the
way of the unfettered private enterprise that the Heritage
Foundation's criteria are supposed to favor. The major real estate,
banking, transport, manufacturing and utility companies listed on
the stock market are all government-controlled entities. They may
be efficient, but is this an economy free of government
intervention? The index also claims that "the market sets almost
all wages." But actually "wages are based on annual recommendations
made by the tripartite National Wages Council."
Tax rates and revenue as a percentage of gross domestic product are
low in both cities. But governments control land supply and use it
not just to raise money but to redistribute income in an
off-the-books manner through publicly developed and managed housing
provided with low-cost land, in which 83 percent of Singaporeans
and 40 percent of Hong Kong citizens live. In Hong Kong, land
prices for the rest are kept especially high, with the result that
living space per inhabitant remains very low compared with
countries with similar income levels. Land in Hong Kong is
sometimes used for subsidizing favored industries and in Singapore
tax subsidies - which by definition are discriminatory - are
common.
Tax levels in Singapore look quite low. But how free of
official imposts are its citizens when compulsory contributions to
its Central Provident Fund take 33 percent of wages and are
invested largely as the government sees fit, through nontransparent
official vehicles such as the Government Investment Corporation?
Compulsory savings help toward the accumulation of foreign-exchange
reserves and a very high investment ratio. But the rate of return
on those assets has been low.
As a social security system, the Central Provident Fund, with links
to government housing and medical care, may have many merits, but
individual economic freedom is not one of them.
There is no space here to go into all 10 of the Heritage Foundation
criteria. Hong Kong and Singapore economies should rate quite well
by most performance and access measures. But the simplistic bases
of these tables, devised from afar, can be dangerously misleading:
The Heritage Foundation index also deems India less free than
China, places Cambodia ahead of Malaysia and Indonesia below
Ethiopia.
Nor is this the only baffling table. The Swiss business school IMD
has a competitiveness index which puts Hong Kong and Singapore just
behind the United States but just ahead of Iceland. IMD has South
Korea inferior to Belgium, Malaysia and New Zealand.
In the World Economic Forum's version of competitiveness,
meanwhile, Taiwan is the leading Asian economy, at No. 5, in a
world headed by Finland and the United States, while Hong Kong is
down at 28th. Choose your index according to your
prejudice.
