SINGAPORE: The Republic has dropped a notch to
fourth place in an annual world competitiveness ranking, with a
weaker showing in areas like cost of living and immigration laws
pertaining to employment of foreign labour.
In Swiss business school IMD's annual World
Competitiveness Yearbook ranking this year, Singapore fell out of
the top three, coming in behind Hong Kong, the United States and
Switzerland. Last year, the Republic was third, with Hong Kong and
the US tying in first place.
The report listed 40 factors that it considered were
the Republic's strengths. These included the unemployment rate,
social cohesion, transparency, higher education achievement and
finance and banking regulation. In these 40 areas, Singapore was
ranked between 1st and 6th place, out of 59 countries.
It also cited 24 areas of "weaknesses" - in these areas, the
Republic ranked between 34th and 57th place.
In particular, Singapore was ranked 57th out of 59 countries under
the cost of living index, while the Republic also ranked 41st for
immigration laws and 48th in pupil-teacher ratio in primary
education.
All these factors were part of four main categories - economic
performance, government efficiency, business efficiency and
infrastructure - used to score a country's competitiveness.
The report used statistical indicators to measure quantifiable
issues and drew from its annual Executive Opinion Survey for
qualitative issues, such as labour relations. The survey had 4,210
respondents from 59 countries. The respondents - executives in top-
and middle-management with global exposure - were nationals or
expatriates in the country, representative of the economy, the
report said.
The report also surveyed respondents on what they perceived were
the "key attractiveness factors" of the economy: "Policy stability
and predictability". "competency of Government", and an "effective
legal environment" were the top three factors cited.
"Effective labour relations" received among the least responses as
being a key attractive factor.
CIMB regional economist Song Seng Wun felt labour relations ranked
lowly as "it was never an issue" and, hence, was not considered by
respondents as a key attractiveness factor.
However, other analysts said the low ranking could be indirectly
linked to the Government's moves to tighten foreign labour
policies. DBS economist Irvin Seah added: "Low-wage Singapore
workers also continue to face a strain and the help given so far,
to some extent, is rather limited."
Apart from the IMD report, other globally recognised
competitiveness rankings include the World Bank Doing Business
report and the Political and Economic Risk Consultancy (PERC)
survey. In this year's World Bank report, Singapore ranked first,
while in the PERC survey between November last year and March this
year, Singapore and Australia generally received the most
favourable assessments.
On the low rating for Singapore's immigration laws, Mr Song
attributed it to the Government's recent moves to tighten the
foreign worker policy, which has made it more expensive to bring in
foreign workers. "Going forward, you probably find that wage cost
will climb, and this is where businesses may have a bit more gripe
in the next survey," he added.
Ang Mo Kio Group Representation Constituency Member of Parliament
Inderjit Singh said he was "surprised" that pupil-teacher ratio was
considered a weakness in the economy. Still, he acknowledged the
ratio in schools here is high compared to schools in Australia, the
US and other Western countries.
Respondents in the survey were also asked to score their country's
attitude towards globalisation. In this regard, Singapore came in
7th, behind places such as Malaysia (4th), Hong Kong (5th) and
Taiwan (6th).
Mr Singh said: "In terms of venturing into a more diversified group
of markets, the Malaysians seem to have done much more than
Singaporeans."
He noted that Malaysians have ventured to as far as Africa, while
Singapore companies are "concentrated in a smaller base of
countries overseas".
The IMD report also identified challenges that Singapore has to
tackle this year, including adjusting to a slower workforce growth
and helping small and medium enterprises with productivity and
innovation. The Republic also needs to encourage
internationalisation and develop new competitive strengths, while
building a fair and inclusive society, said the report.
- TODAY
