Singapore has surpassed the U.S. and Hong Kong as the most competitive economy in the world, the first time this has happened in the last nine years. Hong Kong is now second, while the U.S. moves into third place.
The rankings were released by researchers at Switzerland’s IMD business school.
The IMD analyzes a country’s creation of efficient ways of investment in their ranking, a factor noted to have been achieved by Singapore. The country has developed its technological infrastructure, has favorable immigration laws and skilled labor is in plenty. These have helped it to sail to the top position.
Other key components that IMD uses to gauge a country’s competitiveness include business efficiency, infrastructure, government efficiency as well as economic performance.
With those parameters, after third-placed U.S., Switzerland, UAE, Netherlands, Ireland, Denmark, Sweden, and Qatar are the top ten. Hong Kong SAR maintained its second position.
The fading of the U.S. President’s tariff policies have lowered the confidence in U.S. economy hence affecting its economic performance and that explains its drop in the rankings. The increased fuel prices and also the weakening of high-tech exports affected the economy’s competitiveness.
Arturo Bris, the director of the IMD World Competitiveness Center, noted that the analysis doesn’t consider variations that arise from the uneven competitive ground.
For example, Washington claims that trade imbalances with Beijing have drained the U.S. companies, making the competition unfavorable.
As Bris observes, the trade conflict between the U.S. and China affects U.S. companies more than in any othér nation. He termed it as “a tantrum,” with China focused on hurting the U.S. more than anywhere else.
In the Asia Pacific region, IMD analyzed 14 economies and 11 reportedly either maintained their global rankings or moved slightly higher.
Thailand jumped five places into position 25, while Indonesia leapfrogged 11 other economies to rank 32nd in the world.
The improvements are to some extent as a result of global economic status including the effects of the Sino-U.S. trade war. Most companies have moved some of their supply chains to Southeast Asian countries, running away from China. Friendly domestic policies have also played a role in increasing competitiveness.