Thursday 31 May 2012

Singapore still best for business, report finds

India, China score poorly and US slips in rankings released ahead of E. Asia forum
By Nirmal Ghosh, The Straits Times, 30 May 2012

BANGKOK - Singapore again topped a list of 132 countries and territories ranked on the degree to which they encourage trade - beating Hong Kong by a 'large and widening margin', according to a report released before the World Economic Forum on East Asia.

Smaller countries are traditionally more open to trade, and two engines of the world's economy - India and China - scored poorly. A third - the US - has slipped in the rankings.

The United States slipped from 19 in the last report, two years ago, to 23 in this year's report - with researchers citing 'deteriorating infrastructure and a less conducive regulatory environment'.

The US scored poorly on market access and business environment, and additional costs related to security.

The two-day WEF opens tomorrow in Bangkok, with some 600 delegates from 50 countries expected to attend.

Its theme is 'Shaping the Region's Future through Connectivity'. Some of the discussions will focus on the upcoming Asean Economic Community, which is only three years away.

The 'Enabling Trade Report', released on May 23, notes that trade is part of the growth strategy of many countries in the region. Those countries which have adopted open markets and pro-trade policies have clearly benefited.

The data shows a wide gap between front runners Singapore, Hong Kong and New Zealand, and the rest. The main reasons for their high ranking: open markets as well as world-class transport and telecommunications infrastructure, administration and regulations. Singapore scored 6.14 out of a maximum of seven. Hong Kong was at 5.67.

Several European countries plus Canada, Chile, Australia, Japan and the United Arab Emirates were also in the top 20.

The rest of the region is improving but still far behind. Malaysia came in at 24 globally, Thailand at 57, Indonesia at 58 and the Philippines at 72.

China, however, was at number 56 and India at 100.

'Many agree that Asia has yet to fully leverage the opportunities offered by trade,' says the report.

The message of the report is that trade may now be more important than ever for growth.

The tsunami that hit Japan last year, and the floods which later struck Thailand, disrupted the global supply of auto parts, hard drives and semiconductors, underlining how the world's supply chain is more interlinked than ever. Those disruptions were felt across the world, from a computer store in San Francisco to a car showroom in Berlin. That also means that one country's regulatory regime can affect another country's competitiveness - and hence its economy.

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