Friday 23 May 2014

Singapore regains competitive edge among global economies: IMD World Competitiveness Yearbook 2014

By Alvin Foo, The Straits Times, 22 May 2014

SINGAPORE has risen two rungs to third in the latest global competitiveness ranking by Swiss business school IMD, trailing the United States and Switzerland. The Republic had slipped from the No. 1 spot in 2010 to No. 5 last year.

Robust economic growth and improved infrastructure powered Singapore past Hong Kong and Sweden in the closely watched study of 60 economies out today.

The US kept top spot, owing to its economic resilience, better employment numbers, and dominance in technology and infrastructure, said IMD.

Singapore excelled in areas such as education, international trade and institutional framework, but fared poorly in prices.

Professor Arturo Bris, director of the IMD World Competitiveness Centre, told The Straits Times that three key factors led to Singapore's rise in the rankings:
- Success in strongly attracting foreign investment,
- Improved basic and technological infrastructure, and
- More robust economic growth - well above the top economies in IMD's ranking.
But he also flagged rising costs as Singapore's Achilles heel, noting: "Singapore's main weakness is its price levels, which are highly correlated to labour costs."

The factor of soaring costs here was flagged by IMD in previous polls, and was partly responsible for Singapore's slide down the table to No. 5 in recent years.

"What is important for Singapore is to preserve its business-friendly regulation and to guarantee that its educational system matches the needs of the labour market," added Prof Bris.

The IMD report uses more than 300 criteria to determine an economy's competitiveness. Two-thirds are based on hard economic data, such as gross domestic product and productivity, while one-third reflect opinion surveys with international executives.

The poll also found that executives in Singapore are most bullish on their country's overseas image.

The IMD study is one of two global competitiveness polls keenly monitored by businesses and policymakers.

The other - the World Economic Forum Global Competitiveness Report - has placed Singapore as the second most competitive economy after Switzerland for three years running.

CIMB regional economist Song Seng Wun said that while Singapore's latest display was "commendable", its neighbours Malaysia and Indonesia have also climbed up the IMD rankings. "Singapore needs to ensure that its service delivery improves to offset the rise in costs."

OCBC Bank economist Selena Ling said the latest poll suggests that Singapore's reputation among the international community as an attractive business location has not been "significantly dented, despite the domestic challenges of a tight labour market and an elevated operating cost environment".

Singapore best place to do business: Poll
By Tee Zhuo, The Straits Times, 22 May 2014

SINGAPORE has emerged as the best place in the world to do business over the next five years in a league table compiled by the Economist Intelligence Unit (EIU).

It beat Switzerland in second spot and perennial rival Hong Kong in the study, which assesses the attractiveness of doing business from now until 2018 in 82 different locations worldwide. Singapore also topped the table in the last survey, which looked at the years 2009 to last year.

Malaysia was the next best in South-east Asia in the most recent survey, coming in at 19th, a marked improvement from 24th place previously. Thailand was next, at 34th.

Other countries in the top 10 include the United States at seventh, Sweden at sixth and newcomer New Zealand up from 11th previously to eighth.

Germany, ranked 10th previously, slipped to 12th.

The report by EIU, part of The Economist magazine group, said Asian countries that did well had similar characteristics, including a favourable policy environment for finance and foreign investment and competition policies that "encompass international best practice".

"Especially in East Asia, competition between cities to become hubs for international finance, manufacturing and logistics has driven improvements in the business environment," it noted.

It acknowledged that Asia is a "diverse region" with varying levels of economic development, pointing out the large gap in ranking between the region's best and worst performers. Pakistan, for example, was ranked in the bottom 10 at 74th.

But the report also highlighted that infrastructure "remains a relative weak point" for the region.

Singapore was singled out as the exception, ranking seventh for infrastructure - the only Asian country in the top 10 in the category. Australia, Japan and New Zealand tied at 14th place in this area, while Hong Kong was at No. 18.

"While some of the region's infrastructure is excellent, particularly in telecoms and air transport, other areas require investment to improve distribution networks and utilities provision, as well as lower office rents," the survey added.

The survey factors in 10 distinct criteria and 91 different indicators, including government policies, infrastructure and the economic environment.

Singapore 'No. 6 in Asia for expat pay'
Package about $322,000 a year, with benefits the costliest element: Poll
By Cheryl Ong, The Straits Times, 22 May 2014

SINGAPORE has the sixth most expensive employment package for expats in Asia, according to a survey out yesterday.

An employee from overseas in middle management costs a firm here about US$257,000 (S$322,000) a year on average.

That takes into account salary, taxes and benefits, which can include accommodation, international schools, utilities or cars.

"In Singapore, the most expensive part of the expat package is typically the benefits element: The value of these is second-highest in the region after Hong Kong," said Mr Lee Quane, regional manager of human resources and relocation consultancy ECA International, which conducted the poll of 10,000 expats from more than 269 companies in 163 economies.

Mr Quane also noted that taxes made up the smallest proportion of a pay package here of all the places surveyed.

The value of expat packages in Singapore has increased at a faster pace than in Hong Kong over the past year as the cost of benefits has shot up more sharply.

But expats here were still reimbursed less than their counterparts in Hong Kong, which placed fifth overall behind China at No. 4.

Japan held the top spot with expats there receiving annual payments worth US$379,000 on average.

But if packages are considered in terms of US dollars, then an expat working in Japan would be 10 per cent less costly to employ thanks to a depreciation of the yen over the past year, ECA pointed out.

Australia came in secondand India third despite being "one of the cheapest locations in the region", as taxes accounted for half an expat's package.

"The cost of living allowance is a relatively small part of the overall package," said Mr Quane. "If only the cash salary and benefits were taken into account, India would fall from the third to the 11th most expensive location in the region."

No comments:

Post a Comment