GENEVA: Singapore overtook the United States to become the world’s most competitive economy in 2019, according to the World Economic’s Forum (WEF) flagship Global Competitiveness Report released on Tuesday (Oct 8).
The report measures competitiveness on a scale of zero to 100 based on factors that include infrastructure, health, the labour market, the financial system, quality of public institutions and economic openness.
Singapore scored 84.8 out of 100, but WEF noted that the country had benefited from trade diversion through its ports triggered by the tariff battles between the world’s top economies.
The US slipped from a score of 85.6 last year to 83.7, with the slippage linked in part to President Donald Trump’s trade wars.
Hong Kong rose four spots to claim third place with a score of 83.1, but WEF said the data used in the report was collected before waves of protests began shaking the financial hub.
The Netherlands finished fourth – up two slots from last year – while Switzerland came in fifth place.
TROUBLE SIGNS HAVE EMERGED IN US: WEF
While the report noted that the US “remains an innovation powerhouse” and the world’s second-most competitive economy, some trouble signs have emerged, WEF said.
“There are no two ways (about) it. It is important to ensure the countries are being open to trade,” said Saadia Zahidi, a WEF managing director, when asked to comment on the impact of the tariffs imposed by the Trump administration.
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She noted the lack of “hard data” on the impact of US tariffs imposed on several of its main economic partners, as the set of products impacted remains limited compared to overall trade.
But the sentiment surrounding investing in the US “has been going down”, she told reporters in Geneva.
“That will end up impacting long-term investment; that will end up impacting how decision makers are thinking; that will end up impacting the view of non-American business leaders (of) the United States. So it does matter in the long term,” she added.
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The competitiveness report relies in part on executive surveys, in addition to hard economic data.
Zahidi said that the US had also fallen in the rankings because healthy life expectancy in the country was now lower than in China.
In data published last year, the World Health Organization said that a newborn in China could expect 68.7 years of healthy living, compared to 68.5 for American newborns.
The WEF, which organises the annual gathering of business and political elite in Davos, has released an annual competitiveness report since 1979 that assesses which economies are well placed to see productivity and long-term growth.
The world’s most competitive economies, according to the World Economic Forum. (Table: WEF)
