According to a prominent market analyst, Singapore has maintained its position as the world’s leading business environment for the 15th consecutive year and is expected to hold this status for the next five years.
The annual ranking by the Economist Intelligence Unit (EIU) shows Canada and Denmark tied for second place, with four European countries, the United States, Hong Kong, and New Zealand in the top ten. Regional economies Australia, Taiwan, and South Korea made it into the top 20.
The EIU evaluates a range of categories to understand a region’s performance over the past five years and its likely performance over the next five.
The study found that Singapore scored full marks for its foreign investment policy and foreign trade and exchange controls.
Singapore scored highest in technological readiness, a reflection of the government’s policies to develop tech infrastructure and a start-up ecosystem. The EIU added that the government is also a pioneer in promoting high-tech solutions in public services.
Singapore’s tax score remained stable, but the EIU noted that significant changes are on the horizon.
This includes raising indirect taxes in the coming years, imposing higher taxes on high-income earners and luxury consumers, and a significant increase in carbon taxes starting at the end of this decade, which will also have an impact.
The EIU noted that the labor market remains one of Singapore’s few weak spots, and the country’s score is expected to decline slightly over the next five years.
While upskilling has been a major focus for workers, restrictions on foreign labor will exacerbate the manpower shortages already plaguing many key industries.
The EIU’s ranking assesses the quality or attractiveness of the business environment in 82 countries and economies, based not only on historical conditions but also on expectations for the next five years.
The model examines 11 categories, such as the political and macroeconomic environment and market opportunities. The EIU evaluates several indicators within each category for both the past five and the next five years.
The countries and regions that improved the most over the past year were Vietnam, Thailand, Belgium, Sweden, India, and Costa Rica. Vietnam was the biggest overall riser globally, climbing 12 places, while Thailand moved up 10 spots and India rose by 6.
The biggest drops in the rankings were seen in Bahrain, Chile, and Slovakia.
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