Singapore's Economic Freedom Score 88
Uploaded by
Kaitlyn HoSingapore's Economic Freedom Score 88
Uploaded by
Kaitlyn HoSingapore
Economic Freedom Score
25 50 75 100 free
Most Least free 0
World Rank:
Regional Rank:
88.0
ingapores economic freedom score is 88, making its econS omy the 2nd freest in the 2013 Index. Its score is 0.5 point higher than last year, with an advancement in financial freedom outweighing small deteriorations in five other economic freedoms. Singapore is ranked 2nd out of 41 countries in the AsiaPacific region. Prudent macroeconomic policy within a stable political and legal environment has been the key to Singapores continuing success in maintaining one of the worlds highest levels of economic freedom. Well-secured property rights promote entrepreneurship and productivity growth. A strong tradition of minimum tolerance for corruption is institutionalized in an efficient judicial framework, strongly sustaining the rule of law. Singapores openness to global trade and investment has facilitated the emergence of a more competitive financial sector and continues to provide real stimulus and ensure economic dynamism. Competitive tax rates and a transparent regulatory environment encourage vibrant commercial activity, and the private sector is a continuing source of economic resilience and competitiveness. However, state ownership and involvement in key sectors remain substantial. A government statutory entity, the Central Provident Fund, administers public housing, health care, and various other programs, and public debt is equal to a years production for the entire economy. BACKGrOUND: Singapore is a nominally democratic state that has been ruled by the Peoples Action Party (PAP) since independence in 1965. The PAP won the May 2010 elections with the lowest percentage of the popular vote in its history. Six opposition members also won seats. Certain civil liberties, such as freedom of assembly and freedom of speech, remain restricted, but the PAP has embraced economic liberalization and international trade. Singapore is one of the worlds most prosperous nations. Its economy is dominated by services, but the country is also a major manufacturer of electronics and chemicals.
How Do We Measure Economic Freedom?
2009
Freedom Trend
89
88
87
86
85
2010
2011
2012
2013
Country Comparisons
Country World Average Regional Average Free Economies
0 20 40 60 80
88.0 59.6 57.4 84.5
100
Quick Facts
Population: 5.3 million GDP (PPP): $314.9 billion 4.9% growth in 2011 5-year compound annual growth 5.7% $59,711 per capita Unemployment: 2.0% Ination (CPI): 5.2% FDI Inow: $64.0 billion Public Debt: 100.8% of GDP
2011 data unless otherwise noted. Data compiled as of September 2012.
See page 477 for an explanation of the methodology or visit the Index Web site at [Link]/index.
393
SINGAPORE (continued)
THE TEN ECONOMIC FREEDOMS
Country World Average Rank
RULE OF LAW
Property Rights 90.0 Freedom from Corruption 92.0
0 20 40 60 80 100
2nd 5th
Contracts are secure, there is no expropriation, and the commercial court functions efficiently. Singapore has one of Asias strongest intellectual property rights regimes, although enforcement could be improved. The government enforces strong anti-corruption measures, and acts of bribery, whether committed inside Singapores territory or overseas, are prosecuted by the government.
LIMITED GOVERNMENT
Fiscal Freedom 91.1 Government Spending 91.3
0 20 40 60 80 100
25th 9th
The top income tax rate is 20 percent, and the top corporate tax rate is 17 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals about 14.1 percent of total domestic income. Government spending is equivalent to 17 percent of GDP. Structural budget surpluses have sustained high debt levels near 100 percent of GDP. The state remains heavily involved in the economy through government-linked companies.
REGULATORY EFFICIENCY
Business Freedom 97.1 Labor Freedom 91.4 Monetary Freedom 82.0
0 20 40 60 80 100
4th 2nd 18th
The overall regulatory environment remains one of the worlds most transparent and efficient. With no minimum capital required, launching a business takes only three days. There is no statutory minimum wage, but wage adjustments are guided by the National Wage Council. Inflation is under control despite the challenging external environment. The state influences prices through state-linked enterprises and can impose controls as it deems necessary.
OPEN MARKETS
Trade Freedom 90.0 Investment Freedom 75.0 Financial Freedom 80.0
0 20 40 60 80 100
1st 27th 4th
The trade regime is very open and competitive, and no tariffs are imposed on imports. Foreign and domestic businesses are treated equally under the law, but foreign investment in some service industries remains limited. As a leading global financial hub, the efficient financial sector is highly competitive. The government has been opening the domestic market to foreign banks. Over 100 of 120 commercial banks are now foreign.
Score Changes
RULE OF LAW
Property Rights Freedom from Corruption
394
LIMITED GOVERNMENT
0 1.0 Fiscal Freedom Government Spending 0.2 0
REGULATORY EFFICIENCY
Business Freedom Labor Freedom Monetary Freedom 0.1 0.7 2.8
OPEN MARKETS
Trade Freedom 0 Investment Freedom 0 Financial Freedom +10.0