(Source : wikipedia).

Legatum Prosperity Index: Erosion of Singapore’s advantages in some areas of prosperity, deserves attention

Commentary by Legatum Prosperity Index on Singapore

The decade starting from 2007 has seen Singapore advancing in all aspects of social and economic life, consolidating its position as Asia’s prosperity champion. On the other hand, despite remaining the world’s safest and second healthiest place to live, Singapore’s lead in some areas, notably Business Environment and Social Capital, has been eroded compared to high-rising global competitors. With ups and downs largely cancelling each other out, in 2016 Singapore stands at the 19th in the Prosperity Index, one rank lower than ten years ago.

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As is widely acknowledged, the Singapore model starts from clean and efficient government staffed by disciplined and talented officials drawn via a strict meritocratic selection system. An electoral democracy with a dominant political party, the country is nonetheless rated the 19th best in the Governance sub-index. The country’s population, with the world’s highest 91% of confidence in the national government, are apparently enjoying a degree of government effectiveness, regulatory quality, policymaking transparency, and rule of law unseen in any other country, democratic or authoritarian, on the planet. Always keeping a sharp eye on official corruption, the country’s leadership combines unparalleled public salaries with relentless monitoring and punishment to keep official misbehaviour at bay. Constantly ranking among the top ten on the Corruption Perception Index, the international appraisal proved Singapore’s vows on fighting corruption as being anything but hollow statements. With surging enthusiasm among young Singaporeans in participating in politics, the increasing voter turnout, a jump from barely above 32% to over 50% in the last two general elections, helped push the country’s Governance score even higher.

For a country with tiny physical territory and scarce resources, connections to the outside world and the inflow of foreign capital and talents are an essential way of development and even survival. A pro-business environment has been on the top of the government’s agenda since the country’s separation from Malaysia.

Singapore has dominated the World Bank’s Doing Business ranking since 2010. An entrepreneur only needs to go through three procedures and wait for three days to start a new business. Electricity and credit are easy to get access to with extremely low costs. The government is obsessed with providing the best infrastructure and applying cutting-edge technologies to better serve the businesses. Putting all these together with a flexible labour policy, it’s not surprising that people with ideas and passion flock to Singapore from all over the world to either expand their business or simply start a new one.

The biggest reward from this business friendly strategy is the long term stability and economic progress that is the envy of most other countries. Following a sharp dip in 2009, Singapore’s economy recovered faster than even the most optimistic predictions. The country managed to achieve a nearly 4% average annual GDP growth rate since 2010, a pace unimaginable to most advanced countries. With the unemployment rate checked under three percent, poverty has almost been eliminated and people are growing more content with the country’s economic status and direction, 84% of Singaporeans are satisfied with their living standards in 2015.

Unlike some countries struggling with parallel economic and social development, Singapore has done well at balancing the two. Singaporeans enjoy an outstanding healthcare system and good public order. One of the world’s highest life expectancies and lowest mortality rate are the best testament to its social achievements. An equally convincing record is also captured in the Safety & Security sub-index. People feel safe walking alone at night and incidents of stealing or robbery are rarely heard.

But not all news from the Lion city are good. For LGBT groups this is a difficult place to live. Homosexuality is in practice outlawed and local people are still hostile, though slowly changing, toward same-sex relationships. For a country substantially relying on foreign workers, that almost 30% of the population don’t think the country a good place for immigrants is problematic, and far higher than even increasingly hostile countries in Europe. Government restrictions on religion are growing and capital punishment is still in use. As a result, Singapore has fallen to 97th in the Personal Freedom sub-index.

A more alarming sign comes from one of the most important pillars for Singapore’s prosperity. Once the world’s best destination for businessmen according to the Prosperity Index, the country this year fell to the 6th in the Business Environment sub-index. Leaving aside the relative gains made by other competitors, Singapore has also seen a decline in absolute terms due to stricter labour policies and in particular, a dent in people’s belief in social mobility – compared to ten years ago, 4% fewer Singaporeans believe hard work gets you ahead.

Despite comprehensive improvements in absolute terms over the last ten years, the erosion of Singapore’s advantages in some areas of prosperity, in particularly the Business Environment, deserves the attention of its governors. In an increasingly competitive world, no complacency is allowed if the country aims at the top ten for overall prosperity.

This commentary was first published on http://www.prosperity.com/globe/singapore

According to Legatum Institute’s website, it is an international think tank and educational charity focused on understanding, measuring, and explaining the journey from poverty to prosperity for individuals, communities and nations. It states that it believes true prosperity is as much about wellbeing as it is wealth, if all people are to flourish.