Singapore has resurfaced in the top two positions in the recently released Ernst & Young’s (E&Y) Globalisation Index 2012, next to regional rival Hong Kong. Ireland, which has maintained its position on the top two rungs alongside Hong Kong over the last two years, has been ousted to third place this time.
The Index draws on two sources of authentic research. The first is an Economist Intelligence Unit (EIU) survey of 750 senior business executives worldwide conducted in November 2012. The other, the E&Y Globalisation Index, measures 60 of the world’s largest economies against 20 indicators that fall into five main categories. They include 1) openness to trade, 2) capital movements, 3) exchange of technology and ideas, 4) labour movements and 5) cultural integration. In gist, the Index seeks to determine the degree of the economies’ globalisation relative to their GDP.
Altogether, Singapore scored 6.31 this time, representing a 0.02 decline from 2011. Its rival Hong Kong improved by 0.06 since the last Index, and secured a final score of 7.81 in 2012. Apart from the “openness to trade” category, where Singapore led the pack with 8.57, Hong Kong trumped all other categories. Nonetheless, Singapore improved its own 2011 score in the area of “exchange of technology and ideas,” registering 5.56.
Singapore, though far from perfect, is still an attractive investment destination precisely because it constantly reinvents itself.
By tapping new trade opportunities, improving its infrastructure, technology and environment and by restructuring its economy to be better than it is now, Singapore is never stagnant or boring. This never ending pursuit to be better is extremely attractive and encouraging to investors.”
– Mr. Satish Bakhda
Analysis by Singapore company formation specialist Rikvin shows that Singapore’s overall score could be attributed to a number of factors. In 2012, Singapore experienced modest overall growth of 1.2% in part due to slow growth in the Eurozone and in the US. In addition, inflation, a series of stricter foreign manpower policies and a fortified national resolution to restructure the economy towards higher value-added activities have contributed to an overall modest economic growth last year.
In spite of these factors, E&Y’s rating is positive, and builds on Singapore’s standing as the most innovative economy in Asia and third worldwide in INSEAD’s fifth Global Innovation Index. It also indicates that Singapore is in good stead to improve its growth and national brand when its restructuring efforts bear fruit and when it addresses its contentious labor and population issues with more care.
Commenting on Singapore’s performance, Mr. Satish Bakhda, Head of Operations at Rikvin opined, “Investments go where they are wanted and where they can grow. At the moment, Singapore, though far from perfect, is still an attractive investment destination precisely because it constantly reinvents itself. By tapping new trade opportunities, improving its infrastructure, technology and environment and by restructuring its economy to be better than it is now, Singapore is never stagnant or boring. This never ending pursuit to be better is extremely attractive and encouraging to investors. We are optimistic that this rating will play a role in boosting Singapore company setup activity.”