Singapore has emerged as the most business-friendly economy in the world for the 10th year in a row.
According to a World Bank league table, Singapore’s regulatory environment is highly beneficial for entrepreneurs.
The annual “Doing Business” report released yesterday measures the ease of doing business in 189 economies based on 10 areas of business regulation, including starting a firm, getting credit and electricity, and trading across borders.
By those measures, Singapore led the pack with a score of 87.34. New Zealand was close behind on 86.79.
Entrepreneurs in Singapore need an average of 2½ days to set up a company, while in Eritrea – the economy placed lowest in the rankings – investors usually need about 84 days, according to the report.
The data also showed that it is becoming easier to do business globally. In 2003, it took an average of 51 days worldwide to start a new business. This has been more than halved to 20 days.
“An economy’s scores on Doing Business indicators are somewhat akin to a measure of concentrations of various proteins and minerals in the human blood,” said World Bank senior vice-president and chief economist Kaushik Basu.
“They may not seem important to the lay observer, but they have huge long-run implications for an economy’s health, performance and growth.”
He noted that the study has a deliberately narrow focus.
“Because the report aims to have a global coverage, the choice of indicators is partly constrained by the data that can realistically be collected in some of the least developed economies of the world,” he said.
The report also does not capture many aspects of the business environment that matter to firms, such as security, market size, macroeconomic stability and the prevalence of bribery and corruption.
Still, the best-performing nations are “not those with little regulation but those with good rules that allow efficient and transparent functioning of businesses and markets while protecting the public interest”.
Given that Singapore’s competitors are quickly catching up, OCBC economist Selena Ling said the Republic must “keep adding value and stay abreast of the competition”, despite rising business costs, tighter labour policies and slowing growth.
The World Bank study follows a separate report released last month compiled by the World Economic Forum showing that Singapore kept its position as the world’s second-most competitive economy this year.
This was the fifth year running that Singapore came in second behind Switzerland, which stayed in pole position in the annual Global Competitiveness Report.