Singapore stays 2nd freest economy in world after HK

Singapore has retained its position as the second freest economy in the world after Hong Kong in the 2016 Index of Economic Freedom.

Hong Kong also remained in top spot this year despite a one point dip in its score to 88.6, on the back of its open markets, robust property rights and highly competitive fiscal policies, the report said. Singapore had a score of 87.8, down 1.6 points.

The gap between the two, however, widened slightly to 0.8 point, versus 0.2 point in 2015.

Prudent economic policy and a stable, transparent legal environment has helped Hong Kong maintain its status as the world's freest economy. "Well-secured property rights ensure vibrant commercial interactions and entrepreneurial growth. With a high level of market openness and fiscal discipline, Hong Kong continues to be a leading global business and financial hub," the report said.

An annual publication, the Index of Economic Freedom is released by The Heritage Foundation and The Wall Street Journal and evaluates economies in four main policy areas - rule of law, limited government, regulatory efficiency, and open markets. The global average score of 60.7 was the highest ever since the index was first released in 1995.

"Economic growth has slowed in Singapore, but the city's openness to global trade and investment continues to provide a solid basis for economic dynamism," the report said. "A transparent regulatory environment, buttressed by well-secured property rights, provides commercial security for the innovative and resilient private sector."

The 2016 results marked a third consecutive year of improvement for the region but the scores were a mixed bag. Of the 42 economies ranked from the Asia-Pacific region, 22 reported higher scores, 19 saw lower scores and one retained the same score.

So while four of the world's freest economies came from the Asia-Pacific - the other two being New Zealand and Australia - eight of the most repressed markets are also here in the region. They included Timor-Leste, Turkmenistan and North Korea.

North Korea had a score of 2.3 - albeit up one point - to make it the most repressed market worldwide. Vietnam, which gained 2.3 points to hit its highest-ever score of 54, was the region's most improved economy. India and China were ranked 123rd and 144th respectively in the world, which places them in the "unfree" category. China fell from 139th last year to 144th this year as it struggled with "deep-seated structural problems, a state-controlled financial sector, and regulatory inefficiency" over the past year.

Of the 178 economies ranked, 97 reported improved scores while 74 saw their scores slide. The rest registered no change in their scores. Eight others, including Afghanistan and Iraq, were not ranked in the global study.

This article was first published on Feb 3, 2016.
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