SINGAPORE, June 17 — The raging Covid-19 pandemic has sent Singapore tumbling from the top spot — which it held for two years in a row — to land fifth in the latest world competitiveness rankings of economies released today.

Switzerland took pole position in the 2021 Institute for Management Development (IMD) World Competitiveness Ranking of 64 economies, while Singapore, which was the only Asian economy in the top five, was also overtaken by Sweden, Denmark and the Netherlands.

This is the lowest ranking that Singapore has scored since 2013, when it also ranked fifth.

The world competitiveness rankings, which is released annually, assesses “the extent to which a country promotes the prosperity of its people”.

Advertisement

This is done by measuring economic well-being through hard data and survey responses from senior business executives within the respective economies.

IMD attributed Singapore’s fall in the rankings to the economic impact of the pandemic, which led to economic productivity shrinking.

The pandemic also led to a “sizeable worsening in public finances due to an increase in both government deficit and public debt” for Singapore, said IMD.

Advertisement

The Government has committed close to S$100 billion across five budgets in 2020 to help Singapore weather the economic impact of the pandemic, amounting to almost 20 per cent of the country’s gross domestic product (GDP).

IMD added that Singapore has also seen a fall in employment and a slowdown in productivity.

In 2020, Singapore recorded its sharpest fall in total employment in more than two decades.

In 2013, when Singapore last attained a fifth place ranking, IMD had said that the Republic could improve its competitiveness by strengthening assistance to people of low and middle incomes, as well as help firms keep cost pressures under control.

IMD said that this year’s rankings expose the resilience of countries’ economies in dealing with the impact of the pandemic.

“The report finds that qualities such as investment in innovation, digitalisation, welfare benefits and leadership resulting in social cohesion have helped countries better weather the crisis... and thus ranked higher in competitiveness,” it said.

For example, top-ranked Switzerland, which was third last year, improved on its ranking due to its good showing in areas such as economic performance, particularly in international investment and employment, said IMD.

Switzerland also improved in the areas of business efficiency and management practices, said IMD.

The country also rose to first place for infrastructure and education, and took the third spot in health and environment components.

Singapore, meanwhile, took top spot in economic performance — up from third — and maintained its fifth placing in government efficiency, but fell from sixth to ninth in business efficiency and from seventh to 11th in infrastructure.

Following closely behind Singapore, the top Asian economies were Hong Kong (seventh), Taiwan (eighth) and China (16th).

The report noted that China had seen the sharpest rise in positions among Asian economies, where it was 20th place last year.

This rise continues the upward trajectory that China has been on for a decade, said IMD.

Director of the World Competitiveness Center, Arturo Bris, said that China has managed to do this by continuing to reduce poverty and boosting infrastructure and education.

“Still, China does not rank among the top 10 most competitive economies despite its size and GDP growth potential,” he said.

“But this is what competitiveness is about, prosperity, not necessarily growth.”

Within Asean, Malaysia was the next highest ranking country, taking the 25th spot — rising two places from last year’s rankings.

IMD attributed its rise to the improvements in the business efficiency of its private sector, as well as “relatively healthy public finances” despite the disruption brought about by Covid-19.

Three other Asean countries were part of the rankings — Thailand, Indonesia and the Philippines. They ranked 28th, 37th and 52nd respectively. — TODAY