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UK index names S'pore economy as world's most successful
SINGAPORE has displaced Switzerland as the world's most successful economy, going by an annual index by the London-based think tank, the Legatum Institute.
This is the result of the Republic's high productivity - measured by capital per worker - and its large proportion of high-tech manufactured exports.
Nathan Gamester, programme director of Legatum Institute's Prosperity Index, said: "Singapore is now the No. 1 economy in the world, according to our index. This is largely due to its productivity rate and the strength of its export market."
While the institute's assessment of high productivity may come as a surprise - given Singapore's ongoing restructuring struggle - it is worth noting that the Prosperity Index measures productivity in terms of capital per worker, not value-added or output achieved per worker.
In that context, the findings - that Singapore has the second highest capital per worker in the world of US$240,750 per worker, behind Luxembourg's US$272,931 - gel with a recent Monetary Authority of Singapore (MAS) report, which said that on the capital front, Singapore already has one of the highest capital-to-labour ratios in the world.
The annual Prosperity Index ranks 142 states and territories and bills itself as the only global measurement of prosperity based on both income and well-being. Instead of focusing solely on macroeconomic indicators such as a country's GDP per capita, Legatum Institute's ranking adopts a "GDP and beyond" approach, using 89 variables spread across eight sub-indices.
These are the Economy, Entrepreneurship and Opportunity, Governance, Education, Health, Safety and Security, Personal Freedom, and Social Capital.
Mr Gamester said: "Overall, Singapore is a very prosperous country with good opportunities for entrepreneurs and a good quality health and education system. However, there is still room for improvement, as Singapore ranks 38th globally in the Personal Freedom category."
Singapore ranked in the top 20 in all but two sub-indices - personal freedom (where it was 38th) and social capital (25th). The former measures the "performance and progress of nations in guaranteeing individual freedom and encouraging social tolerance"; the latter measures social cohesion and engagement, and community and family networks.
Singapore performed strongly in the six remaining categories, however. Apart from taking the top spot for Economy, it was 12th for Entrepreneurship & Opportunity, 13th for Governance, 14th for Health , 15th for Education, and 12th for Safety & Security.
Overall, the Republic is ranked 17th on a list where the top five countries are Norway, Switzerland, Denmark, New Zealand and Sweden. However, Singapore pips regional economies Japan (which is 19th), Hong Kong (20th), Taiwan (21st), Malaysia (44th) and Indonesia (69th).
In the Economy sub-index - which measures a country's performance in macroeconomic policies, economic satisfaction and expectations, foundations for growth and financial-sector efficiency - the other successful economies were Switzerland, China, Norway and Germany.
Legatum Institute said Singapore's rise to pole position in the Economy sub-index came not only from its high productivity, but also its export prowess. It noted that 47 per cent of the country's manufactured exports are classified as high-tech - the third highest in the world.
Added the think tank: "Singaporeans are among the people most satisfied with their standard of living. According to the index, 94 per cent profess to being happy with their access to food and shelter. The country has one of the lowest unemployment levels in the world - 2 per cent.
"The 2015 Prosperity Index shows that the country is safe and well-run (and is) largely free of tension between different social groups. Ninety-six per cent of Singaporeans believe that the country is a good place for people of different ethnicities - the highest in the world."