Economic Development

Singapore: Asia's most competitive city

March 06, 2012

Global

March 06, 2012

Global
Our Editors

The Economist Intelligence Unit

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Singapore ranks third overall in the index and is the highest-placed Asian city.

Singapore ranks third overall in the index and is the highest-placed Asian city. The city-state ranks particularly well in terms of its physical capital (ranked joint first overall), financial maturity (joint first), institutional effectiveness (6th), environment and natural hazards (joint 8th) and global appeal (4th). For locals, none of this will be surprising, given the city’s efficient transport, lean bureaucracy, safe and clean environment, and its increasingly highly regarded reputation internationally.

Fundamental to its competitiveness has been its openness to the rest of the world, says Mr Khoo Teng Chye, executive director of Singapore’s Centre for Liveable Cities, a government think tank. “We have always been a hub open to the flow of people, ideas, capital, goods and services,” he says. In particular, he says, the city has always strived to attract both businesses and human capital. It has lured in businesses by, among other things, offering tax incentives and streamlining license approvals.

On the talent front, the city has focussed on what Mr Khoo says are the three aspects of liveability: quality of life (safety, good schools and so on); competitive economy (high quality jobs); and environmental sustainability. Importantly, Singapore emphasised the third element from very early on. “Environmental regulations and enforcement even in the late 1960s were very tough,” says Mr Khoo. Despite being a small, developing economy then, Singapore was ready to turn away industries that could not meet its strict environmental regulations, he says, because it “did not want factories here that would pollute the environment”.

In addition, the city promoted cleanliness through numerous public campaigns as well as concerted clean-up efforts, such as one involving the Singapore River. It also embarked on a systematic tree-planting programme in order to “green” the city. This involved very detailed regulations that, for instance, specify the ratio of trees to parking spaces in the city.

Mr Khoo contrasts Singapore’s forward-thinking, long-term approach to sustainability with some other cities, which pursue what he calls a
“Grow first and clean up later” approach. That is to their detriment, he argues, because “beyond a certain point they realise there is too much pollution, and they end up turning away people and investors.”

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