2013 Index of Economic Freedom

Singapore

overall score88.0
world rank2
Rule of Law

Property Rights90.0

Freedom From Corruption92.0

Limited Government

Government Spending91.3

Fiscal Freedom91.1

Regulatory Efficiency

Business Freedom97.1

Labor Freedom91.4

Monetary Freedom82.0

Open Markets

Trade Freedom90.0

Investment Freedom75.0

Financial Freedom80.0

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Quick Facts
  • Population:
    • 5.3 million
  • GDP (PPP):
    • $314.9 billion
    • 4.9% growth
    • 5.7% 5-year compound annual growth
    • $59,711 per capita
  • Unemployment:
    • 2.0%
  • Inflation (CPI):
    • 5.2%
  • FDI Inflow:
    • $64.0 billion
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Singapore’s economic freedom score is 88, making its economy the 2nd freest in the 2013 Index. Its score is 0.5 point higher than last year, with an advancement in financial freedom outweighing small deteriorations in five other economic freedoms. Singapore is ranked 2nd out of 41 countries in the Asia–Pacific region.

Prudent macroeconomic policy within a stable political and legal environment has been the key to Singapore’s continuing success in maintaining one of the world’s highest levels of economic freedom. Well-secured property rights promote entrepreneurship and productivity growth. A strong tradition of minimum tolerance for corruption is institutionalized in an efficient judicial framework, strongly sustaining the rule of law.

Singapore’s openness to global trade and investment has facilitated the emergence of a more competitive financial sector and continues to provide real stimulus and ensure economic dynamism. Competitive tax rates and a transparent regulatory environment encourage vibrant commercial activity, and the private sector is a continuing source of economic resilience and competitiveness. However, state ownership and involvement in key sectors remain substantial. A government statutory entity, the Central Provident Fund, administers public housing, health care, and various other programs, and public debt is equal to a year’s production for the entire economy.

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Background

Singapore is a nominally democratic state that has been ruled by the People’s Action Party (PAP) since independence in 1965. The PAP won the May 2010 elections with the lowest percentage of the popular vote in its history. Six opposition members also won seats. Certain civil liberties, such as freedom of assembly and freedom of speech, remain restricted, but the PAP has embraced economic liberalization and international trade. Singapore is one of the world’s most prosperous nations. Its economy is dominated by services, but the country is also a major manufacturer of electronics and chemicals.

Rule of LawView Methodology

Property Rights 90.0 Create a Graph using this measurement

Freedom From Corruption 92.0 Create a Graph using this measurement

Contracts are secure, there is no expropriation, and the commercial court functions efficiently. Singapore has one of Asia’s strongest intellectual property rights regimes, although enforcement could be improved. The government enforces strong anti-corruption measures, and acts of bribery, whether committed inside Singapore’s territory or overseas, are prosecuted by the government.

Limited GovernmentView Methodology

The top income tax rate is 20 percent, and the top corporate tax rate is 17 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals about 14.1 percent of total domestic income. Government spending is equivalent to 17 percent of GDP. Structural budget surpluses have sustained high debt levels near 100 percent of GDP. The state remains heavily involved in the economy through government-linked companies.

Regulatory EfficiencyView Methodology

The overall regulatory environment remains one of the world’s most transparent and efficient. With no minimum capital required, launching a business takes only three days. There is no statutory minimum wage, but wage adjustments are guided by the National Wage Council. Inflation is under control despite the challenging external environment. The state influences prices through state-linked enterprises and can impose controls as it deems necessary.

Open MarketsView Methodology

The trade regime is very open and competitive, and no tariffs are imposed on imports. Foreign and domestic businesses are treated equally under the law, but foreign investment in some service industries remains limited. As a leading global financial hub, the efficient financial sector is highly competitive. The government has been opening the domestic market to foreign banks. Over 100 of 120 commercial banks are now foreign.

Country's Score Over Time

Bar Graph of Singapore Economic Freedom Scores Over a Time Period

Country Comparisons

Bar Graphs comparing Singapore to other economic country groups

Regional Ranking

rank country overall change
1Hong Kong89.3-0.6
2Singapore880.5
3Australia82.6-0.5
4New Zealand81.4-0.7
5Taiwan72.70.8
6Japan71.80.2
7Macau71.7-0.1
8South Korea70.30.4
9Malaysia 66.1-0.3
10Thailand 64.1-0.8
11Kazakhstan63-0.6
12Mongolia61.70.2
13Sri Lanka60.72.4
14Azerbaijan59.70.8
15Kyrgyz Republic 59.6-0.6
16Cambodia58.50.9
17The Philippines58.21.1
18Fiji57.2-0.1
19Samoa57.1-3.4
20Indonesia56.90.5
21Vanuatu56.60.0
22Tonga56-1.0
23India55.20.6
24Pakistan 55.10.4
25Bhutan55-1.6
26Papua New Guinea53.6-0.2
27Tajikistan53.40.0
28Bangladesh 52.6-0.6
29China51.90.7
30Vietnam51-0.3
31Nepal50.40.2
32Micronesia50.1-0.6
33Laos50.10.1
34Maldives49-0.2
35Uzbekistan460.2
36Kiribati45.9-1.0
37Solomon Islands45-1.2
38Timor-Leste43.70.4
39Turkmenistan42.6-1.2
40Burma39.20.5
41North Korea1.50.5
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