THE LEGATUM PROSPERITY INDEX™ 2016

Bringing Prosperity to Life

Singapore

Ranked 19th of 149

At a glance

Ranks

19 th on the Legatum
Prosperity Index™

8th
6th
18th
10th
2nd
1st
97th
31st
11th

SUB-INDEX RANKINGS

In the Prosperity Sub-Index rankings, Singapore performs best on Safety & Security and Health and scores lowest on the Personal Freedom sub-index.

Visit our Rankings table to see how Singapore compares to other countries.

Prosperity Gap

The ‘Prosperity Gap’ takes a country's GDP and uses it as the yardstick to measure a nation's expected Prosperity Index ranking.

Despite being the third wealthiest country in the world, Singapore efficiently delivers more than expected in seven out of nine sub-indexes. However, it has seen its overall small prosperity surplus reduced to just a third of its 2007 size in 2016.

Note:
In the chart above, each dot represents a country. The curve shows the general tendency with which prosperity increases as GDP per capita increases. If a country falls below the curve, then we can say that compared to all other countries, it is under-delivering prosperity for its citizens. Likewise, if a country rises above the curve, then we can say that it is over-delivering prosperity for its citizens. Learn more about the Prosperity Gap here.

Alternatively, have a look at the Prosperity Gap view on our Rankings table for a full list of countries and to see how each of them are performing on the various sub-indices.

Commentary

The decade starting from 2007 has seen Singapore advancing in all aspects of social and economic life, consolidating its position as Asia’s prosperity champion. On the other hand, despite remaining the world’s safest and second healthiest place to live, Singapore’s lead in some areas, notably Business Environment and Social Capital, has been eroded compared to high-rising global competitors. With ups and downs largely cancelling each other out, in 2016 Singapore stands at the 19th in the Prosperity Index, one rank lower than ten years ago.

As is widely acknowledged, the Singapore model starts from clean and efficient government staffed by disciplined and talented officials drawn via a strict meritocratic selection system. An electoral democracy with a dominant political party, the country is nonetheless rated the 19th best in the Governance sub-index. The country’s population, with the world’s highest 91% of confidence in the national government, are apparently enjoying a degree of government effectiveness, regulatory quality, policymaking transparency, and rule of law unseen in any other country, democratic or authoritarian, on the planet. Always keeping a sharp eye on official corruption, the country’s leadership combines unparalleled public salaries with relentless monitoring and punishment to keep official misbehaviour at bay. Constantly ranking among the top ten on the Corruption Perception Index, the international appraisal proved Singapore’s vows on fighting corruption as being anything but hollow statements. With surging enthusiasm among young Singaporeans in participating in politics, the increasing voter turnout, a jump from barely above 32% to over 50% in the last two general elections, helped push the country’s Governance score even higher.

For a country with tiny physical territory and scarce resources, connections to the outside world and the inflow of foreign capital and talents are an essential way of development and even survival. A pro-business environment has been on the top of the government’s agenda since the country’s separation from Malaysia. Singapore has dominated the World Bank’s Doing Business ranking since 2010. An entrepreneur only needs to go through three procedures and wait for three days to start a new business. Electricity and credit are easy to get access to with extremely low costs. The government is obsessed with providing the best infrastructure and applying cutting-edge technologies to better serve the businesses. Putting all these together with a flexible labour policy, it’s not surprising that people with ideas and passion flock to Singapore from all over the world to either expand their business or simply start a new one. The biggest reward from this business friendly strategy is the long term stability and economic progress that is the envy of most other countries. Following a sharp dip in 2009, Singapore’s economy recovered faster than even the most optimistic predictions. The country managed to achieve a nearly 4% average annual GDP growth rate since 2010, a pace unimaginable to most advanced countries. With the unemployment rate checked under three percent, poverty has almost been eliminated and people are growing more content with the country’s economic status and direction, 84% of Singaporeans are satisfied with their living standards in 2015.

Unlike some countries struggling with parallel economic and social development, Singapore has done well at balancing the two. Singaporeans enjoy an outstanding healthcare system and good public order. One of the world’s highest life expectancies and lowest mortality rate are the best testament to its social achievements. An equally convincing record is also captured in the Safety & Security sub-index. People feel safe walking alone at night and incidents of stealing or robbery are rarely heard.

But not all news from the Lion city are good. For LGBT groups this is a difficult place to live. Homosexuality is in practice outlawed and local people are still hostile, though slowly changing, toward same-sex relationships. For a country substantially relying on foreign workers, that almost 30% of the population don’t think the country a good place for immigrants is problematic, and far higher than even increasingly hostile countries in Europe. Government restrictions on religion are growing and capital punishment is still in use. As a result, Singapore has fallen to 97th in the Personal Freedom sub-index.

A more alarming sign comes from one of the most important pillars for Singapore’s prosperity. Once the world’s best destination for businessmen according to the Prosperity Index, the country this year fell to the 6th in the Business Environment sub-index. Leaving aside the relative gains made by other competitors, Singapore has also seen a decline in absolute terms due to stricter labour policies and in particular, a dent in people’s belief in social mobility – compared to ten years ago, 4% fewer Singaporeans believe hard work gets you ahead.

Despite comprehensive improvements in absolute terms over the last ten years, the erosion of Singapore’s advantages in some areas of prosperity, in particularly the Business Environment, deserves the attention of its governors. In an increasingly competitive world, no complacency is allowed if the country aims at the top ten for overall prosperity.


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Data

How to read this graph:
When comparing multiple countries on a spider chart, data points that appear
further away from the center represent a better performance to the points that are closer to the center.

Special Analysis

Special Analysis

OVERALL

With gains in absolute terms across all sub-indexes but Business Environment and Personal Freedom, Singapore has extended its prosperity lead in Asia during the last decade and confirmed the title of the safest and second healthiest country in the world.

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Areas of Success
Areas of Success

More people, male and female, joining the labour force drove an eight rank rise in Economic Quality. Greater enthusiasm for public participation reflected in increasing voter turnout added more democratic legitimacy to Singapore’s already highly effective Governance performance. However, Singapore’s biggest improvement in absolute terms was made in Education, with workers’ average years of both secondary and tertiary education moving up towards the world’s best level.

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Areas of Little Change
Areas of Little Change

Singapore has kept breaking its own record, though incrementally due to declining marginal benefit, for the best practice in Safety & Security. The marginal improvement in Natural Environment failed to save the country from falling out of the global top ten as more countries have directed their attention toward environment protection.

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Areas of Improvement
Areas of Improvement

Stricter restrictions on both the labour policy and religious issues accounted for the country’s loss in both absolute level and relative ranking in Business Environment and Personal Freedom sub-indices. If prosperity is to keep rising in Singapore, both must be addressed.