Cultural Environment of Singapore

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393
How Do We Measure Economic Freedom?
See page 477 for an explanation of the methodology
or visit the Index Web site at heritage.org/index.
2011 data unless otherwise noted.
Data compiled as of September 2012.
Quick Facts
Economic Freedom Score
Least Most
free free
50
25 75
0 100
0 20 40 60 80 100
Country Comparisons
Freedom Trend
Country
World
Average
Regional
Average
Free
Economies
2009 2010 2011 2012 2013
85
86
87
88
89
88.0
59.6
57.4
84.5
88.0
Population: 5.3 million
GDP (PPP): $314.9 billion
4.9% growth in 2011
5-year compound annual growth 5.7%
$59,711 per capita
Unemployment: 2.0%
Inflation (CPI): 5.2%
FDI Inflow: $64.0 billion
Public Debt: 100.8% of GDP
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.
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.
World Rank: 2 Regional Rank: 2
Singapore
394 2013 Index of Economic Freedom
Property Rights
Freedom from
Corruption
Fiscal Freedom
Government
Spending
Business Freedom
Labor Freedom
Monetary Freedom
Trade Freedom
Investment Freedom
Financial Freedom
Score Changes
Business Freedom
Labor Freedom
Monetary Freedom
REGULATORY
EFFICIENCY
OPEN
MARKETS
Trade Freedom
Investment Freedom
Financial Freedom
LIMITED
GOVERNMENT
Fiscal Freedom
Government Spending
RULE OF LAW Property Rights
Freedom from Corruption
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
0 20 40 60 80 100
Country World Average Rank
RULE OF LAW LIMITED
GOVERNMENT
REGULATORY
EFFICIENCY OPEN MARKETS
0
–1.0
–0.2
0
–0.1
–0.7
–2.8
0
0
+10.0
2nd
5th
25th
9th
4th
2nd
18th
1st
27th
4th
90.0
92.0
91.1
91.3
97.1
91.4
82.0
90.0
75.0
80.0
THE TEN ECONOMIC FREEDOMS
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...
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