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Singapore Still The World’s Second Freest Economy

Singapore maintained its spot as the world’s second freest economy in the world for the 12th consecutive year, according to the Fraser Institute's Economic Freedom of the World report 2019.

Singapore achieved a perfect 10 score for its credit market regulations, tying with Hong Kong, Malta, and New Zealand from amongst a list of more than 160 countries. Credit market regulations measures refer to the ownership of banks, the extent of government borrowing relative to private-sector borrowing, and control of interest rates. In addition, Singapore also achieved the top spot for its business regulations.

Meanwhile, Hong Kong continues to be the freest economy in the world, a position it has occupied since 1980, and a rating it has carried since the 1950-1965 mark, according to the report. It also topped the freedom to trade internationally as well as the regulation areas of the study.

Other countries in the top five are New Zealand, Switzerland and the United States of America. Other notable markets that were also included in the study are the United Kingdom (7th), Canada (8th), Australia (9th), Japan (17th) and South Korea (33rd).

Amongst the index’s areas, Singapore ranked second for its freedom to trade internationally; and third for both regulation and sound money, the latter referring to the study of inflation, money growth, and freedom to own foreign currency bank accounts.

Furthermore, Singapore achieved seventh place in the legal system and property rights area, and thirty-ninth for the size of government.

The study index measures the degree to which the policies and institutions of countries are supportive of economic freedom, according to the Frasers Institute. Its cornerstones are personal choice, voluntary exchange, freedom to enter markets and compete, and security of the person and privately-owned property.

Five broad areas were measured in the study: “size of government,” which focuses on spending, taxation, and the size of government-controlled enterprises; “legal system and property rights” or the protection of persons and their rightfully acquired property; “sound money”, which refer to the nature of inflation and value of earned money; “freedom to trade internationally”; and “regulation”, divided into credit market, labour market, and business regulation.