21-3-2024 (SINGAPORE) Singapore has emerged as the most appealing destination for foreign investments in the region, yet it lags behind some advanced economies in fostering environmentally friendly and socially inclusive growth, reveals a new index.
The Milken Institute’s Global Opportunity Index for 2023 ranked Singapore first among its Asian counterparts and 14th among 130 nations globally, marking a four-place climb from 2022. Notably, Hong Kong secured the 15th spot, with Japan following closely one position below, rounding up the top 20 globally.
Denmark clinched the top spot globally, with Sweden slipping to second place, trailed by Finland in third, and the United States ascending one spot to fourth.
Dr. Maggie Switek, senior director at the Milken Institute and lead author of the report, informed The Straits Times that Singapore’s ascent in the rankings was propelled by robust economic growth and strength in business perception. The latter measures the ease of conducting business and the regulatory framework facilitating contract enforcement and dispute resolution.
Additionally, Singapore excelled in the institutional framework category, particularly in safeguarding investor rights and transparency.
However, Dr. Switek highlighted areas of improvement for Singapore, particularly in fostering environmentally friendly and socially inclusive growth, reflected in its relatively low ranking in the “future environment for growth.”
While Singapore’s foreign direct investment (FDI) inflows soared to a record high of US$141.2 billion in 2022, making it the world’s third-largest FDI recipient after the US and China, it trailed behind in aspects such as air pollution and the proportion of women in government.
The Milken index, which evaluates 100 indicators across five categories, including business perception, economic fundamentals, financial services, institutional framework, and international standards and policy, provides a comprehensive assessment of a country’s investment potential.
Among emerging and developing Asian economies, Malaysia emerged as offering the most favourable investment conditions, ranking 27th globally, ahead of Thailand at 37th and China at 39th. The latter saw a decline in appeal due to rising geopolitical tensions with the US.
The report also noted a shift in investor sentiment towards Latin American countries, particularly Mexico and Brazil, which jointly accounted for over 60 per cent of foreign direct investment in the region, as capital inflows to China turned negative in 2022 for the first time since 2015.
Despite this, China’s innovation economy exhibited strong momentum, with the mainland surpassing the US in the annual number of scientific publications in 2019, indicating its potential to rival other advanced economies in innovation.
