WORLD RANK: REGIONAL RANK:

SINGAPORE
2 2
ECONOMIC FREEDOM STATUS:
S ingapore’s economic freedom score is 89.4, making its economy the
2nd freest in the 2019 Index. Its overall score has increased by 0.6
point, with increases in scores for trade freedom and government integ-
FREE
rity outpacing modest declines in labor freedom and property rights.
Singapore is ranked 2nd among 43 countries in the Asia–Pacific region,
and its overall score is well above the regional and world averages.

Singapore owes its success as a highly developed free-market econ-

omy in large part to its remarkably open and corruption-free business
environment, prudent monetary and fiscal policies, and a transparent
legal framework. The government has continued to promote economic
growth through an active industrial policy that targets fiscal incen-
tives, increases public investment, promotes development of skill sets
attractive to foreign investors, and focuses on economic diversification.
Well-secured property rights promote entrepreneurship and produc-
tivity growth. The rule of law is undergirded by a societal intolerance
of corruption.

ECONOMIC FREEDOM SCORE

( UP 0.6 POINT )
89.4
0 50 60 70 80 100

REGIONAL AVERAGE
(ASIA-PACIFIC REGION) 60.6 60.8 WORLD
AVERAGE

RELATIVE STRENGTHS: HISTORICAL INDEX SCORE CONCERNS:

Property Rights and CHANGE (SINCE 1995): Financial Freedom and
Government Integrity +3.1 Investment Freedom

FREEDOM TREND QUICK FACTS

100

POPULATION: UNEMPLOYMENT:
5.6 million 2.0%
89.4 88.6 88.8 89.4
90 87.8
GDP (PPP): INFLATION (CPI):
$527.0 billion 0.6%
3.6% growth in 2017
FDI INFLOW:
80
5-year compound
$62.0 billion
annual growth 3.5%
$93,905 per capita PUBLIC DEBT:
110.9% of GDP
70

2015 2016 2017 2018 2019 2017 data unless otherwise noted. Data compiled as of September 2018

BACKGROUND: Singapore is one of the world’s most prosperous nations. Despite an active parliamen-
tary opposition, it has been ruled by one party, the People’s Action Party (PAP), for many decades. Prime
Minister Lee Hsien Loong has led the government since 2004 and will oversee a PAP leadership transition
before the next parliamentary election, due by 2021. Although certain civil liberties remain restricted, the
PAP long ago embraced economic liberalization and international trade. Services dominate the economy,
but Singapore is also a major manufacturer of electronics and chemicals and operates one of the world’s
largest ports. Its unemployment rate is one of the lowest in the developed world. Principal exports include
integrated circuits, refined petroleum, and computers.

374 2019 Index of Economic Freedom

 WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES

12 ECONOMIC FREEDOMS | SINGAPORE

RULE OF LAW GOVERNMENT SIZE
(–1.0) (+1.5) (+3.9) (No change) (+0.1) (No change)

100 100

80 80

70 70

60 60

50 50

97.4 92.4 95.1 90.4 90.7 80.0

0 0
Property Judicial Government Tax Government Fiscal
Rights Effectiveness Integrity Burden Spending Health

Singapore protects property rights and enforces
contracts effectively. Commercial courts function
well, but the government’s overwhelmingly suc-
cessful track record in court cases raises questions
about judicial independence. Singapore is one of the
world’s least corrupt countries and has numerous
safeguards and audit controls in place. When cor-
ruption is discovered, it is dealt with swiftly, firmly,
and publicly.
The top individual income tax rate is 22 percent, and
the top corporate tax rate is 17 percent. The overall
tax burden equals 13.7 percent of total domestic
income. Over the past three years, government
spending has amounted to 17.6 percent of the
country’s output (GDP), and budget surpluses have
averaged 4.3 percent of GDP. Public debt is equiva-
lent to 110.9 percent of GDP.

REGULATORY EFFICIENCY OPEN MARKETS

(–0.1) (–1.6) (+0.1) (+4.8) (No change) (No change)

100 100

80 80

70 70

60 60

50 50

90.8 91.0 85.3 94.8 85.0 80.0

0 0
Business Labor Monetary Trade Investment Financial
Freedom Freedom Freedom Freedom Freedom Freedom

The overall entrepreneurial environment remains one
of the world’s most transparent and efficient. The
business start-up process is straightforward, with
no minimum capital required. The labor market,
supported by flexible labor regulations, is vibrant
and functions well. The government funds generous
housing, transport, and health care subsidy pro-
grams and influences other prices through regula-
tion and state-linked enterprises.
The combined value of exports and imports is equal
to 322.4 percent of GDP. The average applied tariff
rate is 0.1 percent. As of June 30, 2018, according to
the WTO, Singapore had 182 nontariff measures in
force. The country’s openness to global investment
encourages vibrant commercial activity. The govern-
ment continues its ownership in the financial sector
but has steadily been opening the domestic market
to foreign banks.

The Heritage Foundation | heritage.org/Index 375