WORLD RANK: REGIONAL RANK:

SINGAPORE
1 1
ECONOMIC FREEDOM STATUS:
S ingapore’s economic freedom score is 89.7, making its economy
the freest in the 2021 Index. Its overall score has increased by 0.3
point, primarily because of an improvement in the score for govern-
FREE
ment spending. Singapore is ranked 1st among 40 countries in the
Asia–Pacific region, and its overall score is well above the regional and
world averages.

Singapore’s economy has been ranked the freest in the world again this
year for the second year in a row. Singapore remains the only country in
the world that is considered economically free in every Index category,
although its indicator scores for fiscal health and financial freedom just
barely make it over the threshold into the highest category.

IMPACT OF COVID-19: As of December 1, 2020, 29 deaths had been

attributed to the pandemic in Singapore, and the economy was forecast
to contract by 6.0 percent for the year.

ECONOMIC FREEDOM SCORE

▲ UP 0.3 POINT
89.7
0 50 60 70 80 100


REGIONAL AVERAGE
(ASIA-PACIFIC REGION) 60.2 61.6 WORLD
AVERAGE

HISTORICAL INDEX SCORE CHANGE (SINCE 1995): +3.4

RECENT FREEDOM TREND QUICK FACTS

100

POPULATION: UNEMPLOYMENT:
89.4 89.4 89.7 5.7 million 4.1%
90 88.6 88.8
GDP (PPP): INFLATION (CPI):
$593.8 billion 0.6%
0.7% growth in 2019
FDI INFLOW:
80 5-year compound
$92.1 billion
annual growth 2.9%
$101,376 per capita PUBLIC DEBT:
111.8% of GDP
70

2017 2018 2019 2020 2021 2019 data unless otherwise noted. Data compiled as of September 2020

BACKGROUND: Singapore is one of the world’s most prosperous nations, with a business-friendly regu-
latory environment and a very low unemployment rate. Despite an active parliamentary 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 has suggested a leadership transition by 2022. Although
certain civil liberties remain restricted, the PAP has championed 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. Principal exports include integrated circuits,
refined petroleum, and computers.

370 2021 Index of Economic Freedom

 WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES

12 ECONOMIC FREEDOMS | SINGAPORE

RULE OF LAW GOVERNMENT SIZE
(+0.7) (–2.1) (+0.8) (+0.2) (+3.0) (No change)

100 100

80 80

70 70

60 60

50 50

97.5 90.8 93.2 90.5 94.1 80.0

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

Property rights are recognized and enforced effectively. Judi-
cial processes are procedurally competent, fair, and reliable,
and the judiciary is regarded as independent. Singapore is
ranked 12th in the World Justice Project’s 2020 Rule of Law
Index and is considered one of the world’s least corrupt
countries. The government actively enforces its strong anti-
corruption laws, although there have been concerns about
nepotism and cronyism.
The top individual income tax rate is 22 percent, and the top
corporate tax rate is 17 percent. Other taxes include a goods
and services tax. The overall tax burden equals 13.1 percent of
total domestic income. Government spending has amounted
to 14.0 percent of total output (GDP) over the past three
years, and budget surpluses have averaged 4.3 percent of
GDP. Public debt is equivalent to 111.8 percent of GDP.


REGULATORY EFFICIENCY OPEN MARKETS
(+1.0) (+0.6) (–0.2) (+0.2) (No change) (No change)

100 100

80 80

70 70

60 60

50 50

93.8 91.5 85.4 95.0 85.0 80.0

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

The government has enhanced its risk-based approach
to construction inspections and simplified the permitting
process. The law generally does not interfere with business
hiring and firing practices. The government funds housing,
transport, and health care subsidies; influences other prices
through regulation and state-linked enterprises; and has grant
programs to help high-growth local firms to innovate, grow,
and internationalize.
Singapore has 25 preferential trade agreements in force. The
trade-weighted average tariff rate is 0 percent, and 182 non-
tariff measures are in effect. Well-institutionalized openness
to global investment encourages vibrant commercial activity.
The government continues its ownership in the financial
sector but has steadily been opening the domestic market to
foreign banks. No restrictive measures have been taken in the
sector over the past year.

The Heritage Foundation | heritage.org/Index 371