Singapore Buildings

SINGAPORE: Singapore leads Asia in attracting foreign investments, according to the latest findings from the Milken Institute’s Global Opportunity Index. While the country’s economy is strong, the city-state still grapples with challenges in environmental sustainability and social inclusivity.

The Milken Institute’s report for 2023 positions Singapore at the forefront among its Asian counterparts, clinching the 14th spot globally out of 130 countries surveyed. This marks a four-place jump from its standing in 2022.

Notably, Hong Kong and Japan also secured spots in the top 20 globally, ranking 15th and 16th, respectively.

Global Opportunity Index Top 20
Photo: Milken Institute

According to the national broadsheet, Dr Maggie Switek, the lead author of the report and senior director at the Milken Institute, attributed Singapore’s climb in rankings to its robust economic growth.

Particularly, Singapore’s strength lies in its “business perception” reflecting the ease of doing business and the regulatory frameworks supporting contract enforcement.

In addition, Singapore excels in its “institutional framework”, safeguarding investor rights and ensuring transparency.

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Dr Switek noted, “It means that overall investment conditions remain strong, which is also reflected in Singapore’s capital inflows. The strength of investor rights coupled with its relatively low business constraints mean that investors should feel comfortable operating in Singapore.”

According to a United Nations report, the foreign direct investment (FDI) to Singapore reached US$141.2 billion (approximately S$190.27 billion) in 2022, a notable increase from US$131.1 billion (approximately S$176.66 billion) in 2021.

However, the country could do better on its indicators related to environmentally friendly and socially inclusive growth,” said Dr Switek.

Singapore faces challenges in environmental sustainability and social inclusivity, reflected in its lower ranking in the “future environment for growth” category.

Global Opportunity Index Top 20 (GOI Rankings across GOI categories)
Photo: Milken Institute

This discrepancy places Singapore below the average of advanced economies, notably lagging behind in indicators such as air pollution and gender diversity in governance.

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The Milken index, based on 100 indicators across various categories, provides a comprehensive assessment of a country’s investment potential. From business perception to economic fundamentals and institutional frameworks, the index considers multiple facets crucial for investors.

While Singapore shines as a top spot for investments in Asia, Malaysia is also doing well among developing countries, ranking 27th globally. In addition Thailand ranked 37th while China placed 39th.

Due to geopolitical tensions with the US, China has become less appealing  to investors, leading to a shift in sentiment towards Latin American countries.

The report also talks about China’s growing focus on the innovation economy, positioning it as a rival to advanced economies like the United States. /TISG

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