Singapore has lost grip of its top position in a sustainable trade ranking and fell to third place among 19 other Asian economies and the US.
Published on Tuesday (Jun 26), the Hinrich Foundation Sustainable Trade Index, which evaluates economies based on economic growth, social capital and environmental protection, revealed that Singapore had performed generally well, ranking first in the economic pillar in 2018.
However, lower scores on the environmental pillar have caused the country to slide by two places in the overall ranking compared to 2016 when it topped the list.
The Index – put together by the Economist Intelligence Unit (EIU) – uses 24 indicators to measure the readiness of each economy to participate in global trade. Specifically, in ways that create sustainable growth, encourage foreign direct investment, and attract funding and support from multilateral development agencies.
Singapore ranked first in five economic indicators, namely current account liberalisation, tariffs and non-tariff barriers to trade, technological infrastructure, foreign trade and payments risk as well as trade costs, of which a perfect score of 100 was attained for the former three indicators.
Although its lowest score was in gross fixed capital formation – attaining a score of 31 against the Index average of 42.2 – the nation managed to outclass other upper-income economies including the US, Taiwan and Hong Kong.
“This excellent economic sustainability performance related to trade is not surprising given trade has been central to Singapore’s development and continues to play an important role today,” said the report.
With regards to matters of equality and political stability, Singapore stagnated in its performance and remained in fifth position for the social pillar since 2016.
Singapore was one of the top two countries for political stability and educational attainment, following closely behind Japan and South Korea respectively.
Nonetheless, Singapore had one of the highest levels of inequality in the Index based on the Gini coefficient which measures the inequality between the upper and lower income brackets of a country.
In 2018, Singapore’s Gini coefficient was 34, drastically lower than the Index average of 62.3 and hence putting it among the bottom five economies alongside Thailand, Malaysia, China and Hong Kong.
Performance in environmental sustainability had generally deteriorated among richer economies, according to the report. With air pollution, deforestation and transfer emissions having worsened in 2018, Southeast Asian economies – particularly Singapore, Malaysia and Thailand – experienced major score declines.
Singapore dipped from second place in 2016 to fourth position overall in 2018 despite a perfect score on the water pollution indicator that was largely attributed to decade-long efforts to improve water quality.
The biggest performance drop was in the air pollution indicator that measures levels of particulate matter 2.5 (PM 2.5) in a country. Singapore plunged from first place in 2016 to 14th place in the 2018 Index due to significantly higher levels of transboundary haze pollution
Poor scores were also recorded in the indicators for transfer emissions, deforestation, share of natural resources in trade and environmental standards in trade.
Chris Clague, the EIU’s managing editor, said: “Governments are still the driving force behind sustainable trade and the results of the 2018 Index clearly show that many in Asia-Pacific need to be doing more.”
“But it is encouraging to see that the private sector has come to see sustainability – and not just environmental sustainability – as a vital component of corporate strategy,” he added.