Singapore is beating the rest of Asia on one key measure
Singapore the best-ranked Asian country in digitalisation index
Singapore is better positioned than any other Asian country to cash in on an increasingly digital world, which should help protect it as trade takes hits from all directions, a new report says.
The Enabling Digitalisation Index, compiled by trade credit insurer Euler Hermes, ranks countries on their level of “digitalisation” - that is, how a country uses technology to digitise businesses and facilitate the cross-border flow of data. The index also takes into account a country’s quality of digital connectedness, logistics performance and ease of doing business.
Singapore was ranked 6th out of the 135 countries in the index, released exclusively to CNBC, and was the only Asian country in the top 10. The top three were Germany, the Netherlands and Sweden. Japan placed 15th and China was 44th.
The report accompanying the index estimated that digitalisation currently contributed 9.4 per cent to the world’s economic output.
Despite Singapore’s heavy reliance of trade, the Euler Hermes report found that the city-state’s economy would remain resilient in the face of flagging global trade because it was able to find alternate growth strategies and opportunities, including through digitalisation.
This comes amid pushback on mega-trade deals, such as the Trans-Pacific Partnership, which the US has recently stepped away from after eight years of negotiations. Euler Hermes found that there were 352 new protectionist measures, from tariffs to preferential tax cuts, put in place around the world in the first half of 2016 alone.
Global trade has also slowed in recent years on the back of a slowdown in China’s previously rocketing economic growth. The World Trade Organisation (WTO) has forecast growth in the volume of world trade for 2016 to be at its slowest since the global financial crisis in 2009.
World trade volume is expected to grow by just 1.7 per cent this year , which will be the fifth consecutive year that global trade came in below 3 per cent, the WTO said in 2016.