Singapore, the small island city-state, has taken the crown of the most competitive economy in the world, according to an annual, widely followed, study. The United States dropped to third place. Some may consider the reasons obscure because they involve the value of the dollar and high fuel prices.

According to IMD’s study, which began in 1989 and includes 235 measurements, Singapore topped a list of 63 economies. These include nations in North America, Latin America, Asia, the Middle East, Europe, as well as South Africa.

Commenting on the study, Arturo Bris, IMD professor and director of IMD World Competitiveness Center, said:

In a year of high uncertainty in global markets due to rapid changes in the international political landscape as well as trade relations, the quality of institutions seem to be the unifying element for increasing prosperity. A strong institutional framework provides the stability for business to invest and innovate, ensuring a higher quality of life for citizens.

Singapore took the top spot because of its leading technological infrastructure, access to skilled labor, open immigration laws and the ready ability of regulations that allow new businesses to start and potential flourish. This may help explain why Singapore is at the top of one of the richest countries in the world.

Hong Kong SAR took the second place due to “a benign tax” and government regulations that favor businesses and the ability for companies to get access to capital. Deeply trouble Venezuela took last place.

The study’s opinion of the United States rested on the observation that the effects of the Trump tax laws have faded as contributors to the economy. IMD’s comments on American fuel prices have some support because of the increase in the price of crude oil, despite the rise of America to the position as the world’s largest producer of crude. The researcher also observed that “high tech exports” have fallen.

The methodology for the study is based primarily on four factors, which are economic performance, infrastructure, government efficiency and business efficiency. The United States is still the world’s largest economy by far. Many U.S. states even have a GDP larger than entire countries.

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