Singapore is the third most competitive economy in the world, according to the World Economic Forum's Global Competitiveness Report 2009. It was fifth last year. The city-state has become more competitive, according to business leaders, because of the manner in which the government has tackled the recession.

"The country’s institutions continue to be ranked as the best in the world; at a time when confidence in governments in many countries has diminished, they are assessed even more strongly than in past years," says the report.

Switzerland is now ranked the world's most competitive economy, pushing America down to second spot.

But Singapore could be more innovative and more high-tech, says the report, and encourage more broadband Internet use.

Apart from that, the report is all admiration for Singapore. It says:

"Singapore places 1st for the efficiency of its goods and labour markets and 2nd for its financial market sophistication… Singapore also has world-class infrastructure (ranked 4th), leading the world in the quality of its roads, ports, and air transport facilities. In addition, the country’s competitiveness is propped up by a strong focus on education, providing highly skilled individuals for the workforce. In order to strengthen its competitiveness further, Singapore could encourage even stronger adoption of the latest technologies—especially broadband Internet—as well as the innovative capacity of its companies."

Another reason why Singapore does so well in these surveys – and why America fell from first to second place – is money: how the government raises and spends it. High public debt is anathema to business leaders. They value what the report calls "macroeconomic stability". America's "greatest overall weakness continues to be related to its macroeconomic stability," says the report, adding: "Repeated fiscal deficits have led to burgeoning levels of public indebtedness, which are presently being exacerbated by significant stimulus spending." In other words, it does not like President Barack Obama's economic policies.

What the report measures is how good a country is for business – and not its gross domestic product or the size of its economy. China, for example, the third largest economy in the world, is ranked 29th, India 49th.

The 10 most competitive economies are:

Hong Kong is ranked 11th. It is first in financial market sophistication, second only to Germany in infrastructure, second also in goods market efficiency, fourth in labour market efficiency and ninth in technological readiness.

Singapore is ranked first in institutions, goods market efficiency and labour market efficiency, second in financial market sophistication, fourth in infrastructure, fifth in higher education and training, sixth in technological readiness, eighth in innovation, 13th in health and primary education, 14th in business sophistication, 35th in macroeconomic stability and 39th in market size.

The rankings are based on the so-called 12 pillars of competitiveness: Institutions, infrastructure, macroeconomic stability, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market sophistication, technological readiness, market size, business sophistication, and innovation. (See the full report on the World Economic Forum website.)

Taiwan is 12th, Australia 15th, South Korea 19th and New Zealand 20th among the 133 countries and territories surveyed. Rounding off the top 20, Britain is 13th, Norway 14th, France 16th and Belgium 18th.

Closer to Singapore, Malaysia is 24th, Brunei 32nd, Thailand 36th and Indonesia 54th. Among other countries in the region, Vietnam is 75th, Sri Lanka 79th, the Philippines 87th, Pakistan 101st, Bangladesh 106th, Cambodia 110th and Nepal 125th.

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