The democratic political setting in the country and for its neighbours has an impact of peace and confidence that the system can assure to investors. The cost of business operations are largely determined by free economic forces of demand and supply, since democratic establishments do not interfere with market forces. Business is also favoured by the fact that extra costs incurred during political unrest occasioned by political instabilities are not a factor in the country.
Government policies that directly influence business operations are targeted at making Singapore achieve a major stake in Asian economy. For instance, judicial system which may act as an indicator of investor security was ranked one of the best in Asia in 2008. A survey in the year placed Singapore ahead of major economies such as Japan and China. Heavy judicial penalties that include corporal punishment and death sentences are imposed on defaulters of established business practices, sending pleasant and protective signals to investors. However, Amnesty International and other human rights bodies have continually criticised these penalties. Information on taxation and foreigners’ ownership of property in Singapore is yet to be determined for a clearer political picture.
Foreign policies adopted by Singapore have established cordial relations with the United Nations, Commonwealth as ASEAN movements. Business relations with almost the entire world are therefore facilitated in Singapore foreign relations framework. The strategic roles played by Singapore in international treaties and forums have enabled a good business environment to be established with its counterparts. A good example is the Asia Pacific Economic Cooperation (APEC) forum, whose secretariat is located in Singapore position it at an important economic advantage.
According to recent Government Monitor (2010), economic dip did not affect the