Answer Happy

During the first half of the 1960s, two island countries with
nearly identical levels of per capita real GDP—about $2,700—and the
same populations—just over 1,700,000 at that time—became
independent nations.
One was Jamaica, and the other was Singapore. Since that time,
Jamaica’s population has grown to 2,700,000 people. Singapore’s
population has grown to 3,500,000. Today, Jamaica’s per capita real
GDP is about $4,800. In contrast, Singapore’s per capita real GDP
exceeds $31,000.
Why has Jamaica’s per capita real GDP grown so much less than
Singapore’s, even though Singapore’s population has increased at a
faster pace? The fundamental answer is that people in Jamaica have
considerably less economic freedom. In contrast to Singapore, which
has business taxation and regulations rated among the least
burdensome in the world, tax rates and regulatory rules in Jamaica
rank among the most oppressive. As a consequence, rates of growth
of saving, investment, and productivity—and, hence, per capita real
GDP—in Jamaica have been far below corresponding growth rates in
Singapore.
In Jamaica, the cost of registering a business is 13 percent of
the value of a firm’s capital, as compared with less than 0.2
percent in Singapore. In which country would you guess that more
new companies are started each year?