It’s official — Singapore is now the world’s most competitive nation.

In the latest edition of the World Competitiveness Yearbook released by the Lausanne-based Institute for Management Development (IMD), Singapore dethroned the United States from its 16-year reign at the top. Hong Kong comes in a close second after the Lion City.

The yearbook is widely regarded to be the most updated and comprehensive ranking of the management of governments, businesses, people and infrastructure in industrialised and emerging nations. 58 key countries are assessed based on 320 different criteria including economic performance, government and business efficiency, exports, level of corruption and infrastructure.

Under business efficiency, it listed key criteria such as productivity, labour market, finance, management practices as well as attitudes and values.

Switzerland, Australia, Sweden, Canada, Taiwan, Norway and Malaysia make up the Top 10 .

Stephane Garelli, Director of IMD’s World Competitiveness Centre, observed that while Asian nations were as badly-hit as others by the financial crisis, they had the ability to pull themselves out of recession much faster.

He tells TIME, “Singapore and Hong Kong suffered during the recession, but demonstrated a striking ability to rebound.”

Compared with the Western world, both countries are reaping the benefits of strong expansion in the surrounding Asian region, he adds.

He points out that during the first quarter of 2010, Singapore’s economy grew 13.1% and China’s 11.9%, while Europe struggled with a projected growth of only 1% this year.

As the largest industrialised nations like Japan, Germany and Great Britain continue to be saddled by debt, emerging economies like Brazil, Russia, India and China are becoming more robust.

“For the first time, the emerging economies seem to create an economic bloc, which becomes increasingly self-sufficient and encompasses markets with a growing middle class, raw materials, money and global brands,” Garelli says.