Few global safe havens exist these days. The U.S. market is reaching nose-bleed valuations, Europe has sclerotic growth and several of its countries are economic basket cases. The BRICs are corrupt and truly terribly governed. And Japan is running a risky, steroid-driven version of U.S. monetary policy.

And then there’s Singapore. Ranked yet again by the Economist Intelligence Unit as the world’s #1 place to do business, it’s now one of the world’s richest countries, among its least corrupt, growing rapidly and with budget and inflation measures that are well under control. Given the state of the world today, prudent investors, especially income-oriented ones, should own some Singapore stocks. These investments are not in our Global Income Edge portfolios, but we think they are worthy of consideration. 

I have a soft spot for Singapore, having lived there for three years as a child. Even back then, you could feel its entrepreneurialism; it was full of small, remarkably modern businesses being run from traditional straw “atap” huts in the villages or “kampongs.” The population is a vibrant mix of Chinese-origin, Malays and south Indians.

The old British colonial types were clearly worried by Singapore independence (it was the capital of the British Straits Settlements, a Crown Colony, at the time), and by the tendencies of its new prime minister, Lee Kuan Yew. However my late father, got that question exactly right, saying he had every confidence in any country Lee was running, because he would combine private-sector orientation with a highly efficient and honest public sector.

Lee finally retired as “Minister Mentor” in 2011, but his son Lee Hsien Loong has run the place since 2004, getting reelected every five years (the next election must be held by 2016). Singapore, which has a population of 5.5 million, now has a GDP per capita of $62,800, nearly 20% higher than the United States. What’s more, according to the Economist’s team of forecasters, its GDP is expected to rise by 3.4% in 2014, with a slight acceleration to 3.7% in 2015.

By the standards of China, that may not sound like much, but you to have to compare it with the U.S. Europe and Japan, since Singapore is richer than all three of them. It also expects to run a budget surplus in 2014, has very little debt, and its inflation is running at just over 1%.

Singapore makes its money primarily as one of the world’s largest trading and financial entrepôts (a trading post where merchandise can be imported and exported with paying duties), but also has a substantial manufacturing sector with a specialization in electronics. It is rapidly becoming a world leader in private banking, as Switzerland is harassed by the European Union and Hong Kong falls more heavily under the direct rule of Beijing.

The Singapore market is below its 2007 level, and its P/E ratio is only around 14, which is well below the U.S. market. With the economy growing more rapidly than the U.S. and the stock market some 30% less highly valued, that makes Singapore a bargain – it also doesn’t hurt that the ETF, iShares MSCI Singapore Fund (NYSE: EWS) yields a satisfactory 3.4%. It’s volatile (up 25% in 2010 and down 19% in 2011), but its 10-year average annualized return is 10.3.

Many Singapore companies pay only small dividends. For example, the three large banks yield barely 3%. However, apart from EWS, there are a number of Singapore companies with attractive dividend yields that an international income investor should consider.

In our paid issue of Income Without Borders we discuss two Singapore stocks with high dividends.