The PAP’s obsession with GDP growth

Following the publication of the Economic Strategies Committee report earlier this year, we were supposed to be restructuring our economy. Growth was supposed to be slower, and led by productivity gains, not manpower inputs. Yet, the other headline today directly contradicts this: “100,000 foreign workers needed: PM”.

After a drop of just 4,200 foreigner numbers last year due to the downturn, the PAP’s “open-the-floodgates” immigration policy is back with a vengeance. So much for all their promises of “moderating” the inflow of foreigners.

THIRTEEN to 15 per cent. That is the government’s latest projection of GDP growth rate for 2010. To the casual observer, this looks like fantastic news. It makes for a great pre-election fodder.

However, just like fodder, it may turn out to be inedible to humans. This kind of growth rate is not natural, not least for a supposedly developed economy like Singapore. Even China, with all the talk about its economy overheating, is not expected to have more than 10 per cent growth this year. The reality may bite for ordinary Singaporeans in a few months time: Inflation is likely to shoot up; the prices of everything, from utilities to food to transport will continue on their dramatic upward trend. Yet a recruiting firm managing director interviewed by TODAY warned that those who expect a much higher salary from their current job may be disappointed, because many hiring managers still peg their salary figures against last year’s rates. PM Lee himself said that “you don’t want it to happen too suddenly. You have to manage it (wage increases).”.

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Growth must improve welfare of Singaporeans: Sylvia Lim

Our ultimate aim of growth is to improve the welfare of all citizens. GDP is not an adequate indicator of welfare, and the government’s pursuit of growth in the recent years has had serious side-effects on the quality of life, and social cohesion.

This was the speech Non-constituency MP and Workers’ Party chairman Sylvia Lim delivered in Parliament yesterday.

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Each year, the government has certain GDP growth targets and plans the Budget and policies around it.  This year, the government has put in place a productivity target recommended by the Economic Strategies Committee.

Whatever measure is used, the ultimate aim of growing our economy must be to forge a higher quality of life for all our citizens.  Though not everyone has the same talents and capabilities, our growth must provide every person with a good standard of living and a sense of physical and economic security.   We may be a small country geographically, but within our borders, citizens should feel at home and valued as persons and not just for economic contributions. Continue reading “Growth must improve welfare of Singaporeans: Sylvia Lim”

Measuring economic performance: Looking beyond GDP

While GDP is a broad measure of a country’s economic performance, it falls way short as a comprehensive measure of the economic health of a nation in more ways than one.

It is the highlight of every National Day Message from the Prime Minister[1]. No National Day Rally speech gets delivered without its mention. Economic statistics dished out by the government never fail to mention it. It is used as  the main measure of how well our nation is doing economically. Indeed, it is such an important statistic that the bonuses of all the Cabinet ministers and 60,000 civil servants are pegged to it.

I am talking, of course, about Singapore’s Gross Domestic Product (GDP).

The GDP is the market value of all final goods and services produced in a country in a year. Specifically, it is the sum of consumption, investment, government spending and exports, minus imports, in one year. Economists usually talk about GDP in terms of its year-on-year growth, measured as a percentage increase (or decrease) from the previous year. Also frequently quoted is the GDP per capita, which is the GDP divided by the total number of residents in the country.

GDP a poor measure of performance

While GDP is a broad measure of a country’s economic performance, it falls way short as a comprehensive measure of the economic health of a nation in more ways than one.

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