Thursday, July 15, 2010

Singapore is the fastest growing economy in the world!

The Singapore economy grew a whopping 18.1% in the 1st half this year and is set to grow by 13-15% in 2010[Link]. This growth rate exceeds that of China.

This growth spurt like the economic growth of the past few years has not translated to gains for many ordinary Singaporeans in terms of wages. The over-heated rapid growth has resulted only in rising cost of living - housing prices, transport costs etc. PM Lee said yesterday that the rapid growth means that we have to bring in 100,000 more foreign workers:
'It cannot be helped because with the market so tight, if we don't allow the foreign workers in, you are going to have overheating.

'But we are managing the number of foreign workers. Their levies are being calibrated to moderate the inflow.

'But even with that, I would imagine there would be more than 100,000 extra foreign workers this year. I cannot see it otherwise. We have to accept that.' - PM Lee [Link]

I see. So that is what the PAP means when it talks about moderating foreign workers. We have to just accept it - the crowded trains getting more crowded, the high housing prices becoming higher and cost of living goes up further.

So what is the difference for Singaporeans if we grow 5% vs 14%? I figure we have to grow about 4% to maintain full employment for Singaporeans. However, PM Lee said something rather interesting yesterday. He said the rapid growth means we have to import more foreign workers - so the justification for more foreign workers is rapid growth. The truth is we are able to achieve this block buster, world beating economic growth because Singapore imports more foreign workers per capita than any other country (less the few oil rich middle eastern nations). Now this growth becomes justification for more foreign workers. So much for sincerity in wanting to moderate the number of foreigners.

Many countries are wary of the economy growth being too fast. China is one good example. They spent the last 9 months cooling off their economy to get growth down to below double digits because the cost of living was rising too quickly in particular the housing market. I'm not saying the Chinese have done a great job - in recent months there has been worker unrest all over China because wages have risen too slow compared with the cost of living and the income gap in China has widened further. It would have been worse if the Chinese govt had done nothing. The Chinese govt also allowed the Yuan to rise to keep inflation under control. You can expect the MAS to allow appreciation of S$ for the same reason. What is clear is fast growth is not always good ...and in today's economy it is more often bad for ordinary citizens because over the years, a greater % of GDP has been going into company profits vs workers' wages. Do the recent economic growth benefit you greatly? Were you able to sell your HDB flat at a high price...?..Hmm so now you're homeless and have to pay more for a smaller unit!

47 comments:

Always Off Guard said...

this is ridiculous! sg economy is like an adolescent fed with steriods.

if sg is a developed economy, growth will not be so erratic - one year severe recession and the next unbridled expansion.

it all boils down to the incompetency of central economic planning - as usual pap has been caught off guard when they projected growth to be around 4 to 5% early this year.

Anonymous said...

Somehow I think there will be magic 66% who will still be happy, whether fastest growth or recession.

This is because they benefited a lot during fastest growth but also didn't suffer much during recession. That's why they are happy.

If this is ensured, and PAP govt is already an expert on this, they can even import 200K or even 1 million of foreign workers if necessary. Or HDB 3 rm flat to cost $1m. Not an issue.

The opposition have a lot to learn from PAP on this aspect.

Anonymous said...

You are a fucktard if you think voting in the PAP will make your life better. So what if the economy goes up? Pay still remains the same while COL will go up. HDB prices will be even higher and beyond the ordinary citizen's reach, trains will be packed even more as more FTs and new Singapore citizens will be imported. Only Ministers' pay will increase because the economy and GDP grew. Heads you lose, tails you lose, what a fuck-up future.

Anonymous said...

no wonder we are expected to have no flood free singapore....cause even if not to be flooded by rain, also get to be flooded by foreign workers....

Anonymous said...

Im in my fifties and many a time when expressing my concern for the rising cost of housing, friends who are younger will never see the end point. Some of them are jumping into their second home purchase, while others will argue with me that we are indeed lucky to have our assets appreciate over the years.

The influx of too many foreign workers in such a short span of time is disruptive. It will surely ramp up the cost of everything, and yes I agree that even if the GDP were to be 15 pct constant, it will never trickle down to us because it is the MNC that is making the money, and their attendant workers they bring along.

Im no economist, but even as they are paid 1,000 a month, they remit part of it back to their homeland, and the balance is to sustain their living expenses in Singapore. If the wages are not circulated back into the economy, BIG HAIRY DEAL.

In my time, what we make, we put back into the local economy, and every level have a chance to make some. Maybe someone should tote up the outward bound remittances and see the leak to this velocity of money.

Anonymous said...

"...We have to accept that.'

"WE" only applicable to LESSER MORTALS

Reena said...

For the fifty year old anonymous: that's bollocks. Covering your living expenses in Singapore involves rent, food, clothing....and that's money that stays in the country.

Anonymous said...

Opposition jackpot goes up. More will rise to hit the jackpot so all work out for the better.
May the best person laugh to the bank.

Anonymous said...

I thought the big news is we are going to have another 100,000 foreign workers coming this year?

Anonymous said...

For 9:47

Do you know how these imported trash lives and spend?

At least 8 persons to a room, eating packet noodles or free food from charity organisations. The only thing they probably spend on par with Singaporeans is transport. In short, minimal spending relative to their income.

Remitting money home is the raison d'tre of their being here, not pumping up the local economy with their spending. And yes, it would be interesting to know what is the outflow of foreign exchange to the countries they came from.

MM said...

bullshit forecast, is it forecast by that old man?
Just an excuse for them to import more Foreign workers.

tauhuayboy said...

'We have to accept that'

Ya lor. Like we have to accept that the MRT is crowded.

Anonymous said...

I am so happy for all the Minsiters whose performance bonus next year will go up to millions :)
Ps - it is linked to GDP growth I think. Meanwhile, no salary increase for the minions - just crowded MRT and expensive resale flats.
Agree with PM Lee - no choice if the cabinet WANTS higher performance bonuses,

jamesneo said...

high growth does not equate to sustainable growth. In many cases, this high growth is a result of stimulus like what happened after tech bubble burst in US whereby there was a housing boom from 2002-2006.When the bubble burst eventually, we will head to a worse recession. Our property bubble (both the residential and commercial real estate bubble is full steam ahead and might last a few more years before suffering a gigantic bust).

Anonymous said...

Not too long ago, in a desperate effort to sooth citizens' nerves over indiscriminate importation of foreigners to boost GDP, PAP paid lip service by saying they would "tighten" immigration.

Now they're inventing excuses to continue mass importing foreign labour in order to boost property prices and hence create "GDP growth".

After all every human being needs a place to stay, and importing another 100,000 when housing, healthcare and transport systems are already over stretched will only lead to further increases in rent (hence property prices), hospital queues, more sardine packed MRT trains and buses, and fatter bonuses for PAP ministers!

Increasing inputs will naturally lead to GDP increases. This is the easiest way to create that extra GDP growth without actually doing much. These PAP kleptocrats paid themselves MILLIONS to leegally plunder from the system.

Anonymous said...

Phew! Thought they meant they'll need another 100,000 new citizens for the coming erection...

Anonymous said...

To Anon 10.33

How much the FTs' remittance back home does not impact Singapore's economy. Look at it in another way., for example, the thousands of Singaporeans going to Malaysia and their overseas travels/tours everyday. Just try to understand the economics of why this is so as you are confuse about it.

Anonymous said...

15% GDP growth? Big fcuking deal! This is the real breakdown of numbers:-

8% goes to PAPpies and their bootlicking "elites".
6% goes to MNCs and GLCs.
3% goes to CEOs, Chairmans, MDs.
-2% goes to You.

Yes, -2%. Obvious to see that your income does not rise faster or even at the same rate as cost of living or inflation. Hence ultimately you either cannot afford, or you need to borrow more for longer period of time and be enslaved to the system.

And moderation of foreigners coming in? Yeah, moderation from 20,000 a month to 10,000 a month.
But wait! This is only for pre-election publicity stunt. After GE, we will see 30,000 foreigners a month.

Oh btw, thanks to your hard work & sacrifice, PAPpies will be giving themselves 50% bonuses and pay increments.

Anonymous said...

At some point, when it doesnt make economic sense to stay, the well-heeled FTs, PRs, and new citizens will dump this place and move to greener pastures or perhaps back to their respective homelands as landowners etc. It happened in Dubai and it will happened here.
The exodus of the local Singaporean will be felt when they start to feel like foreigners in their own homeland. Thats my prediction but I do hope I am wrong.

Anonymous said...

to anon 11:50

of course the remittance matters. take the philippines for example, it's a country whose economy is significantly dependant on foreign remittance received by overseas philippinos.

your example of sg travelling overseas being equivalent to foreigners sending savings overseas is pure bullocks! outflows in tourist dollars is not the same as regular foreign remittance.

the very fact that pap chooses to hide certain important statistics e.g. foreign remittance shows that there is indeed a skeleton in that closet. just like mica's ban on Dr Lim Hock Siew's film.

Anonymous said...

Visit Orchard Road. Is not even crowded like major cities YET. We have more room to be merrier. The more the merrier. Lol

Anonymous said...

When will Singaporeans wake up and stop believing in the promises of the papists leegime ? The sooner they stop trusting these gangsters and act boldly in the GE the better it will be for all Singaporeans and Singapore. This hope that the papists leegime will change for the better is a major impediment to Singaporeans moving forward.

Ordinary Singaporean said...

13-15% GDP growth - should I, an ordinary Singaporean, be happy?

In the past year, my cost of living has gone up - property tax, children's education fees, utility bill, bus/MRT fares, conservancy fee.

And my take-home pay has not increased. If I lose this job, I would have to compete with younger and cheaper foreigners for another.

Looking forward, bills/fees/fares will go up with the killer being the GST increase from 7 to 10%.

Back to my question - should I, an ordinary Singaporean, be happy?

Go figure.

Anonymous said...

The erratic and highly fluctuating economy means one thing - we are heading faster and faster towards un-sustainability and a major correction ahead. Taking economic steroids will only lead to permanent and irreversible damage. Yet the clown can laugh heartily and pluck a 100,000 figure from the air. Singapore is doomed under this useless and clueless PM and his paper generals.

Anonymous said...

On the brighter side, the jackpot will get bigger. Will you be the lucky one?
At least vote to change $omeone's life for the better.

Anonymous said...

The PM should tell us how this impressive growth has benefited the citizens. If it hasn't, why then should we accept and/or bear the cost of importing these foreign workers.

Maybe the ones who benefited can pay more taxes. Last I found out, when a garang guni man was collecting newspapers from me, even illegal workers supposedly here on 2-week holidays, are competing with them for business.

What has economic growth done for folks like that, Mr PM? What has the home team/immigration dept done to tackle illegal workers making a living here while on "holiday" at the expense of those at the bottom of the economic ladder?

Unless you answer these questions, Mr PM, your rhetoric is only an empty meaningless resonance.

Anonymous said...

Our dear PM: "Accept it."
Us: "Fat chance!"

C'mon pple, why are we still voting in this bunch of bums year after year?

Anonymous said...

This country is like a sickly looking person that regularly requires a plastic beautification, a jab of botox and a thick layer of pancake from time to time, but they are all fakes. At most, it is mere make-ups.

Anonymous said...

We need the church to lead us to milk and honey or how to milk for honey.

Anonymous said...

"We have to accept that"

This reminds me of the "bitter pills" our dear pm advised us to swallow when he raised the GST.

See how easy for him to say such words of wisdom. Yes, it is easy because we are the one having to pay for the social cost, not him.

What a fucking selfish idiot!

Anonymous said...

You people are dry with no answers. For talking rubbish, you deserve each other. LOL

Anonymous said...

what's the use of been fastest economy growth, it doesnt benefits citizens, only let the Pay And Pay people to claim more credit to adjust their pay higher.

Coming out with such report giving them excuse to import more foreigners in.

The recent tighten of importing foreign is just a fake show. Step back 1 step, move forward 2 steps.

Anonymous said...

If our leaders are not paid what they want, not what they are worth, there is always the danger of them becoming corrupted. So, they claimed. THIS IS THE MOST CORRUPTED WISDOM I HAVE CAME ACROSS.

patriot

Anonymous said...

If our leaders are not paid what they want, not what they are worth, there is always the danger of them becoming corrupted. So, they claimed. THIS IS THE MOST CORRUPTED WISDOM I HAVE CAME ACROSS.

patriot

Anonymous said...

@ Anon 15/7/10 19:07

What rubbish are you spewing? What answers are you asking for? Aren't they paid to come up with the bestest solutions?

Why are we even asked to give suggestions for a simple cock-up like the Singapore Pavilion in the Shanghai Expo?

What are we bursting the YOG budget for? Pole dancing? Cheap skate acts for ex-porn stars that we can get at sleazy red light districts for peanuts?

What are we paying the so-called best scholarly brains for? To be spoon-fed with answers? TO waste money?

Don't even get me started on what you deserve!

Anonymous said...

15% Growth ==> more & more jobs for Foreign Trash
15% Growth ==> more & more pay for our already overpaid PAP Overlords
15% Growth ==> nothing for the Singaporean serfs

You still want to vote for PAP ???

Anonymous said...

If any of you read Zaobao, this is what is reported yesterday:

Last year i.e. 2009 PAP's "labour tightening" resulted in a mere 4,200. foreign workers less than previous year. And the foreign worker number still stands at 1.05 million.

The PAP is conning you as usual. There never is any tightening at all.

Anonymous said...

Govt's one and only KPI is GDP growth...which translates to bigger "performance" bonus for political office holders as well as civil service.

Anonymous said...

Allow me to share why I think the majority of Singaporeans still vote for PAP despite such nonsense from them.

True, it may be that they are blinded by money, materialism, kiasuism, kiasism, etc. But there is one thing that many have neglected, and that is the majority find the opposition/dissenters too liberal and/or radical.

We are after all, a largely conservative society. Telling the conservatives that they are conservatives doesn't help. Blaming them for PAP's continuous reign is plain hypocrisy on the democrats' part. Calling them morons takes the cake.

So, another way to win more votes is for you to take the morals and values that our society embraces seriously and include that as a consideration in your strategy alongside your mostly economic/material taglines.

Anonymous said...

Dear Anon 16/7/10 14:07

There is nothing conservative about SG.
Average Sinkees are just like Average Yankees. Dumb.
IF you consider that elite Sinkee intellectuals still believe in Mr Obama, product of Chicago politics and funded by Goldman ... maybe dumber than the average Yankee.

Dumb people vote for personalities or at least people they view as "winners"/"successful". In SG, that means wealth or at least paper qualifications.

Mr Lucky ... we need at least 42 of you.

Anonymous said...

Dumb and dumber.

No wonder most of the votes still go to PAP. It is dumb to vote PAP? It is dumber to call those voters dumb especially if you are from the opposition camp.

You think you are smart but you aren't winning any one over. Courting votes with insults is the dumbest thing to do.

Anonymous said...

Not only tiny Singapore,and great power China is also learning well from Uncle Lee as well.

The trick is to put the country into hands of MNCs,as to local,well,our talented PAP guys/gals are looking after SOEs super well,or so they claim.

In fast growing China,60-70% of its export are performed by MNCs or their JVs,and that is according to PM Wen when he went to USA to explain why it was not a wise move to clamp dowwn on China mighty export machine.

Talk to Chinese businessmen,and they would tell you that their SOEs are eating all their lunchs and dinners and suppers.

Some of our high calibre minds such as top legal brain professor Tommy Koh do believe sincerely that Singapore has indeed found the way forward,I am really not too sure on how this type of policy can be sustained.

All I would agree is that so far so good!

Anonymous said...

It all boils down to the fact that Singaporeans are too stupid to know the difference between GDP and GNP.

To put it simply,

GNP = GDP - income earned by foreigners in country + income earned by citizens abroad.

Here's an example: Suppose an Ang Moh comes to Singapore to open an integrated resort. He makes $100 million but he only has to pay $1 million to the Singapore government for a license and another $1 million to Kwa Geok Choo's nephew for getting him that license.

The full $100 million will count towards Singapore's GDP but only the $2 million (Government's + KGC nephew's) will count towards Singapore's GNP. This is of course assuming that KGC's nephew is a Singaporean, otherwise the contribution to Singapore's GNP would only be $1 million.

Now do you know why the PAP has stopped reporting GNP figures for so many years and only reports GDP figures? When they hoodwink you about economic growth, they are using GDP growth, not GNP growth.

juice said...

i just cannot fathom why is the sg economy growing at such a fast rate but the pay is not growing as fast?
i agree that using the median income is not a good gauge since the rich ppl are growing their wealth at a faster rate than the majority of singaporeans. thus it can be achieved quite easily. but what is important is whether the lower income clusters are also having a acceptable pay increase?

Anonymous said...

haha,the fact is that not only those who have the tendency against PAP deem Singapore voters DUMB,it is actually PAP leaders who deem theri voetrs suer stupid and openly declare so.

Don't you read,well?perhaps you do not read Singapore papers,the fact is there for all to see,to hear,to feel.You may the TOP DUMB after all.Haha

Anonymous said...

Lucky,

Since someone has commented about the very low profile PAP has deliberately taken with regards to GNP,perhaps you should write on this so that geberal readers would understand why is PAP aka LKY doing this

I have the folliwng interesting background article

furrybrowndog.wordpress.com/.../a-quick-examination-of-singapores-economic-figures/

A quick examination of Singapore’s economic figures
with one comment

A question that occurs frequently to me is: What is Singapore’s GNP and why isn’t it reported, and only GDP is? Clearly I’m not alone in wondering. Wikipedia offers a definition of what GNP is and how it differs from GDP:


Gross domestic product (GDP) is defined as the “value of all final goods and services produced in a country in one year”.[1] On the other hand, Gross National Product (GNP) is defined as the “value of all (final) goods and services produced in a country in one year by the nationals, plus income earned by its citizens abroad, minus income earned by foreigners in the country”.[2] The key difference between the two is that GDP is the total output of a region, e.g. France, and GNP is the total output of all nationals of a region, e.g. French.

To give an example of the difference between GDP and GNP, and also income, using United States:[3]

In other words, the key distinction between both economic metrics is that GNP subtracts from GDP income from foreign companies and workers, adds the income of its nationals working in foreign countries. This is the major difference. Most of the rest are technical minor differences which differ by country.

It goes without saying that Singapore’s economy is an open and highly dependent on foreign MNCs and workers. GDP as a measure of economic output does no justice in measuring aggregate income due to Singaporeans alone. For a long time I puzzled over whether the Singapore government releases figures on GNP as well as GDP. Apart from some isolated sources (with dubious credentials) found using Google, I had nothing until very recently.

I was reading a 2002 economics paper titled What Explains the Industrial Revolution in East Asia? Evidence From the Factor Markets by Chang-Tai Hsieh, whomever that may be. By luck I chanced upon a footnote where the following was written:

Singapore’s national accounts provides estimates of the so-called indigenous GNP and GDP, which roughly speaking, is the GNP and GDP corresponding to Singaporean nationals. Since foreigners play such a large role in Singapore’s economy, indigenous GNP and GDP are significantly lower than GNP and GDP. The Singaporean government came up with these measures in the early 1970′s to persuade the IMF to continue to classify Singapore as a developing country

Once I was cognizant of the above, I then did a Google search using those key terms and found the following published by Singstats (PDF file):

Gross National Income (GNI): Refers to the total income receivable by the residents and resident institutional units of a country during the accounting period.

Indigenous GNI: Refers to the aggregate value of GNI accrued to Singaporeans.

For those interested, Wikipedia has an explanation of the difference between GNP and GNI.

Anonymous said...

The two concepts are very similar. But armed with this definition in mind, we can now take a look at the statistics (pg 5 of report):



The data above clearly shows that out of Singapore’s reported official 2007 GDP of S$243.168 bn, about 44.4% of that (or S$108.146 bn) are due to foreign residents and MNCs. Only a mere 55% (or S$135.021bn comes from Singaporeans. Factoring in the contributions of Singaporeans working abroad, the indigenous GNI rises to S$177.335bn. Now we know how much of our economic growth is due entirely to Singaporeans only. If we add indigenous GNI plus income from abroad, we end up with a measure of Singapore’s GNP, which is S$177.335bn. That’s only 72% of the reported GDP figure for 2007. That reflects the extent of the role Singaporeans play in the economy.

Oh yeah, here’s something I found on Tan Kian Lian’s blog:

Population Citizen Non-citizen
Norway (2008) 4,799,300 93.7% 6.3%
Finland (2008) 5,326,314 97.3% 2.7%
Singapore (2006) 4,017,733 74.0% 26.0%
Singapore (2008) 4,839,400 65.4% 34.6%