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!