Gold medal for Economic Olympics

Dear Mr Lim,

I refer to your comments on Singapore’s forecasted economic growth of between 13% and 15% this year as reported by Straits Times on 24 Aug 2010.

You said Singapore will win the Olympic gold medal for economic growth for being number one in economic rebound in 2010. But there is no Olympic medal for being the number one rebounder. If there were, then a 100 metre sprinter can easily choose to go very slow in one year and then ‘rebound’ strongly in another year to win gold without actually winning a race.

Also, there is a strong correlation between GDP and total population numbers over the last thirty years. As the total population grew, so did the GDP. For the last three years, we have had strong growth in total population. While the GDP didn’t grow as much due to the global financial crisis, the additional people were already here so that when the financial crisis blew over, these additional people were ready to contribute to the additional GDP.

In other words, the strong economic growth is nothing more than strong population growth. If we can somehow increase our population numbers by a thousand times without hitting into any constrains, we will correspondingly see our GDP increase by at least a thousand times more as well.

If economic growth simply means population growth without the commensurate improvement in the quality of our lives, then pursuing such growth in numbers will have no meaning.

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