Singapore-Malaysia economies: Size doesn’t matter

Dear editor Nanyang Siang Pau,

I refer to your 10th Dec 2010 commentary on Singapore overtaking Malaysia in GDP which was carried by the Straits Times on 15 Dec 2010.

Do not be overly insulted by Singapore’s economic miracle. It is much easier for smaller countries to prosper compared to larger countries. The world’s wealthiest nations tend to be smaller nations.

Also, do not constrain Singapore to Southeast Asia for it is one of four East Asian tiger economies. Singapore’s prosperity tends to be associated with it being East Asian rather than its location in Southeast Asia. The other East Asian tiger economies have similarly grown manifold since 1965. In the context of East Asia, Singapore’s achievements are nothing out of the ordinary.

Singapore’s record 15% growth rate in 2010 is due to its accumulated mass import of foreigners in the preceding three years. If Malaysia were to suddenly increase its population by 25% overnight, it too would similarly find a spurt in growth due to growth in numbers. But this growth in numbers doesn’t necessarily translate to an improvement in the quality of the people’s lives.

Contrary to what you have described, Singapore was not known to be a poor little market in a dark corner of Asia. It was a British crown colony and has always been a bustling port and emporium.

Being resource rich doesn’t have to be a curse as Norway would demonstrate. The availability of rich resources tends to be the convenient scape goat for failure to achieve high GDP levels. But it is also possible that without rich resources, the situation might even be worse.

While 200,000 Malaysians have become American citizens, Singapore hasn’t fared any better. The following data is obtained from the World Bank’s “Migration and Remittances Factbook 2011”:

Singapore Malaysia
Stock of emigrants 297,200 1,481,200
Stock of immigrants 1,966,900 2,357,600
Total population 4,832,678 28,066,667
Non-immigrant population 2,865,778 25,709,067
Emigrant stock as % total population 6.1% 5.3%
Emigrant stock as % non-immigrant stock 10.4% 5.8%

The stock of emigrants of Singapore origin is 10.4% of our non-immigrant population. This percentage is far higher than Malaysia’s 5.8%. If high emigration rate is worrying, then Singapore has more to worry than Malaysia.

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One Response to “Singapore-Malaysia economies: Size doesn’t matter”

  1. Paul Says:

    Very good points!

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