Government ‘seized chances for growth’

Dear Mr Lawrence Wong,

I refer to the 19 Oct 2011 Straits Times report of your comments in parliament.

You explained that the first half of the last decade saw two recessions and slow growth; the start of the second half of the last decade brought opportunities which the government duly seized but it meant more foreign workers, more investments and more jobs for our people; we ran into infrastructure bottlenecks but that was better than not seizing the opportunity and letting things be; opportunities come in cycles, if we fail to seize them, we would be worse off today.

Referring to Table 1 below, in the period 2002 – 2003, despite SARs, GDP continued to grow even as our population shrank. GDP growth in the period 2003 – 2004 was comparable to GDP growth in the next three periods. Yet, this was achieved with about half to one third of the population growth. It therefore doesn’t seem true that seizing opportunities means having to boost population and foreign workers tremendously.

Period GDP growth ($m) Population growth (‘000) GDP growth / Population growth ($m / ‘000)
2000 – 2001 -$2,016 110 -$18
2001 – 2002 $6,920 38 $182
2002 – 2003 $7,825 -61 -$128
2003 – 2004 $16,438 52 $317
2004 – 2005 $14,353 99 $145
2005 – 2006 $18,169 136 $134
2006 – 2007 $19,913 187 $106
2007 – 2008 $3,671 251 $15
2008 – 2009 -$1,929 148 -$13
2009 – 2010 $35,974 89 $404

Table 1: Year-to-year GDP and population growth

Referring to Table 1 again, the period 2007-2008 and 2008-2009 saw little or no growth. Yet population continued to increase by record levels. How can you say that the government was importing foreign workers to seize opportunities when there were little or no opportunities for growth to be seized during those two periods?

Similarly, referring to Table 2 below, we had about twice as much GDP growth per growth in population in the first half of the decade compared to the second half. If we were seizing excellent opportunities that came along in the second half of the decade, why did our GDP growth per population growth dive so much? We weren’t seizing excellent opportunities that came along, we were growing as much as we could at diminishing returns in GDP. Comparing the two halves of the last decade, the choice wasn’t between seizing opportunities and letting things be. It was between seizing the right opportunities and seizing all opportunities with no regard to our country’s wellbeing.

Period GDP growth ($m) Population growth (‘000) GDP growth / Population growth ($m / ‘000)
2000 – 2005 $43,519 238 $183
2005 – 2010 $75,797 811 $93

Table 2: Half-decade GDP and population growth

Referring to Table 3 below, in the periods 2006-2007, 2007-2008 and 2008-2009, the estimated increase in Singaporeans employed is either negative or minimal compared to the jobs that went to foreigners. Therefore, your claim that more foreign workers meant more jobs for Singaporeans wasn’t always true. In fact, it was more often false than true.

Period Increase in foreigners employed (‘000s) Increase in PRs (‘000s) Estimated increase in Singaporeans employed (‘000s)
2005 – 2006 90 31 118
2006 – 2007 120 31 -25
2007 – 2008 177 29 20
2008 – 2009 30 55 -38
2009 – 2010 48 8 86

Table 3: Year-to-year increase in foreigners employed, PRs and estimated Singaporeans employed

Furthermore, why would we have run into infrastructure bottlenecks if there had been proper government planning and foresight? Worse still, when we ran into infrastructure bottlenecks, the government’s most energetic response then was to deny that there were infrastructure bottlenecks.

You tried to convince Singaporeans that we were better off by comparing median incomes in the first half of the decade with that of the second half. But when the government grants large numbers of citizenship to foreigners with well-paying jobs, it automatically raises the median income without actually changing the incomes of the rest of us Singaporeans. To be fair, remove all citizens granted citizenship between 2005 and 2010 from your data and we shall see how much our median incomes have actually increased without the boost from our new citizens.

You hoped Mr Giam would consider the facts and be persuaded that in the last ten years, the PAP successfully steered Singapore through difficult times and did good for the people. What you wanted Mr Giam to consider are not facts but half-truths and falsehoods. The truth is that the PAP bungled along from one crisis to another. It made things worse for Singaporeans when it chose to grow at all costs.

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4 Responses to “Government ‘seized chances for growth’”

  1. Saycheese Says:

    They are not supertalents if they cannot at least twist the figures to show that the government did well. Of course failure must never be admitted and the mantra of foreign talents creating jobs for Singaporeans must be repeated often enough to become the truth or at least believed to be the truth.
    They pursued growth at all cost in the belief that that can solve all the problems and justify higher pay for themselves. Their biggest failure is not that growth did not solve their bungling, but the failure of the people to continue being suckers to swallow wholesale the various pronouncements and representations that everything is rosy, that their meritorious ability to better our lives deserves the highest remuneration for them, and that we, the great unwashed without much merit, can only hope that the crumbs falling from them gets bigger and better.
    Still, we thank Mr Lawrence Wong and appreciate the tables provided to help us understand the twist on Government ‘seized chances for growth’.

  2. Terence Yeo Says:

    HI, I just have some comments on your methodology.

    1. Source of data
    I was wondering where the data used for your analysis is from? I may have missed it, but usually citing the source would increase the credibility of your conclusions as it allows interested parties like myself to double check on your results 🙂

    2. Conclusions
    While I agree that your findings of a disconnect between population growth and economic growth seems to be superficially supported by the figures you have presented, I’m a little reluctant to accept your conclusions that population growth would have NO relationship with per capita income growth as you have not seemed to compensate for lag effects and did not correct for economic conditions external to population growth which could also affect economic growth (for example the GFC)

    BY lag effects, I mean to say that the economic effect of increasing population might take 1 year or more to feed into observed economic growth.

    This could occur for 2 reasons. First of all, it might take a new worker several months to become fully productive. This is true for both native born and foriegn born workers.

    Secondly, consider the effects of reporting cycles. As an extreme illustrative example, a worker might be newly employed in December 2007 and thus be included in 2007’s increase in population. But the new worker might be seen from your perspective as totally unproductive as he contributes one-twelveth of per worker output in 2007 compared to someone who has been working since January 2007.

    By external economic conditions, I mean effects like those from the GFC, which have causes external to Singapore’s economy. I could, for example counter-argue that increased population growth during 2007-2009 prevented Singapore’s economy from doing worse, and the massive increase in 2010 GDP numbers are due to the 2008 and 2009 population increases, the full productive potential of which was fully realised as the effects of the GFC was removed.

    I don’t mean to say that your conclusions are absolutely wrong, but I think disentangling the effects of population growth and economic growth requires greater econometric sophistication than a simple comparison of numbers that you have shown above. (Note that I do not agree that simple comparison of median income implies that the PAP is right either 🙂

    • trulysingapore Says:

      Singstats. Thought everyone would go to Singstats to obtain Singapore GDP and population statistics, so it didn’t occur to me to state that I got them from Singstats.

      You got the wrong conclusions. This is not saying there is no relationship between population growth and per capita GDP growth. This is to show that, contrary to the picture that the minister painted, the growth in per capita GDP in relation to population growth was worse in the second half of the decade compared to the first half decade. In other words, we werent seizing excellent opportunites but was growing at all costs.

      I know there are lag effects. That is why I’ve also included a comparison between the first half decade and the second half decade in Table 2.

      Furthermore, many of the jobs imported were service sector jobs. These tend not to be too highly skilled and shouldn’t take serveral months to become productive. Even construction workers and maids are fully trained overseas by Singapore agents before they are imported.

      Also, I have compared the period 2002-2003 where labour shrunk, the period 2003-2004 where labour increase was modest with the next three periods where labour increased more significantly. Since the latter three periods are back-to-back, any lag in one period would benefit the next period. They are largely not lost in this comparison. On the other hand, the labour shrinkage from 2002-2003, based on lag arguments, should have been detrimental to the period 2003-2004. Yet 2003-2004 came out well compared to the next three periods.

      You can’t just say that the population growth from 2007 to 2009 prevented Singapore from doing worse. You have to prove it. Conversely, I can say, as the statistics show, that in these three years of massive labour inputs, there were no significant increase in GDP.

      It is quite easy to see that the increase in manpower over 2007 to 2009 helped boost the GDP in 2010. The question is, did we have to increase them as far back as 2007 which was three years before conditions became right in 2010? That’s something for them to justify.

  3. Bruce Tong Says:

    dude, you need to put a social media sharing button so I can let more ppl see this!

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