S’pore is 3rd-riches​t country: Forbes

Using the latest IMF data, Forbes found Singapore to be the third richest country in the world [1].

While Forbes made use of IMF’s 2010 data, IMF’s 2011 data shows pretty much the same thing, that Singapore has the world’s third highest per capita GDP adjusted for purchasing power parity (PPP). But when it comes to nominal (unadjusted for purchasing power parity) per capita GDP, Singapore’s position falls to No. 11. Singapore’s US$ 50,714 nominal per capita GDP gets bumped up to US$ 59,937 when adjusted for purchasing power parity. That’s because Singapore’s price level is deemed to be 0.85 times that of the US’. Singaporeans only need to pay US$ 0.85 for the equivalent of US$ 1 worth of goods in Singapore.

Countries 2011 per capita GDP nominal (US$) Countries 2011 per capita GDP PPP (US$) Countries 2011 price level compared to US’
Luxembourg 122,272 Qatar 102,891 Taiwan Province of China 0.57
Qatar 97,967 Luxembourg 84,829 Hong Kong SAR 0.70
Norway 96,591 Singapore 59,937 Brunei Darussalam 0.74
Switzerland 84,983 Norway 53,376 Korea, Republic of 0.75
Australia 66,984 Brunei Darussalam 49,518 Bahamas, The 0.75
United Arab Emirates 66,625 Hong Kong SAR 49,342 Czech Republic 0.81
Denmark 63,003 United Arab Emirates 48,598 Oman 0.83
Sweden 61,098 United States 48,147 Saudi Arabia 0.83
Netherlands 51,410 Switzerland 43,509 Singapore 0.85
Canada 51,147 Netherlands 42,331 Bahrain 0.86
Singapore 50,714 Austria 41,805 Malta 0.86
Austria 50,504 Australia 40,836 Slovenia 0.89
Finland 50,090 Kuwait 40,740 Qatar 0.95
Ireland 48,517 Sweden 40,614 Portugal 0.98
United States 48,147 Canada 40,458 North America 0.99
Belgium 48,110 North America 39,640 United States 1.00
Kuwait 46,461 Ireland 39,508 Greece 1.01
Japan 45,774 Iceland 38,080 Israel 1.04
Germany 44,556 Germany 37,936 Cyprus 1.08
France 44,401 Taiwan Province of China 37,932 Spain 1.09
Iceland 43,226 Denmark 37,742 United Kingdom 1.10
United Kingdom 39,604 Belgium 37,677 Iceland 1.14
North America 39,407 Finland 36,723 Kuwait 1.14
New Zealand 38,227 United Kingdom 35,974 Germany 1.17
Italy 37,046 France 35,049 Austria 1.21
Brunei Darussalam 36,521 Japan 34,362 Netherlands 1.21
Hong Kong SAR 34,393 Korea, Republic of 31,754 Ireland 1.23
Spain 33,298 Israel 31,005 Italy 1.23
Israel 32,298 Bahamas, The 30,962 Canada 1.26
Cyprus 31,435 Spain 30,622 France 1.27
Greece 27,875 Italy 30,166 Belgium 1.28
Slovenia 25,939 Slovenia 29,179 Japan 1.33
Korea, Republic of 23,749 Cyprus 29,100 Finland 1.36
Bahrain 23,410 New Zealand 27,967 New Zealand 1.37
Bahamas, The 23,175 Greece 27,624 United Arab Emirates 1.37
Portugal 22,699 Bahrain 27,368 Luxembourg 1.44
Malta 22,058 Oman 26,272 Sweden 1.50
Oman 21,681 Czech Republic 25,934 Australia 1.64
Taiwan Province of China 21,592 Malta 25,783 Denmark 1.67
Czech Republic 20,925 Saudi Arabia 24,057 Norway 1.81
Saudi Arabia 19,890 Portugal 23,204 Switzerland 1.95

The table below is the result of Mercer’s cost of living survey 2011. It shows Singapore to be much more costly than New York, one of the most expensive cities in the United States. This suggests that Singapore’s price level is higher than that of the United States’, not lower as IMF has assumed.

Rank City Country
1 LUANDA ANGOLA
2 TOKYO JAPAN
3 N’DJAMENA CHAD
4 MOSCOW RUSSIA
5 GENEVA SWITZERLAND
6 OSAKA JAPAN
7 ZURICH SWITZERLAND
8 SINGAPORE SINGAPORE
9 HONG KONG HONG KONG
10 SÂO PAULO BRAZIL
11 NAGOYA JAPAN
12 LIBREVILLE GABON
12 RIO DE JANEIRO BRAZIL
14 SYDNEY AUSTRALIA
15 OSLO NORWAY
16 BERN SWITZERLAND
17 COPENHAGEN DENMARK
18 LONDON UNITED KINGDOM
19 SEOUL SOUTH KOREA
20 BEIJING CHINA
21 SHANGHAI CHINA
21 MELBOURNE AUSTRALIA
23 NIAMEY NIGER
24 TEL AVIV ISRAEL
25 VICTORIA SEYCHELLES
25 MILAN ITALY
27 PARIS FRANCE
28 OUAGADOUGOU BURKINA FASO
29 ST. PETERSBURG RUSSIA
30 PERTH AUSTRALIA
31 BRISBANE AUSTRALIA
32 NEW YORK CITY, NY UNITED STATES
33 BRASILIA BRAZIL
34 ROME ITALY
34 CANBERRA AUSTRALIA
36 VIENNA AUSTRIA
37 NOUMÉA NEW CALEDONIA
38 GUANGZHOU CHINA
39 DJIBOUTI DJIBOUTI
39 STOCKHOLM SWEDEN
41 LAGOS NIGERIA
42 HELSINKI FINLAND
43 SHENZHEN CHINA
44 DAKAR SENEGAL
44 KHARTOUM SUDAN
46 ADELAIDE AUSTRALIA
47 PRAGUE CZECH REPUBLIC
48 BAKU AZERBAIJAN
49 BANGUI CENTRAL AFRICAN REP.
50 AMSTERDAM NETHERLANDS

The table below lists the 50 most expensive cities in the world according to the 2011 ECA cost of living survey. Again, Singapore is listed as being more expensive than Manhattan New York which again suggests that Singapore’s price level is higher than that of the United States’, not lower as IMF has assumed.

2011 rank Location Country
1 Tokyo Japan
2 Oslo Norway
3 Nagoya Japan
4 Stavanger Norway
5 Yokohama Japan
6 Zurich Switzerland
7 Luanda Angola
8 Geneva Switzerland
9 Kobe Japan
10 Bern Switzerland
11 Basel Switzerland
12 Copenhagen Denmark
13 Helsinki Finland
14 Moscow Russia
15 Caracas Venezuela
16 Sydney Australia
17 Stockholm Sweden
18 Canberra Australia
19 Libreville Gabon
20 Paris France
21 Brisbane Australia
22 Seoul Korea Republic
23 Rio de Janeiro Brazil
24 Kinshasa Democratic Republic of the Congo
25 Melbourne Australia
26 Perth Australia
27 Sao Paulo Brazil
28 Adelaide Australia
29 Tel Aviv Israel
30 Gothenburg Sweden
31 Abuja Nigeria
32 Brasilia Brazil
33 Jerusalem Israel
34 Vienna Austria
35 Berlin Germany
36 Singapore Singapore
37 Vancouver Canada
38 St Petersburg Russia
39 Brussels Belgium
40 Ottawa Canada
41 Dakar Senegal
42 Toronto Canada
43 Rome Italy
44 Manhattan NY United States of America
45 Hong Kong Hong Kong
46 Beijing China
47 Shanghai China
48 Strasbourg France
49 Baku Azerbaijan
50 Montreal Canada

The Economist Intelligence Unit’s Worldwide Cost of Living 2011 index below shows pretty much the same thing. Singapore is the tenth most expensive city in the world with a cost of living index of 137 that is higher than New York’s 100. Again, it suggests that Singapore’s price level is higher than that of United States’, not lower as IMF has assumed.

Rank City Country EIU index
1 Tokyo Japan 161
2 Oslo Norway 156
3 Osaka Kobe Japan 153
4 Paris France 150
5 Zurich Switzerland 148
6 Sydney Australia 143
7 Melbourne Australia 141
8 Frankfurt Germany 140
9 Geneva Switzerland 138
10 Singapore Singapore 137
New York United States 100

There is reason to suspect that the IMF’s estimate of Singapore’s purchasing power parity is off compared to surveys done by Mercer, ECA and the Economist. IMF relies on the World Bank’s International Comparison Programme (ICP) for its purchasing power parity estimates. The last round of ICP was the ICP 2005 released in 2008. The on going ICP 2011 may be released in a year or two. Seems like the ICP is updated once every six years or so and may not be always up to date when used to estimate purchasing power parity. This may be alright for most countries but may not be alright for Singapore which resorts to growth at all costs. Slowness in recognising rising costs associated with growth-at-all-costs may result in our GDP numbers looking better than they really are.

Nevertheless, even when we consider nominal per capita GDP, Singapore is head and shoulders above many other countries. There are two possible explanations: (1) a city with little or no agrarian sector tends to have a higher per capita GDP than a larger country with a more sizeable agrarian sector, (2) Singaporeans work longer hours.

PricewaterhouseCoopers’ Global city GDP rankings 2008-2025 below gets it right by comparing cities with cities. Singapore’s per capita GDP is much less impressive when compared to other First World cities.

City 2008 GDP ($bn PPP) Population (millions) per capita GDP ($000 PPP)
San Francisco/Oakland 301 3.5 86.5
Washington DC 375 4.4 85.5
Boston 363 4.5 80.5
Seattle 235 3.1 75.5
New York 1,406 19.2 73.3
Philadelphia 388 5.5 70.1
Dallas/Fort Worth 338 4.9 69.5
Atlanta 304 4.6 66.4
London 565 8.6 65.8
Houston 297 4.5 65.8
Chicago 574 9.1 63.3
Los Angeles 792 12.6 62.9
Detroit 253 4.1 61.1
Paris 564 9.9 56.9
Miami 292 5.7 51.6
Sydney 213 4.4 48.9
Singapore 215 4.5 47.9
Toronto 253 5.3 47.7
Hong Kong 320 7.3 44.0
Tokyo 1,479 35.8 41.3
Madrid 230 5.6 40.8
Osaka/Kobe 417 11.3 36.9
Moscow 321 10.5 30.7
Seoul 291 9.8 29.7
Buenos Aires 362 12.9 28.0
Mexico City 390 19.2 20.4
Sao Paulo 388 19.1 20.3
Rio de Janeiro 201 11.9 16.9
Shanghai 233 15.2 15.3
Mumbai (Bombay) 209 19.4 10.8

The table below lists OECD countries by number of hours worked per person per year. All the OECD countries work shorter hours compared to Singapore’s 2,307 hours [2].

Country Annual number of hours actually worked per person
Australia  1,686.00
Austria  1,587.00
Belgium  1,551.00
Canada  1,702.00
Chile  2,068.00
Czech Republic  1,947.00
Estonia  1,879.00
Finland  1,697.00
Germany  1,419.00
Greece  2,109.00
Hungary  1,961.00
Iceland  1,697.00
Ireland  1,664.00
Italy  1,778.00
Japan  1,733.00
Korea, Republic of  2,193.00
Luxembourg  1,616.00
Mexico  1,866.00
Netherlands  1,377.00
New Zealand  1,758.00
Norway  1,414.00
Poland  1,939.00
Portugal  1,714.00
Russian Federation  1,976.00
Slovakia  1,786.00
Slovenia  1,664.00
Spain  1,663.00
Sweden  1,624.00
Turkey  1,877.00
United Kingdom  1,647.00
United States  1,778.00

Finally, Singapore’s 2010 indigenous per capita GDP of SGD 46,092 [3] is significantly lower than the corresponding 2010 per capita GDP of SGD 59,813. Therefore, if we set aside foreign firms and foreigners in Singapore, our per capita GDP becomes much lower.

Thus, our third placing is doubtful given the doubtful purchasing power parity estimates. In all likelihood, our position should be much lower and this brings us back to reality. The story that Singaporeans are richer on average than the Swiss or the Germans is too good to be true.

[1] Straits Times, 26 Feb 2012, S’pore is 3rd-richest country: Forbes

Singapore is the third-richest country in the world, ranking behind only Qatar and Luxembourg, according to Forbes magazine.

Using the most recent International Monetary Fund data available, Forbes said Singapore ‘thrives as a technology, manufacturing and finance hub with a GDP (PPP)per capita of nearly US$56,700 (S$71,200)’.

This compares with a per capita gross domestic product (GDP), adjusted for purchasing power (PPP), of more than US$88,000 for the world’s richest nation, Qatar. The Persian Gulf emirate of 1.7 million people taps the world’s third-largest reserves of natural gas for its wealth, some of which it is pouring into the construction of all air-conditioned stadiums for the 2022 World Cup.

Coming in second, with slightly more than US$81,000, was Luxembourg. The tiny Grand Duchy, bordered by Belgium, France and Germany, has only a half-million people, but scores as a financial hub with banking secrecy laws that makes it a tax haven, Forbes said.

The magazine said it compiled its rich list by examining the GDP of 182 countries, adjusted for PPP, which is preferred by economists when doing international comparisons. It says this takes into account the relative cost of living and inflation rates. This is mostly from 2010 figures, but a 2009 estimate in Singapore’s case.

But Forbes quotes associate professor of economics Gian Luca Clementi, of New York University’s Leonard N. Stern School of Business, as saying that ‘the numbers must be taken with a grain of salt’.

Many issues, including how the quality of goods varies from country to country, can make any GDP comparisons misleading, he said.

The top 10 list includes fifth-ranked Brunei, the United States at No. 7, and eighth-placed Hong Kong.

[2] http://www.asiaone.com/Business/News/My+Money/Story/A1Story20100129-195280.html

[3] Yearbook of Statistics Singapore 2011, page 82

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