Singapore’s obssession with the GDP

June 13, 2003
Singapore Democrats

This post is at least a year old. Some of the links in this post may no longer work correctly.

Robert Ho
5 Jun 03

A long time ago, when I was young, I began subscribing to the Straits Times as soon as I started working.

In those days, there were no GDP figures to report. I believe that way back then, there might have been some statistical measures of economic performance but it was probably the GNP, and hardly made the news, since it was just a number only the very few statisticians around understood, or knew how to calculate, and even the collection of statistics was in its infancy and wholly inadequate. In those days, probably even the Govt of Lee Kuan Yew and LKY himself did not fully understand the import of GDP. Certainly, LKY then did not measure himself using this, by now Holy, Number of GDP.

In those days, countries did not compare with one another. And when they did, they merely thought of themselves as ‘advanced countries’ or ‘backward countries’.

An advanced country was one where the people had enough to eat, had decent homes, a good public transport system, and adequate healthcare, etc. In other words, the basics of good infrastructure. A backward country was the opposite.

How much simpler things were then, and how much more relevant comparisons were than today’s over-emphasis on the GPD Number. Today in Singapore (at least, until recently, when the Number began turning ridiculously low and even negative), the GDP is used to justify the $1- to 2-million salaries the Ministers pay themselves. It is also used in other nefarious ways, for example, to change the entire workforce into a GPD-enhancing system, without regard for whether this all-consuming drive for high GDP actually translates into an ‘advanced’ country’s quality of life for the citizens.

As one example, the overriding desire to produce high GDP Numbers has led to the influx of 1 million foreigners, deceptively labelled by the PAP as ‘Foreign Talent’ so that locals would not baulk at the numbers, the highest in the world for a small domestic population of 3.2 million. Also, it was a non-too-subtle putdown for the locals for, if you are not a talent, would you dare oppose so many foreign ‘Talents’ pouring in, and being treated better than locals, to boot? Also, we are told by the Lee Kuan Yew himself, and repeated by his Son, ‘that foreigners create jobs that would otherwise not be created’ and which has been disproved by me in: RH: Why ForeignTalent policy cannot work:

http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&oe=UTF8&th=52e3efd88d3db071&rnum=1

and my postings in this thread:

http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&oe=UTF8&th=1e2fc4eb8c0f952a&rnum=1

Why is this incessant chasing after high GDP Numbers bad? Isn’t this how all countries are ranked and measured now, if not way back then but very true now?

True to some extent. Nowadays, with the Rise of the Economist Profession as the modern day Oracles and Soothsayers, to whom even world leaders have to pay obeisance, the GDP Number is indeed important. But it was not always so. I would put the Rise of the Economist profession about 20 years back. (Different countries would have different times for their Rise of the Economist until today, we are all living in the Golden Age of Economics).

Around 20 years ago, the world and LKY began to adopt statistical measures for everything. For everything, there was a number. Without a number, you could be accused of generalities, of not being ‘accurate’. With numbers, everything seemed so scientific, so precise, so unbiased. No longer did countries call themselves ‘advanced’ or ‘backward’. Now the world had numbers and you stand either on a very precise 6.3% GDP growth or a less impressive 5.9%. Instantly, countries could be very precisely ranked, which is what numbers allow, since numbers are created for that very purpose.

Except that, numbers can lie and do lie, and lie very insidiously. Why?

Let’s take GDP Numbers. GDP is generally defined as “The total market value of all final goods and services produced in a country in a given year, equal to total consumer, investment and government spending, plus the value of exports, minus the value of imports.”

That is a short definition. No proper understanding of GDP can be had in less than a thousand words embedding several technical sub-definitions. Ah, we begin to sense that the GDP is actually woolly and indistinct and not a sharp featured animal — it is a Jabberwocky. Worse, the compilations of the numbers that go into this final so-accurate-looking Number are actually even more woolly. Different countries have vastly differently-sized or even wholly different economy sectors and so we are not even comparing apples with apples.

Since different countries have differently-sized or different economy sectors, this means that Country A’s GDP growth of 4.1% may actually be ‘better’ than Country B’s 6.1%. By ‘better’, I would have to use the old, English, non-Economics meaning of ‘better managed and better-performing’.

I normally dislike using analogies because no analogy is 100% accurate to the meaning it is supposed to illustrate and often introduce inaccuracies and irrelevant sub-meanings that distort the original meaning intended. But I will break my rule here to offer one. Just one. Imagine countries to be runners all running around a 400 metre running track. Also imagine that all the runners started at different times from different start points around the track. Further imagine that some runners are running full marathons of 10 km, some half marathons of 3 km, some 1,000 metres, some sprinting 400 metres and others doing the dash of 100 metres. Now, comparing these different countries (runners) at a moment in time by putting yourself at the Finish Line, could you meaningfully say that Country A is better than Country B or Country C or D, etc? It just doesn’t make sense to even compare.

So, when LKY found that advanced countries measured themselves using the GDP growth rates, and that Singapore happened to score high GDP growth rates because of its unique size and economic features, GDP Numbers became the prime justification for everything from his own salary to deliberately lowering the salaries of workers, and for policies benefiting the rich to become richer while the poor were kept poor and even made poorer by deliberate Govt policies justified on the premise that high GDP growth rates were the be-all and end-all of Govt!

Today, if you have lived long enough in Singapore, especially over the last 15 years or so, and have been reading the local media, you would know instinctively that what I have written above is all true. Except that I am the first one to point out this truth in this way.

So, if comparisons of GDP growth rates between countries are meaningless, are high Numbers also meaningless? The answer is Yes. Coming back to my Running Track Analogy, it is useless and unhelpful to compare a 100m dash runner to one doing the 10k marathon, even if both are passing you by at the same time. They are running different races! Thus even Absolute Numbers are meaningless. If LKY says that he managed 8% GDP growth last year, so what? Does that mean that all the people got better pay/profits by an average of 8% last year? Until that is so, even high absolute numbers mean nothing. The most LKY can say is that, under his rule, Singapore has become better in infrastructure and that people have a better quality of life. Which can also be said of Hongkong, China, South Korea, Taiwan, Japan, Malaysia, Thailand, etc, etc, – more than half the world if we bother to count. Very few countries regress in such things.

Thus, GDP growth rates used to justify astronomical Ministers’ salaries and other unfair Govt policies that benefit the rich and disadvantage the poor is a Lie at best. At worst, it DISTORTS Govt policies away from a more equitable distribution of wealth and important things like healthcare as well as ‘Foreign Talents’ taking away jobs and meaningful lives from citizens. We can say that the PAP Govt, which prides itself on being the most intelligent Ministers in the world, have made themselves the stupidest by not having analysed the issue as I have done here. If they had, they would have come to the same conclusions as I have and the people would all have been better off. I am aware that I am doing the PAP a service by pointing out this aspect of their policies of which they are totally oblivious.

It would have been better for this stupid Govt to express economic growth annually by giving it a say, ‘Good’ score, or an ‘Average’ score or an ‘Excellent’, etc, and be done with it. By getting seemingly impressive numbers in the earlier years, the PAP has gone chasing after high GDP Numbers in a kind of ‘competition to get the highest Number’ contest to the extent it has forgotten that the ultimate end result of all Govt polices is to improve the citizens’ lives and not to achieve some high GDP Number. Other countries are not obsessed with high GDP numbers because they take it in their stride and don’t deliberately formulate Govt policies for the sole effect of high GDP Numbers. This is because most other countries have a free press and a more democratic system that prevents this particular abuse and distortion of Govt policies. When people are allowed to think and criticise, the Govt cannot get away with stupid practices like this of LKY and his PAP Govt. Precisely because only Singaporeans are not allowed to think and criticise, this Abuse and Lie of GDP Numbers is practised only in Singapore.

If the PAP does not deliberately formulate policies for high Numberwhat should it do? Ah, here I may have to do some National Service again, to offer alternatives that are better than the current Number Chase, which has gone on for too long and distorted economic and social and welfare (non-existent) policies.

For example, instead of formulating Govt economic policies for high Numbers, the Govt should set itself a series of Social Contracts.

By that, I mean that the Govt should sit down and think out series of desired objectives for the people, such as:

That no Singaporean should go hungry;
That no Singaporean should live without a roof over his head;
That no young Singaporean should be without at least 10 years of schooling;
That no Singaporean, able or handicapped, be without a job that pays no less than $600 a month, this to be reviewed yearly;
That no Singaporean worker be without a non-politically-affiliated union;
That no Singaporean should be without medical care when sick, even if he cannot pay for it;
That no working Singaporean be without enough leisure to improve himself whether such improvement be educational, in hobbies or community matters;

These are all easily achievable and only require a different focus and a change in thinking from chasing High Numbers to Serving Singaporeans. When that change in thinking is undertaken, the Govt economic policies can be adjusted accordingly, such as reducing ‘Foreign Talents’, etc. These are all very achievable and much of it requires no more than small changes in policies.

Certainly, my Social Contract makes much more sense than the current bullshit about ‘Community Above the Individual’ rubbish which is nothing more than an excuse for continued political control.

Other Social Contracts can include (although I am not hopeful):

That every Singaporean above 18 have the right to elect their MP in a Single-MP Constituency as conducted by an independent elections commission;
That every Singaporean below 18 have their vote exercised by the mother, first, and the second child, the father, and so on;
That every Singaporean household be given a free permanent subscription to a newspaper of his choice, which can be changed;
That every Singaporean household be given a 14″ CTV if it does not already have a better one;
That every Singaporean household be given a radio if it does not already have a better one;
That there be a free-to-air Politics Channel on TV and Radio that broadcasts politics 24/7, including registered Opposition political activities;

If all these seem startling, it is only because of their novelty. I have long thought out parts and pieces of these, so I can say that with time, these are all very sensible, even obvious. They are not pie-in-the-sky ideas at all. The first Social Contract is easily achievable. The second requires a willingness to level the playing field for the Opposition but still confers enormous advantages to the PAP. It will actually be better for the PAP than the Opposition and better overall for Singaporeans, which is high time the PAP moves in that direction.