Friday, April 15, 2011

Why the focus on economy growth?

I was looking through some headlines recently when I saw a World Bank report talking about economic growth. It is challenging the view that high economic growth alone cannot reduce the poverty and unemployment. This report is in the context of developing countries where the economic growth is enough to reduce poverty, but it failed to benefit the masses and address repression, corruption and high unemployment.

However, the talk about high economic growth being unable to reduce poverty and unemployment got me thinking whether if it applies to developed countries. I tried to apply it in Singapore's context.

We have one of the lowest unemployment rates in the world so at one glance, it doesn't seem to apply. However, when looking deeper behind the reasons for high economic growth, I start to see some similarities with the above headline. Why do we need high economic growth? Main reason is to create employment and reduce poverty. Why Singaporeans are complaining about foreign talent? That's because they do not see the high 14.5% economic growth filtering to the guys in the street. Therefore, based on the widespread public opinion in Singapore, it will seem that it is quite possible that high economic growth does not filter down to the average citizen.

In my personal opinion, I feel that the government should take the focus off economic growth. Instead, they should manage by objectives. The objective is never about having high economic growth but it's all about increasing the standard of living for all citizens. Therefore, the focus should be on the objectives, and not on the process.

For example, why is there a focus on economic growth? Economic growth is only one of the ways to increase the standard of living for all citizens. Why narrow your focus to only one of the enablers? Why can't the focus instead be increasing the median income of all citizens? When your focus change, the number of alternatives that you have will also increase.

High economic growth may not filter down to the citizens if there are not enough safeguards to protect the rights of the workers. I'm sure some of us know or have encountered people who were lured to sign an employment contract that is totally unfair to the employee. Work for free during probation period? Have to give a few months notice to resign? There are such people around and because the employment contract is signed and there is no overarching employment law to protect the average employees, no one can do anything about it, even the lawyers.

I will only state the above example or my post will become super long. Look into all the feedback from the citizens and you may see the hidden message behind it. To end off this, I will point to another common grouse among Singaporeans. Minimum wage. 

Why is it important to Singaporeans? Is it really because of the money? Or is it because employees are not treated fairly? Think about it.


Anonymous said...

You may refuse to accept this, but the SG Govt is self-serving, not citizens serving. That's why they focused so much on economic/GDP growth: because their bonus is tied to it! Not because the man-on-the-streets benefit from it (as u correctly pointed out).
We like to think as S'poreans, we have an altruistic govt who cares for us, but if u dare to look thru the veils and get out of your comfort zone of idealism, u see the truth.
Why do u think they kept focusing on foreigners? 'coz these folks bring in the $$$ and up the GDP numbers.
Why is PM Lee reply for high minster pay based on comparing with USA Presidents who give talks after retirement? 'coz PAP cares only how much $$$ they can make from their office.
ERP/COE do not solve our traffic problem. Excuse given there are no better solutions. In reality, govt earn big $$$ from ERP/COE for themselves.
If u dare to be honest, u'll see that S'pore is not a heaven. We used to have a good govt who genuinely cares (our founding fathers) but I have to brutally say our govt values have degraded in the last decade.
They tell us losing GDP will cause us to lose our rice bowl. In fact, losing GDP will cause them to lose their bonus!

Anonymous said...

Btw, check out this eloquent article on "Do We Owe Our Existence to the PAP":

You have travelled widely, so you will be able to attest to the contents of the article.

chantc said...

Actually, after traveling to a few places due to work, I have to admit that Singapore is really the calm eye in the storm. For Singapore to achieve so much, we really have to thank our founding fathers.

In terms of using GDP to measure success, I would say that this is the norm for all the governments of the world. It is the standard measurement of success for countries. To say that PAP is using this to further their own gains is stretching it a little.

Based on economic terms, it is true that losing GDP will cause us to lose our rice bowl. We're no longer living in an era where we are free to grow our own food, barter trade, etc. GDP is in a way related to employment. High GDP does translate to high employment, although it may not be the kind of employment that we want.

In the end, it really depends how we measure success. To some of us, we measure in terms of the time we can spend with our loved ones, without working our socks off. To others, they measure it through the income that they generate.

Since we're known to set our own standards (First world?), we should instead measure our success using different standards.

If we truly want the growth to be inclusive for all citizens, then using the median income as a gauge of success will be the closest to being all inclusive.

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