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A quick examination of Singapore’s economic figures

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A question that occurs frequently to me is: What is Singapore’s GNP and why isn’t it reported, and only GDP is? Clearly I’m not alone in wondering.  Wikipedia offers a definition of what GNP is and how it differs from GDP:

Gross domestic product (GDP) is defined as the “value of all final goods and services produced in a country in one year”.[1] On the other hand, Gross National Product (GNP) is defined as the “value of all (final) goods and services produced in a country in one year by the nationals, plus income earned by its citizens abroad, minus income earned by foreigners in the country”.[2] The key difference between the two is that GDP is the total output of a region, e.g. France, and GNP is the total output of all nationals of a region, e.g. French.

To give an example of the difference between GDP and GNP, and also income, using United States:[3]

In other words, the key distinction between both economic metrics is that GNP subtracts from GDP income from foreign companies and workers, adds the income of its nationals working in foreign countries.  This is the major difference.  Most of the rest are technical minor differences which differ by country.

It goes without saying that Singapore’s economy is an open and highly dependent on foreign MNCs and workers.  GDP as a measure of economic output does no justice in measuring aggregate income due to Singaporeans alone.  For a long time I puzzled over whether the Singapore government releases figures on GNP as well as GDP.  Apart from some isolated sources (with dubious credentials) found using Google, I had nothing until very recently.

I was reading a 2002 economics paper titled What Explains the Industrial Revolution in East Asia? Evidence From the Factor Markets by Chang-Tai Hsieh, whomever that may be.  By luck I chanced upon a footnote where the following was written:

Singapore’s national accounts provides estimates of the so-called indigenous GNP and GDP, which roughly speaking, is the GNP and GDP corresponding to Singaporean nationals. Since foreigners play such a large role in Singapore’s economy, indigenous GNP and GDP are significantly lower than GNP and GDP. The Singaporean government came up with these measures in the early 1970’s to persuade the IMF to continue to classify Singapore as a developing country

Once I was cognizant of the above, I then did a Google search using those key terms and found the following published by Singstats (PDF file):

Gross National Income (GNI): Refers to the total income receivable by the residents and resident institutional units of a country during the accounting period.

Indigenous GNI: Refers to the aggregate value of GNI accrued to Singaporeans.

For those interested, Wikipedia has an explanation of the difference between GNP and GNI.  The two concepts are very similar.  But armed with this definition in mind, we can now take a look at the statistics (pg 5 of report):

Singapore's GNI Source: Singstats

The data above clearly shows that out of Singapore’s reported official 2007 GDP of S$243.168 bn, about 44.4% of that (or S$108.146 bn) are due to foreign residents and MNCs.  Only a mere 55% (or S$135.021bn comes from Singaporeans.  Factoring in the contributions of Singaporeans working abroad, the indigenous GNI rises to S$177.335bn.  Now we know how much of our economic growth is due entirely to Singaporeans only.  If we add indigenous GNI plus income from abroad, we end up with a measure of Singapore’s GNP, which is S$177.335bn.  That’s only 72% of the reported GDP figure for 2007.  That reflects the extent of the role Singaporeans play in the economy.

Oh yeah, here’s something I found on Tan Kian Lian’s blog:

 
Population
Citizen
Non-citizen
Norway (2008)
4,799,300
93.7%
6.3%
Finland (2008)
5,326,314
97.3%
2.7%
Singapore (2006)
4,017,733
74.0%
26.0%
Singapore (2008)
4,839,400
65.4%
34.6%

 

Res ipsa loquitur.

Written by defennder

May 10, 2009 at 4:06 PM

One Response

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  1. […] in Singapore (apart from our foreign counterparts, whom our government are VERY dependent on – my friend Ivan found a PDF which had statistics to prove it: 46% of our GDP is based on foreigners hur hur) are working 5-6 day work week, and perhaps the […]


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