Standard of living and per capita GDP
Note: This was published earlier in a letter sent to The Temasek Review.
I recently re-read this article which Temasek Review re-posted on the UBS study and low relative purchasing power of Singaporean workers’ wages. I tried searching for PM Goh Chok Tong’s quote where he supposedly said that Singapore achieved the 1984 Swiss standard of living in 2000 but to no avail. So I decided to search the older news archive instead. Here’s what I found. It turns out that for the ruling party, standard of living equates to GDP per capita. An August 6th, 1995 article from the Straits Times makes clear this point when then DPM Lee Hsien Loong said that Singapore had achieved that hard numbers target:
IN DECEMBER 1984, WHEN Mr Goh Chok Tong and the second generation of leaders had established themselves in Cabinet, they unveiled an agenda for Singapore that encapsulated their visions for the next 15 years.
Vision 1999 saw Singapore becoming a “city of excellence” and a “society of distinction” by the turn of the century. It set one hard-numbers target, with which it became most closely associated: to achieve the 1984 Swiss standard of living, as measured by per capita output, by 1999.
Six weeks ago, Deputy Prime Minister Lee Hsien Loong stated in an interview that Singapore had reached the goal.
There was no elaboration, but the claim is easily verifiable. It turns out that Singapore’s gross national product per person hit US$ 20,415 (S$ 31,182) last year. The 1984 Swiss GNP per capita was virtually the same, at US$ 21,307 (adjusted to 1994 dollars).
WITH Singapore’s economy growing by more than 7 per cent this year, it may have already crossed the mark.
In characteristic over-achieving style, Singapore appears to have reached a 15-year goal in 10 or 11.
If you have a government which thinks that standard of living equates to GDP per capita without any consideration of how much of that GDP ends up in the pockets of middle class Singaporean workers, it makes you wonder if Singapore would have been a lot better off if they had chosen to target median wages instead of GDP per capita. This is truly disappointing. So does this mean a Swiss standard of living simply means surpassing Switzerland in terms of GDP per capita, but losing out to them massively in terms of purchasing power of wages earned in Singapore. Is this really the Swiss standard of living Singaporeans were promised?