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Why Singapore’s stellar GDP per capita figures are unimpressive in context

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Update: Amended the title just to be more specific with the content of the article.

Some time ago I wrote this post explaining why I felt that Singapore’s high GDP per capita ranking is unexceptional when put into context. It’s still worth a read. The main gist of the argument (more specifically the 2nd point) is that Singapore’s GDP per capita  when compared to numerous other cities does not rank amongst the top in the world. The obsession with GDP per capita, is understood to have reached fever pitch when Singapore was judged to have reached a Swiss standard of living simply by attaining a comparable GNP per capita with Switzerland’s in 1999. For example, Matt Miller of the Washington Post gushed over Singapore’s GDP per capita in a recent op-ed here.

A recent publication by an American think tank seems to support this argument. The report argues that the US is more economically developed than much of Europe simply because more of their population is packed into mega-cities:

The United States, it turns out, actually derives more economic benefit from its cities than any other country on the planet. Roughly 83 percent of America’s GDP came from its “large cities,” defined as cities with a population of 150,000 or more. By contrast, China got 78 percent of its GDP from large cities and Western Europe got a surprisingly small 65 percent of its GDP from its large urban areas. Here’s the chart:

The report’s authors argue that the city gap between the United States and Europe account for about three-quarters of the difference in per capita GDP between the two. In other words, the United States appears to be wealthier than Europe because it has a greater share of its population living in large, productive cities.

All told, some 80 percent of Americans live in large cities, versus just 58 percent of Western Europeans.

In any case, the report also notes that America’s largest cities will continue to play an outsized role in the global economy. In 2025, the report predicts, about 600 cities around the globe will account for 60 percent of the world’s GDP.

So what does this tell us? It means that if a country has more cities and a larger proportion of its people residing or packed in mega-cities, it is expected that the country would enjoy stronger economic growth. Taken to extremes, what happens if your country consists of just one mega-city (ie. a city-state)? The answer is that you would enjoy stellar high GDP per capita figures.

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Written by defennder

May 10, 2012 at 12:00 AM

Tharman’s remarks in the context of the evolving foreign talent policy

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Recently, Finance Minister Tharman stirred up a ruckus when he defended the foreign talent scheme by citing how Taiwanese wages had flattened over the last decade due to its closed door policy. Popular blogger Lucky Tan rebutted Tharman here and here, primarily by turning Tharman’s argument on its head: Tharman essentially put the cart before the horse; the reason why Taiwan’s not attracting foreign talent is precisely because of stagnant wages which had flatlined over the past ten years, not the other way round.

This point is echoed by Taiwan’s deputy Labour minister:

It is not the government’s policies that have led to the brain drain, but Taiwan’s “comparatively low wage levels,” which have failed to retain local talent or attract professionals from overseas, Pan said.

While the average starting pay for new graduates in Taiwan is between NT$20,000 and NT$30,000, “a Taiwanese college graduate may earn NT$50,000, NT$60,000 or even NT$70,000 if they work in Singapore,” he said.

“The problem lies with enterprises who are unwilling to raise salaries for their staff members,” Pan said.

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Written by defennder

April 11, 2012 at 12:41 AM

The naivete of those desperate to see change where little exists

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So I happened to chance upon a link posted by TOC FB, to Ravi’s blog (who is TOC’s chief editor). Ravi posted a screenshot asking if a certain controversial MP had come around and learned to take criticisms in her stride. Ravi cited a Facebook post, ostensibly linked by TPL in linking to a Youtube clip which mocks her now infamous behaviour of stamping her feet:

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Written by defennder

October 9, 2011 at 1:25 PM

Posted in Singapore affairs

Some thoughts on Temasek Review and the Presidential Election

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I’ve not written much recently, given work commitments which allows me only enough time to catch up on stories during weekdays and write on weekends. But I thought I should say something about Temasek Review.

Temasek Review has been offline since 5th Sept, and there’s no word from the main site as to what happened to the web admins. I hope that they are all right and would continue to run the website.

Many online folks blame TR for endorsing Tan Jee Say who won 25% of the votes, a distant finish compared to Dr Tan Cheng Bock who nearly upset the eventual PE winner Tony Tan by less than 1%. Some critics of the establishment have even called it a fiasco. Yet others have gone even further and baselessly claimed that TR is an ISD or PAP-backed website which supported TJS with the secret intention of helping Tony Tan win the PE. I beg to disagree.

I believe such a view however is poorly thought out and misinformed. The key argument I put forward here is that Tony Tan would have performed much better if TR wasn’t around. My own take on this was that TR played a critical role in publicising stories which drove up negative perception of Tony Tan, causing him to win just over 35% of the vote despite the fact that he was much more well-known by the public. I believe that if TR hadn’t existed, or had not reported the way it did, Tony Tan would probably have had won with over 40% of the vote.

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Written by defennder

September 18, 2011 at 4:59 PM

Posted in Singapore affairs

George Yeo’s cryptic message reconsidered

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This post is largely a speculative one. Readers who dislike rumours should ignore this.

Right on the eve of Cooling-off day on 25th August, former Minister George Yeo posted this cryptic message on his Facebook wall:

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Written by defennder

September 8, 2011 at 9:19 PM

Posted in Singapore affairs

Dr Tan Cheng Bock as Dr Subtle

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During the presidential campaign, many opposition voters and strong establishment critics expressed lukewarm support towards Dr Tan Cheng Bock’s campaign. Most frustrating to them were his repeated remarks that the President cannot engage in day-to-day policy debate with the government, and that the role of the Cabinet and Parliament must be respected. Similarly, these people might have been disenchanted with his refusal to publicly promise that he will cut the President’s salary or donate it to charity (and even indirectly criticised Tan Kin Lian for having promised so). In reality, though Dr Tan refrained commenting publicly on policy or current events, he did so in his own unusual way.

While Dr Tan was not half as confrontational as Mr Tan Jee Say, he was in fact sending disguised messages of solidarity to establishment critics in the conduct of his presidential campaign. Unfortunately it appeared that few amongst the more fired-up establishment critics deciphered those messages and most went heavily for Tan Jee Say on Polling Day.

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Written by defennder

August 30, 2011 at 7:17 PM

Posted in Singapore affairs

A non-partisan case against Tony Tan as President

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The question of independence has periodically arisen for the various presidential candidates. But much of it thus far has been focused on questions of partisan independence; how independent a candidate can be said to be from the ruling party. In this post, let’s look at the issue of independence from another perspective. There’s good reason to believe that Dr Tony Tan would be in a serious conflict of interest if he is elected President since he left Singapore’s GIC as its deputy head only very recently (1st July 2011). For the purposes of this post, let’s avoid talking about anything related to Tony Tan’s past record as Cabinet minister.

For the moment let’s ignore his record of past support for the graduate mothers scheme, his refusal to extend tax breaks for lower-educated mothers, his role in doubling the foreign student quota in local universities through overseas recruitment and generous scholarships and grants, his son’s questionable NS stint, his record of pushing for CPF contribution cuts in 1985 and later in 2003 when he argued labour costs in Singapore are getting too high, and who angrily opposed Ong Teng Cheong’s move to approve a workers’ strike in the shipping industry in 1986 when the management exploited the workers. Indeed it’s hard to look past those, but let’s just set that aside for now.

Let’s just focus on the issue of whether Tony Tan would be considered sufficiently independent from the standpoint of corporate governance.

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Written by defennder

August 24, 2011 at 12:50 AM

Posted in Singapore affairs