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Singapore – Are We Really That Rich?

This is worth thinking about

 

According to the International Monetary Fund, Singapore is listed as the third richest country in the world with a GDP Per Capita of US$61,567.28. GDP Per Capita is the total output of a country divided by its population.

If we exclude the first and second on the list, Qatar, which leaks oil, and Luxembourg, a tax haven in Europe, we’re number one! As amazing as this sounds, we have to ask ourselves the tough question of just how much the average Singaporeans have benefited from the growth of the country’s GDP Per Capita.

The median income of a worker in Singapore is $45,240 (US$32,356.69). This may seem like a tidy figure to most people, but consider an alternate thought for just a moment.

By exploring this a little, we will know that the GDP Per Capita of the United States (US) and other large countries are diminished by the fact that the people in these countries have the choice to be “unproductive.”

What we mean by “unproductive” is that they have more options to lead the lifestyles that they choose. This includes moving to a less competitive city, working less, earning less and enjoying a lower cost of living.

In Singapore, we have always been taught that we must be productive citizens. So if we only consider the “productive” citizens, using business-centric states as proxies, we find US cities such as Boston, Houston, Washington DC, Seattle and New York coming out ahead of us. These cities have higher GDP Per Capita than Singapore as a city, yet the people living there enjoy the inherent benefits of being part of a society which allows them to retire peacefully and become “unproductive” in a cheaper city after they have played their parts.

On the flipside, in Singapore, our retirement age keeps increasing.

Our greatest resource, our people

Assuming that what our current government said is true, and that our only natural resource in Singapore’s is indeed our people. You would expect then that this “highly treasured resource” to be remunerated well compared to countries that have other resources to rely on.

Yet in Singapore, we have one of the highest income inequalities in the world. It is hard to overlook this apparent contradiction, that a country that prides its people as its only natural resource, with nothing else to turn to, has such a high-income inequality. The people in Singapore have worked hard, but the richest in the country seemed to have cornered the economic benefits.

While home prices and rents have increased substantially, it is only the people who own them and who are able to unlock this value that gets to see the fruits of a successful country. In the meantime, struggling Singaporeans, both young and old, have to cope with eye-watering home prices, stagnating income level and inflation.

To be fair, the government has realized and appreciates the struggles of the people, coincidentally more so after the last General Elections. Some of the statistics have improved since, such as a marginal narrowing of our income inequality. But the effort put in has to continue for any meaningful difference to be made over the long run.

Image from Benjamin Lim

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