At 17.9, don’t we feel rich now?

The headline figure is no doubt stunning: Singapore’s Gross Domestic Product for the first half of 2010 was 17.9 percent higher than the corresponding period of the previous year. This was strongly flagged in the prime minister’s National Day message issued Sunday night.

I looked hard for some mention of another significant figure in his speech, but it was nowhere to be found: that 2009’s first half GDP was -5.3 percent (yes, minus 5.3) below the corresponding period of 2008. (Source: To me, it is an important qualifier to the headline figure, helping the listener better grasp the significance of it. The prime minister probably didn’t think it was important, omitting it.

Taken together, what it means is that first half GDP for 2010 was 11.6 percent above first half GDP of two years earlier (2008) before the great recession hit. Averaging for the two years, it means Singapore’s economy grew by 5.8 percent annually. This is very respectable, considering a recession blew into us in the interim, but it is a lot more sober than just trumpetting 17.9 percent. I would also note that these were based on 2005 market prices, in other words, the figures have been adjusted for inflation.

Then we should also ask this: what inputs in capital and people have been injected between mid 2008 and mid 2010 to deliver that 5.8 percent averaged growth in GDP? Just because GDP increased does not mean we are each richer. Having more people to make the economy also means having more people to share it. Unfortunately, at this point, I cannot yet see data about investment and population increase to mid 2010. All I can see is that between June 2008 and June 2009, Total Population increased 3.1 percent, and Resident Population (i.e. citizens + permanent residents) increased 2.5 percent. (Source:

Lastly, what portion of that economy belongs to foreigners? Once again, up-to-date details are missing. But data for years prior will indicate that about 40 percent of our economy are attributable to resident foreigners and foreign companies operating here — second line of the table below:

(Source:, Table 5.1)

In compensation, the above tables also show what Singaporeans (i.e. citizens + permanent residents) received from abroad, in the line “Net factor receipts of Singaporeans from rest of the world”, though I have a faint suspicion that a big part of those figures refer to the earnings of our sovereign wealth funds from the way they free-fell 23.6 and 19.5 percent in 2008 and 2009 respectively. The earnings of our sovereign wealth funds don’t exactly go into any individual’s pockets.

Note too that the numbers in those tables are at Current Market Prices, meaning they have not been adjusted for inflation. Generally this means the percentage increase from year to year tends to be slightly exaggerated, since inflation is more often positive than negative.

With that in mind, look at the line “Per Capita Indigenous GDP” in the green portion of the table. It was S$35,597 in 2005 and S$40,764 in 2009, an increase of 14.5 percent. Averaged over 4 years, it represents a Per Capita increase of 2.9 percent per year before inflation.

You may argue that 2009 was a bad year to choose, because it was in the middle of a big recession. Perhaps we should wait for 2010 figures, though someone else might then argue that it too would be a bad year to choose because it would be unusually good due to a bounceback effect. . .  All it shows is that when we assess our economic condition, no one figure is sufficient. We have to look at a whole range of measures, and understand exactly what it is that each measures.

So take the 17.9 percent you’re hearing this week with salt.

11 Responses to “At 17.9, don’t we feel rich now?”

  1. 1 Alan Wong 10 August 2010 at 19:35

    Supposing a few years back, our Great Investment Company invested their funds overseas and for the record lost a lot of money in their investments . A minus for our economy, right ?

    What if some of these investment funds actually ended up in some secretive proxy companies where the real ownership is not disclosed to the public for strategic reasons ?

    And now when it is ripe for the GE, these investments are then ploughed back to the economy again through third party proxy companies to prop up the GDP figures, would anyone be able to find out the truth if nobody in the Family who is in the know is telling ?

    If company accounts can be manipulated, what is there to prevent any unscrupulous government of the day from manipulating such economic figures ? My real concern is whether such a scam can possibly happen in Uniquely Singapore ?

    • 2 prettyplace 11 August 2010 at 01:34

      Possible, but with banking rules and we are not talking about a small sum of money. They are large sums of money.
      It is too difficult to move about.
      Someone will notice and report it.
      Unless of course, they have many, many banks. Which they do.
      Its a tough question, nevertheless.

      40% of the pie to foriegners, wow that’s nice.
      And not knowing the increase in number of people during the time, even better.
      Classic economics, they are sure going back to basics, full use of PPF curve.

      • 3 yuen 11 August 2010 at 02:09

        I wouldnt be quite so cynical, but I believe there should have been publicity about other neglected data:

        1. GDP per capita – if GDP increase is merely due to a larger population then we are not really progressing

        2. income distribution – if GDP increases merely benefit a minority, then we are actually regressing

      • 4 KT 11 August 2010 at 02:25

        It is difficult to pump prime the Singapore economy because it is very open. E.g. if we spend S$1bn on extending the MRT, most of the money would go into construction materials from other countries. And some into foreign talent who remit their earnings home.

        As for using ‘third party proxy companies’, that’s too risky. No secret stays a secret forever, especially when ‘third parties’ are involved.

  2. 5 Fixed 11 August 2010 at 00:24

    Didn’t he said the figures are already out. He just needed to fix them to be in line with his “objective” so that it doesn’t deviate too far from his so-called “sound” policies. Yes, I am reading every statistics being reported in msm, with a huge huge SALT.

  3. 6 Lee Chee Wai 11 August 2010 at 01:42

    Very good analysis, Alex, thanks!

    I’ve been meaning to find the figures for indigenous GDP for a while now. I thought I’d have to make use of household income statistics to estimate those figures …

  4. 7 Alan Wong 11 August 2010 at 10:02


    Fully agree with you that no secret stays a secret forever, especially when ‘third parties’ are involved.

    But remember the Shin Corp fiasco, nobody today would be any wiser if Thaksin had not been ousted and all the secrets about foreign proxies owning part of Temasek assets would never have been exposed.

    Well, it only serves to prove the extent of the risks that Temasek was willing to take, at the expense of Singaporeans’ interests. How about that for good governance ?

  5. 8 yawningbread 11 August 2010 at 11:24

    Actually, the use of proxy companies by Temasek to conceal its majority control was well known even before Thaksin was ousted. I wrote about the transaction in March 2006 (Is the Temasek-Shin Corp deal a loser?) when Thaksin was at the height of his power.
    On a related note, I wrote again about this deal, this time about Temasek making a politically unastute move, in October 2006, just after the coup that removed Thaksin. I have the suspicion that Temasek tried to cosy up to the royal family to protect its investment in Shin Corp after it lost its patron in Thaksin, but in the process, annoyed the Thai royal family even more. See Temasek Holding’s Tongnoi tangle

    • 9 KT 11 August 2010 at 13:30

      Politically unastute or not, the man in charge of the Shin deal, Jimmy Phoon, is back at Temasek. I thought he was fired but it seems he left to ‘pursue his own interests’, for 15 months. I hope he grew some nice veggies.

  6. 10 hahaha 11 August 2010 at 14:35

    Until i see a 17.9% increase in my annual pay package, all these GDP numbers mean nothing and totally irrelevant.

  7. 11 KiWeTO 12 August 2010 at 01:09

    Statement: 40% of GDP attributable to non Singaporeans.

    so, if we be dumb and stupid and simplify,
    our actual ‘owned’ GDP per capita generated is 60% of GDP per capita?

    quick look at worldbank development data (top of google search) says SG GDP/capita @2008 is $37,597.29375 current US$ – 2008.

    so 60% is now $22,558.38.

    When excluding our favourite sovereign fund’s foreign income, does that mean our actual domestic GDP is 66% overstated?
    (for the math-challenged: 40%/60% = 2/3 = 66%)

    Quick glance at more Worldbank 2009 figures says GDP/capita(PPP) is now US$50,701, ranking us 4th highest in the world. Somehow, I don’t see enough Singaporeans going around the world consuming like they were the 4th richest.
    (Taking 60% of that figure would rank us 30something, nearer Italy and Equatorial Guinea. Do we personally feel that we are better off economically compared against the Italian way of life?)

    Reminds me of that famous comment (wrongly?)attributed to Disraeli.

    ‘There are three kinds of lies: lies, damned lies, and statistics.’

    Massage the numbers as you wish.
    Length of queues at the neighbourhood pawnshop might be a better indicator to quality of life for a Singaporean.


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