Why people didn’t care to be the richest country in the world

It must have annoyed a lot of people to see on the front page of the Straits Times, Wednesday 15 August 2012, the boast that Singapore was the ‘richest country in the world’, validated by another hitherto unheard-of ranking study.

There might have been a time when people here would have taken pride in such an accolade. What better proof that all the sacrifices made in the decades post-independence had paid off, and that our city-state had arrived? But several people I spoke too pointed out that not only do we know it isn’t easy to be the richest country in the world, we look around us and we can clearly see so much that is wrong. “Richest country in the world” can’t possibly mean what it means in plain language.

It can only mean another empty boast.

Yet, the fact that our “nation-building” newspaper chose to highlight it on its front page shows how far removed it may now be from the typical Singaporean – that is, if my friends are representative of that. The newspaper is still engaging in old-style propaganda when its readers have changed. What to the Straits Times is welcome good news worthy of trumpetting is disgraceful gloating to its readers. Surely, a more assured recipe for losing customers, a newspaper can hardly design.

Why this gap between a number and people’s perception, I wondered? What’s behind the number in the first place? How valid is it? And why are people’s life experiences inconsistent with what the number indicates?

* * * * *

It turned out that the study cited by the newspaper was the 2012 Wealth Report, by Knight Frank, a property seller. It appears to be a sort of advisory to the “ultra high net-worth community” where to park their assets (preferably in real estate), and perhaps where to locate themselves so they remain connected to important trends, decision-makers and wealth-generating economies.

The website says in its introduction that “we uncover how the wealth being generated by the world’s fastest growing economies is an integral part of the equation, but also discover that economic growth alone is not enough to create cities considered genuinely important by the world’s wealthiest people.”

Please don’t ask me to parse such corporate-speak.

Despite that flimsy excuse, it really was not a rigorous study in macro-economics, though I couldn’t figure from the report’s website what its study method was. But there was enough to suggest that listing countries by relative wealth was only a peripheral issue, not the main aim of the study.

Yet, it merited a front-page shout from the Straits Times. The newspaper’s mendicancy for any news that might burnish Singapore’s image was a sight to behold.

But how was the figure showing  “richest country in the world” confected?

I reproduce at left a small table from the report, similar to the table reproduced in the Straits Times. It shows Singapore at the top of the heap in 2010 GDP per capita. As always with fishy-looking numbers, I began to squint.

What the Straits Times did not reproduce, nor mention in its write-up, is the footnote that local currency values had been converted to US$ at Purchasing Power Parity (PPP). It was not indicated how PPP had been calculated nor by whom nor what the conversion rates were. Needless to say, this is crucial; rankings can swing up and down depending on these assumptions.

(You might also have noticed that for a report produced by what was claimed to be a global real estate consultancy with oodles of money catering to clients with even more oodles of money, they couldn’t even find a minimum-wage spell-checker to spell Norway correctly!)

Despite the lack of background information about method of calculation, I took a stab at checking Singapore’s 2010 number. I’m like that. It’s an itch I have to scratch.

The springboard was our Gross Domestic Product in Singapore dollars for 2010, which was S$310,037 million at current market prices. To arrive at per capita values, we have a choice of dividing it by Total population, Resident population (citizens + Permanent Residents), or only Citizens. You can see the different results at right.

Which of the three per capita GDPs did the Wealth Report use? The report itself didn’t say, and furthermore, it was given in US$.

Using a process of induction, and applying three different exchange rates – US$1 = 1.30, 1.35 and 1.40 – we can draw up various US$ per capita GDPs. Those exchange rates are based on the historical. At the start of 2010, one US dollar was worth S$1.40; by the end of the year, it was worth S$1.30. We are assuming that PPP is not significantly different from market exchange rates since Singapore is not substantially costlier or cheaper a place to live compared to the US – the Wealth Report said it used PPP to convert dollar values, but didn’t say what rates it used.

The closest match with the Wealth Report figure of US$56,532 seems to be our figure of US$58,715. This suggests that the Wealth Report used the per capita GDP for Residents only, converted at about US$1 = S$1.45.

The problem with such a method of calculation is that Singapore’s population is much larger than our Resident Population. In mid 2010, we had 5.077 million on this island, of which only 3.772 million were Residents. And a great majority of the non-Residents hold work passes. In other words, they contribute to the GDP through work. How can we take into account their economic product, yet erase them when it comes to calculating GDP per capita?

It’s more reflective of reality to speak in terms of  Total GDP divided by Total Population, and if we do that, our per capita GDP in 2010 was S$61,070, or about US$42,117 at the same 1.45 exchange rate that I believe the Wealth Report used. That puts us closer to Hong Kong and Australia in the first table, and feels rather more realistic.

Why we don’t feel rich

Two other reasons why the Wealth Report’s figure struck people as removed from reality are:

1. Much of Singapore’s GDP is locked away in corporate profits and government surpluses;

2. A high income divide means the median Singaporean earner is substantially poorer than the statistical average income.

Re (1), a simple back-of-the-envelope calculation will demonstrate what I mean. In 2010, there were 1.15 million Resident households with at least one employed person (source: Department of Statistics), and each household had an average income from work of $8,726. The figures can be seen here. The figure includes employer CPF.

If we multiply the average of $8,726 by 1.15 million Resident households, we obtain a total income from work (including employer CPF) for citizens and permanent residents of S$120.4 billion in 2010. That’s slightly less than 39% of total GDP that same year.

That’s another way of saying that only two-fifths of the economic output of Singapore reaches its citizens and permanent residents via income from work. I glean from web articles on economics that such a proportion is low by world standards. It’s hardly any wonder that Singaporeans don’t feel anywhere close to being the “richest country in the world”. The money isn’t in our pockets.

Re (2), it’s a bit more complicated to try to illustrate what I mean. But, we can glimpse it by comparing the average income per Resident person with the median income.

First, at left is the data about median income for a Resident Singaporean.

As for average income, getting a figure is bit more tricky; it couldn’t find it directly, but I can estimate what it is.

I could find from the Department of Statistics that the average household size in 2010 was 3.5 persons. I could also find that 2.05 million Residents out of 3.77 million are in the labour force. This tells us there are an average of 1.9 working individuals in an average employed household, which in turn means that this average individual earns S$4,593 per month, including employer CPF.

(Avg income per household $8,726)/( (2.05/3.77) x 3.5 persons per household) = $4,593.

The gap between average income per month per person ($4,593) and the median ($3,000) gives you a clue as to the long tail reaching up the income scale. It helps explain how the aggregate can make Singapore seem very rich – pulled up by the super-rich – when plenty of ordinary people don’t find themselves so.

Singing off-key

Our pro-government media are behind the curve. Singaporeans no longer feel proud about sparkling “statistics” that prove how great Singapore is. The days of feeling happy when Singapore is “proven” to be respected by others even when we don’t have enough to eat are over. Today, there is an increasing attention to the self, and any attempt at singing the old tune will just sound off-key, when the self has not yet been satisfied.

Some may say it’s a bad trend. Rising selfishness can’t be a positive for the collective good.

But at the same time, I can see nascent shoots of something even better. Here and there, I spot signs, especially among younger Singaporeans, that the “self” is not just themselves, but also contains a sensitivity to those less privileged than them. When even upper middle-class Singaporeans roll their eyes at headlines such as “richest country in the world”, it cannot be because they feel their lives aren’t comfortable; it is because they are all too aware there are others whose lives aren’t. That there is no honour when victories are cast in soulless national terms, and if we have to measure anything, it must be at the level of real people’s real well-being.

See the box at right.  Think too about the disdain expressed when new citizens won medals for Singapore at the recently-concluded London Olympics.

The “collective” is not the state as defined by the ruling party; it is the community we may be beginning to feel we belong to. And that such flag-waving as headlined in Wednesday’s newspaper will only distract from the immense amount of work that still needs to be done for a truly happier, wealthier society.

37 Responses to “Why people didn’t care to be the richest country in the world”

  1. 1 harishpillay 20 August 2012 at 23:49

    Funny thing is that I saw the headline and the promptly ignored it because it was printed on the ST. Enough said.

  2. 2 Stef 21 August 2012 at 00:01

    You know what Alex, I don’t pretty much cares about whether we are the richest or not? So what if we are? Or aren’t?
    When people around me and myself are trying to cope with rising costs of living, increasingly crowded living conditions, frequent train breakdowns etc. It sure doesn’t feel like we are the richest country. If so, we can all afford our HDB flats or even better still private housing without worrying about whether to take a 50-year loan or not…

  3. 3 Tsumujikaze no Soujutsu 21 August 2012 at 00:15

    At the end of the day, I think we need to understand this: Think tanks have their own agenda in creating their findings. Political ideology to them is not about black and white. It’s about what they should do in their own opinions.

    Secondly, the wealth of a country is all about corporate profits and investments. How much the people earn is only secondary in the eyes of the said think tanks. It’s not just Singapore. If it’s any other country, it will jump at such a positive PR as well, no matter how much of it is the truth/half-truth/lies. Perhaps Mark Twain summed it up best here:

    “There are three kinds of lies: lies, damned lies, and statistics.”

  4. 5 ricardo 21 August 2012 at 03:42

    Mr. Au, please don’t propagate this myth that wanting “progress for us ALL” is selfish. Your suggested amendment to the Pledge is NOT selfish but an indication of the trend you have noticed among the young. As I believe you are not one of them, it appears to be prevalent among the “not so young” too.

    We need to point out at every opportunity, that wanting “prosperity for us ALL” instead of just multi-million Dignity for our Lord LKY, the HoLee Family, the Ministers & friends, is not selfish.

    Instead it is an indication of how Singaporeans are, slowly but surely, growing in civic responsibility and awareness beyond the GDP focused dictates of the Ministries of Truth & Love.

    God grant that this continues and even faster.

  5. 6 CYNIC 21 August 2012 at 06:59

    The Singapore government spared no expense(taxpayer money) directly or indirectly to glorify its dictator.

  6. 7 Backword 21 August 2012 at 07:55

    Either the editor or reporters involved were related to Knight Frank, the property seller OR the Straits Times is behind time in using the tools long discarded by the China’s People Daily.It is really backword.No credit to the new editor in chief.

  7. 8 dolphin81 21 August 2012 at 09:23

    The Straits Times propaganda report is based on overall figures & does not take into account of the the rich-poor gap.

    The large base of low income persons make this “richest country claim” meaningless.

  8. 9 Crap... 21 August 2012 at 09:48

    Great article Alex! But sadly, in reality, there are actually many people who take pride in such news. They are the ones who say things like “be grateful to PAP, look at the poor countries around us.. there is NO corruption here etc etc” The truth is there are more people like that than politcally aware and discerning Singaporeans. It is precisely why the ruling party wins every election.

  9. 10 Chow 21 August 2012 at 09:59

    Minor typo. Were you thinking of Amway when writing this? Norway has become Normay in your very first table…

  10. 12 Kelvin Wong 21 August 2012 at 10:21

    Reblogged this on Salt * Wet * Fish and commented:
    testing testing testing

  11. 14 Natureschild 21 August 2012 at 11:15

    For the man-in-the-street, a high % of whom are working-class S’poreans struggling to cope with their low income in an escalating inflationary environment, such eye-catching headlines, are misplaced. Whether S’pore is ‘the richest country in the world’ does not concern them the least. In fact such trumpet-blowing by the government’s mouth-piece serve more as an ‘irritant’, a mood-dampener, to the average heartlander who is living a stressful life worrying about the high cost of living and ‘competition’ caused by the big number of low-wage PR/foreign workers.
    A well-researched piece. Thanks to Yawning Bread for fine-tuning ST’s ‘off-key’.

  12. 15 Samuel 21 August 2012 at 11:21

    I’m not so certain that they used resident population only. If that were the case, surely some gulf states, say, Dubai or Abu Dhabi, would have come out tops, because their resident population is an even smaller percentage than ours. Still, it’s disconcerting to see the rift between what is said (we are the richest country in the world) and what is perceived (we obviously aren’t).

  13. 16 Anon 2U31 21 August 2012 at 14:21

    Paragraph 15: “The springboard was our Gross Domestic Product in Singapore dollars for 2010, which was S$310,037 billion…”
    Do you mean $310,037 million instead of billion?

  14. 18 George 21 August 2012 at 14:50

    Good article, Alex.

    Thanks for once again bringing out the depraved depths the local govt owned mass media has sunk to in cahoot with an undeserving administration and complicit business organisations, esp. multinational ones.

    One supposes that that is how such toady efforts keep Knight Frank, for one, in the govt’s good books, so as to continue to exploit and mine the opportunities that the overblown and conceited govt of this island provides to all who sings its praise.

  15. 19 E Y 21 August 2012 at 17:42

    I am a simple person. When I read that Singapore is the richest country in the world, yet I don’t see my income giving me the satisfaction that I am all that wealthy, the thought that came to mind was, “jialat, inflation going up again”.

  16. 20 Duh 21 August 2012 at 18:06

    You estimated that about 39% of Singapore’s GDP is through income earned by Singaporeans and its residents and it would not surprise me that the majority of the rest is earned by the Govt.

    You know what the lay Singaporeans have been saying? The biggest earner when GDP increases is the Govt. They earn it through levies, taxation and the like (e.g., ERP, COE) and any opportunity for ordinary Singaporeans to earn money (e.g., investments) has been regulated by the Govt so that ultimately the Govt also earns the most.

    A greedy Govt that hoards wealth and fails to re-distribute to its citizens but rather, fatten itself with million dollar salaries has no integrity to speak of, much less govern the country.

  17. 21 Ng Yi-Sheng 22 August 2012 at 00:45

    Great article! And just for everyone’s info, IMF/World Bank reports say the world’s wealthiest nation by GDP per capita is actually Qatar, followed by Luxembourg and (if you count it) Macau.


    Knight Frank just didn’t bother to include these countries in his ranking. We’re actually number 3, or 4 even.

  18. 23 alf 22 August 2012 at 09:04

    I have a theory that every time Singaporeans see the figures of “gdp per capita” those below that line get unhappier and those above get happier. Given inequality and that the median is well below the average, my theory suggests there’s a lot of mad Singaporeans out there, and the MSM is just contributing to the madness 🙂

  19. 24 Ken 22 August 2012 at 09:41

    I agree with you on many points you have made. However, your choice of photograph (the old lady kneeing down) suggests that you are trying to sensationalise things. I know her (selling 2nd hand stuff below block 4 Sago Lane).

  20. 25 Anonymous 22 August 2012 at 10:07

    Norway spell wrongly.

  21. 27 JW 22 August 2012 at 12:59

    Below quote came to my mind as I approached the closing of your entry:

    “Ideologies separate us. Dreams and anguish bring us together.”
    Eugene Ionesco

  22. 28 Elaine 22 August 2012 at 14:08

    “I glean from web articles on economics that such a proportion is low by world standards. It’s hardly any wonder that Singaporeans don’t feel anywhere close to being the “richest country in the world”. The money isn’t in our pockets.”

    – May I know which are the economic articles that suggest the propotion is low? I would like to learn more. Thank you!

  23. 30 Ordinary Citizen 22 August 2012 at 14:11

    How come I feel poor when I travel to other countries?

  24. 31 berthahenson 23 August 2012 at 12:24

    Excellent piece! I admire your research.

  25. 32 TAP 24 August 2012 at 06:11

    The funny thing is I felt worse for the country after reading the headline. GDP per capita is an average measure and is easily changed by outlying values. Sure, get one or two Western billionaires or rich PRC people into the country and you would have boosted the GDP substantially.

    I personally feel that the country is becoming the playground of the rich, which brings along a set of problem (elitism, inflation etc). It does not bode well for the Gini inequality coefficient of Singapore, which is currently not too good. What does this influx of rich people into the country benefit 99% of the population?

    To me, the pride of the newspapers in this piece of news also suggests an unhealthy fixation of wealth. Personally, the more important matters are health (air pollution – personally I felt quality of air is worse than in other major cities such as Melbourne or Paris, sound pollution – the MRT is really noisy these few years), quality of life (more parks, shorter working hours, better customer service), lower cost of living (cheaper accommodation. cheaper medicine, lower taxes on essential food items).

    No, 1 in GDP per capita? That’s nothing to be proud of…. A few more points deducted from the Straits Times reputation….

  26. 33 Rabbit 24 August 2012 at 12:18

    Just yesterday evening, I heard a conversation between two elderly women in MRT on my way home. One of the elderly women had problems borrowing money from her children for her to seek medical help. She told the other woman that her children barely have enough to feed their own family let alone support her and she skipped appointment because consultation in hospital alone cost nearly $30 without medications and it is called subsidized rate. The other older woman related the same stories about the cost of livings eating away all her savings even while she was currently working as officer cleaner. She showed the other woman her arthritis and wondered how long she could still work. She suggested to the other lady that she relied on Chinese herbs to save cost from visiting govt clinics regularly. Everyone standing nearby was listening to their conversation and than another elderly guy interrupted with sympathy that he too was taken aback by the huge medical expenses for his routine health treatments before he run out of reserves and have to rely on his children sooner. People who were standing nearby and listening to them look rather somber too, one young couple was seen shaking their heads with disbelieve at the state of our older folks today.

    Related to this topic is another finding from Leong Sze Hian on the increasing number of pawnshops here.

    Singapore is like a bank, it is bloated with money from various means but its workers are lowly paid and the shareholders are drawing millions to keep these workers’ wages low. Straits time is a shareholder’s gimmick, like the bank’s brochure printed wholesale, you need to read with tones of salt and draw from your own analysis. We should by now learned a lesson from too belieiving in Lehman Brother products.

    Google for “Money Lenders” in Singapore and you will get a shocking list on the numbers. I am not proud of what I saw and heard. My my skin is not as thick as Straits Times paper boasting about us being the wealthiest nation and leave out our existing poor who were skinned of their wealth by this rich country.

  27. 35 yuen 24 August 2012 at 15:17

    I believe the GDP of SG, HK and China has a high portion in their real estate industry, and in SG the government and overseas investors own a large part of the economy, so that the portion resulting in the generation of disposal income for ordinary people is relatively small.

    as far as I know, most people here are heavily mortgaged after purchasing expensive real estate; while they save a high portion of their income because of CPF, the withdrawal of CPF funds to make down payment and monthly repayments of housing loan, both principle and interest, leaves most people with just a small portion of their savings to pay for living costs after retirement

    it seems to me, a layman in economic theory, that our “high wealth” in the form of property values is also responsible for us feeling not wealth; perhaps some academics/consultants can address this further

  28. 36 Mike S 24 August 2012 at 19:16

    The World Bank calculates gross national income per capita (which is not identical to GDP, but similar) on a PPP basis here:


    It says Singapore’s GNI capita in 2010 was US$56,890 at PPP rates — behind Macao, Norway, Luxembourg and Qatar.

    GDP per capita in current US Dollars is also calculated by the World Bank. In 2010, Singapore weighs in at US$41,987, behind Japan, Finland, Austria, Kuwait, Ireland, Canada, the Netherlands, USA, Sweden, Australia, Macao, Denmark, Switzerland, Qatar, Norway, Bermuda and Luxembourg.


    It makes, frankly, no sense to calculate GDP at purchasing power parity, since it encompasses more than local purchases made in local currency (which is what PPP adjusts for).

    Whichever way you slice it, though, Singapore is doing pretty well financially. It does, however, have a very high degree of inequality, as measured by its Gini coefficient of 0.446 (closer to 1 is more unequal) — http://www.singstat.gov.sg/pubn/papers/people/op-s17.pdf.

    This compares with a Gini coefficient of 0.23 in Sweden, and an OECD average of 0.31. http://www.oecd.org/sweden/47876590.pdf

    • 37 Jeremy 6 September 2012 at 08:23

      The numbers are skewed because Singapore (a city state) is compared to real countries.

      For example, Singapore may be richer than the US but it is poorer than San Francisco, NYC, Boston.

      And that’s just ‘rich’ using the average wage measure. If you use median income measures….Singapore will not crack top 20 in north Europe. If you are a median wage earner, you are far better off not just in Zurich, Stockholm, Oslo, Copenhagen, Helsinki,etc, but even the second tier cities like Aarhus, Bergen, Geneva, Munich, Hamburg, etc.

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