Kor Kian Beng Straits Times 20 Jul 10;
IS THE Government fixated on economic growth to the detriment of social development and the welfare of its people?
The danger is there, argued Nominated MP Viswa Sadasivan, as evidenced by a growing income gap and the large share taken up by profits relative to wages in the gross domestic product (GDP).
No, countered Dr Amy Khor, chairman of government feedback arm Reach and Senior Parliamentary Secretary for the Environment and Water Resources Ministry.
The duo's battle over an issue that is often debated among Singapore's intellectuals came at the tail end of yesterday's Parliament sitting.
Mr Viswa called for the Government to look beyond GDP as the key indicator of progress, to non-economic indicators like job satisfaction and happiness.
Dr Khor's reply: 'We agree that the development of a society cannot be predicated on pure economics alone.
'A responsible government takes a balanced approach towards developing a country, taking holistic account of its
economic, social and security needs, and with a steady eye towards the long term, beyond the election cycle... The ultimate aim is to enable our people to have
quality of life, and not merely a high standard of living.'
She pointed out that a 'growth-at-all-costs' strategy had never been undertaken by the Government.
But it also would not make sense to slow growth down deliberately, she said.
'Slow growth will make everyone worse off, but it will have the harshest impact on the low income, the very ones we are trying to help,' she added. 'The correct approach is not to dumb down the top, but to pump up the bottom.'
Dr Khor also pointed out how the Government's yearly spending on the social sector stacks up against spending on the economic sector.
Economic sectors account for 20 per cent of the Government's annual Budget - half the 40 per cent pumped into social sectors such as education, community and sports.
This is a clear sign of the Government's priorities, she stressed.
On the high GDP share going to companies, Dr Khor said this was not the outcome of deliberate government policy to favour the corporate sector against workers.
In any case, it was not a zero-sum game as some corporate profits go
towards taxes or are re-invested in projects in Singapore, in turn creating benefits for Singaporeans such as new jobs and technology transfers.
Turning to income inequality, she said this was common among global cities. Hong Kong and New York, for instance, had Gini coefficients of more than 0.5, 'like several other American cities'.
Singapore's Gini coefficient is 0.453, after factoring in government transfers and assistance.
The Gini coefficient is a common measure of income equality, with 0 implying perfect equality and 1 extreme inequality.
Dr Khor, the only MP to respond to the NMP, also said the GDP index, despite its failings, is still one of the best gauges of a country's progress and wealth.
Amid the debate on indicators to use, it was important not to forget that indicators serve as only 'signs and pointers', she added.
After all, policymaking cannot be driven by short-term measurement of indicators, but must be 'anchored in a clear understanding of reality', she said.
Singapore's approach has never been 'GDP growth at all costs': Dr Amy Khor
S Ramesh Channel NewAsia 20 Jul 10;
SINGAPORE: Nominated Member of Parliament Viswa Sadasivan has filed a motion that policymakers should look beyond GDP as a measurement of the country's well-being.
Moving the motion for adjournment at Monday's Parliament sitting, Mr Sadasivan said changed circumstances today require a broader framework which looks at non-economic factors.
These could be being able to fulfill aspirations, work-life balance, or just being happy.
For the middle and lower income, it could be buying a flat, or the rising cost of living.
Replying government feedback unit, REACH chairman, Dr Amy Khor stressed that Singapore's policy has never been a "GDP growth at all cost" approach.
She says a responsible government takes a balanced approach towards developing a country.
This means taking a holistic account of economic, social and security needs for the benefit of citizens, so that progress is broad-based.
Dr Amy Khor, Chairman, REACH, said: "Even as we debate the pros and cons of various indicators to reflect our socio-economic conditions, we must not forget that indicators are what they are described to be --- signs and pointers.
"It is a challenge to develop indicators that accurately or unambiguously capture a particular state of affairs in the socio-economic realm, or the outcomes of a policy at any point in time. Hence, it is important that we do not skew behaviour or encourage short term outlook by over emphasising the use of indicators.
"Government policy-making must instead be anchored in a clear understanding of reality, and cannot be driven by short term measurement of indicators."
- CNA/jm
Government very much focused on people: Amy Khor
Business Times 20 Jul 10;
She rebuts MP's contention about Singapore's high income inequality
SINGAPORE has never pursued a 'GDP growth at all cost' strategy, the government said yesterday in a robust response to a view that a growth-centred model here has led to socio-economic dysfunctions.
Through its choices and its Budget, the government is 'very much focused on people', said Amy Khor, Senior Parliamentary Secretary at the Ministry of Environment and Water Resources and deputy government whip.
'Even in our early days, when we were deprived, we were mindful not to allow heavy pollutive industries using old technology to set up base in Singapore to ensure a good quality living environment,' she told Parliament. 'Hence, even back then, we had to turn away much-needed investment opportunities.'
Dr Khor, who is also South West District mayor, was responding on behalf of the government to issues raised by Nominated MP Viswa Sadasivan on going beyond GDP as a measure of the country's well-being and progress.
GDP figures limit the assessment of both objective and subjective elements of well-being and development, Mr Viswa said. Objective measures would include income distribution, purchasing power parity, per capita consumption and wage shares, while subjective elements refer to issues such as health and mental well-being, life and job satisfaction, work-life balance, happiness and social and environmental capital.
A strong focus on GDP growth here over the decades has resulted in not only high income inequality but an inordinately high profit share of GDP and low wage share, according to the NMP. He called for a more balanced framework in the measurement of economic progress and welfare, citing the trend in the major economies, particularly France and Canada.
He also suggested that the government create 'a mixed bag of social and economic indicators' - particularly measures that reflect the people's priorities, such as job satisfaction, happiness, work-life balance, feeling connected and pollution. Or what are qualitative 'non-market externalities', he said.
In response, Dr Khor said that GDP, for all its shortcomings, remains one of the best gauges of a country's progress and wealth, and that economic growth is still key to improving the lives of people.
The high profit share of GDP, relative to wages, is not the result of deliberate government policy to favour the corporate sector against workers, she said. In any case, it is not a zero-sum game, as some of the profits return to Singaporeans in the form of tax revenue, new jobs and technology transfer, and add to a vibrant corporate eco-system here. She also rebutted Mr Viswa's contention about Singapore's high income inequality, as reflected in its Gini coefficient, saying that other global cities such as Hong Kong and New York fare worse. Singapore's approach, in any case, is 'not to dumb down the top, but to pump up the bottom'.
As for Mr Viswa's call for broad-based policy analysis and for regular reporting of non-economic indicators, Dr Khor reminded the House that indicators are but 'signs and pointers'. It is a challenge to develop indicators that accurately or unambiguously capture a particular state of affairs in the socio-economic realm, she said.
'It is important that we do not skew behaviour or encourage short-term outlook by over-emphasising the use of indicators. Government policy-making must instead be anchored in a clear understanding of reality, and cannot be driven by short-term measurement of indicators.'
The government's approach to developing Singapore has always been holistic, multi-faceted and with the long-term view, she added.
