| |
Ethos Issue 6, Jul 2009
Singapore’s Economic Growth Model:
Too Much or Too Little?
Linda Lim
A time of global crisis and
transformation, and of impending major
economic, social and demographic shifts
in our region, is an excellent time to reexamine
not just Singapore’s economic
growth model, but also our identity and values as a nation, since growth and
identity are ultimately linked.
Linda Lim is Professor of Strategy at the
Ross School of Business, University of
Michigan. This article was adapted from a
talk given at the annual Singapore Economic
Policy Conference on 24 October 2008,
organised by the Singapore Centre for
Applied and Policy Economics (SCAPE),
National University of Singapore.
| NOTES |
| 01. |
In the current global financial crisis, the importance
of coordinated interest-rate and bank-rescue policies is
an instructive example of the need to avoid beggar-myneighbour
consequences which would hamper recovery for
everyone. |
| 02. |
This concept is most associated with John Maynard
Keynes’ “paradox of thrift”, but there are other examples. |
| 03. |
Thus, Singapore is unlikely to be, simultaneously,
internationally competitive in semiconductors, life sciences,
health care, education, financial services, digital media,
creative industries and casino tourism. |
| 04. |
Lee, Tsao Yuan, “Growth without productivity: Singapore
manufacturing in the 1970s”, Journal of Development
Economics 19 (1985), 25-38. |
| 05. |
Young, Alwyn, “A Tale of Two Cities: Factor Accumulation
and Technical Change in Hong Kong and Singapore”, in
NBER Macroeconomics Annual 1992, ed. O. J. Blanchard
and S. Fischer (Cambridge and London: MIT Press, 1992),
13-54. |
| 06. |
Young, Alwyn, “The Tyranny of Numbers: Confronting the
Statistical Realities of the East Asian Growth Experience”, Quarterly Journal of Economics 110 (1995), 641-80. |
| 07. |
Krugman, Paul, “The Myth of Asia’s Miracle”, Foreign
Affairs 73. |
| 08. |
Over the last 40 years, Hong Kong’s GDP growth rate and
per capita income have surpassed Singapore’s, and this
was achieved with a smaller state sector, lower savings
and higher consumption, suggesting a more efficient use of
capital. |
| 09. |
Zhiwu Chen, “Privatisation would enrich China”, The
Financial Times, 7 August 2008. |
| 10. |
Huang, Yasheng, Capitalism with Chinese Characteristics:
Entrepreneurship and the State (New York, NY: Cambridge
University Press, 2008). |
| 11. |
Singapore economists like Tilak Abeysinghe, Choy
Keen Meng, Lee Soo Ann and myself have similarly noted
the extremely low share of both labour incomes and
consumption in Singapore’s GDP, and its correlation, as in
China, with increasing income inequality, between average
and rich and also between local and foreign, private and
state actors. In both economies, the state owns or controls
much of the remainder, including investment by foreign
multinationals which are largely controlled and incentivised
by the state. See Abeysinghe, Tilak and Choy, Keen Meng,
“The aggregate consumption puzzle in Singapore”, Journal
of Asian Economics 15 (2004), 563-78. |
| 12. |
Lim, Linda and Lee, Soo Ann, “Globalising State,
Disappearing Nation: The Impact of Foreign Participation
in Singapore’s Hub Economy”, in Management of Success
Revisited, ed. Terence Chong (Singapore: Institute of
Southeast Asian Studies, 2009) (forthcoming). |
I II 4 |
|
