Home > Economics > PM Lee needs to be less narrow minded and look further into the future (as what he always claim)

PM Lee needs to be less narrow minded and look further into the future (as what he always claim)

Yahoo News: PM Lee draws lessons from Qantas fiasco

Once again, PM Lee is telling the entire Singapore that limiting foreign workers equates to lower economic growth. It’s akin to saying ‘hey, you guys want less foreigners, so it’s not my fault that you are going to suffer slower economic growth.’

After being paid millions and receiving an elite education, and as someone who always claim that the government is always looking far, it’s such an insult to the profession of economics to depend so much on the sole factor of labor for economic growth. Economic growth can be created via 3 factors, labor, capital and productivity (or technology). This over-emphasize on labor seems to insinuate that the government does not think much of the other 2 factors.

Increasing capital investment is as important as labor, and admittedly, the PAP government had done a relatively good job in building infrastructure, hubs like Biopolis and invest R&D expenditure, even though more can be done. A quick wiki-check shows that Singapore stands at 26th position in world ranking in terms of expenditure of R&D as a percentage of GDP (source from http://www.battelle.org).

Productivity, or technology is the one important factor that Singapore is truly lacking; if the reports of how unproductive Singapore workers are compared to other advanced economies are any indication. As an economy approaches maturity as in any advanced country, this factor becomes the most important factor in improving GDP growth since there is only so much labor and capital you can invest.

With their pay scale and bonuses tagged to GDP growth, it makes rational sense that the ruling government and civil service would tend to chose the easier way out by increasing labor input instead of increasing productivity. Moreover, the results of productivity takes some years to show. PM Lee himself mention about productivity (http://www.channelnewsasia.com/stories/singaporelocalnews/view/1037480/1/.html) but the importance is somehow not communicated clearly relative to the importance of bringing in external labor.

Increasing labor is the easiest and the fastest way to increase GDP, but not entirely the best option especially in land scarce Singapore with limited breathing space. A pretty obvious decision to make for our highly educated ministers isn’t it? As it turns out, it seems that the government preferred this option, going by how they love to advocate the link between foreign workers and economic growth. It’s almost like Singaporeans don’t deserve any credit for the country’s stellar GDP records.

I am voicing this out because in too many forums have I seen foreigners using the exact same logic the ruling party advocates (that foreign workers contribute to Singapore’s impressive growth) to rebut so-called-xenophobic views of the locals. Such perpetual self-belief among the foreigner community in their ‘superior’ contribution as the main reason why Singapore is progressing so well is worrying, made worse by the (whether deliberate or not) unofficial endorsement from the PAP government.

Of course, I am not saying all foreign workers think the same way. However, I feel that the government could do some good in encouraging their own demoralized citizens instead of overplaying the importance of foreigners in their own country. It’s no wonder that Singaporeans are feeling that their own government is taking care of foreigners more than their own citizens.

******************

Post-note:

Just when I posted a post on foreign workers, the local media finally broadcasted something we knew all long–the blatant discriminatory hiring practices most notably in the banking and IT sector. It’s a joke it has taken so many years for the local media to pick up this news. I won’t be surprised if the ruling party won’t intervene, even after this report. The frustration of Singaporeans is true, going by the comments posted.

I am not going to be coy in pointing out that the India Indian race tend to be heavily hired in fields I mentioned. Logically, there’s no link between Banking skills and IT proficiency and being born as an Indian in India, although the perception may be so. For certain companies that assert Indian professionals are better, it’s just a convenient sweeping statement to hide behind the vile of discriminatory hiring practices. I am not stereotyping but if my sample size is any measure, my own experience with Indian banking/ IT professionals (whether in Singapore or in India) have almost always include a major factor of frustration. Maybe it’s cultural difference, maybe it’s different working styles. But I would expect professionalism to be universal. All that hype about them being really good throws up too much promise on their ability which doesn’t quite measure up in the final results at the end of the day.

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Categories: Economics
  1. Hsq
    November 1, 2011 at 1:41 am

    Exactly my sentiment. Foreigners are over glorified and locals are under appreciated. Thanks for your well written article !

    • November 1, 2011 at 5:25 pm

      Thank you for your compliment. I don’t think I write very well actually. Been a bit too busy with work and most posts are written with my thoughts running concurrently. In fact, I do edit my posts after some re-reads. I wrote this new post on a rush and have since made some minor edits. 🙂

      On the issue of locals being under-appreciated, I think it’s a dangerous trend both socially and politically (to the PAP, if they are ever smart enough to realize). Citizens will slowly lose faith in the government. For the male population, the concept of national defense will be undermined. To the young, the future looks bleaker than what was promised. The whole concept of nationhood risk being eroded as resentment grows and Singaporeans became more xenophobic towards foreigners. All in all, not a very healthy trend.

  1. April 28, 2012 at 7:54 am
  2. October 29, 2012 at 4:58 pm

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