Personal consumption expenditure: S’pore 36%, Hong Kong 66% of GDP?

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I refer to the article “Singapore is falling behind Hong Kong, just do the math” (South China Morning Post, Jun 26).

It states that “You divide the Singapore GDP figure by 3.4 million official Singapore citizens, ignoring the other 2.4 million inhabitants who are not thus deified, leave alone the uncounted labourers who come across the causeway from Johor every day and are not even counted as inhabitants.

You can also make Hong Kong richer by selective counting, but only fractionally.

These figures tell you that Singapore relies heavily on foreign labour. But there is more to the picture. What people don’t jump to tell you down there is that Singapore is also heavily owned by foreigners.

For every dollar of direct investment that Singaporeans have amassed abroad, foreigners have two dollars of direct investment in Singapore.

The results of all the foreign ownership are clearly apparent from the Singapore GDP figures. Net exports are in surplus by the equivalent of 26 per cent of GDP and have run at such high figures for many years.

“Singapore sold so much of itself to foreigners”?

As the chart shows, 40 years ago, before Singapore sold so much of itself to foreigners, personal consumption expenditure was about the same in both Hong Kong and Singapore as a percentage of GDP.

Personal consumption expenditure: S’pore 36%, Hong Kong 66% of GDP?

Since then, the figure has edged up for Hong Kong to 66 per cent of GDP while in Singapore it has collapsed to only 36 per cent of GDP.”

Average to spend on themselves: S’pore US$19,000, Hong Kong US$29,000?

As to “People in Hong Kong on average have US$29,000 each a year to spend on themselves while Singaporeans have only US$19,000, and the margin is growing rapidly in Hong Kong’s favour” – actually Singapore may on a relative basis, even be much worse compared to Hong Kong.

No minimum wage?

One of the reasons for this may be that Singapore does not have a minimum wage like Hong Kong, and Singapore has a very high proportion of lower-income workers.

Median gross income of all employed residents (excluding employer CPF) is $3,125?

According to the Ministry of Manpower’s (MOM) Yearbook of Manpower Statistics 2016 – the median gross income of all employed residents (excluding employer CPF) is $3,125.

407,400 earn less than $1,500?

There were 407,400 residents (about 19.4 per cent of the total workforce of 2.1 million) whose median gross income was less than $1,500 monthly.

After CPF = less than $1,200?

If we deduct the maximum employee CPF contribution of 20 per cent – the net take-home pay may be less than $1,200.

Arguably, most of the 407,400 people with take-home pay of less than $1,200 may be struggling to make ends meet.

47,000 earn less than $500?

If we breakdown the 407,400 earning less than $1,500 into 47,000 earning less than $500, 125,900 earning less than $1,000 and 234,500 earning less than $1,500 – the financial stress that lower-income workers may be facing may be even worse.

Also, Singaporeans have on average US$19,000 each a year to spend on themselves – is the “average” – meaning that the lower-income’s “spend on themselves” figure may be much worse.

Leong Sze Hian

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.