Should Singapore Slow Down Our Economic Growth?

Recently Singapore made the news for money-laundering activities. The real question that underpins this isn’t whether this is moral or not – in capitalistic economies, as the world is largely structured along now, governments pander towards capitalistic overtures of making money, which necessarily means that governments are corrupt. Yet, this shouldn’t just be attributed to capitalism as governance and elites of past had always hoarded wealth to further themselves, whether through ‘clean’ or corrupt ways.

To Accumulate Wealth Or To Slow Down on Growth?

Thus Singapore’s dealings, if indeed true, aren’t surprising. However, the larger issue is this – for a country which does not have natural resources, what can Singapore rely on to accumulate wealth? Indeed, this would be the very first question that our leaders would have asked when Singapore first gained independence in 1965 – how can we survive? You can count how many ways a country can amass wealth in large amounts. If you look at the countries with the highest GDP per capita, they had accumulated wealth through having large reserves of oil, gambling-related activities or to become an offshore bank, which can even be used for purposes of black money laundering. Singapore doesn’t have natural resources or oil, so we have to make use of the other two wealth accumulation sources to great effect. Did we? PM Lee Hsien Loong had recently shared his satisfaction on how the two integrated resorts have brought in wealth for Singapore. Also, Singapore is one of the richest countries in the world, by GDP per capita, so indefinitely, our government’s ability to accumulate wealth is undeniable.

However, the question that has been edging Singapore on for a while now is this – are we willing to have slower economic growth and slower wealth accumulation? If we are to do so, will Singapore be rendered vulnerable, if we do not have enough financial capability to prop us up? This is the question that the government has been asking Singaporeans for the past few months. Singaporeans have said that they are willing yet the government continues to think that it might not be a good idea to slowdown growth. The problem is that for a government not used to explaining its actions to the people, it is faced with a situation where it believes that for Singapore’s standing to be maintained in the world and for Singapore’s continued existence, it is paramount that we continue to hoard on wealth. Yet, how do you explain this to the people, if you are to believe that they might not have the complexity to understand the reasons, as well as that it might reveal the hidden non-transparent modes of wealth accumulation?

However, the essential question isn’t whether Singaporeans should be willing to accept slower growth? This is how the government has framed the question, but this deflects from the real question. Singapore is the fourth largest financial center in the world and we have one of the world’s highest GDP per capita. Singapore’s position as an important node for business will not be undermined so easily, with the amount of business connections in this place. Thus whether or not we want to slow down on growth, this isn’t the question. However, the real question is not for the people but for the government to answer – as one of the richest countries in the world, is the government willing to transfer more social welfare spending onto its people?

The Equation of Trust and Wealth

Norway is also one of the richest countries in the world but do you see the people telling their government that they don’t need that much money? No, but why? The reason is because the people have benefitted from the wealth – Norway has one of the lowest, if not lowest, income inequalities among the economically developed countries. The government is willing to redistribute the wealth it has accumulated, so that the people has a fair share and stake in the government’s goals and in the country. If there’s one reason why there is such strong trust among the people and their government in Norway, it’s because the government shares with the people. Indeed, this is the common trait that ensures that the Nordic governments continue to enjoy such a high amount of trust between the people and the government – the sharing of wealth.

In Singapore, the government continues to ask of the people to trust them. Yet, the erosion of trust couldn’t be more blatant. Singapore held its largest protest gathering since independence against the government’s population white paper this year. In fact, Singaporeans have taken to online mediums to express their disdain and disappointment with the government in even greater numbers over the past past two years. But the erosion of trust didn’t just appear out of nowhere. The erosion of trust was a the byproduct of a government which had veered off course since the early 2000s. From paralleling its growth to the Nordic countries and Switzerland, it paralleled its growth with the United States.

Switching Allegiance to America and China

Why did Singapore send in troops to the wars fought by America? Having a stake in the war also means having a stake economically in those countries that the wars were fought. It’s a strategic move by the government to parallel it’s growth with America – America was strategically outlining its defenses in Iraq and Afghanistan, for stakes in the oil fields in Iraq, as well as to counterbalance the growth of China and Russia through Afghanistan. By aligning itself to America, Singapore can, not only be protected in its defenses by America, but it can also benefit economically from investing first militarily in these countries, and later on, economically. Thus you only have to observe the countries which Singapore sends its military to understand where it believes wealth generation opportunities are abound.

The alignment with America started proving disastrous when it became obvious that America’s then president Bush was mismanaging the economy. As Singapore had paralleled the American economy, we suffered similar consequences, thus our income inequalities rose in the 2000s and when the economic crisis hit in 2008, we were badly hit as well. However, thanks to the strong banking sector that we’ve strengthened from the financial crisis of 1997-98, we managed to thankfully advert a major crisis which continues to plague America today. And thus Singapore started aligning itself more fervently towards China, believing that China’s strong financial standing will be a boon to Singapore. Yet, as much as China has styled itself as a communist which it had actually forsaken and had taken on an aggressive capitalistic stance, it’s situation of high income inequality was something which the Singapore government also shared in the belief was a necessary outcome of economic growth as well.

Being Blinded to Growing Social Problems and Inequalities

Yet Singapore’s situation was vastly different from China. Singapore’s GDP per capita was significantly higher than China and even as we continue to want to accumulate wealth, we are starting from a high base, which means that Singapore is already in a position to not only accumulate wealth at all costs, it was also in a position to share the wealth with its people. And this was where Singapore got it wrong. In paralleling our worldview with America and China, we were led to believe that there shouldn’t be high transfers of social welfare back to the people and that the unhindered growth of high net worth individuals into Singapore would allow Singapore to gain significant wealth within a short period of time. What the Singapore didn’t account for, and indeed for America and China as well, was that because of the sudden and uneven wealth accumulation, social problems also ballooned its way into the society – income inequalities grew to unacceptable levels, and continue unabated, and the people could no longer dismiss or contain their anger with the unequal treatment that they suffer under their government.

Did the government miscalculate? The problem isn’t with miscalculation. The problem is with greed. Like the bankers which collapsed America’s economy, the Singapore government wanted to accumulate wealth at the expense of the people. But the government isn’t a corporate bank, or at least it shouldn’t be. A government’s role should first and foremost be to protect the rights and security of the people. But this was something that the government had waylaid as they followed America and China. And thus it is by no accident that the social movements that now pervades Singapore is similar to that that has transpired in America, where people are starting to question the morality of capitalism and are demanding for equality from their government.

Going Back to Basics – Redistributing Wealth for Equality

But as I’ve mentioned at the start of this article – the root problem isn’t with whether Singapore is too rich or whether growth should slow down. As long as Singapore is mired within the capitalistic system, it is in our interest to continue to accumulate wealth, to protect our standing and sovereignty. However, if the people do not share in the wealth accumulation, they do not see the need in them increasing their production for a wealth which they do not see and thus do not believe needs to be created. And when a government continues to push the people to produce for outputs which they perceive as uncompensated, they would be unwilling to join in the production and would be unwilling believe in the government’s push – thus the lack of trust between the people and the government in Singapore.

This has thus led the government to ask the people – should we slow down growth to have a better pace of life? But the joke is on the government, because the question should be – should the government transfer more social welfare to the people for them to share in the wealth? And the answer is, yes. If the government doesn’t transfer more social welfare to the people, the people will continue not to see the wealth that they are helping the government accumulate and if they don’t, they would rather slow down. So, the root problem of it all is a government which continues to believe in entrapping the wealth from the people, not a people which no longer cares about their country. The people will care as long as their stake in the country is respected, observed and cherished. When it’s not, they become uncertain participants – they become destabilised when they do not know how they are actually contributing to the country, and eventually, for themselves.

The solution to Singapore at this point is very obvious – a return to the basics of governance, where the country provides for the people and observes their rights. Once that is achieved, the people will work with the government to propel Singapore forward. The ball now lies in the government’s court, and if they do not do what they need to, the natural order of social and political evolution will simply render PAP a foregone conclusion at the next general election.


  1. Where is the money

    We can talk about redistribution if we can find out how much wealth we have actually have, something even a President could not acheive. Then we need to find out where all the money is, which by our governments logic would be against the country’s interest. One academic got his pants sued off him for asking “where is our money”. Well at least we can be very sure that Singapore will never go in the way of Cyprus because our external debt is low compared to our public debt of 106.5% of GDP. Our government will not have to impose high tax on bank deposits, this will definitely upset our dear moneylaundering investors. It can simply delay paying out CPF funds or increase the minimum retention amount. That is something even Norway cannot acheive.

  2. eremarf

    Roy I’ve been looking at Americans talking about their deficits, and why the deficit isn’t a problem, and how a surplus (e.g. Clinton era) is a problem (well, it does depend on what goals you’re trying to achieve).

    The Modern Monetary Theory people have interesting ideas (which I must admit I don’t fully understand), such as that when the public sector runs a surplus, the private sector necessarily runs a deficit (assuming there’s no external trade surplus or deficit). (E.g. look at the graphics, might have to scroll a bit, on these pages:,

    I’ve always wondered at how many American experts comment on America, but how almost no Singaporean experts comment about Singapore (in a similar technically expert way). True they have more people, but for every 100 blogging American expert, we should have at least one Singaporean? But we have (virtually) none (maybe Cherian George is one, and he’s not that prolific). (I regularly even see typical Chinese names blogging about the US, James Kwak about finance, Martin Khor from Penang about development stuff, or at least writing books like Karen Ho about Wall Street anthropology – but all the experts aren’t writing in Singapore, about Singaporean things. We’re missing out on all the value independent experts can provide to society and democracy.)

    Sorry to hijack the topic. I think your attempt to frame things is great, it’s very needed, I’m glad you’re speaking. But I always wish we had more experts like in the US, and I don’t know how we can get that critical mass. It’s curious – our internet penetration rate is so high, Singapore’s digital footprint is so large, but yet we’re under-represented in expert knowledge, esp re: economics and politics. Not coincidental I think! The gov’t has been repressing people in this direction for a long time (e.g. Cherian George’s tenure issue which discourages experts and intellectuals from commenting, at least not until the end of the career trajectory a la Ngiam Tong Dow, Lim Chong Yah, Yeoh Lam Keong etc, not releasing data, or retracting it after academic papers are published a la, etc etc).

    • My Right to Love


      Thanks for the comment. The reason why there aren’t as many thinkers commenting on Singapore is because if they do, they either get sidelined, or in worse cases, get sued or framed. As an academic, you have to compromise on your integrity if you want to remain in Singapore, or choose not to discuss socio-political issues in Singapore. If you choose to do so, you have to align yourself to the government.

      Unfortunately, this is how the government has framed themselves and have used the law against academics who disagree. It simply isn’t easy for an academic in Singapore.

      And this is the sad truth about Singapore – that as the government represses the voices of our academics from offering differing viewpoints and solutions for Singapore, we have created a dearth of knowledge where in times of need, such as where we are now, the government becomes lacking because of the lack of diverse viewpoints to inform them of the various approaches forward. It is our government’s own undoing if Singapore fails.

      On the other hand, there are many burgeoning online voices, especially over the past two years. We might not have academic speaking up but more and more so, more online commenters are coming out with clear and well-argued analysis. This is our stop-gap measure for now. To the government, this is a suitable compromise because online commenters are perceived as not being taken seriously and have less of an ability to upset the government’s reputation internationally.

      However, in the long term, this is not sufficient. The government needs to liberalise the educational and academic sector. Otherwise, we are no different from the Khmer Rouge – where even if we do not eliminate intellectuals themselves, we eliminate intellectual thinking. Our progression into a knowledge economy will be severely impeded, if we manage to transit into a knowledge economy. Singapore will become irrelevant, before we even know it, if this government doesn’t take the necessarily steps to reform our political and educational system. It is no longer a choice.


  3. Jonno

    LOL, another example of how economic statistics can be manipulated to fool ignorant people including sophisticated investors. If one understands statistics and econometric modelling, GDP can be manipulated to show growth & inflated despite the low wage levels.
    Listen up – Look at the amount of on-going construction work in Singapore. These are included in GDP numbers! But who works in construction? Singaporeans – nope! Foreigners but their numbers & wages are not included in the national wage count.
    2nd trick – Singapore is a tax efficient OHQ & a trans-shipment port. What this means is the MNC use Singapore for transfer pricing activities – China manufactured ->S’pore certificate of origin (OHQ) ->Ultimate destination. Profits captured in S’pore – subject to low or no taxation due to OHQ status. GDP boosted from transshipment value – wow, fantastic bit of accounting trick! HK also benefit from this a lot! Just look at construction & OHQ activities contribution to GDP numbers to see the disparity! Cheers!

  4. Jonno

    I’ll put it in simple terms – the Singapore govt has the mentality of a tin-mine operator or more appropriately, a cruise ship owner given that S’pore has embraced casinos.
    A tin-mine operator of the past exploits the incoming laborers, runs or controls various lucrative businesses and trading concessions for the laborers ie. opium, cigarettes, brothels, liquor, necessities, etc. Everything & anything that can be exploited, will be fully exploited. I used this example to show how far S’pore have come in 40-50 years yet we are still enmeshed in a tin-mine operating environment (…of another form) to this day.
    In the current day, the S’pore govt is much like a cruise ship owner – the casino operator, the shop concessions, the onshore tour operator, etc. – all are contractors to the owner. They take the business risk while paying high rentals or concession fees. In return, the owner provides the captive market for them to exploit to the fullest. Superimposed the ship casino (Integrated resorts), shop concessions (shopping malls, REITs), onshore tour operator (Singapore Flyer, F1 Night Race, etc.) – S’pore is much like a cruise ship!
    Look at social goods that real govts provide to their electorate – healthcare, education, social welfare, pensions & aged care. These are non-existent or only available on a user pay basis in Singapore or welfare subjected to a means test!. What does that tell you? Govt or tin-mine/casino ship owner? Govt budgets are run on a consistent surplus basis – public housing, public tertiary education, public transportation & public healthcare are all run on a for-profit basis! This is not a govt but a cunning business operator exploiting profit to the fullest!
    For once and for all, do Singaporeans seriously think that the S’pore govt would share the wealth? I don’t think so!

  5. joe

    Good post and valid posts.

    But…its never gonna happen. There is a difference between dont know and dont care. They are also smart people. Im sure ‘they’ know what is happening to citizens. But they are not gonna care because its not affecting them. So good luck to us


    Impreso Abajo + medias: un sello muy raro en esta chaqueta de plumón corto, el estilo y el patrón, y la impresión le da un estilo muy dulce, una versión corta del tipo y muy auto-cultivo, ideal para el tipo de licitación MM, Con mallas, dulce temperamento momentáneamente ciego por el enfoque de edad durante todo el invierno.

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