Monday, 13 August 2012

Prime Minister of Population Driven Income Growth


From the 1965 -2011 population and income changes under 3 different Prime Ministers of Singapore, it is not so difficult to identify the population driven income growth prime minister.

From the published statistics# of population and income from Department of Statistics, we can see the performance of the 3 Prime Ministers.  Using 1965 as the base year, the year of our independence, the period under Lee KuanYew is 25 year (1965-1990), Goh Chok Tong 14 years (1990-2004) and Lee Hsien Loong 7 years (2004-2011).  

Clearly, Lee senior scored very well in both population and income increase. His 25 years saw an increase of 1.16 million in population (61.49%) but an income increase of 1302% to $22,868 per capita. His strategy is slow population increase and high income increase. 

Goh Chok Tong used another 14 years, increased the population by another 1.119 million (36.49%) but with a slow income growth of 85.65% to $42,455 per capita.

From 2004 to 2011, Lee junior used only 7 years to increase the population by another 1.017 million (24.41%) and of course the income also grew by 45.31% to $61,692 per capita.

Table 1: 1965-2011 Singapore population and income@
Year
Population (‘000)
Population increase (‘000, %)
Income@ (S$)
Income increase (S$, %)
Government Administration (PM)
1965
1,886.9

1,631

Lee Kuan Yew
1990
3,047.1
1,160.2 61.49%
22,868
21237 1302.1%
Goh Chok Tong
2004
4,166.7
1,119.6 36.74%
42,455
19,587 85.65%
Lee Hsien Loong
2011
5,183.7
1,017 24.41%
61,692
19237 45.31%

@ Per capita GNI at current market prices

Shorter and shorter time taken to increase million populations
From 25 years (1965-1990), to 14 years (1990-2004) then to 7 years (2004-2011), million-population increase was achieved under the 3 different prime ministers. At the same time, nearly $20,000+ income per person was also achieved during the 25, 14 and 7-year periods.

Shorter time to have additional million populations and shorter time to have another $20,000 per capita income, this is how we do it.   

A success story
Starting from a low base, Singapore is really a success story as claimed by the PM during his National Day Message this year.  From a population of 1.886 million and an income per capita of only $1,631 in 1965, we did very well in the past 46 years. Our yearly increase of population is 3.8% and income per capita, 80%.  In 2011, our population and income per capita stood at 5.183 million and $61,692 respectively.     

What a wonderful achievement in term of population and income increase!

Table 2: Comparison between 1965 and 2011 population and income        
Year
Population (000)
Population increase (000, %)
Income@ (S$)
Income increase (S$, %)
1965
1,886.9

1,631

2011
5,183.7
3,296.8 174.72%
61,692
60,061 36824.7%
Yearly increase (%)

3.80%

80.05%

Population driven income growth
If we divide 46 years into 3 different periods under 3 different prime ministers, based on yearly increase data, Lee Hsien Loong achieved his income growth by injecting more population into Singapore economy in a shorter time.  His 3.49% population yearly increase is the highest comparing to his father and Goh.

And this income growth percentage (6.47%) is only slightly better than Goh’s 6.12% but Goh only used a population yearly increase of 2.62% as compared to the current PM’s 3.49% per year.

Table 3: Yearly average increase in population and income 1965-2011 under 3 different PMs
Period
Years
Yearly increase in population
Yearly increase in income
Administration
1965-1990
25
2.46%
52.08%
Lee Kuan Yew
1990-2004
14
2.62%
6.12%
Goh Chok Tong
2004-2011
7
3.49%
6.47%
Lee Hsien Loong





1965-2011
46
3.8%
80.05%


Can Singapore income growth increase as before under Lee Hsien Loong without a high rate of population increase? It seems not likely.  Comparing Goh and Lee junior, there is a substantial difference in population growth strategy.  Goh uses a moderate growth rate of 2.62% but Lee junior uses a higher rate of 3.49%.

Education and quality of workforce
Even with better education and higher quality of (local) workforce, Lee is not able to make used of this advantage to increase income. He has to depend on population increase to achieve income growth.  During Lee senior’s or even Goh’s tenure, our local education level and quality of workforce were much more lower but these have not affected the income growth.
How come we manage to increase income with less educated and less qualify workers from 1965 to 2004 and why not now?

Declining birth rate
From early period of stop at two to the later period of more marriages and more babies, the population is still manage to grow at 3.8%  yearly in the past 46 years.  

This means a substantial increase in population is foreign driven.  Are we importing lower quality workforce to make up the number, to lower down the average education and qualification level of the total population? (So that there is room to pay lower wages to both local and foreign workforce).   


There may be more interesting co-relationships between published population and income statistics #.    Here, we have not discussed the distribution of the increased income – who have taken away the share?   We may need to divide the income into local and foreign to get a better picture.  We need to do more to …..

Some qualify academics may help to provide a better picture to Singaporeans. Can we seek some helps from the liberal thinking of Yale-NUS College next year when it starts its education in Singapore?  

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