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Saturday, February 17, 2007

RH: GDP and other Lies...

From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: GDP and Other Lies...

View this article only

Newsgroups: soc.culture.singapore
Date: 2003-06-05 09:26:59 PST

RH: A long time ago, when I was young, I began subscribing to the
Straits Times as soon as I started working.

In those days, there were no GDP figures to report. I believe that way
back then, there might have been some statistical measures of economic
performance but it was probably the GNP, and hardly made the news,
since it was just a number only the very few statisticians around
understood, or knew how to calculate, and even the collection of
statistics was in its infancy and wholly inadequate. In those days,
probably even the Govt of Lee Kuan Yew and LKY himself did not fully
understand the import of GDP. Certainly, LKY then did not measure
himself using this, by now Holy, Number of GDP.

In those days, countries did not compare with one another. And when
they did, they merely thought of themselves as 'advanced countries' or
'backward countries'.

An advanced country was one where the people had enough to eat, had
decent homes, a good public transport system, and adequate healthcare,
etc. In other words, the basics of good infrastructure. A backward
country was the opposite.

How much simpler things were then, and how much more relevant
comparisons were than today's over-emphasis on the GPD Number. Today
in Singapore (at least, until recently, when the Number began turning
ridiculously low and even negative), the GDP is used to justify the
$1-2 million salaries the Ministers pay themselves. It is also used in
other nefarious ways, for example, to change the entire workforce into
a GPD-enhancing system, without regard for whether this all-consuming
drive for high GDP actually translates into an 'advanced' country's
quality of life for the citizens.

As one example, the overriding desire to produce high GDP Numbers has
led to the influx of 1 million foreigners, deceptively labelled by the
PAP as 'Foreign Talent' so that locals would not baulk at the numbers,
the highest in the world for a small domestic population of 3.2
million. Also, it was a non-too-subtle putdown for the locals for, if
you are not a talent, would you dare oppose so many foreign 'Talents'
pouring in, and being treated better than locals, to boot? Also, we
are told by the Great Helmsman himself, and repeated by his faithful
Echo Cronies and Son, 'that foreigners create jobs that would
otherwise not be created' and which has been disproved by me in: RH:
Why ForeignTalent policy cannot work:


and my postings in this thread:


Why is this incessant chasing after high GDP Numbers bad? Isn't this
how all countries are ranked and measured now, if not way back then
but very true now?

True to some extent. Nowadays, with the Rise of the Economist
Profession as the modern day Oracles and Soothsayers, to whom even
world leaders have to pay obeisance, the GDP Number is indeed
important. But it was not always so. I would put the Rise of the
Economist profession about 20 years back. (Different countries would
have different times for their Rise of the Economist until today, we
are all living in the Golden Age of Economics).

Around 20 years ago, the world and LKY began to adopt statistical
measures for everything. For everything, there was a number. Without a
number, you could be accused of generalities, of not being 'accurate'.
With numbers, everything seemed so scientific, so precise, so
unbiased. No longer did countries call themselves 'advanced' or
'backward'. Now the world had numbers and you stand either on a very
precise 6.3% GDP growth or a less impressive 5.9%. Instantly,
countries could be very precisely ranked, which is what numbers allow,
since numbers are created for that very purpose.

Except that, numbers can lie and do lie, and lie very insidiously.


Let's take GDP Numbers. GDP is generally defined as "The total market
value of all final goods and services produced in a country in a given
year, equal to total consumer, investment and government spending,
plus the value of exports, minus the value of imports."

That is a short definition. No proper understanding of GDP can be had
in less than a thousand words embedding several technical
sub-definitions. Ah, we begin to sense that the GDP is actually woolly
and indistinct and not a sharp featured animal -- it is a Jabberwocky.
Worse, the compilations of the numbers that go into this final
so-accurate-looking Number are actually even more woolly. Different
countries have vastly differently-sized or even wholly different
economy sectors and so we are not even comparing apples with apples.

Since different countries have differently-sized or different economy
sectors, this means that Country A's GDP growth of 4.1% may actually
be 'better' than Country B's 6.1%. By 'better', I would have to use
the old, English, non-Economics meaning of 'better managed and

I normally dislike using analogies because no analogy is 100% accurate
to the meaning it is supposed to illustrate and often introduce
inaccuracies and irrelevant sub-meanings that distort the original
meaning intended. But I will break my rule here to offer one. Just
one. Imagine countries to be runners all running around a 400 metre
running track. Also imagine that all the runners started at different
times from different start points around the track. Further imagine
that some runners are running full marathons of 10 km, some half
marathons of 3 km, some 1,000 metres, some sprinting 400 metres and
others doing the dash of 100 metres. Now, comparing these different
countries (runners) at a moment in time by putting yourself at the
Finish Line, could you meaningfully say that Country A is better than
Country B or Country C or D, etc? It just doesn't make sense to even

So, when LKY found that advanced countries measured themselves using
the GDP growth rates, and that Singapore happened to score high GDP
growth rates because of its unique size and economic features, GDP
Numbers became the prime justification for everything from his own
salary to deliberately lowering the salaries of workers, and for
policies benefitting the rich to become richer while the poor were
kept poor and even made poorer by deliberate Govt policies justified
on the premise that high GDP growth rates were the be-all and end-all
of Govt!

Today, if you have lived long enough in Singapore, especially over the
last 15 years or so, and have been reading the local media, you would
know instinctively that what I have written above is all true. Except
that I am the first one to point out this truth in this way.

So, if comparisons of GDP growth rates between countries are
meaningless, are high Numbers also meaningless? The answer is Yes.
Coming back to my Running Track Analogy, it is useless and unhelpful
to compare a 100m dash runner to one doing the 10k marathon, even if
both are passing you by at the same time. They are running different
races! Thus even Absolute Numbers are meaningless. If LKY says that he
managed 8% GDP growth last year, so what? Does that mean that all the
people got better pay/profits by an average of 8% last year? Until
that is so, even high absolute numbers mean nothing. The most LKY can
say is that, under his rule, Singapore has become better in
infrastructure and that people have a better quality of life. Which
can also be said of Hongkong, China, South Korea, Taiwan, Japan,
Malaysia, Thailand, etc, etc, -- more than half the world if we bother
to count. Very few countries regress in such things.

Thus, GDP growth rates used to justify astronomical Ministers'
salaries and other unfair Govt policies that benefit the rich and
disadvantage the poor is a Lie at best. At worst, it DISTORTS Govt
policies away from a more equitable distribution of wealth and
important things like healthcare as well as 'Foreign Talents' taking
away jobs and meaningful lives from citizens. We can say that the PAP
Govt, which prides itself on being the most intelligent Ministers in
the world, have made themselves the stupidest by not having analysed
the issue as I have done here. If they had, they would have come to
the same conclusions as I have and the people would all have been
better off. I am aware that I am doing the PAP a service by pointing
out this aspect of their policies of which they are totally oblivious.

It would have been better for this stupid Govt to express economic
growth annually by giving it a say, 'Good' score, or an "Average'
score or an 'Excellent', etc, and be done with it. By getting
seemingly impressive numbers in the earlier years, the PAP has gone
chasing after high GDP Numbers in a kind of 'competition to get the
highest Number' contest to the extent it has forgotten that the
ultimate end result of all Govt polices is to improve the citizens'
lives and not to achieve some high GDP Number. Other countries are not
obsessed with high GDP numbers because they take it in their stride
and don't deliberately formulate Govt policies for the sole effect of
high GDP Numbers. This is because most other countries have a free
press and a more democratic system that prevents this particular abuse
and distortion of Govt policies. When people are allowed to think and
criticise, the Govt cannot get away with stupid practices like this of
LKY and his PAP Govt. Precisely because only Singaporeans are not
allowed to think and criticise, this Abuse and Lie of GDP Numbers is
practised only in Singapore.

If the PAP does not deliberately formulate policies for high Numbers,
what should it do? Ah, here I may have to do some National Service
again, to offer alternatives that are better than the current Number
Chase, which has gone on for too long and distorted economic and
social and welfare (non-existent) policies.

For example, instead of formulating Govt economic policies for high
Numbers, the Govt should set itself a series of Social Contracts.

By that, I mean that the Govt should sit down and think out series of
desired objectives for the people, such as:

That no Singaporean should go hungry;
That no Singaporean should live without a roof over his head;
That no young Singaporean should be without at least 10 years of
That no Singaporean, able or handicapped, be without a job that pays
no less than $600 a month, this to be reviewed yearly;
That no Singaporean worker be without a non-politically-affiliated
That no Singaporean should be without medical care when sick, even if
he cannot pay for it;
That no working Singaporean be without enough leisure to improve
himself whether such improvement be educational, in hobbies or
community matters;

These are all easily achievable and only require a different focus and
a change in thinking from chasing High Numbers to Serving
Singaporeans. When that change in thinking is undertaken, the Govt
economic policies can be adjusted accordingly, such as reducing
'Foreign Talents', etc. These are all very achievable and much of it
requires no more than small changes in policies.

Certainly, my Social Contract makes much more sense than the current
bullshit about 'Community Above the Individual' rubbish which is
nothing more than an excuse for continued dictatorship.

Other Social Contracts can include (although I am not hopeful):

That every Singaporean above 18 have the right to elect their MP in a
Single-MP Constituency as conducted by an independent elections
That every Singaporean below 18 have their vote exercised by the
mother, first, and the second child, the father, and so on;
That every Singaporean household be given a free permanent
subscription to a newspaper of his choice, which can be changed;
That every Singaporean household be given a 14" CTV if it does not
already have a better one;
That every Singaporean household be given a radio if it does not
already have a better one;
That there be a free-to-air Politics Channel on TV and Radio that
broadcasts politics 24/7, including registered Opposition political

If all these seem startling, it is only because of their novelty. I
have long thought out parts and pieces of these, so I can say that
with time, these are all very sensible, even obvious. They are not
pie-in-the-sky ideas at all. The first Social Contract is easily
achievable. The second requires a willingness to level the playing
field for the Opposition but still confers enormous advantages to the
PAP. It will actually be better for the PAP than the Opposition and
better overall for Singaporeans, which is high time the PAP moves in
that direction.

Robert Ho
5 Jun 03
UK 1727 S'pore 1227
Post a follow-up to this message
Message 2 in thread
From: Robert Ho (ho3@pacific.net.sg)
Subject: Re: RH: GDP and Other Lies...

View this article only

Newsgroups: soc.culture.singapore
Date: 2003-06-08 11:22:09 PST

RH: I belatedly acknowledge an intellectual debt to Dr Chee Soon Juan
for the above post, "RH: GDP and Other Lies..." because he had long
sounded this theme in various speeches, books and publications in the
Open Singapore Centre and the Singapore Democratic Party as for
example, in this webpage of an OSC Announcement July 25, 2001:


WEBPAGE: The Open Singapore Centre is proud to announce the
publication of Dr Chee Soon Juan's latest book "Your Future, My Faith,
Our Freedom: A Democratic Blueprint for Singapore". Below is an
excerpt from the book. Check this site for details of the launch next

"Maintaining an unabated flow of foreign capital into the country has
been at the core of the government's policy considerations, and this
is done even at the expense of continuity in public policy. Nowhere is
this more evident than the PAP's flip-flop in the 1980s, when it
decided that industries should upgrade their operations then reversed
course when MNCs started to relocate to other countries to avoid the
rising costs. This is also reflected in the country's inability to get
out of the cost-competition battle with its neighbours and to
establish a truly higher-skilled, higher-education economy.

The educational system is another example. School curricula have been,
more often than not, tailored to produce the model worker for the
prevailing economic outlook. When the government perceived that the
economy needed a workforce with more brawn than brains, it streamlined
education for young schoolchildren so that the less intelligent could
leave school early to fill factory assembly lines.

Not even the most private aspects of human behaviour have escaped the
PAP's interference. In the 1970s, when it was calculated that the
economy could not sustain so many people on so small an island,
drastic measures were taken to discourage couples from having more
than two children. Many couples were pressured to undergo
sterilisation. Then someone calculated that the economy needed more
intelligent people for economic growth to continue, and the Graduate
Mothers Scheme was created, which attempted to persuade women who were
university graduates to produce more children, and women who were not
to produce fewer. Later, when it was discovered that more Singaporeans
were needed to keep the economy buoyant than the birthrate allowed,
the two-child policy was abruptly abandoned altogether. When
exhortations to families to produce as many children as they could
afford went unheeded, the government did a complete volte face and
offered to pay citizens to go forth and multiply. And when all else
failed, foreigners were taken in to make up the shortfall.In the
meantime, warnings about a shortage of land and resources on the tiny
island, so forcefully expressed when the government felt population
growth had to be curbed, were abandoned completely.

It is important to disabuse ourselves of the notion that the PAP is
the visionary architect of Singapore's economy. The party's
policy-changes just to accommodate foreign investment works at the
expense of the people and against the sustainability of progress. The
country has no need of more PAP-directed policies to drag the
workforce this way and that in the never-ending search for external
capital. Nor should the government involve itself in corporate
business. Quite apart from ideological considerations, there is ample
evidence to demonstrate that GLCs have performed dismally in
generating appreciable returns on their investments, as well as in
fostering innovative production. What the country does need is an
overhaul of the present economic paradigm, a fundamental alteration of
government-society relations.

The sooner this is realised and attempted, the faster Singapore can
get on with the business of constructing an economic strategy based on
regard for the well-being of the people, not just the ruling elite. A
true economic vision must, perforce, incorporate the values of
transparency and democratic accountability." ENDS.

RH: In his seminal speech at Stanford University, "The Puzzle That
Never Was", he clarified my thoughts with the refrain, "Economic
growth for whom?" (see:

http://www.sfdonline.org/chee/stanford.html ).

Now that I have given the source of my inspiration, perhaps readers
will go to the fount and read more for themselves. Dr Chee's books are
available from the SDP website:


including his latest, "First World -- For Whom?"

Robert Ho
8 Jun 03
UK 1922 S'pore 0222