RH: Leeconomic growth, measured in GNP, mediocre all along

From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: Leeconomic growth, measured in GNP, mediocre all along
View: Complete Thread (5 articles)

Original Format

Newsgroups: soc.culture.singapore
Date: 2003-11-11 09:03:21 PST

RH: If I remember correctly, Singapore did not always measure its
growth rates in GDP. In the earlier years, it was measured in GNP,
probably like every country else. The US changed from GNP to GDP
measure only in 1991. So, we probably copied that change, if not from
the US, then probably one of the earlier changers. Like everything
else that LKY copied from the West. In fact, in those earlier years,
collection of data in Singapore was primitive and so probably, it did
not matter what you measured because there was little to measure and
little to measure with.

LKY at that time, had not latched on to the GDP obsession because he
was not getting very good numbers. Also, he had not started to define
and measure his contribution to Singapore in numbers. That came later
when the GDP numbers started to look good. And gave him the excuse of
matching his and his cronies' salaries to the seemingly impressive
numbers. But would the numbers look so good if they had remained in
GNP instead of GDP?

So, first, we have to take an explanation of GNP and GDP. One
explanation of both states: "It is important to differentiate Gross
Domestic Product from Gross National Product (GNP). GDP includes only
goods and services produced within the geographic boundaries of a
country, regardless of the producer's nationality. GNP doesn't include goods and services produced by foreign producers, but does include goods and services produced by that country's firms operating in foreign countries."

Now, if we look at the whole industrialisation drive of Singapore
under LKY, and latterly GCT [nominally, anyway], we'd see that
practically the entire manufacturing and much of the services
industries are, in fact, owned by foreigners. Since output by
foreigners is counted in GDP but not GNP, it is therefore reasonable
to assume that had LKY measured his little 650 sq km island's progress in GNP, it would have remained pretty mediocre, from his time till now.

In fact, readers who know more about economics than I do, like MadCow
[and practically everybody else, too] and who have the time, could go
back to the records in the Statistics Department, and recalculate all
the growth figures in GNP and this would probably prove my point.

Thus, we could have had a pretty different history. We'd have annual
GNP growth of say, 2-3%, like everybody else, and LKY wouldn't be able to strut around the world stage like he was a David Copperfield of Economic Growth. More importantly still, he would not be able to
justify his $2 million dollar salary and that of his cronies, only
slightly less. And even more crucially, without a seemingly impressive number every year, would he have been able to act so tough on everybody? Would the populace remain so docile, like sheep in sheep's clothing? Would LKY have the gumption to proffer the Asian Values Theory to justify his dictatorship?

I think not.

History would thus be different. All because of a simple change in
economic measurement. Here, if any Oppositionists are reading this,
take note. If you could do the little exercise of recalculating the
economic growth of the last few decades in GNP instead of GDP, your
results would give you an enormous stick to hit LKY and his cronies
with.

In my inexpert opinion, Singapore should be measured in GNP instead of GDP. That is because uniquely, Singapore had had to depend on foreign investment and foreign factories and foreign companies to grow its economy. Almost totally. The local companies are tiny. They don't have overseas operations, hence, no foreign operations' profits to bring back to Singapore's GNP calculations. The few big Government Companies are not big either. All these mean that the GNP figure will be very modest.

If I may quote myself QUOTE: "Thus, his entire economics policy
(singular, because he has had only one) became one long drive to
attract Foreign Direct Investment and lately, to bring in vast hordes
of Foreign Talents to work in the jobs this FDI brought. Where, you
might ask, do Singaporeans figure in all this? We don't. Foreigners invest here, employ foreigners to work here to produce the goods and services –- most for export, and both these foreign parties make the money and probably repatriate much of it back home. We look on as unemployed locals. And meanwhile, this 'foreignisation' of the economy seems to produce decent Numbers that LKY and his Court Eunuchs can boast about and on the basis of which they reward themselves with yet more pay rises!" UNQUOTE

[Above quote from my

RH: Robert's Complete Case Against Leeconomics (Main)

whose URL is:

http://groups.google.com/groups?q=RH:+leeconomics+group:soc.culture.singapore.*&hl=en&lr=&ie=UTF-8&group=soc.culture.singapore.*&selm=c443dfe.0306180602.6ee2adb6%40posting.google.com&rnum=3

Thus, Leeconomics, measured in the [in my opinion] inaccurate GDP,
gave a false sense of achievement to LKY and Gang. If measured in GNP, these gods will prove to have clay feet.

Robert Ho
11 Nov 03
UK 1702 Singapore 0102