Global ranking drops
Its population increase and powerful euro help push Singapore
way down the ladder. By Seah Chiang Nee
Jul 11, 2005
changed landscape, Singapore's developed status has eroded,
its global economic ranking overtaken by countries that
had lagged behind it.
peak in 1997, the republic ranked among the world's top
eight in per capita GDP, but after several years of economic
weakness, it has now dropped to 22nd.
recently released IMF World Economic Outlook 2005 showed
Singapore at US$26,481, behind even the poorer European
countries like Italy (US$31,874) and Spain (US$27,074) that
it had little problem beating previously.
nations that were behind but have surged ahead of Singapore
include Australia (US$33,629), Britain (US$30,098) and Germany
traditional rival Hong Kong, which was slightly behind,
has shot up to a dozen places above the republic at US$32,292,
helped by its link to the strong US dollar.
1999 and 2003, Singapore's per capita GDP at purchasing
power parity fell from US$27,800 to US$23,700. At the peak,
only three countries ranked higher on PPP terms; today it's
takes into account price differences between countries for
a more accurate measure of national wealth.)
things into perspective, Singapore's global slide was not
caused solely by its trade weakness, but also by currency
GDP per capita, the value of a nation's goods and services
divided by the population, is measured in US dollars.
dozen or so nations that overtook Singapore were Europeans
whose rankings were boosted by the powerful euro, especially
over the Sing dollar.
major cause was Singapore's population jump due to immigration.
It went from three million in 1996 to 4.18 million in 2003,
the period of the ranking decline.
island plans to push it to seven million by 2030 by immigration,
which will make it hard to reclaim its former high per capita
The revelation couldn't have come at a less opportune time
for the ruling People's Action Party, which is preparing
the ground for general elections.
slide explains why Prime Minister Lee Hsien Loong is leaving
the bulk of Singapore's foreign affairs to his senior Cabinet
colleagues to concentrate on the hard-hit economy.
there are bright spots.
it appears to be on the mend. In 1996, the per capita GDP
stood at US$25,105 but it fell to US$20,775 in 2001. Last
year, it recovered to US$26,481.
is in transition. Its economy is being restructured, which
probably means that the future could be more hopeful than
The state has signed a series of bilateral free trade agreements
with major trading partners and invested billions to expand
its life sciences, tourism, and hub activities in health,
education and the performing arts.
republic has also decided to build two mega casino resorts
by 2009 after saying "no" to casinos for 40 years.
When mature, all these new activities will move the economy.
the most cheerful news has come from investments abroad.
the domestic scene didn't measure up in recent years, its
external pair of economic wings has done better.
Singapore has become quite a global investor. Between 1998
and 2003, as its GDP per capita weakened, smallish Singapore
invested an incredible S$147bil abroad, doubling its total
global investments to nearly S$300bil, the Department of
Statistics announced last week.
than half were in direct investments, mostly in Asia, topped
by China with 37.2%, followed by Malaysia and Indonesia.
same time, the government's investment arm Temasek Holdings
announced it had agreed to buy US$1bil of stock in China
Construction Bank's initial public offering.
of Singaporeans have greeted Singapore's drop to 22nd position
questioned if it could still be classified as a First World
nation, saying it's best described as a League player dropping
from Division One to Division Two.
the Swiss standard of living; Singapore doesn't even have
the Spanish standard of living!" declared another writer,
throwing cold water on one of Goh Chok Tong's pledges when
he was prime minister.
blame the woes on the open-door immigration policy, pursued
for more than 10 years.
of a stronger economy as promised, it has become weaker,"
take the ranking game seriously. They drool when told that
theirs is the most globalised country or the second best
airport in the world, but when the grades fall, the public
pessimism could also be exaggerated.
happened last month when Singapore Airlines, which was frequently
named the best airline, managed only a fourth place.
attribute it to rising expectation among youths who are
used to the good life and anything that falls short of it
represents a mini crisis.
simply find it hard to accept that in this competitive world,
others are improving all the time.
world has changed and so will global ranking. They will
likely change more regularly with new names popping up and
old ones disappearing.
about the fortune of nations, one writer said Argentina
was one of the world's richest nations at the turn of the
century because of its natural resources and cattle.
they are nowhere near the top," he said.
practical, the majority of Singaporeans are less bothered
by world ranking than the living reality at home.
multinational corporations have pulled out and the government
is frantically raising skills and reducing costs (including
wages), cutting into Singaporeans' living standards.
poor are hit the hardest and the rich-poor gap has widened.
The Department of Statistics said the wages for the bottom
one-fifth of Singaporeans had fallen by 3.2% between 1998
same time, another survey by Housing Development Board (HDB)
confirmed that the household income for those living in
smaller one-room and two-room flats had declined by 17%
who have gone through worse times see the recent past as
a passing cloud.
Kuan Yew has told youths not to despair because their future
will be brighter. Singapore 2030 will be a flourishing global
city of six to seven million people, he adds.
who admire his vision are hopeful that in 25 years, their
city may achieve the current living standards of Switzerland
(per capita GDP US$52,879).
article was written for, and published in, The Sunday Star
on Jul 10, 2005)