S'pore: Consumer spending not central to economy

A friend email the following to me:

Malaysiakini
S'pore: Consumer spending not central to economy
Robert Schwatrz
Aug 24, 05 11:30am

Writing about Singapore's economic outlook is boring. It's not that there is nothing to say, it's that there is nothing to say about Singapore itself.

In 2001, the trade and industry ministry published a paper that looked at the four primary long- term drivers of Singapore's economy. The number one influence was growth in the United States.

Number two? Growth in the economies of Indonesia and Malaysia. Third was global semiconductor sales. And rounding out the top four was domestic construction.

But wait, you might say, what about Singaporeans' love of shopping? Certainly that has to count for something? You're right it does.

The problem is that Singaporeans’ love of shopping is usually done someplace other than in Singapore. The fastest growing component of private consumption over the past decade or so has been Resident Expenditure Abroad.

Of the spending done in Singapore, the fastest growing type of retailer (by far) has been motor vehicle dealers. From 1997 to the third quarter of last year, dealership sales had increased by a total of nearly 260 percent, not including the effects of inflation.

The next fastest growing category was supermarkets, which grew by a total of nearly 32 percent. Overall, non-motor vehicle retail turnover grew, excluding inflation, by a total of 7.1 percent from 1997 through September 2004.

The key to Singapore's retail sector is not the average Singaporean. The key to retail in Singapore is the overseas visitor. If you want to get a handle on how well the sector is doing, look at the growth in visitor numbers. These have traditionally led the retail numbers.

No political voice

So again, where does this leave the people of Singapore? In their government housing units voting for the PAP every so often and that's about it. As far as making the economy move forward, the average Singaporean is a non-event. And as such, he or she has little say in the political environment. No economic clout =no political constituency = no audible political voice.

The consumer's share of Singapore's economy is around 42 percent. This compares to about 55 percent in Japan, a country notorious for saving, and close to 70 percent in the US. It is not coincidental that the average American, who is such a vital part of the US economy, has such a central role in the political sphere.

In fact, the average consumer in the US has more power over the direction of the Singapore economy than does the average Singaporean. It is the continually increased spending on ever more gadget-filled electronics equipment or on a new lifestyle drug done by a typical American that drives the sales which drive Singapore's production.

To be fair to the government, it knows that any money spent on boosting the consumption of average Singaporeans is money that will very quickly find its way to foreign shores. As such, the PAP has decided that it would prefer not to spend its hard-earned tax revenues boosting the local economies of Batam, Johor or Bangkok.

This is also why the government's interest in the domestic consumer economy is limited to construction. This is a section of the economy that can't be taken out of the country.

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No wonder we have been treated like 2nd class citizens by Singapore govt! We don't spend enough here to have the economic clout. So, ladies and gentlemen, if you want to be heard then start shopping like no tomorrow and make sure you do it here and not elsewhere.

Buzz

Business Times - 05 Aug 2005
PM Lee reveals two regrets in interview
He says he would liked to have been a leader in the turbulent 60s
By NANDE KHIN

PRIME Minister Lee Hsien Loong wishes he had some experience of working in the private sector. And he would have liked to have been a key decision maker in Singapore in the tumultuous 1960s.

'I mean, in this world you have to understand economics, you have to understand business, you have to understand how deals are done, how contracts are made, businesses grow, prosperity is created,' Mr Lee said in an interview aired last night.

And even though Mr Lee, who is also the finance minister and a former chairman of the Monetary Authority of Singapore, has 'looked after finances, taxes and incentives and training', he says that to 'have been on the other side, to have done something and made it grow' would have added 'something extra' to his experience.

To 'have really lived through rough times' is also something Mr Lee wishes he could have done.

He was referring to the 1960s, when Singapore threw off the yoke of colonialism, separated from Malaysia, fought communism, achieved independence in a 'struggle for existence and just survival'.

The prime minister said that reading about these times and living them as a child is different from living them as a leader.

He revealed his feelings in an interview in Washington with American TV journalist Charlie Rose.

In the interview, which took place last month, Mr Rose had asked if there was any experience 'in the wise exercise of power' that Mr Lee wished he had.

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On the Singapore front, Mr Lee emphasised that it is not casinos but integrated resorts - of which casinos will be only a small part - that will create a 'buzz'.

And this 'buzz' is really about 'renewing the city, to make it different, to make it exciting, to make it have activities', so that Singapore can not only attract tourists but can also be a place where 'ambitious and talented' people who 'start new businesses or new projects or do research want to live'.


The government seemed more interested in copying and importing 'buzz' from abroad than cultivating it organically within its citizenry. Imported 'buzz' is ersatz 'buzz' as it is superficial and lacked soul.

It may attract foreigners to spend a vacation but not to stay on to start businesses, projects or do research. Ambitious and talented people are attracted to places that have distinct character where the people are interesting and passionate with life and work. The rigid control by the government, unfortunately, have rendered Singapore souless and stultified the imagination and imprisoned the innovative impulse of Singaporeans' minds.