By: Tan Jee Say
In 1979, Singapore started to restructure its economy away from labour intensive low tech industries to high productivity high tech ones. To achieve this, a wage-correction policy to increase wages by 20% per year over 3 years, was implemented to compel employers to use less labour and achieve higher productivity. An average productivity growth target of 4% per annum was set.
But Singapore has been far from achieving this target in the last 37 years; at the beginning of this decade, Finance Minister Tharman as chairman of the Economic Strategies Committee, lowered the target to 3%, yet productivity grew a dismal 0.7% per annum in the first half of the decade, forcing the Minister in a panic move midway through the decade to lower the target yet again to 2-3%.
Why has Singapore failed so miserably? The straight answer is that high productivity growth can only be sustained through true innovation that frees the mind to pursue new ideas and products that challenge existing ideas and ways of doing things; but PAP is only focussed on their type of “innovation” namely “political innovation” and is always thinking of ways to change rules to their favour and “fix” the opposition like having GRCs, town councils and elected presidency so that they can remain in power and prevent the emergence of new players with new ideas.
PAP’s so-called “political innovation” is effectively counter-innovation. Even now in the midst of a serious economic decline, some of our best brains in the land are engaged not in economic matters but in “political innovation” to come out with recommendations that will likely restrict the highest office in the land to very select people probably not averse to the powers that be (to use a rather popular phrase of late).
PM Lee has been in charge of the Singapore economy since he became chairman of the Economic Committee in 1985. In this span of 31 years, he failed to achieve the productivity target that was key to Singapore’s economic future. When Tharman became Finance Minister in 2007, he took on the key role of promoting productivity, but he too is a dismal failure as the record of the last decade shows.
Can PM Lee and DPM & MOF Tharman achieve Singapore’s productivity target in the next 5 years when they failed so miserably in their combined 40 years trying to do so? Don’t count on it.
Is there hope for Singapore’s economic future? Not under the PAP.
Republished from Tan Jee Say’s Facebook.