International Business & Economy Should Singapore adopt a Steady-State Economy?

Should Singapore adopt a Steady-State Economy?




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As income equality increases across Asia, with the economic weight of the world shifting towards the vast economic engines of the growth markets of China, East Asia, South Asia and Central Asia, societies will have to ask themselves the hard questions that come with the challenges of wealth.

Singapore has the lowest fertility rates in the world, one of the highest per capita GDPs, and a Gini index that, as of 2013, was .463. This is a figure that correlates with a generation expressing deep unhappiness with current socioeconomic realities in the city-state.

With recent UN projections estimating the  global population could potentially reach 12.3 billion people by 2100, the planet cannot sustain a trend of excessive consumption, especially with finite resources.

Perhaps, what is needed is a new socioeconomic model, where inequalities are minimised, in order to ensure a reduced degree of inequality. Rather than an economic model based on constant growth (i.e. growth economics), a steady-state economy may be more desirable.

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Singapore & the Steady State Economy

A steady state economy, in the long run, aims for stable or mildly fluctuating levels in population and the consumption of energy and materials. Birth rates equal death rates, and production rates equal depreciation rates.

The government’s constant focus on economic growth and Singapore’s rapid economic transformation under the PAP are commendable. However there have been considerable tradeoffs. Deficits in political and civil freedoms are one aspect.

Singapore’s political system —  dominated by the PAP — is not as resilient as some may believe. Many aspects of the state apparatus, media, academia and civil society have been co-opted by the PAP regime, leaving a political monoculture that’s created systemic groupthink throughout the government, with little incentive to challenge norms.

Despite this, Singapore’s economic growth has provided obvious and immense benefits, propelling it upwards in international rankings and attracting professionals from around the world, as well as granting its residents one of the highest per capita incomes in the world – albeit distributed unequally.

There are compelling reasons for shifting to a steady-state economy, given that Singapore needs to achieve demographic, political, economic and environmental sustainability. In fact, the residents of a country undergoing transition and ‘economic regrowth’ may even enjoy improvements in living standards.

Any Asian countries seeking to emulate Singapore’s economic develop will suffer Singapore’s ecological overshoot, with the resulting environment impact. There is a better approach to economic philosophy than an ethos of crass consumerism and materialism.

In Ending

Politics, economics and social justice are inextricably linked. What affects one dimension impacts the other. Economic behaviour is one part of human behaviour, with human beings existing within a framework of different ecological systems.

There’s more to life than just wealth and money. Singapore needs to take a hard look at its value system, as well as the economic context that accompanies such values. What impacts the natural ecosystem has costs for society.

We need to achieve sustainable and equitable prosperity worldwide. But trying to achieve prosperity through more growth damages natural ecosystems, depletes natural resources and destabilises societies over the long run.

In an increasingly competitive world, with emerging economies from South America, Africa and Central Asia to countries like Indonesia, sustainable growth and equitable distributions of wealth are possible.

But only if the intellectual freedom to question assumptions and conventions exists, and only if people can reframe key perspectives and evaluate the evidence critically.

It requires transformative political leadership. And more importantly, a society with a critical mass of people that actually care enough to affect change. Unfortunately, Singapore seems to lack both.

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