No Productivity Leh.

That's basically what SM Goh said in a BT report today.
For the past 10 yrs, SG's productivity has been growing at avg 1% per annum.
Yet economic growth has been a miraculous 5% per annum.
Why so? Increased used of labour as an FoP - this is Econs 1101.
This is the contribution of all the foreign labour tt we have been
importing over the past 10 years or so.

But it cannot be sustained much longer. SM Goh has been quoted
as saying the government "has decided to moderate the influx of foreign workers".
Due to many many reasons. But in short, the happy scenario
that we have had can no longer last. Perhaps this is a concrete
example of what I mentioned when I wrote sometime back that Singapore's
miraculous economic growth cannot possibly last. It was based
on history - there has been no country which has enjoyed the kind
of impossibly high rates of economic growth tt we have had without running
into some major crisis sooner or later. Juz no precedent. It's been some
45 yrs of prosperity now, and based on that alone, I was pessimistic
about Singapore's future.

Paul Krugman - the economist - of course had written about this long ago.
It was in fact some 20 yrs back in 1990/ 91 when he said that Singapore
had reached the saturation point for increased usage FoP - land, labour and capital,
and tt it was a matter of time that growth in the economy wld slow to mirror growth
in productivity. Fortunately for us, he was off by some 20 years.
For 20 yrs we have managed thru one trick or another to keep
increasing our inputs of labour and capital - that is until now.
So he was right. But wrong by 20 years. That is the danger of making
such predictions.

And of course, it would be unwise to portend Gloom and Doom for Singapore
in the coming 20 yrs. But what I feel is this: Unless the people of SG heed
the call of SM Goh and find some means to increase our productivity,
it would be very difficult indeed to expect continued prosperity.

There are concrete ways to do this. Perhaps we might start with certain
big Public Sector Organizations - for instance tt which is in charge of our Defence,
where they pay people $5000/ month to pretend to compose emails.
It's not just them. I think a lot can be done for our GLC's also. For instance,
I read somewhere tt revenue/ employee for a bank like DBS is much lower
than say any of it's US counterparts (excluding perhaps Citigroup).

It all boils down to this: Future workers (which means people like us),
can no longer expect a comfortable working life especially in any
organization (esp public ones) unless we are prepared to suffer Japan-style growth.
Ahh... Perhaps then it is lucky I did not sign up for any govt scholarship.
These are the things the study of history can teach one.