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Tuesday, April 24, 2012

What use fast GDP growth, when it results in social discord?

Letter from Henry Tan Seng Lee

I REFER to Ms Mona Chew's letter "Wage reform will allow for a chance to transform Singapore" (April 18). The issue goes deeper than just wages.

Her description of two worlds in Singapore is by and large a result of a national strategy, starting in the 1990s, that had put gross domestic product (GDP) growth above almost all else.

The strategy accelerated over the next decade, in the belief that GDP growth had no serious downside, and if there was, it would be healed by the growth itself. In that climate, business interests started to drown out societal concerns.

Businesses brought in more low-skilled foreigners, who became an alternative to investment in productive machinery and upgrading jobs.

In some instances, such as the replacement of automated car wash machines with foreign labour, productivity gains were reversed.

Instead of redesigning jobs and changing habits to increase productivity at food courts, businesses used cheap labour to clear and clean tables.

Such labour not only drove productivity down but also taxed our limited spaces and facilities such as transport and healthcare.

To relieve pressure on our facilities, more foreign labour was needed. They, in turn, had basic needs that required even more foreign labour to meet.

So, seemingly innocuous business clamour for cheap labour had created an unnecessary dependence on foreign labour and triggered a multiplier for them.

Singapore needs to restructure this part of the economy, to break its reliance on cheap foreign labour, by investing in machines, redesigning jobs, driving up productivity and educating locals that more is at stake than indulgence in small, frivolous services.

Many jobs for foreign labour would be lost, but better-paid jobs would be created for locals, and the two worlds described by Ms Chew would draw closer.

This restructuring requires political leadership to look beyond the legitimate self-interest of businesses and to treat GDP growth as it is, a rough measurement of increased economic activity.

How we choose to grow it and at what speed are more important than the result itself. What is the use of fast GDP growth when it is attained by bringing in a whole spectrum of foreigners and results in social discord?

In fact, Ms Chew may have missed another world in Singapore, the foreigner world.

ORIGINAL SOURCE
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