Rethinking the “ED” in “EDB”
Is economic development synonymous with economic growth? In Singapore, the answer is yes
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“Economic development, definition: Qualitative measure of progress in an economy. It refers to development and adoption of new technologies, transition from agriculture based to industry based economy, and general improvement in living standards.” -From the Business Dictionary
“Our job fundamentally is about economic development, to see to the economic growth for Singapore on a sustained basis, to get good jobs for Singaporeans.” -Lim Siong Guan, outgoing Chairman of EDB, in Home (issue on 24th June, emphasis added)
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During my time in IB, we were taught the difference between economic growth and economic development. While economic growth speaks of a quantitative measure (i.e. increase in GDP), economic development speaks more of a qualitative measure of the quality of life in a country, access to healthcare and basic utilities, income equality, social and political freedoms etc. It was a simple but important distinction to identify, because economic growth doesn’t necessitate economic development — China, for example, has been growing astronomically, but their rural/urban gap divide has been growing with it too.
In this light, I find it pretty interesting how the Economic Development Board (EDB) in Singapore, one of the key statuary boards in Singapore, has a slightly different philosophy. From Mr. Lim’s own words, the role of the EDB is to ensure that economic growth takes place on a sustained basis, and for jobs to be created for Singaporeans. However, by very definition of the term “economic development”, shouldn’t economic development entail a lot more than that?
Rather than making this question entirely academic, which serves no purpose, let’s look at the empirical evidence. By examining the role of the EDB, I don’t mean to imply that the government has neglected economic development here, because by many measures, it hasn’t. Economic development would include many factors like quality of healthcare, education, access to utilities, and by many of these standards, we’ve meet these. In the Economist’s quality of life rankings, we ranked 11 in 2005, a very respectable position that puts us ahead of countries like Canada, the United Kingdom, and Germany. So, going by academic definition, heck, we’re pretty well developed.
What I do want to point out however, is the nature of our priorities, how this reveals our Singaporean psyche; growth, especially in the numerical sense of the word, means everything. We hear it here in this brief interview, and every year in our National Day Rallies, where the forecast for our economic growth/survival will come in one form or another. And it makes sense, because you can’t have economic development without economic growth. However, in it lies a complacency trap, the fallacy that economic growth equates to economic development.
For example, in obsession to maintain our GDP, we’ve neglected another figure: the gini-coefficient, a term used to reflect the level of income inequality in a country. According to the Economist’s data in 2005 seen in the above link, we have one of the world’s highest GDP per person (9th in the world). However, our gini coefficient has been rising in recent years, to a level where we’re in no. 30 in a list of 135 countries (starting with countries that have the highest income inequality), making the GDP per person rank an inaccurate measure of quality of life, due to the law of averages. So for all the commotion about China’s widening income gap, if you pay attention on the list, China’s actually no. 36, which puts our income inequality levels six ranks worse than theirs.
I’m not in a position to criticize the EDB or any other government agency, because for the large part, they’ve done a stunning job in steering our economy over the last few years. Rather, I’m just here to erect a caveat, especially in the light of recent economic conditions: if we narrow our understanding of economic development to just sustaining our GDP, we will neglect alot of other important factors too.
-A.S.
The overcrowding of public infrastructure at MRT stations, bus stations, shopping malls etc. is a clear indication that the quality of life growing inversely to our GDP growth story.
When you squeeze with 50% foreigners in the MRT, you wonder if you’re better off or worst off than 10 years ago when it felt more like 10-20% foreigners on average in an MRT cabin during peak hours.
Then again, maybe quality of life is a psychological thing based on perceived degrees of freedom (i.e. no of choices and latitude of choice). Since we have no space, it is a sort of zero-sum game. The only way to avoid the space constraint is sell services that need little infrastructure. But these tend to require a lot of high-end education (e.g. consultancy, which needs only minimal office space and legal infrastructure).
In a city-state (of which Singapore is really the only remaining major example now that HK and Macau have changed political status), the options are by definition limited by the boundaries and hinterland (of which Singapore has none under flag). The politics of the city are the politics of the state, and they have a more immediate and direct impact on the citizens than in a state that isn’t a city-state.