High household debt, low growth, low wages, high inflation, low productivity?

By Leong Sze Hian

I refer to the Ministry of Trade and Industry’s reply “Govt’s goal to create good jobs for S’poreans” (Straits Times, May 24) to Leon Perera’s “Different spin on wheels of productivity” (Straits Times, May 21).

Vibrant economy = Good jobs?

It states that “The Government’s aim is to create good jobs for Singaporeans by building a competitive and vibrant economy, with productivity as a key driver.”

Against this rhetoric, let’s take a look at the reality and some stark statistics.

I refer to the article “HK’s household debt rises to record 61% of GDP!” (TR Emeritus, May 4).

Hong Kong – record 61% household debt

It states that “Hong Kong’s economy is at risk of overheating after household debt rose to a record 61 percent of gross domestic product”.

Singapore’s even higher at 74%

Actually, Singapore’s household debt is even worse than Hong Kong’s, at 74 per cent of  gross domestic product in Q3 2012. (“Household debt rise may curb domestic demand here: RBS“, Business Times, Mar 22)

2nd highest in Asia

“Witjin Asia, Singapore is one of the countries seeing both higher levels of and faster growth in private sector lending.

In terms of average debt to GDP, Singapore comes second after China among major emerging Asia economies.

China’s credit was 127 per cent of GDP last year, on average, while Singapore’s was 115 per cent.

The Monetary Authority of Singapore (MAS) said that as of the fourth quarter last year, Singapore’s private sector domestic debt-to-GDP ratio was 118 per cent.

Fastest growing debt?

Not only are Singapore’s absolute lending levels high, but they have been growing faster recently than most of its neighbours’.

Among Asian countries, Singapore and Thailand have seen the steepest year-on-year rises in their bank credit to GDP ratios over the last two years”. (“Asia is lending itself to higher debt risks“, Straits Times, Mar 12)

Hong Kong’s GDP growth at 1.4 per cent in 2012, was slightly higher than Singapore’s 1.3 per cent.


How do we get out of the quagmire of low economic growth, low wage growth, high inflation, low productivity and high private sector domestic debt-to-GDP?

How did we end up in this pathetic state of affairs – despite the two casinos, liberal foreign labour and immigration policies, keeping local wage costs low, etc?

Have we run out of ideas, as we seem to be talking and doing essentially much of the same policies and strategies?