Talk about moving the goal posts. With the Singapore economy likely to grow slower than before, Prime Minister Lee Hsien Loong wants the country's economic performance to be judged not only by the gross domestic product but also by Singapore companies' overseas investments.
"We have to look at multiple indexes," he said. "I don't think you can look at just one. GDP will remain important, but perhaps we should look at GNP together with it."
While GDP or the gross domestic product is the income earned inside a country, GNP or the gross national product includes projects and investments abroad whose benefits flow back to Singapore, he said, reports the Business Times.
"If we focus only on developments within Singapore, we are physically constrained. There are limits to our space and manpower," he said.
He is right.
The only problem is the GDP is the standard measure of economic performance. The World Trade Organization lists a country's GDP, not GNP.
Here is Singapore's economic performance over the past nine years compared with its neighbours and a few other East Asian countries.
Indonesia has been the most consistent performer. Singapore and Hong Kong have had stellar years, but Malaysia and Thailand have not done badly either. Singapore and Taiwan have been through two recessions — in 2001 and 2009.
The 2010 forecasts for all the countries are taken from the latest issue of the Economist. The 2009 figures for Singapore, Malaysia and Thailand are government estimates and the rest taken from the Economist. The 2001-2008 data for Singapore are taken from the Singapore Department of Statistics and for the others from the Global Finance website. The 2008 GDP figures are taken from the World Trade Organization website.
No related posts.
guess:
finding a new excuse for increasing ministers bonus?
trying to find a new stat to show growth?
I wouldn’t joke about bonuses but GNP may show growth.
multiple indices???
very good, how about singaporeans’ median real pay growth????
pls do the right thing by God, you can’t bring (ill-gotten) money to hell you know.
Well, the debate between GDP and GNP continues
First of all, I’ll like to clarify I’m a post-grad student specialising in financial economics so the GDP-GNP divide isn’t really up alley so to speak, BUT it might be valid to look at GNP figures as well as GDP numbers, depending on what is being analysed.
If the object of analysis is to measure the productivity of a country’s economy, then it is clear that GDP is the more insightful measure.
However, GNP is more useful in drawing conclusions about economic benefits accruing to the population/institutions of the country.
So if a country is heavily involved in foriegn investment, e.g. a net investor in other countries or a net reciever of foriegn investments, the GDP figure reflects the total amount produced within the country itself, but doesn’t fully reflect the income recieved by the citizens of that country.
After all, foreign investors are likely to repatriate at least part of their investment income. In which case, if we are talking about changes in quality of life, which, if assumed is directly related to current income, then GNP might be more relevant.
However, GDP is considered more appropriate in forecasting long-term growth in countries in which trade or FDI does not constitute a large proportion of the overall economy.
You are right. It would be nice if Singapore gave both its GDP and GNP. One could then compare the two. The World Trade Organization and other international economic agencies use the GDP, not GNP, because GDP affects the man in the street who presumably has no foreign investments.