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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published June 30, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Growth bonus for civil servants inches closer
Surging economy could spell boom time for them - but elsewhere, the buzz is missing
By ANNA TEO
(SINGAPORE) For all the growing chorus of criticism over the past decade or so about the use of gross domestic product as the main measure of economic prosperity, it looks like the indicator is here to stay, for now anyway.
And with Singapore's economic growth set to top 10 per cent this year - that much seems certain, even at the half-way mark - there does seem for now, for at least one big group of Singaporeans, a clear and literal link between GDP and some 'prospering' to come. That will take the form of a special 'growth bonus' for civil servants - a performance incentive introduced in 2007, payable 'in times of exceptional economic performance'.
Officially, the government's forecast of Singapore's 2010 GDP growth still stands at 7-9 per cent, which was an April estimate.
But with the first quarter having hit a record 15.5 per cent growth pace, and Q2 possibly racking up yet another new high on the back of a manufacturing surge, it would be hard (to put it mildly) for even the most conservative and cautious at the Ministry of Trade and Industry to stay with its 7-9 per cent range forecast. It will be surpassed even if the economic momentum crashes and fizzles out in the second half - which is not foreseen for now, even in the most bearish eurozone scenarios.
Private sector economists have, of course, long gone to town with their double-digit projections for Singapore, with the more gung-ho among them having revised their 2010 forecasts to 12.5 per cent - while speaking, in the same breath, of chances of growth breaching 15 per cent.
Incidentally, if Singapore's 2010 growth hits 12 per cent, it would be 'only' a 37-year high. According to the historical figures, the Singapore economy grew 13.5 per cent in 1972, and in what seems to have been a super three-year stretch between 1968 and 1970, GDP growth was 13.6, 13.7 and 13.8 per cent, consecutively!
In any case, it does seem like an upgrading of the official 2010 growth forecast would be due - most probably when the Q2 flash GDP estimates are released, some time in the next couple of weeks.
And double-digit growth - one year after a recession, unanticipated early on - would well qualify as 'exceptional economic performance', meeting the criteria for civil servants' special growth bonus. In 2007, when the economy fared better than expected and grew 8.5 per cent, civil servants received (on top of their variable payments for the year) the additional bonus - which amounted to half a month's pay for 'good performers', and 'up to 0.8 month' for 'exceptional performers'. That was the only time so far that the growth bonus has figured, since GDP growth in both 2008 and 2009 was anything but good.
Still, even if 2010 GDP growth hits 10 or 12 per cent or higher, does it look or feel like boom-time across the board, beyond civil servants with bonus in hand?
The spectacular output figures of late have been driven by massive inventory restocking - sort of a catch-up after the recessionary lull last year - and sector-wise, largely by the highly volatile pharmaceutical industry, which only late last year saw sharp plunges month after month.
Back in 2007, with the economy headed for a fourth straight year of 7-9 per cent growth amid low inflation, Singapore did indeed have 'Boom Town' written all over it: rising incomes, buoyant job market, property market on a roll. Economists believed that the economy, driven by an influx of foreigners, could well grow 8 per cent a year - far above its long-assumed 4-6 per cent underlying potential.
One recession later, the economy's trend growth is now back to a 3-5 per cent estimate - with two-thirds of it supposed to be powered by productivity gains. So this year's double-digit pace, if it happens, will indeed be exceptional - and exceptional more in the sense of being unusual than in being robustly good.
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Growth bonus for civil servants inches closer
Surging economy could spell boom time for them - but elsewhere, the buzz is missing
By ANNA TEO
(SINGAPORE) For all the growing chorus of criticism over the past decade or so about the use of gross domestic product as the main measure of economic prosperity, it looks like the indicator is here to stay, for now anyway.
And with Singapore's economic growth set to top 10 per cent this year - that much seems certain, even at the half-way mark - there does seem for now, for at least one big group of Singaporeans, a clear and literal link between GDP and some 'prospering' to come. That will take the form of a special 'growth bonus' for civil servants - a performance incentive introduced in 2007, payable 'in times of exceptional economic performance'.
Officially, the government's forecast of Singapore's 2010 GDP growth still stands at 7-9 per cent, which was an April estimate.
But with the first quarter having hit a record 15.5 per cent growth pace, and Q2 possibly racking up yet another new high on the back of a manufacturing surge, it would be hard (to put it mildly) for even the most conservative and cautious at the Ministry of Trade and Industry to stay with its 7-9 per cent range forecast. It will be surpassed even if the economic momentum crashes and fizzles out in the second half - which is not foreseen for now, even in the most bearish eurozone scenarios.
Private sector economists have, of course, long gone to town with their double-digit projections for Singapore, with the more gung-ho among them having revised their 2010 forecasts to 12.5 per cent - while speaking, in the same breath, of chances of growth breaching 15 per cent.
Incidentally, if Singapore's 2010 growth hits 12 per cent, it would be 'only' a 37-year high. According to the historical figures, the Singapore economy grew 13.5 per cent in 1972, and in what seems to have been a super three-year stretch between 1968 and 1970, GDP growth was 13.6, 13.7 and 13.8 per cent, consecutively!
In any case, it does seem like an upgrading of the official 2010 growth forecast would be due - most probably when the Q2 flash GDP estimates are released, some time in the next couple of weeks.
And double-digit growth - one year after a recession, unanticipated early on - would well qualify as 'exceptional economic performance', meeting the criteria for civil servants' special growth bonus. In 2007, when the economy fared better than expected and grew 8.5 per cent, civil servants received (on top of their variable payments for the year) the additional bonus - which amounted to half a month's pay for 'good performers', and 'up to 0.8 month' for 'exceptional performers'. That was the only time so far that the growth bonus has figured, since GDP growth in both 2008 and 2009 was anything but good.
Still, even if 2010 GDP growth hits 10 or 12 per cent or higher, does it look or feel like boom-time across the board, beyond civil servants with bonus in hand?
The spectacular output figures of late have been driven by massive inventory restocking - sort of a catch-up after the recessionary lull last year - and sector-wise, largely by the highly volatile pharmaceutical industry, which only late last year saw sharp plunges month after month.
Back in 2007, with the economy headed for a fourth straight year of 7-9 per cent growth amid low inflation, Singapore did indeed have 'Boom Town' written all over it: rising incomes, buoyant job market, property market on a roll. Economists believed that the economy, driven by an influx of foreigners, could well grow 8 per cent a year - far above its long-assumed 4-6 per cent underlying potential.
One recession later, the economy's trend growth is now back to a 3-5 per cent estimate - with two-thirds of it supposed to be powered by productivity gains. So this year's double-digit pace, if it happens, will indeed be exceptional - and exceptional more in the sense of being unusual than in being robustly good.
</TD></TR></TBODY></TABLE>
