Singapore's
productivity growth is often criticised for being lacklustre, but an economist
from Oxford Economics said the country has done "remarkably well".
Productivity
grew 1.5 per cent between 2000 and 2015, outpacing gains in similarly
high-income countries such as the United States and Britain. The US recorded
productivity growth of 1.2 per cent while the United Kingdom posted a 0.9 per
cent expansion, said Ms Priyanka Kishore, lead Asia economist at the
British-based global advisory organisation.
"Though
Singapore is already a mature and urbanised economy with little scope for
sectoral shifts to increase productivity, it has done remarkably well,
comfortably outperforming other high-income economies in terms of percentage
growth," she said.
She
attributed Singapore's productivity gains to high household savings as a stable
supply of finance is needed to invest in both physical and human capital.
She also
noted that Asean countries have had "a very impressive track record in
productivity over the last 15 years". Productivity in the region grew by 3
per cent a year between 2000 and 2015, 2 percentage points higher than the
annual growth rate of Latin America and 1.44 percentage points higher than
Africa's.
Ms
Kishore, who is also an economic adviser to the Institute of Chartered Accountants
in England and Wales (ICAEW), attributed Asean's productivity growth to several
factors. The key one was the sectoral shift from agriculture to manufacturing
and services. Citing Viet- nam's strong productivity growth, she noted
employment in agriculture there has come down from 60 per cent a decade ago to
40 per cent now, with room to drop even more.
South-east
Asia is poised for more productivity gains over the next five years, with
Vietnam leading the pack, added Ms Kishore, who presented the ICAEW-commissioned
report on the region yesterday to ICAEW members and members from other partner
organisations.
"It
is best placed in terms of urbanisation as well as working population. Its
labour productivity is still low but we expect that to continue rising over the
next five years, and that should enable a high productivity gain," she
said.
Despite
projected productivity gains, the short-term outlook for Asean is clouded by
factors such as weak global trade. Ms Kishore added that limited monetary and
fiscal stimulus can be expected, as most Asean countries except Singapore are
facing an overall deficit.
While the
report forecast robust growth in the Philippines and Indonesia because of
healthy domestic demand and strong macro-economic fundamentals, it said
Thailand's chronic political uncertainty could impact economic growth and
Malaysia could come under pressure from falling oil revenues, high household
debt and the ongoing 1MDB saga.
MS PRIYANKA KISHORE, lead Asia economist at
Oxford Economics.
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