What We Can Learn From the Data

As we saw in Figure 0.1 in the introductory chapter, Singapore’s real GDP per capita, which had been growing at a pace to just maintain its relative distance to the U.S. economy, began to speed up to race towards the standard of living of the world’s economic leader of the 20th century after independence in 1965. What caused this economic catch up and what mechanisms shape the future trajectory are critical questions we seek to answer. In order to make progress in our understanding, we need to gather data of economic variables and seek to provide a theory to organise the way we think about how these economic variables are related to each other. In this chapter, we explore data to make empirical observations about the Singapore economy. Various time series of economic variables show the very large extent to which Singapore is integrated with the global economy, suggesting that Singapore’s economic openness plays a causal role in the economic take-off. Another set of data provides measures of economic outcomes: real wages of workers of different levels of skill, unemployment rate, labour market tightness, and retrenchment rate. Concomitant with the changes of these economic variables over time, the measures of wealth, educational attainment, and total fertility rate have also evolved, providing clues to the future challenges facing the economy. We also make observations about the variables that show the shifts in the structure of the economy as well as the availability of fiscal resources and their uses. An examination of past challenges and the policy responses provides insights into the workings of the Singapore economy and the way forward.