GROWTH ACCOUNTING OF THE SINGAPORE ECONOMY : 1973-1984

Abstract

The Singapore success story is a well-known and oft-told one. After attaining self-government from British rule in 1959 and Independence in 1965, she has gone on achieve one of the highest sustained rates of GDP growth in the world, accompanied by price stability, high foreign reserves and rising standards of living. The Singapore economy has not remained static in the face of changing world circumstances. Indeed a hallmark of the small island is her dynamic capacity to respond positively to the state of flux in the international economic order. Modernisation and structural transformation are an integral part of this adjustment process and they are evident in the changing industrial structure of production and employment. The purpose of this study is to investigate the structural changes that have occurred by the use of sources of growth analysis. Analysis is performed within the conventional demand and supply framework. On the one hand, the growth of output over a period of time is allocated to the growth of inputs - both primary and intermediate, of domestic or foreign origins; on the other hand, it is allocated to different sources of demand stimuli - the growth of domestic and world markets and changing relative competitiveness in the production of different commodities. The main task is to conceptualise the various effects on output growth in a quantifiable form, so that a coherent growth accounting of the Singapore economy may be obtained.