Risks of Unchecked Export-Driven Growth

Risks of Unchecked Export-Driven Growth

Singapore's basic economic strategy of surviving by tapping on the global economy by attracting foreign investments to Singapore and exporting our goods to international markets is flawed. Goldman Sachs said in a client note on Thursday that, "We reiterate our view that Singapore has one of the highest exposures to weakness in external demand, because of its high ratio of exports to GDP and the high portion of exports-driven domestic demand". The brokerage firm has lowered its forecast for Singapore gross domestic product for 2009 to -8 percent from -4 percent previously as the US economy is expected to contract further in the year, curbing already weak demand for Asian goods.

In Singapore, consumption composes only 40 percent of the GDP versus at least 55 percent in other developed Asian economies. With globalisation, more players have entered the "export-driven" economic playing field. Good skills are offered at lower wages by these players. This globalisation will only continue to progress faster than ever as the pace of technological advancement continues to accelerate. Many jobs that have been lost during the past recessions are gone forever. Many more will be lost in the current depression. Structural unemployment is here to stay for a long time. We cannot continue to bury our heads in the sand by claiming that "The fundamentals of our growth model are sound". Although Singapore supposedly 'bounced back' three times within the last ten years from comparatively milder crisis, the current global mayhem makes it increasingly unlikely that Singapore's export-driven economy is going to 'bounce back' any time soon.

How do we rise up and meet the challenges of this crisis? Fairness and equality do matter as we attempt rise up to meet this economic challenge. There is an imperative need for new, appropriate economic policies to be drawn; bearing in mind the connections between society, environment and the economy. We cannot continue to rely on continuing growth to provide sufficient finance for public services, or on market mechanisms to ensure their efficiency – because financial markets are less reliable than ever; because markets only reflect and cannot repair inequalities. Unchecked export-driven growth puts everything we hold dear at-risk.

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