Has Singapore achieved the Swiss standard of living?

Singapore is ranked 4th in the world by GDP per capita surpassing the United States, Hong Kong and even Switzerland. Does this mean our standard of living is higher than the people in Switzerland and Hong Kong?

GDP per capita is calculated by the value of all final goods and services produced within a country in a given year , divided by the average (or mid year) population for the same year.

Source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

The world bank ranks Singapore as the 4th and the IMF ranks Singapore as the 3rd. The Singapore government once said that they strive to achieve the Swiss standard of living for Singapore. It does look like we have surpassed Switzerland currently.

However, with such a high GDP per capita, are Singaporeans enjoying the results of this success? Have the hard work of previous generations benefited the current generations in Singapore? Truthfully, our lives in Singapore is much better than in the past. We enjoy the clean environment, a safe place to live and the convenience to travel around. Singapore as a nation has also become very wealthy and in fact the rich are getting richer.

How about the poor? Do they benefit from all these wealth? The Gini coefficient, used widely to measure the level of income inequality in countries, shows Singapore ranking on the high side. Singapore's Gini coefficient was 0.459 in 2012. The highest in the world is Hong Kong at 0.537 and lowest in Norway at 0.256. (http://sg.finance.yahoo.com/news/singapore-income-inequality-rise-dept-135226813.html)

This shows that the rich are getting richer and the poor stays poor or even poorer in Singapore. As the cost of living rises, the poor have even a harder time to adapt to the rising cost of living. There are people earning less than S$800/month in Singapore.

We are no doubt already a developed country. Should we be relaxing like the rest of the developed countries like Switzerland and Norway and enjoy the fruits of our success? If you go to Switzerland, their city is not so crowded and the pace of life is much slower as compared to Singapore. Even in developed countries like Australia, they enjoy retirement and welfare benefits and they have short working hours. Most of the shopping centres close by evening 5pm in Australia.

In my economics class this week, we discussed on this issue. One reason Singaporeans still need to work harder is because of our small population and a lot of workers need to play multiple roles in their jobs, also known as multi task. One way to solve this problem of labour shortage is to increase productivity. Switzerland population is small at about 7.4 million currently. Singapore has a population of 5.3 million. But Switzerland's productivity is much higher than Singapore.

    

Singapore's productivity has been declining according to the ministry of manpower. This is a concern for the government and they are increasing efforts to increase the productivity level in Singapore. If productivity increases in Singapore, we should see shorter working hours but still producing the same amount of output or even more. This will enable Singaporeans to have a better work life balance. With productivity at a negative now, Singaporeans are working longer hours and doing more work but not producing much to sustain our economic growth.

If we compare the productivity of Australia, we can see an increasing trend as shown below:
 

Now, this may be the reason why they can have a slower pace of life, shorter working hours but still a growing economy. Switzerland's productivity level is even higher than Australia at more than 107.

  

We are no doubt ranked higher than Switzerland in terms of GDP per capita but our productivity levels is still far from those of a developed nation. I do think that Singapore is on the right track of training workers to have better skills and increasing productivity. We cannot belittle the negative effects of slower economic growth. It does affect the country and also individuals living in it. Look at the situation in Europe especially Greece, Portugal, Spain and you will know.

If we want to have a better work life balance but still strong economic growth, working lesser but producing more is the key. Technology plays a big part in this. We should increase our skills, learn new technology to enable us to be more productive. Singapore has no natural resources and a big portion of our economy is generated through the services sector. Financial services is important to a country like Singapore as a lot of money is invested in Singapore.

Increasing our financial knowledge and learning how to manage and compound our money makes the economy grow as cash flows through the economy. In finance classes, we learn that a good financial system is vital for businesses to grow in a country as funds can be raised through the bond and stock markets and liquidity can constantly flow in the economy. We can help to increase the financial literacy in Singapore that many people can benefit from good money management habits.