Slowing down growth will not help create a more equal society: Josephine Teo

Singapore

DELIBERATELY slowing down Singapore's economic growth will not help tackle inequality, but will instead make everybody worse off, said Manpower Minister Josephine Teo on Friday. "It will have the harshest impact on the bottom," Ms Teo said. "Jobs will be lost and incomes fall for those at the lower end of the workforce, while at the top end, those with the talent or entrepreneurial ability to seize opportunities elsewhere will up and go." Ms Teo was speaking at a panel discussion during a conference organised to celebrate the 30th anniversary of the Institute of Policy Studies (IPS) at Marina Bay Sands.

She pointed out that slowing down growth "so that those behind can catch up" may sound like an intuitive solution to inequality, but the evidence goes against it. Much of Singapore's growth since 2000 took place between 2004 and 2007, when its gross domestic product (GDP) grew by an average of 8 per cent yearly. Median income adjusted for inflation grew by 20 per cent during that decade, and "virtually all" of it happened during that four-year period. "By going for growth when the conditions allowed, we offset the downturns we experienced earlier in the decade," Ms Teo said. "In the process, we reduced unemployment and raised wages for Singaporeans after the standstill in the first part of the decade."