Singapore, SWFs, and Other Countries: Part I
A common question is: how does Singapore compare to other countries with regards to its finances both other sovereign wealth fund countries and other countries. Let’s examine that question as they do nothing but further demonstrate fallacies about Singaporean public finances.
From 1992 to 2012, Singapore ran the third highest average government budget surplus as a percentage of GDP. The top ten countries by average budget surplus from 1992 to 2012 are below.
There are two things that make Singapore’s appearance in this table so interesting. First, Singapore is the only non-oil exporter on this table. The other countries in the table are the major oil exporters like Norway, Saudi Arabia, Kuwait, and the United Arab Emirates but also lesser known oil countries like Angola and East Timor. These countries run government surpluses because they receive oil royalties from the extraction of oil not extraction of revenue from its people.
The second reason Singaporeans appearance on this is so interesting is how it has decided to spend the revenue it does raise. If we look at the third column average government expenditure as a percentage of GDP, Singapore ranks last on the table. In other words, of the countries with large structural budget surplus, Singapore spends the least amount of money on its citizen of these countries.
However, I can already hear the complaints that I am making an unfair comparison because these countries have so much oil money to spend on their citizens. This is a reasonable concern about whether I am biasing the data so let’s expand our comparison to all other countries in the world. Below is a Table of Singaporean and other countries with similar levels of government expenditure as a percentage of GDP.
Singapore ranks second to last in the world of government expenditure as a percentage of GDP. In terms of public expenditure as a percentage of GDP, Singapore ranks ahead of only Myanmar and behind such caring socialist paradises as Haiti, Sudan, and Bangladesh.
I am personally a strong believer in the free market with healthy competition but what we witness with Singapore is not limited government. Instead, Singaporean public finances betray a modern day developed economy extraction of wealth from its people. Singapore has built its sovereign wealthf funds by refusing to deliver public goods and services to its citizens.
Oil dependent countries run large budget surpluses because of the enormous ongoing royalties they receive from resource extraction. The government of Singapore is running public surpluses not because the tax burden is incredibly high but because the spending on its people is incredibly low. Singapore runs large budget deficits because it over taxes and under delivers public goods and services. Singapore is treating its people as sources of wealth extraction. Rather, people should be considered resources.
The people of Singapore deserve better than Myanmar and Banglades