Singapore ranks high in study on well-being: 2015 Sustainable Economic Development Assessment

Republic made particularly strong progress in education, governance
By Phyllis Ho, The Straits Times, 8 Jun 2015

SINGAPORE has scored high in a study that attempts to assess the elusive concept of well-being.

The country was ranked 10th, the only non-European nation to make the top 10. Norway led the way followed by Luxembourg, with Switzerland and Iceland sharing the third spot, in the study by the Boston Consulting Group (BCG).

While Singapore came in 21st in last year's report, the 11-place jump does not necessarily imply progress as the study normalises the top and bottom performers. That means a ranking of 75 last year may not be worse than 70 this year.

The process drew on 43 indicators to measure three overarching elements, namely economic performance, investments in social development and sustainability.

The data collected from 148 countries for the 2006 to 2013 period was crunched to come up with what is called the Sustainable Economic Development Assessment (SEDA).

Singapore was found to have made particularly strong progress in education and governance, scoring 22 points over the world average in both fields.

But it fell below the mean on economic stability, which was based on inflation and growth-related figures.

However, Dr John Donaldson, associate professor of political science at the Singapore Management University, said economic variability is to be expected in a small economy.

The country was also seen as lagging in income equality.

Singapore scored 0.446 on the Gini coefficient last year, its second-lowest figure since the first calculation in 2000.

But anything above 0.40 is classed as "dangerous" by the United Nations.

The Gini coefficient is the standard indicator to measure inequality: 0 means an equal distribution of income while 1 is the most unequal.

Dr Donaldson said the lower figures in the past two years mark an improvement, due to more financial relief for low-income households.

The BCG study also showed that aspects of Singapore's infrastructure and health are ahead of most economies, but it made little progress in these areas over the seven-year period under review.

Overall, SEDA revealed that middle-income economies - those with gross national incomes of US$1,000 ($1,355) to US$6,000 in 2006 - made the most progress.

But there is a widening gap in the sustainability element, which looks at income equality, civil society, governance, and the environment.

The report said countries are generally inching ahead or falling further behind.

BCG lead analyst Heng Shu Ling, one of the experts behind SEDA, said the study seeks to prompt countries to consider overall well-being instead of gross domestic product (GDP) as a primary goal.

Mr Donald Low, associate dean (research and executive education) and senior fellow at the Lee Kuan Yew School of Public Policy, lauded SEDA's emphasis on well-being: "Economists always knew that GDP per capita is a proxy for well-being but an imperfect and incomplete one."

This was echoed by Dr Donaldson. He added that issues of well-being need to be addressed further: "Key question is: what's causing the improvement and lack of improvement?"

SEDA also outlined broad-based policy prescriptions, including what it termed a "hierarchy of interventions".

This calls for nations to "remove obstacles (to trade) first, subsidies last".

But Dr Donaldson said the approach is rather similar to a World Bank report on maximising GDP growth, except that the emphasis here is on well-being.

Mr Low cautioned that the approach also underlies "a rather ahistorical view" of how economies have developed: "Almost every country that has developed has done so through activist industrial policies, some of which were protectionist...

"The role of the state in selecting industries to promote... was quite critical."

The next SEDA, which assesses the period to 2014, is slated to be released next year.