Will Singapore catch up with developed countries' standards of living?

Finance Minister Tharman said, if incomes grow by 30% in the next decade, Singapore will catch up with the developed countries' standards of living.

According to his recent round-up speech, growth in incomes were accompanied by growth of employment.

Singaporeans have benefited from the growth of employment. From 2006 to 2010, 228,000 new jobs went to Singaporeans. In fact, in 2010 alone, 44,700 new jobs went to Singaporeans.

It has led to a higher employment rate among Singaporeans. If you are looking at the working age population and see what proportion of them are employed, Singapore used to have a significantly lower rate than the developed countries, but we have now caught up. Singapore's employment rate has caught up with most of the developed countries.

The big difference however, is that Singapore's high employment rate is a result of a very low unemployment rate among those of labour force. Whereas the same employment rate in the developed countries is a reflection of higher labour force participation rates particularly among women, but offset by a very high unemployment rate. So we are in the right place, high employment rate because we have got very low unemployment – and that‟s because Singapore has a dynamic economy.

One aspect of dynamic economy is assuring Singapore has rational policies and that includes our policies on foreign labour. Have a price mechanism to encourage upgrading, but recognise that foreign labour is part and parcel of the growth that can help Singaporeans raise incomes.

Singapore needs to change the way we grow going forward, because local labour force is nor going to grow much more slowly. And we want to avoid an ever increasing proportion of foreigners in our workforce. That is why we have shift to productivity-driven growth.