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22 Feb 2019
Ministry of Trade & Industry
Feedback View - 364
Improve productivity in Singapore

The economists measure productivity by dividing the total output by the number of workers. During years of low productivity, the cause is usually identified by an increase in the number of low wage foreign workers allowed to work in Singapore. 

This measurement fails to recognize some major issues. I like to touch of them.

a) We need to identify useful and wasteful output. If we have bad traffic management, we will get more people providing the transport service, e.g. private hired cars. The output has increased due to the earnings of these drivers. But this output is a bad output that could be avoided, e.g. if we have an efficient public transport service that reduces the congestion.

b) It fails to recognize the inefficiency of our business processes. We have a large number of payments made by checks. The checks have to be prepared, signed and posted. The receiving party has to send the check for clearance by the banks. All of these activities add to the total output that they could be avoided. 

c) We are still using communication by postal mail. These communication could be transferred to electronic mail, but many government and business organizations do not use e-mail because it is considered as not secure. 

d) We spend considerable administrative work to compute GST every quarter. We need to have a separate system to compute the outputs and to recover the inputs. While the work can be reduced by an efficient computer system, there is still a lot of work that has to be done manually to capture the inputs.

Many countries have reduced their work by making payment through bank transfers and making more use of e-mail for non-sensitive communication. They can improve their productivity using these new methods. But the business process in Singapore continue to be inefficient.

We now have a high cost of doing business. This is translated into high prices paid by consumers and contribute to our high cost of living in Singapore.

We need to remove inefficient and wasteful processes to improve our productivity and reduce the cost of doing business.

We are now quite inefficient compared to many countries, including the emerging economies. We cannot afford to continue our wasteful ways.

Tan Kin Lian

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