Past and Future
4. Structural change As we saw in the previous chapter Singapore’s rapid output growth rates have been accompanied by one of the highest rates of investment in the world. Furthermore, there have been considerable changes in the structure of production, especially since the early 1960s before industrialization started. In this chapter we ﬁrst examine changes in the expenditure structure of the economy in order to establish the extent of and reasons behind the increase in saving and investment and how these changes have aﬀected domestic consumption. We also look at the likely future trends in saving and how they might limit future growth. We then look at the changes in the structure of production and especially in the development of the manufacturing sector and the role of foreign investment. We also look at the change in the distribution of income in general terms; information that has only been recently published. 4.1 COMPOSITION OF EXPENDITURES Standard national income accounting categorizes expenditures in the economy into private consumption (C), government consumption (G), investment (I), which consists of gross ﬁxed capital formation and the change in inventories (increase in stocks, which can be positive or negative), and exports (EX), foreign demand. All these expenditures include imported items. This demand for output is met from two sources of supply which are domestic production, Gross Domestic Product (GDP) and imports (IM). Hence: CϩGϩIϩEXϭGDPϩIM Therefore, GDPϭCϩGϩIϩ(EX ϪIM) where the bracketed term is called Net Exports. This...
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