Business

Sri Lanka’s 73 vs. Singapore’s 55

  • Where have the two economies gone since independence?

 

Recently, when the Covid Performance Index compiled by the Australian think tank, the Lowy Institute, stated that Sri Lanka was ranked as the 10th country in the world for performing well in terms of combating Covid-19, a spark caught on among local news organisations and social media, claiming that Sri Lanka is performing well in comparison to Singapore. 

But to what extent is this true? Did you know that when the Lowy Institute released these official statistics, the Government of Singapore launched its first commercial autonomous bus services in the same week? 

Sri Lanka was ranked 10th in the Index with an average performance of 76.8, in comparison to Singapore, which ranked 13th with an average performance of 74.9 over time in managing the Covid-19 pandemic in the 36 weeks following their 100th confirmed case. However, would this mean Sri Lanka is overall performing well in comparison to Singapore? To clarify this, let’s compare the performance of both countries with official statistics.

In terms of comparison, Sri Lanka won its Independence first on 4 February 1948, and several years later, Singapore got its Independence in 1965. Since then, both Asian countries have been striving their best to perform to their utmost level. 

 

GDP

After several years of steady growth in Gross Domestic Product (GDP), Sri Lanka was worth $ 84.009 billion in 2019, the World Bank said. In terms of the data published by The Economist, Sri Lanka is expected to gradually recover in 2021 with a growth of 3.4%, after experiencing its worst-ever recession in 2020.  

Further, The Economist forecasts also stated that Sri Lanka will have a private consumption of 1.7% of GDP in 2021. 

Meanwhile, after decades of independence, Singapore rapidly developed from a low-income country to a high-income country. Quoting the official statistics by the World Bank, Singapore’s GDP was worth $ 372.06 billion in 2019. 

According to the data published by The Economist, Singapore experienced a 5.8% slump in 2020. However, its forecast for 2021 is placed at 5.1%. Besides, The Economist forecasts that Singapore will have 8.3% of private consumption in 2021.

Despite Covid-19, both countries have performed well in terms of their Consumer Price Index (CPI). For instance, Sri Lanka has risen to 138.70 points in January 2021 from 138 points in December 2020, the Central Bank of Sri Lanka (CBSL) noted. Meanwhile, according to the latest statistics published, the CPI of Singapore has risen to 100.50 points in December 2020, from 100.10 points in November 2020.

 

Export and imports

The export industry was affected globally after Covid-19 played its role in the industry. As of the latest data published by Trading Economics with reference to CBSL, the export data as of November 2020 is at 819.20, which has contracted from 848.00 in October 2020.  

Likewise, in terms of import industry, Sri Lanka performed well as there has been a decline to $ 1204.80 million in November, from $ 1362.80 million in October 2020. However, Singapore did see a rise in imports despite the Covid-19 pandemic. Accordingly, imports increased to SGD 38,142.13 million in December, from SGD 38,050.50 million in November of 2020.

However, Singapore was able to manage its export industry during the pandemic, with a result of increasing exports to SGD 41,984.76 million in November 2020, compared to SGD 40,759.9659 million in October 2020, according to Trading Economics, referencing official data published by the Singaporean Government. 

“The Import and Export Price Indices rose 1.6% and 0.8%, respectively, in December 2020 over November 2020, due mainly to higher prices of oil. Excluding oil, the indices fell 0.2% and 0.5%, respectively, attributed mainly to lower prices of machinery and transport equipment,” the Department of Statistics reported. 

 

Labour 

When countries were globally hit by Covid-19, a decrease in the employment rate was noticeable in all nations. However, the official statistics of Singapore and Sri Lanka is as follows.

The number of employed persons in Sri Lanka has drastically decreased to 7,977,000 in the second quarter of 2020 in comparison to 8,020,446 in the first quarter of 2020, according to official data released by the Department of Census and Statistics of Sri Lanka. 

With a population of 21.9 million, Sri Lanka has a total of 458,359 unemployed persons as of the second quarter of 2020. According to the CBSL, the labour force participation recorded within the same period of the year decreased to 50.20% in the second quarter of 2020, from 51% in the first quarter of 2020.

Commenting further, the Department of Census and Statistics of Sri Lanka to the pandemic and other reasons involved as such, the youth employment had risen up to 27.70% in the second quarter of 2020, from 26.80% in the first quarter of 2020

In contrast to Sri Lanka, the employment rate of Singapore had also decreased to 3,597,700 in 2020 from 3,778,000 in 2019, according to the official date released by the Ministry of Manpower. 

The total employment fell by 13,500 in Q4, amid a further decline in employment in both manufacturing and construction, largely due to reductions in non-resident work permit holders. In 2020, the unemployment rate rose to 3.0% from 2.3% in 2019, with resident unemployment rising to 4.1% from 3.1%, while citizen unemployment increased to 4.2% from 3.3%.

 “The Covid-19 pandemic has a significant impact on the labour market in 2020. Although the latest indicators point to a broad improvement, the labour market is still not back at pre-pandemic levels,” Singapore’s Ministry of Manpower said in a statement.

 

FDI

Covid-19 did have an impact on all investors, companies across the globe. However, when comparing the Foreign Direct Investment (FDI) of both countries, Singapore has performed very well during 2020.

According to CBSL data, Sri Lanka has recorded a reduction in FDI of $ 153 million in the first quarter of 2020, in comparison to the previous data published, which recorded $ 235 million in FDI. 

On the other hand, Singapore has performed exceptionally well in terms of FDI within 2020, as FDI, which was recorded at SGD 20,561 million at the start of 2020, climbed to SGD 25,682 million by the second quarter. 

 

Tourism 

One of the key indications of revenue that Sri Lanka was always dependent on is tourism; however, this sector was severely affected in Sri Lanka due to the closure of tourism and the airports for at least 10 months. 

The Sri Lanka Tourism Development Authority (SLTDA) said that foreign tourist arrivals in the country slumped 99.8% year-on-year to 393 in December of 2020. “No tourist arrivals have been recorded since April to 27 December due to the termination of all passenger flight and ship arrivals into Sri Lanka from 18 March 2020, amid the coronavirus pandemic,” it noted.

Commenting further, the SLTDA added that visitor numbers tumbled by 73.5% to 507,704, with the biggest decline recorded from India (-74.8% to 89,357), the UK (-72.1%to 55,455), Russia (-42.9% to 49,397), Germany (-74.4% to 34,507), and China (-84.4% to 26,147).

“Visitors from Europe became the largest source of tourists to Sri Lanka, with 55.5% of total arrivals in 2020, while that of Asia Pacific accounted for 35.7% of total arrivals,” the SLTDA added. 

Meanwhile, the Singapore Tourism Board (STB) stated that arrivals within the period of January to September 2020 declined by 81.2% over the same period last year, to 2.7 million visitors. 

Accordingly, Singapore’s tourism receipts stood at SGD 4.4 billion, a decline of 78.4% compared to the same period last year. “The decrease in tourism receipts can be observed across all components: shopping, accommodation, etc.,” the STB added. 

 

Digitalisation 

As of 2020, the number of internet users in Sri Lanka totalled 10.10 million. The number of internet users increased by 399,000 (+4.1%) between 2019 and 2020. According to the statistics produced by #Digital2020, internet penetration in the country stood at 47% in January 2020.

A total number of  31.80 million mobile connections users were recorded in January 2020; this is due to the increase in the number of mobile connections by 2.2 million (+7.5%) between January 2019 and January 2020. Eventually, with this rise, the number of social media users in Sri Lanka also grew by 491,000 (+8.3%) between April 2019 and January 2020.

In comparison to Sri Lanka, Singapore has a total of 5.14 million internet users by January 2020, with a rise of 258,000 (+5.3%) users between 2019 and 2020, according to statistics produced by #Digital2020

Accordingly, a total of 8.56 million mobile connections were recorded in Singapore in January 2020, with a rise of 145,000 (+1.7%) users between January 2019 and January 2020. Due to this, a total of 4.60 million social media users were recorded within the same year. 

This is just the statistic recorded before the Covid-19 pandemic – so imagine the difference in statistics of internet penetration and social media users that could be present for the month of December 2020. Definitely, due to the lockdowns and curfews imposed in both countries, these numbers would have drastically risen more than ever before. 

 

Conclusion 

During the ongoing Covid-19 pandemic, all nations across the globe are striving now more than ever to combat the deadly virus and protect their people, along with other fights such as competing in the international market, sustaining inflation rates, improving growth alongside GDP, and also protecting people from losing their jobs, so that purchasing power does not reduce. 

Referring to the above figures, it is noticeable that both Sri Lanka and Singapore have performed well despite the countless restrictions imposed; however, it is noticeable that Sri Lanka has a long way to go if it is to surpass Singapore in terms of the economy.