What S’pore and Ireland have in common?

No not because S’pore is heading for insolvency etc if Tan Kin Lian is to believed http://tankinlian.blogspot.com/2010/11/will-singapore-face-same-outcome-as.html

We and the Irish are dependent on MNCs.

Mr Honohan [the Irish Central Bank governor] … points out that Ireland’s official GDP and unit labour cost statistics have consisently overstated the size of the Irish economy and its productivity respectively – largely because that economy is so dependent on multinationals with headquarters in the Republic, whose high profits acrrue to the overseas owners of those multinationals rather than to Irish residents.

That overstatement of the magnitude of the output of Irish residents, which in some real sense is attributable to those residents, could be as much as quarter, he says. Excerpt from Robert Preston’s blog on BBC Online.

Here, where the economy too is dependent on MNCs, this means that the economy is not as big as the stats imply. And that productivity is even worse than the already lousy numbers show*. The latter isn’t juz Reform Party spin. Remember there is yet another government campaign to raise productivity going on.

Perhaps the fact that the economy is smaller than the stats imply  is why the government seems obsessed by the need to build up the reserves. We will (not might) need the rainy-day money, one day. Question of “when” not “if”.