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Rankings cited not reliable for international comparisons of inequality

10 Jul 2019

Rankings cited not reliable for international comparisons of inequality (10 Jul, Forum, Pg B10)

Dr Leong Yan Hoi had thoughtful views on tackling inequality, including the measures which he noted are already in place (Inequality inevitable but we can take steps to close gap, July 5).

However, in setting the context, he also cited rankings in the CIA World Factbook and the Oxfam Commitment to Reducing Inequality Index report.

Unfortunately, the two reports do not allow for reliable international comparisons.

The CIA World Factbook collates Gini coefficients for different countries based on different income definitions, coverage and time periods.

For example, Singapore's Gini coefficient in the CIA World Factbook is based on income before taxes and transfers, while for several other countries it is based on income after taxes and transfers.

Based on Organisation for Economic Cooperation and Development (OECD) methods that allow for better international comparisons, Singapore's Gini coefficient, before taxes and transfers, was 0.412.

This puts us as having a lower level of inequality than most OECD countries.

Our social policies, including those that do not directly impact Gini coefficients, have also narrowed inequality and provided opportunities across the society.

The Oxfam report was based on indicators that naturally favour countries with high taxes and large social expenditures.

Many of its indicators also measured inputs, ignoring outcomes. Singapore's ability to achieve strong outcomes in education and healthcare by most international comparisons, despite less spending, is not reflected in their rankings.

We closely monitor inequality indicators based on more careful international comparisons. The Government remains committed to mitigating inequality and will continue to adapt its policies in response to changing circumstances and needs.

Lim Yuin Chien
Director (Corporate Communications)
Ministry of Finance

Priyadharshini Navaratnam
Director (Communications and Engagement)
Department of Statistics