By CHUANG PECK MING

AMERICAN multinational corporations (MNCs) in Singapore have got a deal that locals would describe as 'cheap and good' - they get more out of their workers here than nearly everywhere else, and at a lower salary.

Estimates from the latest US government figures on American MNCs' operations in 2006 show Singapore workers added an average US$144,250.87 in value to their businesses that year. This is higher than the average of US$104,828.28 for all the nine million-plus workers who worked for US MNCs globally.

Singapore workers - some 114,800 of them - were certainly the most productive among Asian workers on US MNCs' payrolls that included workers from the region's developed economies of Japan and Australia.

Asian workers employed by American MNCs contributed an average US$81,154.10 in value added in 2006. The contributions of Japanese and Australian workers were higher, at US$141,654.68 and US$140,836.94 respectively.

This makes them the second and third biggest contributors to US MNCs' Asian operations in 2006.

The Japanese and Australian workers were also paid more - US$74,043.17 and US$55,912.70 respectively, compared to the average US$29,427.15 for all Asian workers, according to figures released by the US Department of Commerce.

But Singapore workers, the biggest contributors in value added to US MNCs in Asia, cost only about half what the Americans paid Japanese workers.

With an average compensation of US$37,831.01, the Singapore workers on US MNCs' payrolls were in fact cheaper than their counterparts in many parts of the world in 2006, when American MNCs' average compensation cost globally was US$40,477.27.

While their productivity has made a big jump, the compensation of Singapore workers has not made much headway - they rose just 5 per cent from 2005 to 2006.

The value added of Singapore workers hired by US MNCs surged 25 per cent in 2006 to overtake the contributions of the Japanese and Australians.

As a contribution to Singapore's gross domestic product (GDP), US MNCs' operations here produced value added of US$16.56 billion in 2006, up from US$13.39 billion in 2005.

Commenting on the value added of American MNCs in Asia in 2006, the US Commerce Department says in its report: 'The largest increases were in manufacturing, mining, wholesale trade and finance (except banks) and insurance. The increases in manufacturing were largest in Singapore, Australia, Korea and China.'

In Singapore and China, the biggest jumps were in computers and electronic products manufacturing.

According to the report, the share of US MNCs' value added in a country's GDP probably reflects a variety of factors, including the country's business infrastructure, macroeconomic conditions and commercial policies. It is also related to 'linguistic and cultural similarities between the host country and the US'.

'Use of the English language is widespread in all of the host countries that accounted for the five largest (US MNCs') shares in 2006 - Ireland, Singapore, Nigeria, Canada and the United Kingdom,' says the report.

The report also notes that US MNCs' spending on research and development (R&D) has risen more rapidly in 'certain countries' in Asia, 'particularly China and Singapore'. Their R&D expenditures in Singapore swelled from US$576 million in 2005 to US$850 million in 2006 - a 47.6 per cent jump.

For China, the spending increased 20.4 per cent to US$1.74 billion.

This article was first published in The Business Times on January 06, 2009.