Why Singapore’s future in the next ten years is a bleak
one
In a speech made to Tanjong Pagar residents recently,
Singapore’s strongman Lee Kuan Yew said Singapore’s future over the
next five to 10 years is an “optimistic” one.
Lee did not elaborate on the reasons behind him thinking so, but
he appeared to bank his hopes on the tourism industry spear-headed
by the two IRs drawing in the necessary number of visitors to give
Singapore’s domestic economy a boost.
Though the state media has been busy of late trying to generate
positive publicity for the IRs, external observers are not too
optimistic about their success.
An analyst from Citicorp Anil Daswani expressed
doubts about the profitability of Singapore’s two integrated
resorts in September last year.
In a report on the prospects of Las Vegas Sands (LVS), which
owns Marina Bay Sands (MBS) here, Citi said that assuming
MBS contributes 20 per cent of LVS’s total Ebitdar in its first
full year, every eligible Singaporean will have to go to the casino
five times a year and spend more then the average visitor to
Macau.
However, a hefty entry fee of $100 is likely to put off some
Singaporeans. Furthermore, unlike Las Vegas or Melbourne, Singapore
has a small population of only 5 million people.
Ronnie Chan, chairman of Hang Lung Properties Ltd., Hong
Kong’s fifth-biggest developer by market value, said
recently in a Bloomberg Forum in Hong Kong that the two
casino-resorts in Singapore will fail because they won’t be able to
attract high-rollers:
“The big rollers are what make money in casinos, they
will never come to Singapore, it’s a family entertainment”
location. You think big-rollers will go to Singapore where they
have teeth and fangs coming out sideways? There are too many
rules. I was in Sentosa island, I really think that it’s
going to be a flop…..The whole integrated entertainment industry,
I’m worried for them. The good thing about Singapore is that if you
flop, you’re given a second chance,” he said.
Singapore cannot depend on the IRs to spur economic
growth. Neither can attracting MNCs to set up manufacturing plants
in Singapore do so as our workers are becoming more expensive
compared to our neighbors.
The key to a nation’s success lies largely in growing the
personal wealth of the middle class which forms the bulk of the
population and to ensure that the lower income group do not fall
further behind.
The seeds of Singapore’s decline and eventual failure have
already been planted a few years back by the ruling party which is
running fast out of viable ideas to lead Singapore into the next
phase of development.
Singapore’s economic growth in the last few years has
been fueled by the easy availability of cheap foreign workers which
boost GDP figures by keeping labor costs down.
However, Singapore cannot depend on cheap labor forever
to gain an edge over its competitors and we may already have
crossed the limits.
According to a recent Wall Street Journal editorial, the
relentless influx of foreigners has depressed the wages of ordinary
Singaporeans, increased the cost of living, especially that of
public housing, decreased labor productivity and led to an overall
decline in the standards of living.
While the rich has become richer, the middle class and the poor
has become poorer as a result.
The negligible increase in the wages has been offset by
sky-rocketing property prices which plunge Singaporeans into ever
greater debts and wiping off their retirement savings.
The lack of a comprehensive social safety net for the vulnerable
and needy in the community has perpetuated a vicious never-ending
cycle of poverty.
Only the rich elites and foreigners have benefitted from
Singapore’s economic boom, but a nation cannot survive solely on
these small group of people.
The ruling party’s recent U-turn in its economic policies to
place more emphasis on productivity is nothing more than a rehash
of the productivity drive launched in the 1970s and 1980s.
In order to increase the income of the average
Singaporean, we have to start producing high-valued goods which our
competitors like China, Malaysia and Vietnam can’t.
We have to evolve into a knowledge-based economy like
Japan, South Korea, Finland and Sweden instead of relying on
manufacturing, tourism and other industries to continue to thrive
and prosper.
Due to the high cost of living in Singapore, Singaporeans cannot
expect to compete with workers elsewhere in terms of cost.
Stagnant wages and inflation will lead increase the level of
stress and tension thereby contributing indirectly to Singapore’s
low birth rate.
The private sector is the best medium to grow the
economy. Singapore’s domestic economy is currently dominated by
major state-linked companies which stifle both creativity and
competition.
The ruling party has to relinquish control of
Singapore’s economy and return the ownership of the nation to the
people.
Only then can we harness the full potential of every
Singaporean and build a knowledge-based economy to compete with the
rest of the world.
Unless the political economy is liberalized to allow new players
to enter the fray, Singapore will risk becoming an economic
basket-case within a decade with the emergence of China and
India.
The factors critical for Singapore’s success in the last fifty
years have now become its liability.
While complete political control ensures stability and
continuity, it does not foster an active citizenry to partake in
the nation-building process.
A “tops-down” approach serves only the interests of the
ruling elite and not the society as a whole.
We are already witnessing the pitfalls of the present system:
the middle class is falling behind, Singaporeans are getting
increasingly flustered, unhappy and worried about their futures,
birth rates are falling and the sense of pride in Singapore as a
nation is diminishing with each passing day.
If we persist in doing things as they are now, we may end up
becoming a playground only for the rich and powerful, but with no
nation to speak of.
