Poverty
looms in Isle of Riches
Star, Malaysia
July 5, 2008
INSIGHT: BY SEAH CHIANG NEE
WHEN the republic
celebrates its national day next month with its traditional
stirring parade and patriotic songs, the mood of many of its
citizens will be less than joyful.
On Aug 9 they will try to put aside an unusual combination of
bad news – including crushing inflation and threat of a global
recession – to wave flags and watch the fireworks.
But it will be with a heavy heart. To put it simply, Singapore’s
43rd birthday is coming at a bad time, possibly one of the worst in
decades.
Ironically, the economy of the richest nation in South-East Asia
had been firing on all cylinders in recent years.
A booming construction sector, record tourist arrivals and a
fast-growing financial sector have contributed to a gross domestic
product growth of nearly 8% last year.
The number of millionaires (in US dollar terms) increased to
77,000, making Singapore the seventh in the world in growth of
people with high net worth.
That was the recent past. The present is less cheery. A
Newsweek correspondent who visited here in 2007 asked:
“If the island’s economy is booming, why are so many
citizens worse off than they were 10
years ago?”
Even as the country prospered, the lives of lower middle class
and the poor have become tougher over the past decade. It has in
fact become bleak for the elderly and unskilled, who work as
cleaners and labourers, admits the Ministry of
Manpower.
Their wages have remained
stagnant for 10 years, unlike other groups such as
managers, professionals, sales and service workers, as well as
plant and machine operators.
Last year, managers – the best-paid group – earned 4.86 times
more than cleaners and labourers. The gap has widened in 10 years.
It was 4.13 times in 1997.
A government committee on low-income earners says
300,000 workers, or 20% of the population earn
S$1200 (RM2760) or less a month – half of them S$900 or
less.
“Income gaps are widening,” said Finance Minister Tharman
Shanmugaratnam, while Minister Mentor Lee Kuan Yew admitted that a
narrowing was not likely any time soon because of cheap labour from
China and India.
Inflation, the worst in 26
years, has further aggravated the problem since it is
affecting the poorer class more than others.
The wage gap has become a particularly acute problem among older
and lower-skilled workers, who are among the most disenchanted
population in Singapore.
Commentators believe that the political fortunes of the ruling
People’s Action Party (PAP) are tied to its ability to tackle this
dilemma at a time when Lee's influential presence enters its sunset
years.
If inflation worsens further or if the PAP cannot improve the
lives of the middle class and the poor, it could face a
crisis in the 2011
election.
An unusually frank write-up in the government-controlled
Channel News Asia
last year said that middle class stagnation could lead to social
instability.
“Anecdotally, it seems to me that our society is already
beginning to fray at the edges. There is an increasing coarseness
to life,” the writer said.
“People have no more time to be considerate to others; even
scavengers have to become pushy for fear of losing out to
competitors.”
On a possible scenario if poverty spreads, he sounded a warning
to the contended rich: “Even if you close your eyes to vagrants
around us, you can’t avoid breathing the air that you share with
them.
“Even if you drive around in a sealed BMW or Lexus, one day,
homeless kids will catch up with you at traffic junctions offering
to clean your windshield.
“Or you find yourself taking the long walk to your parked car,
because the shorter route takes you past suspicious-looking men who
might be desperate enough to snatch your bag.
“I wonder if the decay has begun to set in, even as we continue
to boast of high GDP growth rates.”
The island state has become a rich oasis with pockets of rising
poverty, where the homeless sleep at void decks or beaches.
Workers in their 60s or 70s clean toilets and sweep floors,
instead of enjoying their retirement with grandchildren as is
befitting the world’s seventh richest nation (in per capita
GDP).
To say the government is not worried is understating the fact.
It has set up a special body to study measures to improve the
earnings of these 300,000 people.
Ideologically, Lee has always
rejected subsidies or welfare schemes for the needy. The younger
ministers, led by his son Prime Minister Lee Hsien Loong,
have, however, been tweaking the no-welfare system by dishing out
more cash and topping up savings of the
lower-income workers.
Called Workfare, it
provides hundreds
to thousands of dollars to poorer families. Much of
it has, however, been eaten up by the higher cost of
living.
Some economists have called for a new social safety net to meet
Singapore’s modern needs. Yeoh Lam Keong suggests identifying a
basket of goods and services that is necessary for individuals and
families to enjoy a minimum standard of living.
Based on this index, the government should formulate new
policies to help low-income earners counter the effects of
globalisation.
“We are in a strong fiscal position and if any country in the
world can afford to find a better solution to deal with this
growing income divide, it is Singapore,” Yeoh said.
o Seah Chiang Nee is a veteran journalist and editor
of the information website littlespeck.com
