As Singapore gets richer, more people left behind
By Kevin Lim
SINGAPORE Mon Dec 23, 2013 12:08am
EST
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Eighty-year-old cleaner Lim Chin Seng takes a break from his job
at a shopping mall in Singapore November 26, 2013. REUTERS/Edgar Su
Eighty-year-old cleaner Lim Chin Seng takes a break from his job
at a shopping mall in Singapore November 26, 2013.
Credit: Reuters/Edgar Su
(Reuters) – Every day, through eyes clouded by glaucoma, Peter
witnesses the spending power generated by Singapore’s economic
success, knowing he can only afford to look.
The 54-year-old shopping mall security guard is part of
Singapore’s hidden problem – a growing number of poor living on the
margins in one of the world’s most expensive cities.
The party that has run the city state since independence in 1965
has always preached the virtues of self-reliance, but for some the
cost of looking after themselves has moved beyond their means.
Peter fears that he cannot afford to treat his glaucoma, a
condition that could threaten his sight, despite being eligible for
subsidized surgery and other state benefits.
He was told treatment would cost over S$4,000 ($3,200), but the
ailment only qualifies him to take up to S$1,700 from his
state-administered healthcare savings.
Peter, who wanted his surname to be withheld as he did not have
his employer’s permission to speak to media, earns around S$1,600
($1,300) a month working in the glitzy Orchard Road area.
Half of his salary goes paying off S$20,000 of debts run up when
his wife broke her ankle two years ago, and they are also still
paying off their small flat in a public housing block.
“We have no savings,” he mumbled, recounting how he had borrowed
from 18 moneylenders after his wife’s accident.
COMPULSORY SAVINGS
Singapore operates a system of compulsory savings, supplemented
by employer contributions, for retirement and healthcare through
its Central Provident Fund (CPF). Private insurance schemes are
also available.
Yet, Mindshare, a global media and marketing services firm,
found in a survey last year that 72 percent of Singaporeans felt
they “cannot afford to get sick due to high medical costs”.
Data for 2002 to 2011 shows the government paid for less than
one third of all healthcare costs, whereas the average for
developed countries in the Organisation of Economic Cooperation and
Development was between 60-70 percent.
Mounting unease over the number of voters who feel excluded from
the comforts of living in Singapore has persuaded the People’s
Action Party (PAP) to re-set its goals.
At a convention this month, the ruling party issued its first
new resolution in 25 years, promising to improve living standards
for all, create quality jobs, and provide affordable
healthcare.
Minister for Social and Family Development Chan Chun Sing said
the government is ready to help citizens struggling to meet medical
costs, but some were unaware of the support available.
“Very often, the people who are most in need may not read the
newspapers, access the Internet or even understand English,” he
told parliament last month. “They need people who can talk to them
in their language, people who will knock on their doors, check on
them to see whether they are okay, and explain some of these
assistance schemes to them.”
MORE MILLIONAIRES, BIGGER GAP
The city-state has seen a huge rise in wealth over the past
decade as it positioned itself as a luxury low-tax base for
ultra-wealthy people from across the world.
Per-capita GDP of S$65,048 exceeds that of
the United States and Germany. And surveys highlight how Singapore,
with a population of 5.4 million people, has more millionaires per
capita than any other country. The Economist Intelligence Unit
ranks it as the world’s sixth most expensive city.
But data published by the CPF shows the
proportion of Singaporeans earning less than half the median income
– an international yardstick for measuring the proportion of poor
people—rose to 26 percent in 2011 from 16 percent in 2002.
“As one of the world’s richest nations, we can afford to do
better,” Caritas Singapore, the Catholic Church’s social outreach
arm, said at the launch of an advertising and social media campaign
to highlight the plight of the poor.
About 12 percent of the 2 million Singaporeans at work earn less
than S$1,000 a month. Whereas, Hui Weng Tat, an associate professor
in economics at the Lee Kuan Yew School of Public Policy, reckons a
typical worker needs a minimum S$1,400-S$1,500 a month to cope with
living costs.
The city-state’s Gini co-efficient, a measure of income
inequality, hit 0.478 in 2012, according to government figures,
higher than every other advanced economy aside from Hong Kong.
Unlike Hong Kong, Singapore has not set an official poverty
line, and the government has rejected calls to introduce a minimum
wage.
What PAP has done is to make it harder for
firms to recruit low-cost foreigners, tighten requirements to boost
wages at the low-end, and amend labor laws to give more job
security.
There are also plans to expand social protection and increase
spending on healthcare. And while Singapore isn’t going to raise
income tax anytime soon, it has raised taxes on bigger cars and
luxury homes.
“There’s more to be done,” Finance Minister Tharman
Shanmugaratnam said during a recent dialogue with diplomats and
university students. “I’m not satisfied with the situation in the
way it is.”
($1 = 1.2587 Singapore dollars)
(Reporting by Kevin Lim; Additional reporting by Laura Philomin;
Editing by Rachel Armstrong and Simon Cameron-Moore)
