Liyana Dhamirah, 24, says she and her husband Fazli bin Mohd
Jailani, 31, and their three young children lived in a tent on the
beach in Singapore for four months in 2009 when their Housing
Development Board flat was repossessed as they were unable to
service their mortgage loan.
The Singapore government provides subsidized housing via the
Board to its citizens. Liyana and Fazli now share a rented flat
with another family.
"It's unfair. I'm a Singaporean, yet I'm not benefiting at all
from how rich Singapore has become."
Liyana and Fazli say they earn a combined S$800 ($652) a month
but have been unable to make ends meet. "Sometimes I can't even
afford a S$1 ($0.80) ice cream cone for my kids," says Fazli, a
former mechanic apprentice, who is now unemployed and depends on
the income from his wife's online handmade trinkets business.
Singapore goes to the polls on Saturday and income inequalities
have become a major political issue,with the opposition
highlighting the rising cost of living and the increase in foreign
workers.
Those rising costs have come during an economic boom, with the
country reporting a 23.5 percent increase in gross domestic product
(GDP) quarter on quarter and 8.5 percent over the previous year.
This was on the back of GDP growth of 15 percent in 2010.
But not everyone in this island nation of 5 million people is
celebrating. Irvin Seah, an economist at Singapore bank DBS says,
"Plainly, not everyone has benefited equally from the economic
growth that has occurred over the past decade."
Median household incomes have grown only 21 percent in the past
decade, compared to real GDP growth of 72 percent in the same
period, according to government statistics.
In 2010 when GDP expanded by 14.5 percent, household incomes
rose on average just 0.3 percent after adjusting for inflation.
Take the case of Rokiah Ahmad, 46, a librarian at the Singapore
Department of Statistics. She says her salary was S$1,500 ($1,222)
per month 10 years ago, and after a decade of small increments,
it's now S$1,700 ($1,385) a month.
"It's not enough to raise three daughters and one son. We have
financial difficulties."
Chow Penn Nee, an economist at United Overseas Bank says, "Wage
growth is clearly not keeping up with GDP growth and the divide
between the rich and the poor is getting bigger."
Asked for the government's response, Singapore's Minister for
Manpower, Gan Kim Yong said income growth cannot be equated with
GDP growth, "as the former is also influenced by other demand and
supply factors."
The opposition Workers' Party candidate, Chen Show Mao, who was
a corporate lawyer before he joined the largest opposition party in
Singapore, said during the party's election rally that the benefit
of Singapore's economic growth "went to corporate profits and the
wages of top earners".
Government data showed that last year the bottom 10 percent of
the population had a household monthly income of S$1,400 ($1,141)
compared with S$23,684 ($19,308) for households in the top 10
percent.
Singapore has the highest concentration of millionaires in the
world. According to the Boston Consulting Group's Global Wealth
2010 Report, 11.4 percent of Singapore's population is
millionaires.
And it has the second highest income gap among 42 nations "with
very high human development," according to the United Nations.
Singapore's Gini coefficient, a measure of income inequality where
zero is complete equality and one maximum inequality, was 0.472 in
2010.
CIMB-GK Research economist Song Seng Wun believes that growth
itself partly explains the widening income gap. "In any capitalist
society where profit maximization is key, this gap will widen
unless we get heavy government intervention."
According to Leif Eskesen, HSBC's chief economist for India
& ASEAN, some inequality is integral to the effective
functioning of a market economy, "but too much inequality could
also hurt growth."
When contacted by CNBC, Singapore's Ministry of Finance cited
the recent budget in which the government promised to raise the
productivity of Singaporeans via training and other benefits.
In its budget in
February, the government handed out one-time
benefits valued at S$3.2 billion ($2.6 billion) targeting
lower-income citizens. The ruling People's Action Party has also
promised larger bursaries and grants in its manifesto.
OSK-DMG economist Enrico Tanuwidjaja says these handouts can
only cushion the impact of inflation temporarily since they are
one-offs. "Purchasing power actually stays the same."
Liyana and Fazli say since 90 percent of their wages are used to
pay bills, the extra money
Singapore's Ministry of Manpower says the government aims to
raise incomes by 30 percent in the next 10 years by improving
productivity. The ministry also says it has committed S$5.5 billion
($4.47 billion) for this purpose over the next five years.
Prime Minister Lee Hsien Loong has promised in his party's
political broadcasts that the PAP, which is widely expected to win
the elections, will ensure that low-wage workers are not left
behind. On Tuesday, the Straits Times reported the Prime Minister
apologized for not moving fast enough to address some of the
shortfalls in housing and transport. "We're trying our best on your
behalf. And if we didn't quite get it right, I'm sorry but we will
try and do better the next time," the newspaper quoted him as
saying.
71-year-old cleaner Mr Tan, who only wanted to be identified by
his last name, has been earning just S$4.00 ($3.20) an hour for the
past 5 years. He says he's not convinced.
"They don't care about us. The profits all go to the bosses and
government ministers. And when we speak up, we're considered as
complaining."
-- Yahoo!
