By ALEX KENNEDY, Associated Press Alex Kennedy, Associated Press – 40 mins ago
SINGAPORE – Singaporean Ramzi Mohamed is tired of sleeping in
the living room of the two-bedroom apartment he shares with his
mother and older brother.
His problem is that housing prices in the city-state are up
almost 70 percent since 2006 while the 29-year-old gym
administrator's monthly salary of 1,200 Singapore dollars ($938)
hasn't budged in five years.
"When I was 20, I thought I'd have my own place by 30," Ramzi
said. "Now that I'm almost 30, I wonder if that will ever
happen."
Like tens of thousands of others living in the tiny island
nation that boasts one of the world's highest levels of GDP per
person, Ramzi's failure to realize his modest ambitions is no
accident.
A flood of cheap immigrant labor — and stiff competition for
manufacturing jobs from Asian neighbors like China and Vietnam —
has kept wages stagnant for many and widened the gulf between a
very wealthy minority and the island's poorest. Housing prices have
skyrocketed as rapid population growth outstrips supply.
At the same time, ostentatious signs of the wealth enjoyed by
the elite have multiplied. That has put the government under
pressure to loosen its tightfisted stance on welfare in the next
national budget Friday as it tries to defuse criticism its policies
have worsened the plight of ordinary Singaporeans.
The government must also call general elections by February
2012. Analysts expect the ruling People's Action Party, which has
held power since independence in 1965, to maintain its overwhelming
majority in parliament. But if poorer Singaporeans who feel left
out of the country's prosperity bring their discontent to the
polls, the government could find itself with a weaker mandate and
the beginnings of a stronger opposition.
"The lowest income group has struggled to stay afloat," said
Irvin Seah, an analyst at Singapore's biggest bank DBS. "Plainly,
not everyone has benefited equally from the economic growth that
has occurred over the past decade."
Singapore's
economy — which relies on manufacturing,
finance and tourism — grew a record 14.5 percent last year.
Despite rapid economic growth, the U.N says
income
inequality in Singapore has risen steadily
over the last decade and is the second highest behind Hong Kong
among developed nations. From 1998 to 2008, the bottom 20 percent
of households saw their income drop an average of 2.7 percent while
the salaries of the richest 20 percent rose by more than half.
To be sure, the poor in Singapore as a whole are better off than
their counterparts elsewhere in Southeast Asia — homelessness and
hunger are almost nonexistent. The richest 20 percent of
Singaporeans mostly live in private developments, and the rest of
the population lives in housing built by the government, so slum
areas of concentrated poverty don't exist.
The few opposition figures in tightly scripted Singapore are
calling for more housing construction, a minimum wage — and fewer
foreigners.
"We've had over a million new people come to live in Singapore
in the last 10 years with very little increase in the stock of
public housing, so it's inevitable that prices have risen sharply,"
said Kenneth Jeyaretnam, son of Singapore's best known opposition
politician J.B. Jeyaretnam, who died in 2008.
"We need to slow the intake of foreign workers and concentrate
on raising the productivity and incomes of Singaporean workers
instead," he said.
The government in recent years has also courted events such as
Formula 1 — a predominantly European sport with little local
following — and allowed two casino resorts, where citizens must pay
a $78 fee per day to gamble, while foreigners enter for free.
"Some feel that we're creating this place to be a playground for
the rich," said Eugene Tan, assistant professor at Singapore
Management University. "There are people who genuinely feel that
Singaporeans don't come first."
The PAP has long rejected policies such as a minimum wage or
public retirement pensions, arguing welfare state-style policies
would undermine competitiveness, foreign investment and economic
growth. But it increasingly recognizes its hold on power will be
undermined if a large section of society is left behind.
"Economic growth must benefit all members of the community," top
government adviser and former Prime Minister Goh Chok Tong said
last month. "Otherwise, our community may be divided by differences
in income levels within it."
Analysts expect the government — whose coffers are flush with
last year's budget surplus estimated at about 7 percent of GDP — to
announce Friday increased retirement fund contributions, training
for low-income workers, tax cuts, rebates and
cash
handouts.
Part of the reason for the jump in income inequality has been
the success of Singapore's richest — billionaires whose fortunes
largely stem from banking and real estate development. According to
Forbes' list of richest Singaporeans last year, eight of its 11
billionaires made their money in banking or real estate.
The island also has the world's highest percentage of
millionaires — households with at least $1 million in liquid assets
— at 11.4 percent of the country's 5 million population, according
to a survey last year by Boston Consulting Group. Rolls Royce,
whose least expensive model in Singapore costs about $850,000, said
sales in the city-state soared 171 percent in 2010.
"The PAP has made it a central plank that it is a party for
all," said Tan, the assistant professor. "Once enough people feel
that is just rhetoric, then that would really undermine the
government's legitimacy."
