SINGAPORE - To the world, Singapore is a remarkable success
story: a former fishing port, the city-state in just 40 years has
turned itself into Asia's second-richest country in terms of per
capita income. Yet, underneath there's another reality that speaks
of a widening wealth gap, with most forced to work long hours to
make a living.
"There is a growing gap," said Sinapan Samydoray, chairman of Think
Centre, a Singapore-based organization that deals with social
issues. "The bottom 20% of the population earns less than10 years
ago in real terms. Almost 87% of the people are staying in
government houses. Sixty percent of the people do not pay tax
because they earn too little."
Singapore's social divide increased during the economic crisis that
hit East Asia in 1997. While the average income of Singaporeans
fell by 2.7% in that period, that of the poorest families fell by a
staggering 49%, according to a paper by Professor Mukhopadhaya
Pundarik of Singapore's National University. However, it seems the
problem is inherent in the country's past and present political
economy (the production, distribution and consumption of goods and
services and their management).
Singapore's success story has been mainly based on attracting
foreign investment. To do so, the country offered top-class
infrastructure, a corruption-free environment, tax incentives and -
crucially - low-cost labor. The policy has borne fruit.
Multinationals poured in, and the country's economy ballooned from
S$8.9 billion in 1965 to the current S$180.5 billion (US$109
billion).
In the last few years, competition from countries such as China,
India, Thailand and Malaysia has meant that, to remain competitive,
Singapore's workers have been asked to tighten their belts further.
In addition, the new global climate spurned a soul-searching among
Singapore's political elite, who decided to shift the country's
economy to higher-value added activities.
The tougher competition and the shift in economic policy have not
affected the country's well-educated and the rich. In fact, the
number of millionaires in Singapore is increasing faster than any
other country, according to the Merrill Lynch/Capgemini World
Wealth Report in 2004. Those with assets of more than US$1 million
now number 48,500, an astounding 22.2% more from the previous
year.
At the same time, the bottom 60% of the city-state's 4 million
inhabitants - who are not as well educated or skilled - face an
increased chance of unemployment as well as daily hardship to make
ends meet. Singapore's official unemployment rate stands at 3.3%.
But, according to a recent Ministry of Manpower labor market
report, 66.7% of those still looking for a job six months after
having been laid off are people with no more than a secondary
education. "Those who are 40 to 50 years old are really struggling.
They have no education to handle the new technology," Samydoray
said.
And things do not look too promising. The country's gross domestic
product growth has slumped to about 4% from last year's 8%, and
Prime Minister Lee Hsien Loong is on record as saying that "the
jobless rate may rise to about 5% in the coming years, as Singapore
loses jobs to China and other countries where labor costs are
lower."
To make matters worse, as explained by Samydoray, there is no
minimum wage in Singapore, and the influx of temporary foreign
labor has driven wages down for locals. "Every employee has
[his/her] own contract," he said. "There is no minimum wage and it
all depends on how good you are at bargaining. Migrant workers are
not wrong but they keep labor costs very low and locals are stuck.
Singaporeans are forced to find two jobs just to survive."
However, long working hours are often not enough for low-paid
Singaporeans to earn the S$1,500 a month, deemed the minimum
necessary to get by. For these people, the city's perks are out of
reach. Fil Low, a 20-year-old shop assistant at I Nuovi Cosmetics,
averages two hours overtime a day but still only makes S$ 900 a
month. "We do not really enjoy our life because of our schedule,"
she said. "We can only really go out about two or three times a
month. It is not an enjoyable life. Professionals have a good life.
For us, it is just making a living."
Lion, 52, drives his taxi a minimum of 12 hours a day, seven days a
week. He never goes to a cinema, bar or to see friends. "I am just
too tired and not in the right mood. I work all the time but I
still cannot support my family properly," he said, without
disclosing his monthly earnings.
Razman, 30, works as a security guard at a Carrefour supermarket
during the day and as a personal trainer in a gym three nights a
week. He averages 14 working hours a day, which pocket him about
S$1,400 a month. "I never go out," he said. "I sometimes see my
friends in the evening for a couple of hours when I am not working
at the gym, but no more than that. I am usually tired ... I am used
to this. Maybe it is in my genes; my father also worked very hard.
Whatever other people do in other countries, we have to do twice as
much. It is Singapore's lifestyle."
Fabio Scarpello is an AKI-ADN Kronos International Southeast Asia
correspondent. He can be reached via www.fabioscarpello.com.
