Monday, January 22, 2007

Singapore featured in NEWSWEEK!!!

"Due to globalisation, it is no longer enough for govts to tell the people to accept low wages because their lives may improve later as this simply may not happen......"
- Sylvia Lim maiden parliamentary speech.
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The PAP's grand achievements have come to the notice of the people in Newsweek. They have a full feature this week about Singapore's wonderful economy, an economy that has won so many praises on my blog and earned so many comments from blog readers. So many Western countries are now envious of our 7.7% growth, yes the PAP has once again proven itself an effective govt deserving of its million $ minister's pay and the constant cheerleading in our official media.....everything is getting better for you and nobody is fedup with progress.....
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Our MM Lee has just said there will be a minimum 1% cut in corporate tax this translate to a $500-$600M cut, that is about the size of 2% GST hike....somehow it is just coincidence because as I understand it, the GST hike is meant to help the poor.
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Here's the article for your reading pleasure.....
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Singapore Swing
The island's economy is booming. So why are so many citizens worse off than they were 10 years ago?

By Sonia Kolesnikov-Jessop
Newsweek International

Jan. 29, 2007 issue - Tiny Singapore, with its population of 4.3 million, is often lauded for the way it has embraced globalization to maximum advantage. In the last decade, the city-state has opened its doors wide to foreign investment and talent, slashed corporate taxes, offered incentives to nurture strategic industries (such as biotech, pharmaceuticals and financial services) and cut free-trade deals with a host of other countries. The payoff has seemed clear: over the past three years, Singapore's economy has averaged 7.6 percent growth—a staggering pace for an industrialized state—and created new jobs at a rate any European government would envy.
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There's only one problem: average citizens have yet to reap the benefits. New statistics reveal that middle-class households have tasted none of Singapore's spectacular growth, and that the island's poorest 30 percent are worse off than they were five years ago. "Although we have seen very strong growth, we're experiencing this new phenomenon of median real-wage stagnation and low-income decline," says Yeoh Lam Keong, vice president of the Economic Society of Singapore.
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This predicament is hardly unique. Wages and salaries are stagnating across the industrial world. What's surprising is that even a country famous for its smart and transparent leadership has been unable to prevent the gains of globalization from flowing mostly to rich individuals and multinational corporations. In its bid to adapt Singapore's economy to international competition, the government has tried hard to reduce business costs. This has meant slashing labor prices, which has helped push wages down. According to official figures, over the past five years Singapore's wealthiest 10 percent have seen their income rise by 2.3 percent annually (and that doesn't include nonwage earnings such as capital gains or dividends). At the same time, the poorest 10 percent have suffered a staggering 4.3 percent drop in their salaries each year. The government has also allowed employers to cut their contributions to Singapore's Central Provident Fund, which pays for pensions, public housing, medical expenses and education
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There's only one problem: average citizens have yet to reap the benefits. New statistics reveal that middle-class households have tasted none of Singapore's spectacular growth, and that the island's poorest 30 percent are worse off than they were five years ago. "Although we have seen very strong growth, we're experiencing this new phenomenon of median real-wage stagnation and low-income decline," says Yeoh Lam Keong, vice president of the Economic Society of Singapore.
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Together, these factors have led to lower-than-expected private consumption, which has risen by just 3 percent in the past two years. "Private consumer spending has been the weak link in this current expansion," says Chua Hak Bin, an economist at Citigroup Global Markets in Singapore. This has, in turn, stung Singapore's large retail sector. "It is evident that [they] are not the big winners from high growth," says Manu Bhaskaran, a director of the U.S.-based Centennial Group.
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Foreign competition is also hurting. Contractor Tan Boon Soo is one of many Singaporeans feeling the pinch. He installs windows for a living but laments "cutthroat competition" from contract laborers, who have flooded the island from places such as Indonesia and Bangladesh. Unskilled workers like street sweepers and security guards are also finding themselves undercut by immigrants willing to work for less. This is forcing native Singaporeans to change occupations or work harder for less money. "They talk about growth, but I don't see it," says Tan. "Maybe the bankers are doing well, but construction has not been. I'm worse off now than I was in 1997."

All this could spell big trouble. "If these trends continue unchecked," warns Yeoh, "we could begin to get the formation of an underclass [and] the makings of social instability." Such an underclass was never part of Singapore's grand plan. Now its leaders must figure out how to prevent one from emerging without relying on the kind of welfare programs they often deride. Last year the government launched an experimental workfare program that gave low-wage earners bonus pay of up to $780. Now Prime Minister Lee Hsien Loong's government is con- sidering making the program permanent in an effort to thin the ranks of the working poor.
"We will try out different forms, but the principle will be the same—help yourself [and] we will help you," the prime minister told lawmakers last November. "It's essential for us to tilt the balance in favor of lower-income Singaporeans because globalization is going to strain our social compact."

Lee has already announced that he'll make Singapore's rich-poor divide a major focus of his annual budget speech next month.
If knowing is half the battle, it could be an important first step.

7 comments:

Anonymous said...

interesting piece. the article carries similar points as Mr Brown's infamous piece. It being NewsWeek, i'm very keen to see how the govt responds to this piece.

Anonymous said...

Limit its circulation, teach those editors behind their desks a lesson!
Afterall no one is supposed to be engaged in partisan politics here in Singapore other than the legitimate. These foreigners are alwsys trying to increase despondency when things are going so well.

Anonymous said...

Local talent Mr Brown writes the same thing (with humour I might add) but he got whacked.

But it is ok for foreigner to talk like that about Singapore. Anyway, it is not like the Gahmen can whack someone living across the ocean.

Welcome to the Farm: One Country, Infinite Systems.

Anonymous said...

oh...the journalist in question is Singapore-based. she contributes to South China Morning Post from time to time.

Anonymous said...

future watch. what a show. the only person that make sense to the commoners was none other than a grassroot lady. she raised real ground problems but her superior blew hot air over symptomatic issues and even digressed.bah.thumbs down for overpaid professionals with no substance. continue to avoid an ideological problem our problems will mount.
nevertheless, the honest lady is more real than the hotair but then, if she got promoted, would she smoke hotair too?hhmmm

Anonymous said...

damn. what kind of newsweek article is this man. makes me so bloody confuse. this is so different from my daily fav no.1, feel-good straits times. polar opposites. quick MICA, do something to cure my headaches.

Anonymous said...

"What's surprising is that even a country famous for its smart and transparent leadership..."

Umm... I'm confused, is the writer referring to Singapore? Since when has our leadership been transparent??