The year 2011 ended with a dramatic breakdown of our MRT system that woke everyone up to the urgent need to improve our public transport. On the last day of 2012, I took the circle line and was delayed for more than half an hour in the morning due to a "track fault". In the afternoon, there was a problem with the EW line when a breakdown occurred at Redhill MRT[Link]. On the same day, there was also a disruption on the NEL - what a way to end the year. I wrote about the problems with our transport system 6 years ago, identifying the privatisation of our public transport and the pressure for profit to please shareholders as factors that will lead to decline in service quality. Unless we can change the model, we will not see the dramatic improvement of service quality needed to lift the quality of life of most Singaporeans - with rising COE and more middleclass Singaporeans forced to take public transport, there will be rising dissatisfaction over unmet expectations The problems with our public transport system is perhaps emblematic of the socio-economic issues faced by Singapore in the recent and coming years. Our old solutions to problems become new problems and we find ourselves unable to solve the new class of problems because we applied old solutions for too long ignoring the deep and far reaching negative consequences.
“The problem with Singapore is that suddenly, we became a one-trick pony......Our one trick was bring in more cheap foreign labour; we will increase GDP every year. And that is true, but it’s not the only trick in the book — (yet) it became so convenient for us that we used it all the time.” - AWARE executive director Corinna Lim.[Link]
This year ended with Singapore nearly entering recession. Our growth has stagnated because of our high dependence on cheap foreign labour for growth . The govt introduced mild curbs to foreign imported labor but our economy needs high level of foreign imported labor to to keep our economy growing because we are "out of new tricks". The busineess community in the form of Singapore International Chamber of Commerce (SICC) and Singapore European Chamber of Commerce (SECC), claimed that Singapore will "lose its competive edge" unless the floodgates are again re-opened. The business lobby wants more of the old solution and to play the same one easy trick. No where else in the developed world do businesses enjoy such a liberal foreign worker policy yet the business lobby demands the floodgates stay open[Link]. The interests of the business lobby are not just narrow, they are short term in nature. In 2012, Singapore's economy was showing signs of overheating with inflation hitting 5.7% in Nov 2012[Link], business rentals, housing prices and COE breaking new records. If the Singapore had done what the business lobby wanted easing the curbs on foreign labor, we would have even higher inflation and the type of GDP growth that brings little benefit, if not negative effects, for ordinary Singaporeans.
In 2010, minimum wage [Link] was proposed as solutions for our income inequality and low wage worker problem. This was quickly rejected by the govt, govt-controlled union and the business lobby. Their claim was such schemes would lead to unemployment and it is undesirable to interfere with the free market. A pro-business govt with controlled unions and a business community just cannot get some of these bold but workable ideas through to solve a problem that will polarize our society and threaten us in the longer term. In 2011, the Hong Kong govt decided to adopt minimum wage legislation - the pro-business lobby there screamed that thousands of businesses would shut down, unemployment would rise, inflation would spin out of control and Hong Kong would become uncompetitive. The Hong Kong govt fortunately had enough resolve to overcome the resistance from the business lobby and boldly implemented the measure. The legislation pushed the wages of lowest paid workers by a whopping 28%. One year after implementation none of the deleterious effects has been seen - unemployment remained the same, inflation rate is lower than Singapore's and the Hong Kong economy kept growing. Economists generally conclude that the implementation is a success[Link]and the Hong Kong govt intends to increase minimum wage by another 7% in May next year[Hong Kong increases min wage] benefiting 320,000 workers.
There has been little progress in tackling the income gap which in now near dangerous levels[Link]. This year our GINI index (after govt transfers) did not improve from 2011 [Link]. Despite all the govt publicity surrounding GST vouchers, Workfare, U-Save etc, these transfers knock off only 0.02 from our GINI index which remains 0.452 after transfers (0.473 before transfers). Some countries reduce their GINI by 0.1 to 0.2 through govt transfers[Link]. Although the income gap did not get worse, maintaining it at these levels has harmful long term effects including increased poverty and allowing the growth of an permanent underclass to take hold. The govt limit what it does today to face the consequences of its inaction further down - the problem will become harder and more expensive to solve.
The issue is not whether we can solve any of these problems quickly - they have become entrenched and difficult - but Singaporeans need to know we can get on the right path. But 2012 is another year the PAP govt demonstrated that it cannot change fast enough to overcome the problems we face. The ideological shackles, the old formulas and the hard truths of one man, keeps the govt on a narrow path afraid to walk an alternate track on which solutions might lie. We are in a system that cause our people to be the unhappiest in the world[Singaporeans the unhappiest people in the world] yet the PAP govt is still trying to make do small tweaks and still constantly preach to us that there is nothing fundamentally wrong with the system they have constructed. ..but the reality is we have the most unhappy people in the world who have been dis-empowered by a ruling elite whose interests over time have diverged from that of the common folks...how can it be that no major change is needed to address this?
The PAP today still uses propaganda, filters information and uses a considerable amount of spin to keep Singaporeans in a bubble of ignorance and acceptance of their system. But with alternate sources of information, more Singaporeans realize the flaws and unsustainability of the current system. 2013 like 2012 will see more Singaporeans turning against the system that is generating negative outcomes in the quality of life for an increasing number of people. Nothing improved in key areas that affected our quality of life in 2012 - housing became less affordable, COE for cars are at record levels, public transport saw no improvement, cost of healthcare kept rising and inflation is in excess of 5%. There is rising indebtedness in our society with consumer loans increasing 34% from $151.5 to $201.4 billion from 2010 to October 2012 since I last wrote about it [Link], and loan sharking has become epidemic in recent years with more than 65,000 cases in the last 4 years. Singaporeans have the highest debt to income ratio in the world[Personal Debt Bomb].
After 2012, it is hard to be optimistic that the PAP govt will eventually be able to acquire a brave vision to lead us out of our problems and improve the quality of life of Singaporeans. The close link between the PAP and the network of businesses that form our GLCs has resulted in interests that diverged from those of ordinary Singaporeans. Policies have been unbalanced for many years will continue to remain unbalanced until Singaporeans acquire real power to effect changes in the system.