Over the past few weeks, there has been a lot of discussion among Singaporeans on the issue of xenophobia. Some believe that there is no xenophobic sentiments in Singapore, whereas some think that there are. Some believe that we shouldn’t label what’s going on as “xenophobia”. Yet, the discussion rages on, as different personalities have chimed into the discussion.

There are some key questions that we need to ask.
1) Are Singaporeans indeed xenophobic, or rather, are there some Singaporeans who would discriminate irrationally?
2) What has happened that has led to the current situation?
3) And what do we need to do to move away from the current situation?

Why Are People Xenophobic? Why Do People Discriminate?

The truth is that there are some people in Singapore who would discriminate, and this is not unique to Singapore. Everywhere else in the world, there’s always a group of people who would discriminate. So, in Singapore, before Singaporeans had discriminated against foreigners on this wider scale, there were other populations who were discriminated against, such as against races and other sexual identities, such as gay people. We’ve seen in recent years how the police has arrested people for speaking up on issues pertaining to race.

The question to ask is – why do people discriminate? There are many theories and explanations, some of which are that people discriminate because they fear, and most of the time, they fear because they do not have a good understanding of something, or they might simply be reacting to their own insecurities. So, when there were some people who had spoken up against the wedding practices of another race, it’s because there weren’t familiar with the practice of another race, and when they are in the midst of doing something in their own homes, instead of taking the time to go down to the wedding, and finding out what’s actually happening, and celebrating with the wedding couple, a person might choose to look at things from his or her own perspective, and believe think that the wedding is a disturbance.

But what’s really happening? We simply don’t understand the practices of others well enough and are unwilling to find out more about what the other person is doing, and when we judge them according to our point-of-view, without looking at things from their point-of-view, we will take on a biased perspective. In order for us not to discriminate, we can reach out to learn more and understand more about another so that with that understanding, we won’t be biased in our attitudes.

Resentment Towards Foreigners or Bad Government Policies?

In the current debate about Singaporeans vs foreigners, it’s a similar issue where Singaporeans are reacting to their fears. In the past, the fears arose because our wages were being depressed or not rising as quickly as inflation, prices such as property prices were increasing, places became more crowded and we decided to attribute all these to foreigners. Truth is, it is true that as foreigners were coming in, wages became depressed, property prices increased and places became more crowded. But I would like you to take a step back and reconsider – if the government had enacted adequate policies to prevent businesses from paying low wages, would wages have been depressed? If the government has enacted policies to prevent housing prices from shooting up, would housing prices have shot up? If the government had enacted policies to calibrate the increase of the population in Singapore, would we feel over-crowding?

Let’s not even look at foreigners. How many Singaporeans took advantage of the rising housing prices and invested in homes to earn a quick buck as well? Before we point at foreigners, did we even look at ourselves at pointed at ourselves? Some of us might then argue, but not all Singaporeans had done that. Only the rich did. Well, then perhaps we can go on and on, and keep finding scapegoats for our own displeasure.

First, we need to understand why we discriminate. We discriminate because we fear that we are unable to continue having a balanced livelihood and because we feel that our lives might be threatened. And we’ve learnt to attribute our fear to what seems to be the most obvious cause – people, and more specifically, we’ve learnt to think of these ‘people’ as the foreigners. But as I’ve explained, this isn’t a specific issue about foreigners. It’s a complex issue about wages, prices, over-crowding, and ultimately, where do all these issues point to? Or rather, what’s their common root problem? Bad government policies.

Why Do We Choose to Be Upset with Foreigners Rather Than On Government Policies?

I’ve been trying to reinforce this point several times. However it hasn’t gotten into people. Why? It’s simply easier to direct your anger at a person, rather than a broader idea such as the policies or the government. If you direct your unhappiness at a person, it feels that it’s easier to resolve the ‘problem’. And so, people are asking Li Yeming to de repatriated because they claim that he is inciting xenophobic sentiments in Singapore. It’s very easy to ask someone to leave. Then we can also ask the many Singaporeans who have invested in properties to also leave. And then what? After Li Yeming, who should we turn to? Gilbert Goh (the organizer of the protest against the population white paper)? I read this morning about an article which claims that Gilbert has taken on many ideologies before, some against and some favourable towards foreigners, and had aimed to discredit him. I do not know how much of the information is true.

But do you see what we are doing? We are picking on one person after another. It’s always a person. Why don’t we dare take on the larger challenges? Why is it, when we know it’s governmental policies that are problematic and the government in itself that needs to reform itself politically, do we yet refuse to take on the larger, more pertinent problem? Why do we continue to target individuals, who, let’s be honest, are only pawns on a chessboard game. Do you think Li Yeming had criticized Mr Low Thia Kiang on his own accord? Do you think that he could possibly frame his arguments all by himself? He’s not acting on his own, but like The Straits Times, he has become a mouthpiece, and he is only sprouting what he had been told to, with guidance by the powers may be. And this is a clever strategy, because in the event that whatever he says backfires, as it has now, it only backfires on him. No one else needs to take the flak for it. So Li Yeming has also become the scapegoat.

And we need to be very clear. Why are we wasting our energies on a scapegoat? Why do we not direct it at the perpetrator? Like an American president, Eleanor Roosevelt, had said before, “Great minds discuss ideas; average minds discuss events; small minds discuss people.” Right now, many Singaporeans are discussing the people – Li Yeming and Ong Soh Chin, who wrote an article about the ‘Punk Boy’ who she believes represents a “threatening” presence. But why do we focus ourselves on the people and chastise them? How different are we from them? How different are we from Li Yeming who had accused Mr Low Thia Kiang, or how different are we from Ong Soh Chin, who had labelled a fellow Singaporean as the ‘Punk Boy’? Are we not equally at fault for our own targeted responses at individuals?

Photo credit: Say “No” to an overpopulated Singapore Facebook page

Moving Beyond Discourse Against People to Developing Solutions

Let’s try to discuss ideas. What did Li Yeming say that we had disagreed with? Let’s have a debate with him. And even as we do so, we do not need to drag his character into the fray as well. We do not need to malign him, whilst having a debate. If we do, we are only playing to our own anger and displeasure. We are only holding on to our internal fears, and we are using our fears to respond to him.

Which brings us back to our fears. In order to have a healthy debate with someone else about ideas and not about directing our anger at them, we need to understand our own fears. As I’ve explained, if you understand that you fear because you feel insecure, and if feel so because of lower wages, higher cost of living and over-crowding and if you understand that this is due to government policies, what action can you take? You can do two things. One, you can continue to get angry and fearful and direct your energies at blaming every foreigner that you see. Or two, you can decide to find ways to to resolve the issue, by speaking up against the government policies, by proposing alternative solutions, and by forming ourselves into groups to rally for change. Which is a more effective solution?

The Population White Paper As A Legitimization of Xenophobia

What the population white paper has done was to bring to fore the unhappiness that is already present among Singaporeans, and actually, among foreigners as well. Many foreigners have as well come to Singapore with beliefs of a world-class city, where they can earn a better living from. Don’t we all have the same wants when we move to another country or city? Yet, the foreigners come, feeling entrapped in a place where the promises didn’t seem to live up to their expectations, where they feel the same pressures from over-crowding, and where they have to put up with the verbal tirade that Singaporeans throw at them. They are as well, like us, victims of bad government policies. Of course, you might say that they have a choice to move out, but like all of us do, we need to think about career progression. It’s not as simple as to say, let’s get out.

Or what about the foreign workers who are lowly paid? How do we treat our maids? How do we treat the construction workers? Do we not similarly treat our maids with little respect and little freedoms? Do we not pay them low wages and expect them to do everything that we want from them? And when we are in a bad mood or stressed up at work, do we not also lash out at our maids? Why do we even complain about our government treating us badly when as employers, we don’t even have the basic decency to treat our employees and maids decently anyway?

It’s not about xenophobia, really. It’s about discrimination and its about our inherent attitudes. What has happened is that we have made use of the white paper to bring our discriminatory attitudes to fore. We have used the white paper to legitimize our discrimination towards foreigners. We have used it as an excuse to be able to throw our attacks at foreigners, by framing it as an issue about how the foreigners will cause the population to balloon to 6.9 million. Let’s be honest with ourselves. Let’s look at our own attitudes. Why do we discriminate. And as I’ve described throughout this article, we fear for our security and livelihood and thus we’ve decided to turn our attention onto foreigners. But foreigners aren’t the problem. The government’s bad policies are.

Where Is The PAP Leadership, Or Absence?

In fact, during this episode, where is PAP and where is the government? After the protest, one after the other PAP member had decided to slight the protest and brush off its significance. Nary one PAP member is willing to address the issues brought out in the protest and perhaps, start to take note of the real concerns that a pool of Singaporeans had brought out. Sure, it might be only 5,000 people but aren’t they people living in Singapore as well? What does it say of a government which is willing to slight the viewpoints of 5,000 Singaporeans but would bend their backs backwards to a few business representatives?

The PAP has not spoken out, to calm Singaporeans or to provide counterbalanced viewpoints about how we can understand foreigners in a different perspective, or to apologise for their missteps, and propose bold solutions to tackle the insecurities that Singaporeans have. Where is leadership when we need one? Where are leaders when we need them? Why is the PAP hiding in every hole that they can dig themselves into, rather than standing up and facing up to what they stand for? Why are the PAP members not being the leaders we’ve paid them millions to be?

I’m very displeased because this is the PAP which has used a fear-based ideology to constraint the people’s minds, such that in times like this, people operate on fear and learn to hurl assaults at another, instead of calm down, reflect and think about how to deal with the situation better. This is the PAP which is happy allowing the people to fight among themselves, where they hide in their holes, not wanting to bring balance back into Singapore. As the patron of the Singapore Federation of Chinese Clan Associations, why hasn’t PM Lee Hsien Loong spoken to the association, to educate the members about the importance of achieving social balance in Singapore? And perhaps if he has indeed has, why is it then the tirade continues?

But PAP’s Main Aim Is To Stay In Power. It’s Not On The Side Of The People

We all know the tirade was meant to attack Mr Low Thia Kiang, to dent the credibility of the Worker’s Party. But why does PAP allow party politics to take precedence over the peace of Singapore? Which is more important in Singapore? For you and PAP to stay in power? Or for there to be balance and peace in Singapore?

I’m very disappointed in this PAP-led government because as much as it claims to be on the side of the people, we all know by now that it’s only concerned about maintaining its power, and that it’s willing to go as far as to maintain its silence while the people let out at each other, all because if the people do not realise what the actual problem is, it saves them from the hassle of having to address the inherent problems. If there’s xenophobic attitudes in Singapore, and if there’s discrimination of any form in Singapore, PAP is, if not an instigator, a key player in allowing such discriminatory attitudes to be at play.

We’ve Allowed PAP’s Fear-Based Ideology to Entrap Us

And which is why I urge Singaporeans to understand what the main problems are. Why do we direct our anger at one another, when such anger cannot lead to any resolution? And so what if we ask one, or one thousand, or one million foreigners to go? Who will we turn to next? Singaporeans? Minority Singaporeans? If we let our fears run amok and allow ourselves to be ruled by our fears, we are playing exactly into the hands of PAP who have used their fear-based ideology to manipulate us.

Chris Ho had shared this on his Facebook today: “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum….” — Noam Chomsky, The Common Good (courtesy of Black Orchid Syndicate [Singapore] on my FB wall). A pal, who used to work in the public media, points out that the quote says it all about the strategy used in Singapore. It’s completely accurate, he adds.” If you’ve noticed, this is exactly what PAP has been doing with the recent news. And we’ve played right into their hands.

Singaporeans Need to Focus on Developing Solutions and Taking the Government to Task

Singaporeans, we need to start looking at the issue clearly. We need to realise that we are showing anger and unhappiness at foreigners, and discriminating, because of our own internal fears and insecurities. Now, we need to cast that aside and understand what the real problem is – bad government policies. If this is the case, if we know that being upset with foreigners is only reacting to our own personal insecurities, we need to direct our energies to something more fruitful and effective, and come out with solutions and alternate policies which we will then rally the government to adopt. If there is a next protest, our aim should be to consolidate ourselves and to identify solutions and alternate policies which we will take the government to task on.

We have to be very cognizant of how the government uses the media to sway our thoughts, and to entrench our fears and how they’ve chosen to stay by the side even as they need to take on a leadership role now. Some Singaporeans are starting to discuss about what the ways are that we can vote, to ensure that we vote for the government we want, at the next general election, and how when the next government is formed, that we can play our part by being part of the solution. This is what we need to do. We need to move away discussing our fears and impinging it on people. We need to move beyond, to understand the backdrop as to why things occur, and how we can direct our energies to thinking about ideas, and putting these ideas out as solutions, and finding ways to make our government hear them. This is a more sustainable and effective solution to turning things around for ourselves, and finding the balance that we want for ourselves.

In the Today newspaper today, it was reported that the current way that Singapore computes the Gini coefficient (which is a measure of income inequality) is “based on household income from work per household member, as Singapore, Hong Kong and Japan do.”

According to Today, “some countries compute their Gini coefficients based on … the “square root scale” (used in some OECD reports), which “take into account that households may enjoy economies of scale when sharing resources among household members”.

According to the current way, “Singapore’s Gini coefficient of 0.478 last year, before accounting for Government transfers and taxes, is on a per-household-member basis.” According to the “modified OECD scale” Singapore’s Gini coefficient is “0.435 if the square root scale is used” and would be 0.414 after Government transfers and taxes.

All fine and well, right? If Singapore’s Gini coefficient is adjusted downwards based on a different scale, it looks like Singapore’s income inequality is actually not that high, right?

Singapore Has The Highest Income Inequality Compared to the Economically-Developed OECD Countries

Not really. What the Key Household Income Trends 2012 report doesn’t tell you that even if we use OECD’s scale to compute Singapore’s Gini coefficient, Singapore still has the highest income inequality, as compared to all the other developed economies in the OECD.

I had looked at the OECD Stats Extract and obtained the following statistics (of selected countries), in the chart below.

You can see that, clearly, Singapore’s income inequality is significantly higher than the other economically-developed countries in OCED.

According to the ‘An Overview of Growing Income Inequalities in OECD Countries: Main Findings’ report, “policy choices, regulations, and institutions can have a crucial impact (on income inequality). They can shape how globalisation and technological changes affect the distribution of income. They can also influence income distribution directly, e.g. through deregulation in product markets, changes in social transfers, wage-setting mechanisms, or workers’ bargaining power.”

According to the report, “Public cash transfers, as well as income taxes and social security contributions, played a major role in all OECD countries in reducing market-income inequality. Together, they were estimated to reduce inequality among the working-age population (measured by the Gini coefficient) by an average of about one-quarter across OECD countries. This redistributive effect was larger in the Nordic countries, Belgium and Germany, but well below average in Chile, Iceland, Korea, Switzerland and the United States.”

I had superimposed Singapore’s statistics into the chart below. You can see that even before government transfers and taxes, Singapore’s Gini coefficient is already much higher than most of the economically developed countries. Whereas all the countries in this chart were able to reduce their income inequalities significantly, with the exception of South Korea, Singapore wasn’t able to do so, or rather, the government isn’t willing to. South Korea did not adjust income inequality downwards but its income inequality is comparatively much lower, to begin with.

Credit: An Overview of Growing Income Inequalities in OECD Countries: Main Findings

The often put out argument by the government is that Singapore’s taxes are low, and thus we are not able to afford to provide high social welfare spending. However, is this true?

The report by OECD clearly puts to myth the Singapore government’s argument. It states that, “Redistribution is not only about cash. Governments spend as much – some 13% of GDP – on public social services (education, health, care services, etc.) as they do on all cash benefits taken together. Some countries even spend much more on the provision of such “in-kind” services than on cash benefits: it is the case in the English-speaking and Nordic countries, Korea, and Mexico. While the prime objective of social services is not redistribution, but the provision of a decent education, basic health care, and acceptable living standards for all, they are in fact redistributive. Across OECD countries, they reduced income inequality by one-fifth on average and their share of GDP and redistributive impact remained constant over the 2000s.”

Rising Income Inequality Will Result In Social Unrest

The report also warns that, “Rising income inequality creates economic, social and political challenges. It can stifle upward social mobility, making it harder for talented and hard-working people to get the rewards they deserve. Intergenerational earnings mobility is low in countries with high inequality such as Italy, the United Kingdom, and the United States, and much higher in the Nordic countries, where income is distributed more evenly. The resulting inequality of opportunity will inevitably impact economic performance as a whole, even if the relationship is not straightforward. Inequality also raises political challenges because it breeds social resentment and generates political instability. It can also fuel populist, protectionist, and anti-globalisation sentiments. People will no longer support open trade and free markets if they feel that they are losing out while a small group of winners is getting richer and richer. Reforming tax and benefit policies is the most direct and powerful instrument for increasing redistributive effects… Government transfers – both in cash and in-kind – have an important role to play in guaranteeing that low-income households do not fall further back in the income distribution.”

According to Mr Soon Sze Meng in the Today newspaper, “The Ministry of Finance’s intergenerational income mobility study, which measured 38,500 father-son pairs for sons born between 1968 and 1978, shows evidence of lessening mobility among the poor… (and) social cohesion will wear away when the poor believe they cannot work their way up.” Though the Ministry of Finance would beg to differ, by saying that, “The cohorts studied (those born between 1969 and 1978) in fact experienced relatively high mobility… (even as) there was some evidence of slightly lower mobility for sons of poor fathers.”

The recent protest against the population white paper needs to be understood in this light. Do Singaporeans understand what the long term implications are to sound economic policies for Singapore? I am sure we do, as our parents and grandparents for a large part of the nearly 50 years of Singapore’s modern day history. However, as the report had pointed out, the rising income and social inequality, fuelled as well by a flawed practice of meritocracy which favours the well-heeled over the poor, has resulted in “social resentment”, and gradually, “political instability”, as can be seen. Thus discussion about xenophobia has also arisen out of this context of being “protectionist” – the people are reacting to their inner insecurities about their own future, and unfortunately have misdirected their anger onto foreigners, even as they should direct it to the government and their flawed policies. Because of government policies which have favoured the rich in and who have come to Singapore, “while a small group of winners is getting richer and richer”, this has caused Singaporeans to feel that “they are losing out” and thus they are starting to believe that Singapore can “no longer support open trade and free markets”. And thus Singaporeans are disagreeing with the 6.9 million population projection figure, because of fears of how an open trade and free market economic system will do to their already worsening livelihood.

Protecting Our Poor, Elderly and Women to Reduce Income Inequality

As the report has stated, “A key challenge for policy, therefore, is to facilitate and encourage access to employment for under-represented groups, such as youths, older workers, women and migrants. This requires not only new jobs, but jobs that enable people to avoid and escape poverty. Recent trends towards higher rates of in-work poverty indicate that job quality has become a concern for a growing number of workers. Policy reforms that tackle inequalities in the labour market, such as those between standard and non-standard forms of employment, are needed to reduce income inequality.”

However, in Singapore, instead of enabling our older workers, women and migrants to acquire new jobs that enable them to escape poverty, they are forced to work on low wages. This has the resultant effect of depressing the wages of Singaporeans who work in jobs which pay similarly, and has thus trap a group of Singaporeans in a state of chronic poverty. There are abour 300,000 Singaporeans who earn less than $1,000 a month and about 450,000 who earn less than $1,500. We often hear of age discrimination where elderly workers are not employed when employers find out about their age or where mothers have their employment terminated because of their pregnancies. Employers also pay migrants low wages because migrants have very low bargaining power. Because of the low pay that employers give to them, this results in Singaporeans’ wages being pushed downwards, which means that the pay of the lower income workers are not commensurate to the cost of living in Singapore.

The clear solution is to ensure that Singapore implements a minimum wage law which protects these marginalised groups from earning unequal wages. It also means for the government and businesses to have a fundamental re-understanding of how these supposed ‘low-skilled’ industries can be restructured, so that with technological investment, these occupations can become more ‘high-skilled’ and the workers can earn higher wages. However, the government currently does not believe in investing in these industries and thus this group of people will continue to be disadvantaged by the system and be trapped in chronic poverty.

As can be seen in the chart below, Singapore is the only country among the developed Asian economies which does not have a minimum wage law, to date.

Credit: TimeOut

The Government Needs to Do The Right Thing

In the latest Key Household Income Trends 2012 report, the government decided to use new scales to compute the Gini coefficient, because they want Singaporeans to think that the income inequality in Singapore isn’t as bad as it seems, or even as we feel. The fact is that with the same amount of money, the people feel that they can buy less. They feel squeezed.

Yet, the government had wanted to put out a preposterous news article to try to confuse Singaporeans into thinking that the income and social inequality isn’t as bad as people think. How irresponsible! When you look at the other countries, these countries have much lower income inequalities, even before government taxes and transfers. Not only that, the government steps in further to further reduce the income inequalities significantly in many of these countries. Yet, our government has chosen to take a back seat and keep purporting about how their hands are tied because of the low taxes that the government is collecting.

In 2011, our personal income tax constitute only 13% of the revenue. The government has many other diversified funding sources, also through our CPF monies which they use for investment which accumulates high interests which are not channelled back. The government also earns substantial monies through their investments through Temasek Holdings and GIC. Is there more the government can do, even with their current state of finances, for the people? Certainly.

The question now is, if this government willing?

It is of no use and simply quite ridiculous to change a numerical statistic to try to make believe to people that our income inequality isn’t that bad, by whitewashing what the fact is, obviously. Instead of fudging the statistics, the government should instead start enacting policies, such as a minimum wage law and to channel more funding into our healthcare bills, where the government already forks out the lowest proportionate expenditure, as compared to other economically-developed countries.

This is the very least this government can do, or lose their already very damaging moral integrity, if there is any.

In this article, I will discuss specifically on the impact of the rent-seeking behaviour by the government and how this is the key reason for our low productivity growth. This also explains why the government had to resort to increasing the population instead, because they couldn’t effectively improve productivity, by large part due to their rent-seeking behaviour, which reduces impetus for innovation. I will also the white paper in this context, and the reasons and timing for the release of the white paper.

To put it simply, in terms of the management of the economy, the role of the government should be two-fold:

1) Enact minimal laws and regulations to create an environment for businesses which is conducive for the ease of business exchanges, so that this will attract businesses to Singapore, and to also encourage them to invest and innovate, whilst earning profits.

2) Enact policies to protect the people’s social rights and prevent businesses from unfairly treating them, whilst businesses aim to maximise their profits. So, a government should enact laws such as anti-discrimination laws, for example.

At the same time, the government should regulate as minimally as possible, so that it doesn’t make businesses feel constricted. Otherwise, businesses will not find Singapore an attractive place to invest. Over-regulation might also reduce businesses’ willingness to innovate and develop new ways of working.

The Problem of the Singapore Government’s Business Interests

On the issue of Singapore, why has this become a problem?

1) First, our government is also in the business of profit-making activities. By some estimates, the government owns 60% of the economy. By right, what this means is that the government will do its best not to regulate the economy, so that it doesn’t impede on its own profit-maximisation activities. This is true in that the government is thus interested in keeping corporate tax rates low and is thus resistant to implementing a minimum wage or to increase employer’s CPF contributions back to 20%.

2) Not only that, because of the government’s ownership of the economy and this large ownership, the government, in effect, becomes a monopoly. Thus this reduces incentive for the government-company to innovate and do things differently since even as there is competition, the government controls the competition. Companies who want to invest in Singapore have to abide by the rules set out by the government, which thus means that they are less likely to challenge the government’s control over Singapore companies and will work around these barriers. This might explain why our broadband speeds for example, continue to fall behind other countries in the region, such as South Korea and Hong Kong. Because the telecommunications companies are owned by the government, and because there is a lack of competition, there is no incentive for the government to increase broadband speeds.

3) Most importantly, the government is also in the business of collecting rents from businesses. This, in itself, isn’t a problem because as a responsible government, the government needs to diversify its income sources, and so through taxes, CPF contributions, from housing and COE premiums. And for the businesses, this will be from corporate taxes and rents. We know that for Singaporeans, because of the government’s diversification of income sources, we are paying more to the government from different channels. Not only that, we are paying increasingly more over the past few years, as can be seen from the lower CPF withdrawals, and the much higher housing prices and CPF premiums. But what had not been discussed adequately is the impact of the government’s rent-seeking behaviour on companies.

As mentioned, the government is also in the business of running the business and because it owns a large part of the Singapore economy, it also acts as a monopoly in some sense. Businesses which want to invest in Singapore needs to play by the government’s rules, by virtue of the fact that the government is, well, the government. And thus in the event that rules are not favourable towards businesses, the hands of the businesses are tied.

How Does the Government’s Practices Affect Businesses

Then, the question is, why would businesses then want to invest in Singapore? Fortunately, for now, businesses are still coming in because of a sound legal and regulatory framework, which provides a business environment which is relatively non-corrupt and which protects businesses from unfair practices. The logic is that it should encourage innovation.

Now, where rents become too high for companies, this means that companies would have to close or move out from Singapore. The main businesses which will be affected are the small and medium-sized enterprises (SMEs) because of low cash-flow. However, big businesses are less likely to find high rents a problem because they would have more capital. As a paper by Murphy, Shleifer and Vishny featured on Harvard’s website had said, “public rent-seeking in particular may afflict innovative activity the most and hence sharply reduce the rate of economic growth.” Now, the government obviously knows this and the government knows that at the rate it is marking up its rental, mainly big businesses will be able to sustain themselves in Singapore, and which is why the government’s key focus is on attracting big businesses and multi-national companies (MNCs) to Singapore.

For MNCs, it isn’t a problem for them to want to invest in innovation, because they should have the capital. However, it would be a problem for SMEs, because they don’t. So, for SMEs who continue to want to stay in Singapore, they are unlikely to want or are able to innovate, and thus productivity is unlikely to improve for them. So, herein lies the problem of the rent-seeking behaviour of the government. It prevents SMEs from wanting to innovate, and productivity will stay stagnate, or drop. Not only that, because these businesses feel squeezed by the high rentals, they are unlikely to pay their workers fair wages as they would want to depress their worker’s wages as much as possible, to reap higher profits. At the same time, they would also want to import cheaper labour to do so.

Low Rental Causes Productivity And Wages to Remain Low

So, this explains Singapore’s issue of chronic low and dropping productivity. It also explains Singapore’s chronic problem of low wages. Where does the problem come from? The government’s rent seeking behaviour, that’s where. Does the government knows this? I bet it does. Which then begs the question – why did they want to peg the increase in wages to the increase in productivity when they would know that productivity is unlikely to rise in their planned scenario, and thus wages are unlikely to rise as well. Then, why? Well, the government isn’t interested in reducing rents, because it will eat into their revenue, and thus this proposal of pegging wages to productivity. Then, you might say, maybe the government wants more revenue so that it can spend more on the people. I don’t buy this because first, if so, why would the government do this pegging and causes wages to continue to remain low? Second, if indeed the increased revenue is for the people, where is it? It’s not coming back, and at the same time, people are taking less out of their CPF. So clearly, the government is in this to increase the revenue and profits, but for who?

Bringing In More Workers to Resolve Low Productivity Growth

But back to the problem – and so because the government isn’t able to raise productivity, because of their refusal to reduce rent, the other solution for their equation is thus to increase the number of workers, to increase economic output and grow the economy. And that’s why there’s the Singapore Population White Paper 2013. As said, the whole problem arises because of the government’s rent-seeking behaviour and their underlying profit-making objectives.

Which means by the government’s economic activities, by their size of it and by the way they could monopolise it, it has created competition against the very companies that the government wants to grow and attract into Singapore. Now, this is very dangerous. If the government doesn’t have the interests of the people at heart, they can continue to have a workforce here because it’s not like people are so mobile that they can all decide to leave. But if the government becomes disinterested in taking care of businesses, whilst protecting their own business interests, businesses will feel marginalised and will leave. And it’s easier for businesses to leave, at least for the big ones, because there are many other financial and economic centres in the world.

This is not forgetting the other softer aspects of our society, which also creates impediments for businesses. Right now, it’s really mainly our legal and regulatory framework that’s keeping businesses here. If you look at our workers, at least for the lower paid workers, they feel that they are not paid an adequate renumeration for their job. This reduces their motivation and interest in innovating or in being productive. There is many research to support this. Also, for the middle income earners, they feel that they are also unequally treated because of the high income inequality. This also has adverse effects on their willingness to work productively. I’ve also mentioned because that our workforce aren’t the most innovative because our education system has created a workforce which as many has observed, is good at maintenance work, but not innovation. So you can see, our Singaporean workforce feels highly disempowered and unmotivated. Why then are businesses still willing to come? This is also why the government has such an open door policy towards having foreigners come to Singapore to work.

Increasing the number of foreign workers into Singapore is the government’s solutions to first, increasing our economic growth, and second, to compensate for a workforce which which is unmotivated and less innovative. But as said before, this is a very lazy way to resolve the problem, as as the Worker’s Party had said, a “half-hearted” attempt.

But you need to understand, it’s not because the government is unwilling to take time to seriously resolve the issue. They simply do not want to because this means that they need to reduce rent, and thus essentially means that they will earn less profits.

Positive Effects of Reducing Rental for Businesses

If you ask me, what the government is trying to do is that they are trying to milk rental as long as they can, and in fact, milk their other sources of income (from the people as well) for as long as they can. They want to do this so that they can accumulate as much wealth as they can, before they embark on their next step, which they know would be to have to restructure the economy, and then to to reduce rents. Perhaps the government intends to continue with their current course for another 3 years or maybe 5 or 8, or 20, but it looks like they’ve miscalculated the balance and thus they would need to revisit when they want to transit into the next stage of our economic development now, rather than later.

As explained, once the government reduces rental, this will give businesses some breathing space, which will allow them to decide if they want to invest in technology to enhance productivity. Also, as mentioned at the start of this article, the government should regulate as minimally as possible, so that businesses will not feel stifled by the regulations. So, the problem of low wages can theoretically be resolved without having to implement a minimum wage, if the government reduces rental for businesses. This will then free up some money, which the businesses might then use to increase the wages of workers, so that they will be more motivated to innovate as well, and to increase productivity. So, the effect of reducing rental, as one of the key pillars of restructuring our economy, can have very positive outcomes. It can create a more dynamic economy an workforce and will definitely be more sustainable than simply increasing the number of workers, who will feel stifled and uninspired to work in a crowded and lowly-paid environment.

Like I’ve discussed many times, can this be done? Can the government reduce rental? Can the government restructure the economy? Well, they can. It’s a question of whether they want to, whether their vested interests will allow them to, and whether they will be committed to do so, and not simply pay lip service to it.

Now, with the current decisions that the government is making, it will bring Singapore towards an undesirable direction. Already, companies are feeling the squeeze and the only thing that is really keeping them here is because Singapore is still the 4th largest financial centre in the world, so they can continue to interact with the other major businesses which are here. Also, our sound legal and regulatory environment is also what is keeping them here. Right now, our government is making use of our natural central location and institutionalised systems to keep businesses here. But there’s really nothing else to keep them here, because they can always move to the other top financial centres, say South Korea or the cities of Canada. And if they continue to want to stay in the region, they can also consider moving to Kuala Lumpur, which is moving up as a financial centre quickly.

*****

Back to the White Paper: Why Did the Government Release it?

Which is why it’s very worrying that the government doesn’t want to change its course. Do you know why the government had wanted to release the Population White Paper? They know that businesses are unhappy, and so, if they show businesses that there are plans to increase the number of workers, they can buy more time to continue to charge businesses high rental, for another 10, 20 years. This is why they had released the white paper. The government knows that it can push the endorsement of the paper through easily in parliament, and pacify companies. The government is willing to sacrifice the people, at the expense of companies, so that they can continue to grow their wealth.

What Does the White Paper Have to Do With Aim-AHTC and the By-Election?

What they didn’t count on was the people’s displeasure and uprising. It was a series of poor miscalculations. In early January, the government knew that they had to call for a by-election soon, because they needed to. They had already planned to release the white paper anyway, and then to release Budget 2013 anyway. This means that for the whole of February, they wouldn’t be able to hold a by-election. They most probably have other announcements for March and April, possibly on the Our National Conversation, which they are now conducting. What this means is that they have no other suitable time of holding a by-election, except at end of January.

But the two things that they didn’t count on was first, they called for a by-election right after the Aim-AHTC episode, where the distrust that Singaporeans have towards PAP was going down. Second, they didn’t realise that the anger that Singaporeans have towards their mismanagement of Singapore was so great that it would have such a negative effect on their losing the by-election. And then again, it is very bad timing when they decide to release the white paper, right after the euphoria came with Singaporeans’ vindication at the by-election. Singaporeans got really pissed off that the government had to ruin their celebrations.

And this why PM Lee said on Chinese New Year’s eve that the government will looking into how to manage the announcement of the white paper better in future. They had calculated many things wrongly and they had timed many things wrongly. The problem that has occurred is that the government had made their plans very early on, possibly last year for the announcements of the white paper and budget. As someone had commented, they needed to announce the white paper first, to secure its endorsement, so that they can then proceed with releasing the budget based on the endorsement. But as mentioned above, the Aim-AHTC incident was not part of the plan. Also, they most probably would have wanted to call for the by-election by end-December but the Aim-AHTC incident didn’t allow them to, so they had no choice but to wait it out. Finally, they simply didn’t have a choice by early January as the Aim-AHTC dragged on and because of their refusal to come clean, it looked like there was going to be no end to it, and which is why they had to announce that a review of the town councils would be down, to diffuse the situation, so that they could then immediately call for the by-election. So, it’s really a matter of timing. Their had compressed everything together, because of unexpected circumstances and because they had miscalculated. They simply pushed themselves into a corner and had no choice but to announce the review of the town councils, the by-election and the release of the white paper back-to-back. Most importantly, they had been very rigid. And the reason why they are rigid is because PAP has taken it for granted that they can determine the pace of things, but no longer.

Also, to be clear that even as PM Lee said that they would look into how to manage the announcement better, this isn’t the real problem. If they sincerely believes this is the problem, this shows that they continue to be deluded. The inherent problem is their profit-making fundamentals which has prevented them from finding the real solutions.

The other thing that worked against their favour is this – because they want to control mainstream media so much and because they want to sway public opinion so much, they became the victims of their own perpetration. They were deceived by their own media and the stories that they’ve created of themselves, and they sincerely believed that people weren’t as angry as they actually were, and they sincerely believed that they were going to win the by-election.

So, together with rigid planning, severely bad timing and miscalculations of on-ground sentiments, driven by their control and self-deception of mainstream media, the situation spiralled out of control, and out of their hands, back into the hands of the people. Yay!

What’s the Solution?

Actually, this whole episode which began all the way from late last year shows that PAP needs to open up. They need to, because it’s for their own good as well. As much as they want political survival, the situation that they’ve created is also what has messed up for them. They simply do not know how to handle their control anymore. So, they need to open up so that they can have a more accurate understanding of Singaporeans, and be able to read them properly, and anticipate their reactions better. This will then mean that they would be better able to predict responses to the release of white papers, and also gain more support, if need be.

The current problems are self-inflicted and can be resolved, all if PAP is willing to be truly honest, non-corrupt and open. A quick note that as much as PAP believes that it’s non-corrupt, the very structures that they’ve created and tie themselves to means that they are inadvertently allowing their own people to benefit, and whether this is intended or not, has created unfair practices.

Finally, back to the issue of their rent-seeking behaviour, PAP simply has to reduce their want for wealth generation and to remember the basic principles of governance – to first protect the people and take care of their welfare. Once they remember that, they will know to do the right thing.

But if they don’t, well, there’s the next general election. And we will then do the right thing for them.

Singaporeans, please don’t fall for it.

I have said it again, and I will say it again. This Singaporean vs foreigner sentiment is a gimmick, it’s a ploy.

Please, I don’t know how many times I need to say this, but we need to remember who we are directing our unhappiness to. It is not to the foreigners.

Singaporeans, the reason why there will be too many people on this small island of Singapore is because of a government who has implemented bad policies which have not been properly thought out by them. The reason why this country is too crowded is because this government has made population projections, which they couldn’t adhere to, and where the actual numbers ran out of proportion, and where because they didn’t plan properly, there simply isn’t enough infrastructure and diffusion of spaces to keep up with the speed of population growth. This government has bad planning, bad foresight and bad policies – now, let’s get this right, please.

Who is to blame for the current problem? If there are good policies that are enacted, what do you think will happen to Singapore? We will have a more moderate flow of people coming in and going out of Singapore. The growth of the population will be more balanced and measured. And we will not be in a state of unhappiness. So, what is the problem? The government’s policies of managing the flow is flawed and not thought out carefully.

Now, I speak in thorough disdain and displeasure of this government because:

1. The government’s responsibility is to maintain and upkeep the social fabric of Singapore. As a citizen, it is our right to ask – how dare PAP bring in people without any consideration of the well-being of all the people that will reside on this island? How dare PAP not come out now and firmly put to rest the discussion about Singaporeans vs foreigners, by apologising for their bad policies. PAP needs to amend this policy, and not simply retain the policies and put unnatural curbs on the number of people coming into Singapore, without any other adjustments to business costs or wages. This has thus not only resulted in a twin problem socially, but also among businesses, who are thus stifled.
2. Why are foreigners getting the flak in the discourse of Singaporeans vs foreigners? PAP lured the foreigners to come into Singapore, and then left them in Singapore to fend for the criticisms that they are facing, in large part because PAP could not plan their policies well and resulted in over-crowding. And why are the foreigners left to pick up the pieces while PAP continues to sit on their high horse, planning for more people to come in, which will allow for more foreigners to be verbally abuse, and possibly in other ways? They didn’t ask to be abused. PAP invited them into Singapore, and if you have the cheek to ask them in, then you jolly have some basic decency to take care of them. Otherwise, you manage your flow better.
3. Why does this government allow Singaporeans to lose our moral character because of bad policies that you cannot even plan properly? Now, this government allows the conversations of the people to degenerate into bad mouthing one another, and this government doesn’t even come out and apologise for the bad policies that they had implemented, which has resulted in Singaporeans feeling so stressed that they have allowed themselves to speak badly of another.

Where is the human decency and humanity of this government?

Singaporeans, please, if our government is unable to maintain their respectability and their standards, at least we, as a people, should have a decency to speak up and stand up for what is right. The right thing to do is not to get angry at the foreigners, or to get angry at one another. The right thing to do is to refocus our attention and direct it at the perpetrator – this ineffective government.

Accusation Against Mr Low Thia Kiang on ‘Inciting Xenophobia’

Picture credit: Martyn See’s Facebook

Today, The Straits Times reported on how Mr Li Yeming, vice-chairman of the Singapore Federation of Chinese Clan Associations, had made a charge on Worker’s Party chief Low Thia Khiang that he was “inciting xenophobia”. Li “accused Mr Low and the WP of fanning anti-foreigner and anti-immigrant sentiments during the White Paper debate.”

Now, let me be clear – who was it who started talking about the “Singaporean core”? Who was it who started talking about increasing the population of Singapore to 6.9 million, such that there will be over-crowding in Singapore? Who was it who wanted to grow Singapore at all costs, while pretending to want to keep a “Singaporean core” in 2030, which by 2040, will no longer be the “core”? It was not Mr Low Thia Khiang.

Mr Low Thia Kiang had to speak up in parliament to protect the people on this island from over-crowding. And thus he suggested slowing down the pace of growth in the first decade, and then increasing the pace of growth at a moderate rate in the subsequent decade, when the infrastructure has been increased after the first decade. Mr Low wanted to do what was right to protect Singaporeans, foreigners and anyone who will reside on this island.

Who was it who didn’t bat an eyelid as to how bad the situation might be in Singapore but then, only because of the pressure put on them by Singaporeans, passed a separate motion to ask Singaporeans not to focus on the white paper, and started discussing about how perhaps, we need to look into building up the infrastructure first, before we talk about the population projection?

It is Mr Li Yeming who has gotten his facts terribly wrong. Perhaps Mr Li might not have known better, but why would he? Mr Li is from the Singapore Federation of Chinese Clan Associations. Have you taken a look at their website? On their website, PM Lee Hsien Loong is the patron of the Federation of the 14th session of the Governing Council.

The federation is also very proud to display pictures of our PAP politicians, such as DPM Teo Chee Hean, Vivian Balakrishnan and President Tony Tan.

Now, where is PM Lee, DPM Teo, Mr Balakrishnan and Mr Tan when Mr Li from the Singapore Federation of Chinese Clan Associations had decided to send this letter of accusation to Mr Low Thia Kiang?

As Mr Low had put it, “In the past, those who held different political views from the Government would often be charged for dividing society, inciting the people or different races, or being against national interest.”

Now, I ask of my fellow Singaporeans, who is it who is holding different political views and who is dividing our society now? Who is the one who is inciting the people of different nationalities? Are we Singaporeans protesting against PAP’s population and economic policies because we are “against national interest”? Clearly, PAP is the one who is against national interest by pushing through policies which harm the large proportion of the people living on this island.

As I have said before, this government is not interested in protecting the rights of the people. This government is interested in seeing the people on this island degenerate into bad mouthing and mudslinging. The more you do it, the more it takes the attention away from them. And so, now, Mr Li Yeming from the Singapore Federation of Chinese Clan Associations has also been thrown into the fray to add to the divide and rifts that is already tearing Singapore apart.

May I remind you that for many associations and clans in Singapore, they have ties with this government. May I remind you that The Straits Times is also a mouthpiece of this government, without nary a sense of pride or integrity. And now, we have seen it for ourselves how this clan and this newspaper has sold their morality and soul to the government by reporting on a fellow Singaporean who, they claim, is inciting xenophobia, when Mr Low isn’t even the one to first speak of the “Singaporean core” or the 6.9 million population. Mr Low is not the one inciting xenophobia. Rather, the accuser is.

Right now, Mr Low and the Worker’s Party hold the high moral ground among the people in Singapore. After PAP’s disastrous showing at the Punggol East by-election and their unsuccessful attempt to sway the people to buy into their population white paper, and with the protest against the white paper over the weekend well-attended by a few thousand people in Singapore, PAP is starting to feel anxious and nervous once again. What better way than to find ways to compromise on Mr Low’s integrity?

Singapore for Singaporeans: Xenophobic?

At the protest over the weekend, an individual had held up a signboard with the words, “Singapore for Singaporeans”. There have been many discussions ongoing about how this individual might also be displaying xenophobic sentiments.

Singaporeans, I will be wary to jump into conclusions. You have to understand that at the current state of mind that many people in Singapore are in, there is a careful cautiousness that pervades the people, because of the current sensitivity of how the issue of Singaporeans and non-Singaporeans is being discussed. If this signboard was held even 10 or 15 years ago, would it have thrown up such divisive sentiments?

Now, I have spoken to this individual and I know where he is coming from. I myself have written in one of my articles about how we need to build a Singaporean Singapore. Why do we say that? In light of the current context, many people will be fearful of fanning xenophobic sentiments, and thus the words we use or the things we say can be held accountable to doing that. Rightfully so, this means that we need to be even more cautious in the way we express ourselves. As a responsible and thoughtful society, we should ensure that we respect the rights of others. In this context, the choice of word use to describe a “Singaporean Singapore” might not be the most enlightened.

But, please allow me to explain. I share this individual’s understanding of the matter because when we talk about a “Singaporean Singapore”, this is talked about, in comparison with a “PAP’s Singapore”. I do not want a Singapore where PAP makes all the decisions and where this Singapore is sculpted by the one-side or 80-sided PAP politicians. I want a Singapore where all Singaporeans have a voice in making Singapore the Singapore that we want to live in and where we can call home. When we talk about a Singaporean Singapore, we are talking about all citizens who have a right to vote, who get to have a stake and a say in this country, and who get to make decisions for ourselves, and where we do not want to have our rights taken away by the 80 PAP politicians, who believe that we should be the ones dictating how our lives should be, and by the PAP. This is the context that this is talked about, and as I understand, how the individual feels.

There are many ways to look at a situation, and the words that have been used, “Singaporean Singapore”, are used in the context of our electoral and citizenry rights. Does that mean as a Singaporean who gets to decide the fates and fortunes of our country, that we get to slight others who are thus not Singaporean? If we were to think so, then I would be terribly embarrassed. True, in light of the ongoing discussion, the choice of “Singaporean Singapore” might be poor word choice which I would most likely not use in my subsequent articles, because I do not want what I say to be misconstrued, because of the many interpretations that can occur.

PAP Has Lost Its Moral Authority

But let’s be clear. I think at this point, many of us have an amazing awareness of how we need to be careful in our thoughts and attitudes, as I have, and as this individual in question has as well.

But the positive outcome of this episode is that in this discussion and in a discussion which the protest at Hong Lim Park on Saturday was able to refocus onto, everyone on this island has to be cognizant that we shouldn’t be directing our unhappiness at anyone individual, be it a Singaporean or foreigner, or people of any other identities or characteristics.

It is clear that the current situation that we face in Singapore now is due to bad policies and a government which refuses to apologise for the bad policies and a government which continues to fan nationalistic sentiments and divisions. This government had started the use of the idea of the “Singaporean core”. This government has not stepped out to apologise for the xenophobic sentiments that they have caused by the usage of this terminology. And this government has not stepped out to recognize the upset and divisions that they have caused to a large population of Singaporeans, but continue to slight the people as being significant. This government doesn’t want to take the people seriously, because it continues to think that it knows what right and will continue to play divisive politics where it can. This is a highly irresponsible and reprehensible government which should be ashamed of itself and its own doing, and soon-to-be undoing.

Mr Lee Kuan Yew had said in 2008 that he believed that the optimum size of the population in Singapore should be 5.5 million, so that we can “preserve the open space and have a sense of comfort”. Perhaps our current ministers have so big a salary and a house that their open spaces are so well-preserved in their bungalows that they believe that they have achieved the sense of comfort that they need, that other Singaporeans can be thrown into small living spaces of 60 or 90 square metres, without needing a sense of comfort.

As Mr Low had said, “I hope to see a society where civilized debate can create a consensus and cohesiveness, and a Singapore where people feel a sense of belonging to their nation.” Mr Goh Chok Tong had slighted the speeches by the speakers at the protest as “rhetoric” that this “rhetoric” is “too political, too one-sided, appealing to issues only and not shedding light on important issues.”

I think we can see for ourselves who the leader of this country truly is.

A reader had posted a comment in the Part 1 of this article, sharing that the Singaporeans need to take responsibility for our xenophobic attitudes as well. I agree and I have more to add as well. This was my response to her:

If I may add, as to why Singaporeans do not seem to exhibit accepting attitudes towards others, you are right and this isn’t just reflected in our attitudes towards foreigners, but also on our attitudes to other races and other populations as well.

There are two attributions to this – first – on the people themselves, and this is why the people need to be more aware and need to learn to look within and deeply to reflect on themselves and their own attitudes and second, this can be attributed to the government’s policies.

Why do I say this? The government’s policies of segregating the races, for one, has inevitable created a situation where the different races have as well a less understanding of one another. Whereas in our parent’s and grandparent’s time where they had close kinship with their fellow neighbours of all races, is this as prevalent in Singapore now?

Also, because discourse on racial and cultural issues are strongly frowned upon and the Singaporean society is not encouraged to reflect and think about social issues, because of laws in place which causes people to inhibit social and political thinking, it has bred a people whose ability to think critically and deeply is severely stunted.

So, when people judge another, do they step back and take the time to think about and understand why they judge another, and in doing so, learn not to do so? They don’t. In our culture where we’ve learnt to be look at things on the surface, we’ve inevitably created a people who judge because they think in reactionary ways and do not explore their reactions deeply.

Do I fault them? It has to be an equal share where both the government and the people play a part. But I would attribute more missteps to the government’s policies. You see, I know of some people who are able to learn to be aware, and it requires a mind that is willing to challenge the system and think beyond the system, to be able to then learn to identify with the fellow human person and to learn to understand what another person is going through, so that we can then learn to understand and accept them.

With government policies which causes undue stress among the people, where day in, day out, they have to think about their own survival, people are unlikely to spend time empathising with another. Not only that, nearly 50 years of controlled education and political landscape has created a people who have been severely limited in their minds and imaginations to be able to think otherwise. Yes, we might have a well-educated population, but one which is educated in hard sciences, where our ability to understand the human psyche and society has been severely compromised.

Do I fault the people for not being able to appreciate and accept differences? Yes, because we should try to break out of the mould and learn to think deeply about our own attitudes and learn to show acceptance to others. But, I would place most of the attribution on the government for refusing to overhaul or reform a system which has created people who are unthinking and obedient, and because of this, has created people who have become so sorely self-centred and self-protectionist. This government has to allow for people’s rights and autonomy to be respected if we are to move the Singaporean society into a first world society. We have a first world economy but hardly a first world government or society.

Do I fault our people for behaving like cultured barbarians when their government, which isn’t too far off, has set the tone and standards which they are made to abide by?