The Problem with Singapore: Relooking our Governing and Economic Fundamentals

A reader asked me the following question and below is my reply:

“Can you please give me your thoughts on how best to arrest the aged population problem in 2030 with the background now awash by the ill effects of capitalism that have crept insidiously into our life situations? If we make a move, there is strong opposition; but if we stayed put, we will diminish and perish as a nation.

In my opinion, the adverse ground feel against the government took root from the fact that they feel oppressed by the 1% rich and powerful – it is Singapore’s ‘Arab Spring’ or ‘Occupy Wall Street”. If we look around, it is the same everywhere – UK, EU. It is the business owners, the cruel business managers who are the cause of all this suffering. Often, governments are victims themselves – see how the US Congress deals with the Fed?

I cannot imagine Singaporeans oppose to the white paper to deal with the impending aged population, which is a certain problem in a few decades from now, just of their opposition to PAP. The aged problem has to be dealt with now and there is no time for delay. So, what can we do?

Regards,
Jacob”

*****

Please see below my reply:

Singapore’s Problematic Governing and Economic Fundamentals

I think if you look at the foundations of Singapore, they are very strong. We have a strong legal system and framework. And fortunately for now, we continue to have strong international business interests in Singapore and a well-educated group of Singaporeans. If not for these, Singapore would have started falling off the radar 5 years ago. We have to thank our founding leaders for this.

The problem that we have with Singapore now is that we have new leaders who have taken over the system who do not understand the fundamentals behind this system. They continue to promote the ideals that the initial leaders had put down – such as meritocracy – when their planning fundamentals have already shifted. It began in 2001 when this current group of leaders started shifting their goal posts to grow their wealth. They did this by earning not only from businesses, but from the people as well. And that’s why rents increased, CPF withdrawals decreased, real wages fell and so on. Thus they developed new principles of the growth of wealth, yet propagating old principles which no longer represent what they truly believe in, which is why you can see a disjoint when they speak of these olden values and you can see that they no longer understand what the values means.

To be fair, across the world, there was a dynamic shift into focusing on growing world economies through a strong focus on capitalism, profit maximization and consumerism, after the 2001. World economies were shakened by America’s propaganda and governments started becoming strongly capitalistic, and also took on the role of earning from their people. This was what happened in Singapore and what shifted. This also explains the further deepening of the income disparity.

Does PAP care about the people? I believe that there are PAP politicians who do believe and care for the people, but on the overall, the core management of PAP wants to increase Singapore’s wealth, so this compromises on their ability to care for Singaporeans, precisely because even if they want to care for Singaporeans, it is in the very areas that they know they need to care about, that they yet need to take advantage of Singaporeans. Which is why PAP continues to say that it has the backs of Singaporeans or that we are in this together, but yet continue to make money off the people. Our government is operating on contradictions. You see, on one hand, the PAP politicians sincerely believe that they enter politics to help Singaporeans, but on the other, their fundamental ideal to generate wealth prevent them from doing so. They need to overcome this hurdle.

We Need to Reform Singapore’s Political, Economic and Political Systems

But the question is, can this hurdle be overcome? There are two fundamental problems with our current batch of leaders. They are people schooled in the new education of Singapore, where they’ve been trained with a one-route mindset, geared almost exclusively for economic growth. Second, they’ve been severely sheltered from the rest of Singaporeans, having grown up in their protracted environment and education from the rest of Singaporeans. They cannot have a complete grasp of the realities of Singapore and Singaporeans, and their education doesn’t allow them to see expansively and holistically. This is why in the current debate over the population white paper, the current leaders could only focus on the problem at hand – we need more people – instead of realise that they need to look at the evolution of the problem, to understand the state the economy has evolved into, how it interacts with the population and their needs, and how we need to reenvision the problem by going back to the basics. They are unable to do that, precisely because they are a by-product of the Singapore’s education and its singular focus towards producing workers and managers for the economy.

Essentially, the real and much deeper problem is that we need to reform our economy and education system, but more importantly, the inability of our leaders do see this, and yet continue to believe in their decision-making also means that there is an urgent need to reform out political system. But this is something that PAP will not acknowledge, and so Singaporeans need to take the responsibility of reforming our political system, by voting in diverse minds into the government, to overhaul the thinking patterns within governance and political system. This does not suggest PAP isn’t the right government. The government is not about PAP and their power. The government is about putting people in who can represent us and who can think expansively, when needed, to resolve Singapore’s problems, and we owe it to ourselves to do what is right to protect ourselves, our future and our children’s future.

Taking Care of Singapore’s Older People

On how we can resolve our ageing problem, I will suggest this – currently, we look at our elderly as wealth generating nodes. We do not look at them as people. In fact, this is something the government does to everyone in Singapore – everyone is a statistic. When we do that, when the government manages Singapore, instead of thinking about their needs and well-being, the government has a very silo mindset of simply increasing the statistics of who work, and thus any statistic which is capable of becoming labour should work. And that’s how the government looks at Singaporeans. This is especially dire for the elderly, because at their old age, they shouldn’t be having to work day in, day out because in your golden years, you should be allowed to finally rest having been made to pander to the capitalistic tendencies of your country for the past 50 or 60 years of your life. They should finally be some respect accorded to you as a person, and not just as an economic node. But yet, the government continues to work them.

Realistically, for Singapore, the truth is we need more and more workers, but this is if we go down the current path. If indeed we need our older workers to work, the question is how can we ensure that they have a respectable work life? As I’ve discussed in a previous article, more than 90% of the older workers work full time and they work the longest hours of 49 hours. Also, a majority of them work in blue collar occupations. We need to allow them to work respectably. This means that if they have to work, we have to let them work shorter hours and for fewer days. Also, they are currently doing menial jobs. We need to allow them to use technology to make their work easier, or we have to allow them to move into occupations which do not repurpose them into unskilled jobs – because this frame of mind shows precisely that we do not value them, and that’s why we want them to take on the lowest skilled jobs in Singapore.

And most importantly, because they are in the blue-collar occupations, our older workers are paid the lowest wages. It becomes a chronic problem because they do not have enough savings to retire. They do not have enough in their CPF, Medisave and Medishield, and so forth, which means they are trapped in chronic poverty, which our older Singaporeans are stuck in. But did they choose it? The problem is with the system which marginalises them.

How Can We Protect People in the Lower Economic Groups?

And this is turn, a broader issue which involves thinking about our treatment towards supposed low-skilled workers. Do we think that they are so unimportant that we pay them such a low wage? Do we think that they are so unimportant that we import foreigner workers and pay them low wages to do these jobs? So again, the fundamental problem is that this government is capitalistic and our decisions as to how much we should pay low-skilled workers impinges on how little economic value capitalism has accorded their skills, and thus their pay.

We could go into a further elaboration on this. But put simply, we need to pay the supposed low-skilled workers fairer and more equitable pay, which also respects their role as a person, and not just as a worker. Once we are able to do this, we will be able to protect our older workers, because the very problem that has caused them to have to continue to work will be resolved upstream.

Which brings us to another issue – how can we simply increase the wages of the supposed low-skilled workers? We can because if you look at the Nordic countries, and even Australia and Canada, people are paid relatively high wages even if they are in supposed low-skilled jobs. Why? First, as described, it’s because we do not treat these workers as just economic nodes without capitalistic purpose, but we treat them as people who need to be respected and protected.

Why Singapore’s Productivity Continues to Be Low

Second, and this is the inherent problem of Singapore, is that we need to restructure these occupations. Currently, the government talks about raising the productivity of the low-wage earners so that once we do so, we can increase their wages. As I’ve discussed before, this will not happen (not with current mindsets and practices) because our productivity will not improve, as businesses have no impetus to invest in improving productivity, and why – because their profit margin is already so tight, also driven by the high rental that the government has put in place. So again, the government has a role to play in why downstream, productivity won’t improve, and why our low wage earners will continue to earn low wages and why our older workers will continue to work past 65, 67 or 70.

The government cannot peg wage growth to productive growth. The solution, and this applies to the whole of the Singapore economy, is to restructure and reform our economy and labour market. So, if you look at the example above again, instead of ‘increasing productivity’ we need to reform the industry. We need to first, accord proper hours and fair wages across the board to all workers, regardless of their age, gender, national identity etc. Then, we need to introduce new ways of working, such as by using technology.

But it comes to mind – isn’t this what we’ve been talking about? Yes and no. First, the current solutions are framed in terms of increasing productivity. This is not the right framing. It’s the wrong perspective. We need to look at it in terms of restructuring the job and labour market. Then, what this means is that companies need to have the impetus to do so. And this is where from here, the problems are not currently being discussed, and thus not resolved. This means that the government needs to be targeted in their approach, by working with specific industries to brainstorm how they can restructure these economies, and by investing financially to assist them on making the transition. But more so, and this I would argue is the key fundamental problem in this situation – the government needs to lower rental to reduce costs, so that this frees up the company with some spare cash and breathing space, to kick-start innovation and build momentum.

A Fundamental Rethinking In Government and of Governance Is In Order

Which brings me to this final point – will the government reduce rent? Will the government start treating people not just as workers but as people with rights, dignity and who should be respected in all senses, including their wage remuneration? This government will not because their organizing principles are structured along the lines of wealth generation, one which they undertook even more aggressively since 2001, and the limited education that they’ve undergone has prevented them from developing more dynamic solutions to resolve the current deeper impediments that surround our economy. If we want to reform our economy and our labour market, we need to reform the political system in Singapore.

In order to reform the political system in Singapore, the current government needs to have a change in their mindsets. The question on everyone’s mind is – can they? If we do not think they can, then we need to do what’s right by putting ourselves up, and then by voting ourselves in, so that we can reinvigorate our government with new thinking and new solutions. Thereafter, we need to ensure that all the other estates of governance – President, economy, judiciary, military, media – become independent so that they can become a credible check on the government, keep the government on its toes and allow the government to be kept nimble so that the government will be ensured to always think in dynamic ways to resolve issues in our country.

This is what I think and believe in. It would also be good to also understand how you might think about this.

Thanks much!

Roy

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5 comments

  1. Pingback: Daily SG: 21 Feb 2013 | The Singapore Daily
  2. PG

    I agree with one major point That:
    all the other estates of governance – President, economy, judiciary, military, media – become independent so that they can become a credible check on the government, keep the government on its toes and allow the government to be kept nimble so that the government will be ensured to always think in dynamic ways to resolve issues in our country.
    Unless this is done Singapore is going nowhere in the future .

  3. Pingback: [GPGT]Do you agree with this problem flowchart? - www.hardwarezone.com.sg
  4. Hardeep Saini

    I can envision a scenario whereby the current government has been overthrown. As you mentioned, this would invigorate the political scene. The new government will have people who do not have the mindset of the present government.
    We are now in a political territory that is near to ideal.
    We will now have the Police, the Military, The Judicial System, The Media that are independent.
    The widespread grassroots organisations that are affiliated to the PAP would hopefully also be dismantled by now.
    Therein lies the danger.
    The new found freedom afforded Singaporeans WILL be used by the now very unhappy and vindictive PAP to freely cause major disruptions in many ways to create obstacles in the path of the new government to the point that parts of government may, or will not, be able to function properly.
    The PAP will then scream inefficiency, lack of public order and other name calling that they can conjure.
    Imagine what is now happening to the Workers Party held GRC multiplied by 100.
    The greatest enemy of Singapore and Singaporeans today is the PAP government and the greatest threat to Singapore and Singaporeans in the future will be a PAP in opposition.

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