Recently Singapore made the news for money-laundering activities. The real question that underpins this isn’t whether this is moral or not – in capitalistic economies, as the world is largely structured along now, governments pander towards capitalistic overtures of making money, which necessarily means that governments are corrupt. Yet, this shouldn’t just be attributed to capitalism as governance and elites of past had always hoarded wealth to further themselves, whether through ‘clean’ or corrupt ways.
To Accumulate Wealth Or To Slow Down on Growth?
Thus Singapore’s dealings, if indeed true, aren’t surprising. However, the larger issue is this – for a country which does not have natural resources, what can Singapore rely on to accumulate wealth? Indeed, this would be the very first question that our leaders would have asked when Singapore first gained independence in 1965 – how can we survive? You can count how many ways a country can amass wealth in large amounts. If you look at the countries with the highest GDP per capita, they had accumulated wealth through having large reserves of oil, gambling-related activities or to become an offshore bank, which can even be used for purposes of black money laundering. Singapore doesn’t have natural resources or oil, so we have to make use of the other two wealth accumulation sources to great effect. Did we? PM Lee Hsien Loong had recently shared his satisfaction on how the two integrated resorts have brought in wealth for Singapore. Also, Singapore is one of the richest countries in the world, by GDP per capita, so indefinitely, our government’s ability to accumulate wealth is undeniable.
However, the question that has been edging Singapore on for a while now is this – are we willing to have slower economic growth and slower wealth accumulation? If we are to do so, will Singapore be rendered vulnerable, if we do not have enough financial capability to prop us up? This is the question that the government has been asking Singaporeans for the past few months. Singaporeans have said that they are willing yet the government continues to think that it might not be a good idea to slowdown growth. The problem is that for a government not used to explaining its actions to the people, it is faced with a situation where it believes that for Singapore’s standing to be maintained in the world and for Singapore’s continued existence, it is paramount that we continue to hoard on wealth. Yet, how do you explain this to the people, if you are to believe that they might not have the complexity to understand the reasons, as well as that it might reveal the hidden non-transparent modes of wealth accumulation?
However, the essential question isn’t whether Singaporeans should be willing to accept slower growth? This is how the government has framed the question, but this deflects from the real question. Singapore is the fourth largest financial center in the world and we have one of the world’s highest GDP per capita. Singapore’s position as an important node for business will not be undermined so easily, with the amount of business connections in this place. Thus whether or not we want to slow down on growth, this isn’t the question. However, the real question is not for the people but for the government to answer – as one of the richest countries in the world, is the government willing to transfer more social welfare spending onto its people?
The Equation of Trust and Wealth
Norway is also one of the richest countries in the world but do you see the people telling their government that they don’t need that much money? No, but why? The reason is because the people have benefitted from the wealth – Norway has one of the lowest, if not lowest, income inequalities among the economically developed countries. The government is willing to redistribute the wealth it has accumulated, so that the people has a fair share and stake in the government’s goals and in the country. If there’s one reason why there is such strong trust among the people and their government in Norway, it’s because the government shares with the people. Indeed, this is the common trait that ensures that the Nordic governments continue to enjoy such a high amount of trust between the people and the government – the sharing of wealth.
In Singapore, the government continues to ask of the people to trust them. Yet, the erosion of trust couldn’t be more blatant. Singapore held its largest protest gathering since independence against the government’s population white paper this year. In fact, Singaporeans have taken to online mediums to express their disdain and disappointment with the government in even greater numbers over the past past two years. But the erosion of trust didn’t just appear out of nowhere. The erosion of trust was a the byproduct of a government which had veered off course since the early 2000s. From paralleling its growth to the Nordic countries and Switzerland, it paralleled its growth with the United States.
Switching Allegiance to America and China
Why did Singapore send in troops to the wars fought by America? Having a stake in the war also means having a stake economically in those countries that the wars were fought. It’s a strategic move by the government to parallel it’s growth with America – America was strategically outlining its defenses in Iraq and Afghanistan, for stakes in the oil fields in Iraq, as well as to counterbalance the growth of China and Russia through Afghanistan. By aligning itself to America, Singapore can, not only be protected in its defenses by America, but it can also benefit economically from investing first militarily in these countries, and later on, economically. Thus you only have to observe the countries which Singapore sends its military to understand where it believes wealth generation opportunities are abound.
The alignment with America started proving disastrous when it became obvious that America’s then president Bush was mismanaging the economy. As Singapore had paralleled the American economy, we suffered similar consequences, thus our income inequalities rose in the 2000s and when the economic crisis hit in 2008, we were badly hit as well. However, thanks to the strong banking sector that we’ve strengthened from the financial crisis of 1997-98, we managed to thankfully advert a major crisis which continues to plague America today. And thus Singapore started aligning itself more fervently towards China, believing that China’s strong financial standing will be a boon to Singapore. Yet, as much as China has styled itself as a communist which it had actually forsaken and had taken on an aggressive capitalistic stance, it’s situation of high income inequality was something which the Singapore government also shared in the belief was a necessary outcome of economic growth as well.
Being Blinded to Growing Social Problems and Inequalities
Yet Singapore’s situation was vastly different from China. Singapore’s GDP per capita was significantly higher than China and even as we continue to want to accumulate wealth, we are starting from a high base, which means that Singapore is already in a position to not only accumulate wealth at all costs, it was also in a position to share the wealth with its people. And this was where Singapore got it wrong. In paralleling our worldview with America and China, we were led to believe that there shouldn’t be high transfers of social welfare back to the people and that the unhindered growth of high net worth individuals into Singapore would allow Singapore to gain significant wealth within a short period of time. What the Singapore didn’t account for, and indeed for America and China as well, was that because of the sudden and uneven wealth accumulation, social problems also ballooned its way into the society – income inequalities grew to unacceptable levels, and continue unabated, and the people could no longer dismiss or contain their anger with the unequal treatment that they suffer under their government.
Did the government miscalculate? The problem isn’t with miscalculation. The problem is with greed. Like the bankers which collapsed America’s economy, the Singapore government wanted to accumulate wealth at the expense of the people. But the government isn’t a corporate bank, or at least it shouldn’t be. A government’s role should first and foremost be to protect the rights and security of the people. But this was something that the government had waylaid as they followed America and China. And thus it is by no accident that the social movements that now pervades Singapore is similar to that that has transpired in America, where people are starting to question the morality of capitalism and are demanding for equality from their government.
Going Back to Basics – Redistributing Wealth for Equality
But as I’ve mentioned at the start of this article – the root problem isn’t with whether Singapore is too rich or whether growth should slow down. As long as Singapore is mired within the capitalistic system, it is in our interest to continue to accumulate wealth, to protect our standing and sovereignty. However, if the people do not share in the wealth accumulation, they do not see the need in them increasing their production for a wealth which they do not see and thus do not believe needs to be created. And when a government continues to push the people to produce for outputs which they perceive as uncompensated, they would be unwilling to join in the production and would be unwilling believe in the government’s push – thus the lack of trust between the people and the government in Singapore.
This has thus led the government to ask the people – should we slow down growth to have a better pace of life? But the joke is on the government, because the question should be – should the government transfer more social welfare to the people for them to share in the wealth? And the answer is, yes. If the government doesn’t transfer more social welfare to the people, the people will continue not to see the wealth that they are helping the government accumulate and if they don’t, they would rather slow down. So, the root problem of it all is a government which continues to believe in entrapping the wealth from the people, not a people which no longer cares about their country. The people will care as long as their stake in the country is respected, observed and cherished. When it’s not, they become uncertain participants – they become destabilised when they do not know how they are actually contributing to the country, and eventually, for themselves.
The solution to Singapore at this point is very obvious – a return to the basics of governance, where the country provides for the people and observes their rights. Once that is achieved, the people will work with the government to propel Singapore forward. The ball now lies in the government’s court, and if they do not do what they need to, the natural order of social and political evolution will simply render PAP a foregone conclusion at the next general election.