This article is taken from Asiaweek (For Richer Or Poorer), to allow our readers to revisit the issues of welfare, the aged, foreign workers, and wages in Singapore.
It is quite troubling to note that this article was first published in Nov, 2000. The problems faced by those who are struggling are largely the same today – 6 years on.
The article is by Roger Mitton
Lee Chong Peng is the symbol of Singapore’s broken dream. She lives alone in a one-room flat on about $3 a day. “I watch television and take short walks,” she says. “My legs ache now, so I cannot go so far.” But without fail, every Wednesday afternoon, Lee takes the lift down eight floors to the ground level of her public housing block.
There she joins dozens of other poor folk from her district in Chinatown to sit, waiting, on concrete benches. Lee, 84, chats with friends, while others remain sullen, lacking even the warmth of comradeship. At 5 p.m. they all form into a line and shuffle forward to receive a plastic bag containing six eggs, 1.5 kg of rice, a can of baked beans, a can of sweet corn, one packet of hot chocolate, one packet of coffee, some cereal and a single toilet roll. Without this weekly donation from a charitable group, Lee and her neighbors find it tough to survive.
What happened to Singapore, the land of plenty?
In its rush to forge a manufacturing, then a high-tech economy, the city-state rarely bothered to look back at those who were lagging. Senior Minister Lee Kuan Yew developed a system based on hard work and government support for industry. Singaporeans were expected to earn their rewards. The results were astounding: a middle class emerged to build Asia’s second-richest country.
But with the advent of globalization and an influx of cheap foreign workers, Singapore’s economy is becoming increasingly ruthless. According to its own statistics, the nation’s rich are getting richer and the poor are falling further behind. To most Singaporeans, the mere existence of poor folk in need of care packages comes as a shock. And this realization has prompted an uncharacteristic bout of soul-searching. The rich-poor disparity strikes right at the heart of Singapore’s development model — and challenges the city’s smug self- image. Many younger Singaporeans raised in middle-class comfort are beginning to think that Lee’s ideal is outdated; they argue that the government has a responsibility to care more for the downtrodden.
Lowest 10% of society had an average monthly income of only $75.81
The issue burst into Singapore’s consciousness in May, when the media reported a Department of Statistics disclosure that the lowest 10% of society had an average monthly income of only $75.81. Officials said the figure (which included unemployed and retired people) had been misused to present a distorted view. Trade and Industry Minister George Yeo presented a raft of numbers in parliament to show that Singapore’s poor really were not so poor after all. “The standard of living among the lower income has gone up,” said Yeo. Nearly all had televisions and telephones, on average they had about $11,500 in the state retirement fund (CPF), and all but a quarter lived in 3-room or larger flats. “In other words, many in the bottom 10% have significant wealth in the form of CPF savings and their homes,” added Yeo. “They are not an underclass.”
The hot potato might have cooled there, except that in a classic piece of mistiming the government then announced substantive pay hikes for the civil service. On average, salaries jumped 13%. Prime Minister Goh Chok Tong’s wage soared to a cool $1.1 million — almost $3,000 a day. Goh says the new wage bill will cost each Singaporean about $6 a year — the equivalent of five plates of char kway teow, a popular noodle dish. But opposition legislator Chiam See Tong noted: “I think U.S. President Bill Clinton receives only about S$600,000 [about $343,000] a year. Surely that should also be enough for a minister in Singapore?”
Goh claims qualified Singaporeans are not interested in such a “poor” salary. “Several high-fliers pleaded young family or lack of interest for not coming into politics,” he says. “They never say it is because they can earn more outside, but I can tell clearly that pay is a consideration.” The ill-timed raise further exacerbated the festering subject of income divergence. Admits legislator Charles Chong: “The ratio between the top and bottom has been increasing.”
“They won’t starve or go homeless or be refused medical care”
As a result of prosperity and shifting values, attitudes toward the poor are slowly beginning to change. Singapore already is doing something to reduce the adverse effects of the income gap. For starters, the city’s poor don’t have it too badly. Says Chong, from the ruling People’s Action Party: “We look after our disadvantaged people. They won’t starve or go homeless or be refused medical care.” Adds National University of Singapore academic Mukul Asher: “By spreading the consumption of basic amenities like housing, schooling, healthcare and transport in a more equal way than other societies, the government mitigates some of the effects of large and growing income inequalities.”
But helping the poor directly would go against the grain of the ruling party’s old guard. Notes veteran oppositionist J. B. Jeyaretnam: “It is Lee Kuan Yew’s dogma that nothing is free in this world. There is no free lunch, no handouts, no subsidies.” Jeyaretnam has called on the government to lessen the inequalities by providing free medical treatment, free education and old-age pensions to those in need. Younger members of the ruling party are beginning to realize that poverty is a growing problem — one that the government will have to address to stay in power. “It’s true, there is a kind of paranoia among older leaders about Singapore degenerating into a welfare state,” says legislator Chong. “But nowadays, the younger leaders are saying that if we want to be considered as a humane, civilized society we have to help these poor people more.”
How did Singapore leave its poor behind?
In part, cheap foreign labor shoved unskilled Singaporeans aside. To achieve high growth rates, the government has increasingly allowed larger numbers of foreign workers to make up the labor shortfall caused to some extent by low birthrates. Explains academic Asher: “Singapore does not believe in redistribution of wealth. Instead, it always wants high rates of growth to reduce poverty levels.”
Electrical fitter Bazlur Rahman, a Bangladeshi working in Singapore, puts up with his small salary — something few Singaporeans would be willing to do. He earns $11 a day and saves more than $170 a month, which he sends home. Bazlur lives with 3,200 other foreign workers in a cramped, tight-security compound at Kaki Bukit. Says Asher: “Singapore has been able to use these foreign workers and their low wages and conditions to maintain its competitiveness and high growth rates.”
Reduce wages or be priced out of the market
To compete with Bazlur and thousands like him, Singapore workers must reduce their wage demands or be priced out of the market. Yet to keep top-end managers and professionals at home, the government and its private sector must make matching offers. Says Asher: “All round you have got a larger wage inequality; wealth is more concentrated.”
Admits Prime Minister Goh: “Yes, the income gap in Singapore is widening because of globalization and the knowledge revolution, which have enhanced the value of talent dramatically and pressed down the wages of the unskilled.” Can the government do anything? It has already ruled out the idea of holding down wages at the top or artificially raising wages at the bottom.
It is already running capable retraining programs. Says Goh: “We must not envy those who have made it rich. Rather, we must provide the opportunities for more to be like them. It means operating on the basis of meritocracy — that you can get ahead in life if you work hard, regardless of your background.”
What else can be done? As a result of growing concern about the poor, the government has set up nine community development councils, which are jointly funded and operated by local officials and charities. Community leaders draw up policies and every dollar donated to the councils is matched three-to-one by the government. This initiative has moderated attitudes. “We don’t want the government to take over the voluntary welfare organizations, but we’ll enhance their work,” says Chong. “If in this way we are seen to be helping the less well-off, there will be fewer social problems.”
Money politics
But where there is money, there is politics. Opposition legislators such as Chiam claim that the ruling party uses this aid for political gain — in effect, to buy votes. “The chairman of a community development council will go around like Santa Claus giving money away to the poor and unemployed,” says Chiam. “It’s the politicians who go out to give this money and of course they’ve got to get their votes. That’s the way they dish out welfare: very selectively.” The council chairman in Chiam’s constituency, the ruling party’s Andy Gan, denies that aid is used to garner votes. “Our office is open to all residents and I do not ask for their votes before seeing to their needs,” Gan says.
The circumstances of Teng Ah Mui suggest that this community-based assistance is inadequate anyway. Teng, 54, lives alone and recently began receiving charity food packages each week in order to survive. She has held various unskilled jobs, but since falling and injuring her leg six months ago she now relies on public assistance. After paying her rent and utilities bills, she is left with about $80 a month. “It’s not enough, so I have to depend on food donations and help from friends,” she says. A decade ago, it might have been easier for Teng to rejoin the workforce. These days, there is too much competition for menial work and too few opportunities.
Public assistance of about $115 per month.
The bottom line is that the government’s willingness to help the poor is still minimal. In Singapore, children are required by law to look after their elderly parents. But often they cannot do this, especially if they are low-income, single children. Admits Minister of State without Portfolio Matthias Yao: “Parents know what their children can afford. They don’t bring cases to court when they know that their children are too poor to look after them.” If neither friends nor family can help, and if the person is unable to get work, then — and only then — will the government step in with the barest subsistence-level help. Last year 2,238 people qualified for this public assistance (usually about $115 per month). The number has increased each year for the past three.
So what will happen when the number of aged people quadruples in the next 30 years? They already comprise the largest chunk of Singapore’s new poor (the other major components are retrenched workers, single mothers and the disabled). Even now, rich Singapore cannot look after its older folk without drawing on the services of charity groups. Says Asher bluntly: “The government will need to do more.” If it does not, income disparities could threaten the country’s cherished social harmony. They might even eat into the ruling party’s monolithic hold on power.
The government knows this is a serious matter — perhaps the most serious socio-economic threat Singapore has faced. Despite some bluster about meritocracy, retraining and limits on foreign workers, no one really knows a surefire way to solve the problem. Says Asher: “Policy-makers are still thinking in terms of economic output and growth; while the people are increasingly thinking more and more of their welfare.” But don’t count out the ruling party. It has been skillful at adapting to meet the needs of its citizens. Adds Asher: “One can expect that they will begin to change as this issue becomes more pressing. They will have to in order to maintain their legitimacy and their support.”
Just don’t call it welfare
For now, the subject remains virtually taboo. But soon Singapore will be forced to find a remedy for its new, more disparate, reality. Just don’t call it welfare.
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