A proper gauge of the extent and depth of poverty in Singapore is urgently overdue
The self-descriptive title of a new book by economist Leo Goodstadt – “Poverty in the Midst of Affluence: How Hong Kong Mismanaged its Prosperity” – might hold a familiar ring for Singaporeans. In Hong Kong, the city with which Singapore has drawn the most comparisons, lower income groups have seen their plight worsen in the last two decades despite the city’s rapid growth, due to a widening wealth gap that Mr Goodstadt blames on the government’s emphasis on growth at the expense of social spending. Incredibly, the first-ever government estimate of the poverty line in September found nearly a fifth of the city’s inhabitants below the line, defined as half the median income.
Publishing such a poverty line was a step in the right direction. To combat inequality and poverty, it helps to have some measure of the problem, and the poverty line is a common metric in many countries. Sadly, the notion of a similar indicator here was summarily rejected by the Singapore government. During a parliamentary debate in October in which the issue came up, the social and family development minister warned about a “cliff effect” – in which those below the threshold benefit from assistance while those above, however deserving, do not – arguing that a poverty line does not “fully reflect the severity and complexity of the issues”.
The minister’s reply was in part a red herring. Few would concede, as he did, that only those below a poverty line would be eligible for benefits: most countries have some sort of sliding scale of benefits to help those left behind by growth. For example, under the new healthcare law in the US, states can expand subsidised insurance coverage using federal funds for people earning up to nearly a third more than the federal poverty level, even as those below the threshold get higher subsidies.
And while it may be true that a poverty line might not be indicative of the severity and complexity of the issues, these are insufficient grounds for utterly rejecting such an indicator. For one, at least having a poverty line would give some idea about the extent of the problem. As a report by SMU’s Lien Center for Social Innovation published on 11th November (and cited by the Wall Street Journal) argued, “Most Singaporeans are not aware of the scale and depth of poverty in Singapore.” Moreover, the Lien Center report put forward the notion of having a poverty line accompanied by a broad range of non-monetary indicators, including living standards, nutrition levels, child mortality, access to education, and social exclusion. That seems largely sensible, and is roughly in line with the metrics such as the Human Development Index used by international bodies when comparing development across countries.
Instead, the government’s stance on the issue of a poverty line suggests a stubborn refusal to acknowledge the problem at all, reminiscent of its steadfast claims in 2001 that “poverty has been eradicated” in Singapore, despite much evidence to the contrary. This obstinacy might itself be rooted in a simplistic view of poverty. Mr Goodstadt, in an interview with the Wall Street Journal, quoted a former Hong Kong chief executive as declaring that “The government must never try to assist the poor using its own resources, for this is doomed to failure, just like pouring sand into the sea to reclaim land.” It would not be surprising if the Singapore government held similar views, even if, as some of its critics have argued, its policies are responsible for the worsening the problem.
Whatever the case, the key issue here is the government’s refusal to countenance a poverty line – or even any sort of statistics or studies on poverty – risk downplaying a problem that might be getting worse. The Lien Center report, in an estimate of relative poverty (as opposed to “absolute poverty”, more commonly used in developing countries), assessed that between 20% to 22% of all households could be considered poor, earning less than S$2,500 or 50% of median monthly income for Singapore resident families, rather astonishing in a city with one of the highest concentrations of millionaires in the world
With income inequality on the rise and the wages of lower income groups essentially stagnant, it is difficult to see the problem of relative poverty easing rather than exacerbating. A proper gauge of the problem is urgently needed so that policies to deal with it can be better formulated and their effectiveness assessed. To this end the Lien Center report has made some sensible suggestions – it is time for the government to reconsider its stance.