A crowd in Singapore (Photo by pzAxe/Shutterstock.com)

Singapore is one of the worst performing countries in the world at tackling inequality, according to a newly released edition of the Commitment to Reducing Inequality Index developed by Oxfam and Development Finance International.

The index, which ranks 157 countries on their policies on social spending, tax, and labor rights is being published ahead of this week’s meeting of finance ministers and other economic leaders at the World Bank and International Monetary Fund Annual Meeting in Bali, Indonesia.

Singapore ranks 149 out of 157 countries despite being one of the world’s wealthiest nations. It is one of only three high-income countries in the bottom 50. The report says that the government’s poor performance across the three indicators considered critical to tackling inequality is fueling inequality in the country.

In terms of tax, the Oxfam reports places Singapore as the world’s worst performing country on tax (157th place).  This is partly because Singapore under taxes wealthy individuals and corporations, says the report.  Singapore’s corporation tax stands at just 17% and the maximum personal income tax rates for high earners are just 22%. Moreover, the report indicated that Singapore also has a number of harmful tax practices that enable corporations to avoid billions of dollars of tax at home and abroad – depriving governments of the funds they need to tackle poverty and inequality.

On the rating of labour rights, Singapore also scored poorly, placing at 71. The report hangs this on the lack of equal pay or non-discrimination laws for women, adding that the laws on both rape and sexual harassment are inadequate. Singapore’s lack of a universal minimum wage also contributes to this low ranking.

Finally, the last indicator of inequality if health. In this, it was reported that Singapore’s spending on health, education and social protection is one of the lowest among the rich countries (91st place). Only 39 percent of the country’s budget goes to education, health and social protection combined – well below countries such as South Korea and Thailand which spent half their budget in these areas.  Singapore also cut spending on education by over 5 percent in 2017/18 which was one of the biggest percentage cuts in education spending in the world during this period.

“Singapore can play a huge role in tackling inequality at home and around the globe. By taking steps to strengthen labour rights, enacting anti-discrimination laws and increasing spending at home, Singapore can bridge the inequality divide,” says Oxfam’s Head of Inequality policy, Max Lawson. He added that Singapore is a position to send a strong message on global inequality by ending harmful tax practices that provide a haven for tax evasion. He said, “As it stands Singapore is part of the problem of burgeoning global inequality, but it can be a part of the solution.“

The index also reveals a clear split between countries such as Singapore, Nigeria and India which are fueling inequality and those such as South Korea and Indonesia that are fighting it. For example, Indonesia (90th place) is taking steps to implement a system of universal health coverage and increased spending on health to support this. It has also increased the minimum wage and improved tax collection.

Across East Asia, Southeast Asia and the Pacific, only Laos PDR (150th place) ranks lower than Singapore on the Index. However, the index also shows that all countries, even those at the top, could be doing much more.

Inequality slows economic growth, undermines the fight against poverty and increases social tensions. The World Bank predicts that unless governments tackle inequality the goal of eradicating extreme poverty by 2030 will not be met and almost half a billion people will still be living in extreme poverty.

Matthew Martin, Development Finance International’s director said, “What’s most striking is how clearly the Index shows us that combatting inequality isn’t about being the wealthiest country or the one of the biggest economy. It’s about having the political will to pass and put into practice the policies that will narrow the gap between the ultra-rich and the poor. This index clearly lets us see who’s doing that and who’s not.”

So then the question for Singapore and its leaders now is this: What can we do to fix this?

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