Wednesday, 16 September 2009

Property Prices, New Singaporeans and the PAP’s Social Contract

The Singapore social contract is at work again. The influx of foreigners is being slowed down and measures have been implemented to cool off the exploding property market.
A few days ago some nominal measures to reduce the attractiveness of investing in property were announced. Yesterday, the Prime Minister stated that the influx of foreigners into Singapore will be slowed down.
New condominiums under construction in Singapore's Marina Bay area
Of course, given the depressed economic environment no real policy measures are required (nor were announced) to slow the influx of foreigners. The slowdown is a natural consequence of fewer jobs available these days.
It is not the entire foreign population that Singaporeans are concerned about. They are mainly concerned about the number of newly naturalized citizens and Permanent Residents (PRs) and the allocation of state resources in the form of education and health to the new entrants.
A question that may be partially addressed through greater integration measures.
Despite the headlines, there does not seem to be any modification of the long term policy of attracting 'Foreign Talent' into Singapore. It is highly likely that once the economy improves it will be back to 'business as usual' as far as PRs and citizenship applications are concerned.
However, once jobs are back then the 'true blue' Singaporean has less to grumble about. He will not be so concerned about 'New Singaporeans' in a buoyant environment. He will be more concerned about participating in the new stock and property market bubble!
Until the economy fully revives the government will just bide its time and absorb the displeasure of its citizens.
Singapore's social contract with the ruling People's Action Party (PAP) is predicated upon a continued improvement in the standard and quality of life of average Singaporeans
The Singapore system works pretty well.
Initially, Singaporeans collectively grumble sotto voce (softly). Then a few brave souls start writing about the grievance, both in the official print media and the 'New Media' such as online news sites and blogs.
At some point, the many letters to the editor and the constant grumblings in online forums catches the eye of the official media. (Essentially, the entire Singapore media is connected with the Establishment given that it is managed by the government.)
The Straits Times, Singapore's main English language daily, is no Pravda but neither is it the Washington Post. It is unlikely that any high ranking official will lose his / her job due to a 'revelation' by a locally printed newspaper.
Once popular discontent starts to seep into the official media then it is time for the policy making establishment to pay attention. A breakthrough into the official media via editorial nibbles at the edges of the (unofficially) imposed 'boundary markers' signal that the topic is worthy of a national debate.
The government policy making instruments and the PAP then do their business of running the government. To be sure, any issue that remains bubbling around the surface for a sufficient period of time ultimately begins to seep into official corridors.
This is a key part of the Singapore Social Contract. Arguably, it is a decentralized form of direct 'kampong' governance which can only be practiced in a small city state.
Whether Singaporeans will still be able to maintain a sufficiently responsive system of governance ten years from now is an open question. Perhaps it is time to consider formalizing a Swiss style referendum system for Singapore – with the first issue put to the vote being cycling on footpaths?

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