Monday, 17 October 2011

Singapore’s first world problems: quality of life and social security

One significant factor in Singapore's economic growth of the last few decades has been quantity: a much larger quantity of people. Singapore's population grew by approximately two million during the last two decades.
Adding two million consumers, or a growth rate of approximately 67 percent over Singapore's 1990 population of three million, is a powerful driver of growth.
Singapore's new residents did all the things that residents do. They paid rent, bought from local shops and used the entire host of goods and services that ordinary people do in an ordinary life. In the process, government coffers filled up with taxes, including through the (regressive) Goods and Services Tax (GST).
Until recently most, if not all, Singaporeans benefitted from the influx.
A few years ago things started to go awry. Some sort of a tipping point was reached. Singapore's normally immaculate infrastructure started to show signs of age.
Perhaps it began with the collapse of Nicholl Highway. However, most observers shrugged off the tunnel collapse as a onetime event. 
Singapore's normally immaculate infrastructure shows signs of age (and complacency?)

Then Orchard Road began flooding ... regularly. And Singapore's public transport system began to creak and groan under the weight of human traffic. Litter, conspicuously absent until this century, started appearing. Bicycles came to dominate footpaths. In some neighborhoods walking became a dangerous pastime. Loan sharking became an epidemic. Murdered dead bodies were not front page news anymore. 
Suddenly, rising property prices were no longer a 'feel good' factor for increasing spending and wealth. Property affordability moved out of reach from the average Singaporean.
FT no longer stood for 'foreign talent' but for 'foreign trash' instead. For most Singaporeans, littering, crime and various other social ills ultimately found their origin with the influx of foreigners.
The ruling People's Action Party (PAP) finally realized that convincing Singaporeans' about the importance of foreign talent was not doing the PAP vote bank any favors. Consequently, popular discontent was reflected not only by netizens but also by voters in Singapore's presidential and general elections.
Slightly late, the PAP decided to change gears on its immigration policy. At the same time, Singapore's double digit economic growth rates vanished due to the global financial crisis which began in 2008.
Undoubtedly, Singapore's traditional social contract 'give me economic growth and I will ask no questions' is in transition. What should come next for this young and successful city-state is debatable.
However, Singapore's historical singular focus on GDP growth rates and other quantitative analytical tools to manage the island must be balanced with a qualitative, judgemental approach. The debate is particularly pressing as Ministry of Manpower recently revealed that pay levels of Singapore's low wage earners stagnated during the last decade.
Singapore's transition to a developed state is virtually complete. Modern Singapore's problems reflect the country's newly found developed status. The challenges now relate to 'quality of life' issues and constructing a sensible social safety net.
Imran is a business and management consultant. Through his work at Deodar Advisors, Imran improves the profitability of small and medium sized businesses. He can be reached at


  1. Singapore always faced the challenge of limited space. Increasing the number of population is a common strategy for sustainable growth. But, population cannot keep growing like this as we face more constraints on resources i.e. food. We need a different kind of economic that can sustain growth without increasing the population drastically.

  2. I could not agree with you more.

    I also wonder whether a long period of economic 'stagnation' is to be feared. Japan's economy has done very little for the last couple of decades and the Japanese people seem to be doing ok. Japanese industry has adjusted and remains globally competitive. It gives pause for thought about the notion of pursuing economic growth as an end in itself.

    Have a great day.

    Best regards,