Singapore's future: a miserable and expensive (though global!) city-state?

Singapore’s image has taken a beating in recent times. Not only is it the most expensive city in the world but it has also been labelled a ‘City of Misery.’ A city where everything, perhaps even happiness, must be mandated or authorized by the government!

It’s easy to pick on Singapore? It’s a small city-state whose name is synonymous with efficiency, practicality, authoritarianism and success. At least if success is measured by average per capita income.

The gradual appreciation of the Singapore Dollar is one factor in Singapore's jump in global cost of living indices

As successful people are aware, success come at a price. Envy and jealousy are the most obvious though not the most useful. More important is the analytical discourse surrounding achievements, such as Singapore’s progress from Third World to First World.  

In this vein, Singapore’s newest accolade as the world’s most expensive city is a wake-up call for the city-state.

Like most societies, Singapore’s economic progress is a significant factor in maintaining social cohesion. If Singaporeans’ perceptions about economic progress and social mobility suffer then the impact on the country’s broader social structure may be considerable.

Statements by parliamentarians notwithstanding, during the last few years Singapore has become an expensive city.

Part of the reason is down to conscious policy decisions, e.g. the exorbitant cost of owning a car as a result of the government’s Certificate of Entitlement (COE) system. However, there are factors other than the vehicle COE system affecting Singapore’s cost competitiveness. Certainly, the recent focus on foreigners has added to inflationary pressures. As lower paid foreign workers from nations like China, the Philippines and Myanmar are replaced with better paid Singaporeans, increased wage cost are ultimately borne by consumers. Small and Medium Enterprises (SMEs) are the hardest hit.

Singapore’s foreign exchange rate policy also plays a part. The gradual appreciation of the Singapore Dollar against the US Dollar makes the city seem more expensive to expats, particularly when placed in the regional context. Neighbours like Indonesia and Malaysia sport depreciating currencies.

Singapore may well yet morph into Switzerland or Australia, countries with rigid labor markets and high levels of government provided social welfare. Call a plumber and pay a handsome sum just for the tradesperson to step into your home - and schedule the visit on a future date to suit only his convenience. In such a world, costs are high and efficiency suffers; though society leaves no one behind as a result of an a comprehensive and far reaching social safety.

In Singapore, an all pervasive social safety – coupled with a rigid labour market - net may be ours too ... if we are ready for Goods and Services Tax (GST) rates to gradually move to fifteen percent; and personal income tax rates towards 50 percent!

Is it worth the cost? It’s your choice Singapore.

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Imran is a business and management consultant. Through his work at Deodar Advisors, Imran improves profits of businesses operating in Singapore and the region. He can be reached at imran@deodaradvisors.com. 

Singapore’s Pioneer Generation, work ethics and accountability

How soon will the phrase 'Pioneer Generation' join Singapore's popular lexicon? The answer may reflect upon the values held by Singapore's younger generation. The 'Pioneer Generation' phrase was aptly used by Prime Minister Lee to describe the generation of senior Singaporeans' responsible for propelling Singapore into the developed world's ranks in one generation.

Undoubtedly, Singapore owes a great debt to those who built Singapore into the prosperous city-state of today. The debt becomes greater if one remembers the realities of life during the 1960 – 1980s.

Jobs were not as plentiful – perhaps not plentiful at all; no Medishield program to pay for medical expenses; public transportation was in its infancy: the subway system was inaugurated as recently as 1987. That too with a single train line between Toa Payoh and Yio Chu Kang. Education was about learning survival skills – not a means to actualize creative potential in 'abstract' artistic or creative fields. The transition from kampong attap huts to Housing Development Board (HDB) flats – with all its associated implications for piped water, sanitation, etc. - only began in earnest in the late 1960s.

A glimpse of traditional 'kampong' or village life of yesteryears

Today, in 2013, the quality of public infrastructure is world class. Singaporeans' need not be quite as anxious about basic necessities such as housing, medical care and education. Worries have shifted to questions about quantum of disposable income (how to pay for the next vacation, latest phone, new car, etc.); getting one's child into a secondary school of choice; or the desire to maintain a better work-life balance ... and so on.

I am a newcomer to Singapore. I did not witness the transformation of marshy swamplands into concrete towers leave alone the shift from kampongs to community centers. However, I get the impression the urban landscape is not the only characteristic which has changed in the city-state.

Many Singaporeans' have lost the all-pervasive sense of ownership and accountability held so deeply by the Pioneer Generation. If something needed to happen, the community got together and did it – with the encouragement of local community leaders. The reflex action was not to complain and subsequently expect the government to address the problem by throwing taxpayer money at it.

The changes appear to have permeated the political elite too.

Sure, members of parliament are available to constituents at regular 'meet the people' sessions. However, the 'real' connection between the political elite and the population has weakened. A leadership living in landed properties or condominiums driving expensive cars to work is less able to relate to a population still overwhelmingly living in public housing and using public transport to commute to work. (Something reflected by the SMRT CEO's comments a few years ago about people having a choice to board trains?)

Additionally, many public servants (bureaucrats) seem content to keep their 'iron rice bowl' secure at the expense of delivering quality public services. The incessant 'outsourcing' of tasks to foreign workers, often supervised by more 'skilled' foreign workers, means accountability and quality of work suffers. Perhaps the 'non-Pioneer Generation' is more interested in sitting in an air conditioned office and less inclined to pull up their sleeves and make things happen?

But what do I know? I am not even a 'real' Singaporean ... certainly not a descendant of the Pioneer Generation.

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Imran is a business and management consultant. Through his work at Deodar Advisors and the Deodar Diagnostic, Imran improves profits of businesses operating in Singapore and the region. He can be reached at imran@deodaradvisors.com.