Singapore General Elections 2015: ten key takeaways

With the 2015 General Election results now confirmed, here are ten 'quick and dirty' takeaways.

Pros:

1.   GE 2015 was a genuine general election. Every constituency was contested and every Singaporean cast a ballot. There were no walkovers.

2.   Singaporeans made politicians work hard to earn their votes. No vote was taken for granted. Even the ruling People's Action Party (PAP) made an effort.

3.   The Workers Party (WP) consolidated its role as the only credible opposition party in Singapore. The new talent brought in by the WP is ostensibly of well qualified and of high quality.

4.   A natural narrowing of the political arena is occurring with other opposition parties beginning to fade away thus, ultimately, leaving the field clear for the possible evolution of two party system.

5.   Singaporeans are developing a taste for accountability from its leaders. This may translate into unpredictability of voting patterns, something that should keep the PAP leadership on constant alert and sensitive to voter concerns.

Cons:

1.   The PAP's margin of victory may influence its leadership to revert to the party's past leadership style, often perceived as arrogant and condescending.

2.   Singapore has no worthwhile opposition to speak of, at least not presently. If the WP can survive and 'professionalize and corporatize' itself over the next few general elections then it has a chance.

3.   All the other (not WP) opposition parties are perceived by the electorate as amateurish with no genuine leadership capability or platform. None was able to make a significant mark among voters in any constituency.

4.   Given the strength of the PAP's mandate, it may now attempt to 'strangle' and discredit other political parties through 'political-administrative' measures to 'cleanse' the political arena.

5.   Singaporeans must wait five more years if they want to make a change!

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. 

Singapore’s strategic challenge: SG50 to SG100

SG50 celebrations are quickly fading from Singapore's collective memory. The mutual self-congratulations and laudatory speeches are a thing of the past. Indeed, the political focus has shifted decisively towards the future with the official announcement of general elections expected imminently.

While Singapore's 'usual suspects' (e.g. immigration, public transport, cost of living, etc.) will command most attention during the forthcoming election campaign, it is Singapore's welfare over the next 50 years which demand more focus.

Arguably, the 50 years nation building period since 1965 may prove easier to navigate than the coming 50 years. Why? Several reasons come to mind.

Lee Kuan Yew (LKY) is the most obvious answer.

Singapore was fortunate to have firm, visionary leadership for several post-independence decades – a luxury denied most newly decolonized nations. Leadership best symbolized by LKY, but also includes other cabinet members (e.g. Goh Keng Swee, Rajaretnam et. al.) influential in their own right in shaping critical national policy frameworks.

Singapore circa 1965 was a typical third world city: undeveloped, unclean and riddled with crime. Arguably, things could not get much worse – only better. Certainly, development is easier when started from a low base - improvements are more visible and impactful.

Singapore took a free market, export led approach to generating economic growth in an era when many decolonized countries practiced and preached economic self-reliance. China was well and truly a People's Republic. Deng Xiao Ping had not yet worked his magic. India was a socialist country firmly implanted on the Soviet Union's side during the Cold War. Both China and India were off limits to international investors.

For ASEAN's Asian Tigers it was a sunny period as they received large doses of direct foreign investment from wealthy industrialized nations. There was far less competition for the international investment dollar. Fast forward to 2015 and things are different.

Singapore no longer starts from a low economic base.

On the contrary, Singapore is now one of the wealthiest nations in the world. It is hard, if not impossible, to generate and sustain (say) seven percent annual GDP growth with GDP per capita at USD 56,000 versus the 1965 per capita income of USD 516. Put simply, seven percent growth equals an annual increment of USD 36 in 1965 versus a yearly increase in income of almost USD 4,000 today (a monthly wage increase of approximately SGD 450).

Suddenly one pillar of Singapore's historical social contract looks a bit wobbly?

Like other Asian Tiger economies, a key factor in Singapore's early economic success was its low cost structure. Contemporary Singapore is no longer cost competitive for traditional businesses. Quite the reverse, recent surveys suggest Singapore is now a frightfully expensive place for international companies.

That's not all. Singapore's economic success brings with it other concerns.

A wealthy, literate population has different expectations from the country's political leadership.

Having achieved success, some Singaporeans believe they are entitled to a 'cradle to the grave' social welfare structure, often citing various European countries as appropriate models. The increased demands by citizens coupled with the power of the social media – think Arab Spring – has on occasion forced the government's hand towards populist polices.

Undoubtedly, Singapore can afford higher social expenditure but if the 'entitlement' trend continues then Singapore becomes closer to Europe in other ways too: high taxes, poor delivery of government services and a rigid labor market. Or Singapore heads towards unsustainable social expenditure (think Greece)?

Unfortunately (or fortunately) ASEAN is not the European Union and no one owes Singapore a living!

Politically, no single leader has the gravitas and respect accorded to LKY and his team.

The political contract was simpler in 1965: the government improves economic conditions and the citizenry don't ask too many difficult questions. In contrast, today's electorate is keen to question the leadership and flex its muscles at the ballot box. The upshot: despite the ruling People's Action Party's achievements for Singapore over the last 50 years, the city's long standing rulers cannot take the popular vote for granted.

Consequently, the government cannot enact unpopular policies with the same bluster as before. A literate, connected and wealthy (entitled?!) electorate is not as easy to boss around as the less well-off, kampong dwelling Singaporean of the past.  

History is for historians and the future is for the next generation (or, PAP, what have you done for me lately)?!

Despite all the challenges face in an uncertain world, there are many reasons to argue for Singapore's continued success in the next 50 years.

Governmence structures are solidly in place.

Public service and the bureaucracy continue to attract talent due to competitive compensation structures. In an often unstable region, Singapore's educated and English speaking society provides a haven of stability which allows the country to charge a 'Singapore Premium.'

Currency reserves – effectively savings squirreled away for a rainy day - are sizeable.

Between GIC and Temasek, Singapore's two sovereign wealth funds, GIC and Temasek, contain a massive USD 538 billion in assets. A sum equivalent to approx. USD 161,000 for each of Singapore's 3.4 million citizens! These savings provide a limited insurance policy for increased social welfare expenditures.

Singapore's new found wealth also makes the country ideally placed in a capitalist world.

The Republic is a global investor in its own right with large investments, particularly in developing ASEAN and China. In time these investments will generate significant positive income for the country.

But let's forget logic for a moment. After all, human society is a collection of human emotional endeavours?

Singapore's future is about survival for its resourceful and creative population. So if necessity is the mother of invention (or re-invention is this case) then the odds suggest that this small (non-secular!) island republic will succeed in for the next fifty years!

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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. 

Singapore's governance: should MPs only be MPs?

I sent a letter to the Straits Times Forum for publication a few weeks ago. The Forum chose not to publish my letter. I have reproduced the text of my letter below. 

______________

The Straits Times,

Singapore.

April 20, 2014.

To the Editor:

Recently, I had cause to write to my Member of Parliament (Bishan-Toa Payoh GRC) to seek his assistance with a particular matter. I was disappointed not to receive an acknowledgement of my request for assistance, leave alone any assistance.

It was not until I followed up with an email ten days later that I finally received a response from my MP. His response was upsetting as the text indicated he had neither bothered to fully read my initial communication nor attempted to properly understand my situation.

Perhaps the blasé manner with which my plea for help was treated is due to the competing demands on an MP's time, i.e. maintaining a professional career within a law firm alongside his duties as an elected representative? In light of my experience, it seems appropriate for the authorities to initiate an independent study to determine whether time spent by an MP on his 'external' professional career, say as a lawyer, impinges on his ability to carry out his obligatory duties towards his constituency.

If the government wishes to maintain the trust of the electorate then the attitude reflected by the MP for Bishan-Toa Payoh does not help. Ignoring requests for help from a constituent simply widens the perceived gap between the 'ruler' and 'ruled.' It is time the governing party implements and enforces quantitative standards upon its elected representatives, e.g. response times to requests, etc. Such delivery standards are the norm within any efficient managerial establishment, including Singapore's own bureaucracy, and are necessary to maintain Singapore's usually high standards of governance.

Yours sincerely,

Imran Ahmed. 

Singapore: Monaco of the East!

Cities reinvent and regenerate themselves constantly. At least, cities which thrive and beat the ravages of time to stay relevant are no strangers to change.

Singapore is no exception. During the last ten years, the city explicitly decided to shirk its 'Fine City' image, moving from being a sterile, gum free environment to a hip, happening urban setting. As is often the case, Singapore's policymakers succeeded ... perhaps too well for the city's own good.

The casino, nightlife and incremental lifting of social restrictions worked its magic. From being the fortress 'Gibraltar of the East,' Singapore reinvented itself in the image of Monaco, i.e. the 'Monaco of the East.'

Monaco, of course, is a playground for the world's wealthy. Singapore too has become a playground for the worlds wealthy, particularly China's nouveau riche looking for a 'safer' place to park themselves and their cash. And, the annual haze notwithstanding, breathe fresh air.

Education is a key component of Singapore's drive to retain economic competitiveness in the coming years

To some extent, the 'New Singapore' means accepting larger income gaps between the wealthy and the not so wealthy. According to one widely accepted measure of income inequality, the Gini coefficient, Singapore's income inequality has risen during the last year – even taking into account all government subsidies and other redistribution measures.

However, all is not well in the PAP's (Singapore's ruling People's Action Party) domain.

Singaporeans are pushing back in an unprecedented manner. Locals are unhappy with Chinese immigrants driving Ferraris while subway trains get more crowded; or having to fight with foreigners for places in the local school system.

Nonetheless, there is no turning back for Singapore. The city's 5.3 million people will become 6 or even 6.9 million, maybe not at the PAP's proposed timetable but perhaps sometime within the next decade. (Seats on subway trains will remain a scarcity for commuters, forevermore!)

In the midst of all the changes in Singapore, one change becomes ever more obvious with time: Singapore's price competitiveness is eroding.

According to the latest Mercer cost of living survey, Singapore is the world's fifth most expensive city for expatriates. Hong Kong, Geneva, Zurich and Shanghai are all cheaper cities. The change may not be explicitly policy driven but it is a consequence of multiple factors, including growing Singapore's population by 66 percent in two decades.

To be sure, Singapore has moved beyond the stage of relying simply upon cost to retain economic competitiveness. Nonetheless, can Singapore afford to be the fifth most expensive city in the world and still preserve its 'regional hub' status – or will the Little Red Dot be relegated to being a hub exclusively for knowledge intensive 'Research and Development' areas such as biotechnology?'

Relying on knowledge intensive industries is no bad thing really ... if Singaporeans don't mind the income gap between rich and poor widening further in the coming years.

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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. 

Singapore’s future social mix and today's immigration policies

Until recently, population growth through immigration was a major part of the Singapore government's economic growth model. During the last two decades, the island's population has grown by over 60 percent. From a population of approximately three million in 1990, Singapore entered the 2010s with a population of five million.

Prima facie, the population growth policy appears to have worked and generated economic growth on the island. From 1990-2010 (inclusive), the Singapore economy grew at an average GDP growth rate of 6.6 percent. During the same period, the economy contracted only twice: 2001 and 2009.

Nonetheless, there have been some unintended consequences of the government's 'open door policy.' Politically, the People's Action Party (PAP) has seen support amongst Singaporean voters plummet from historically high levels. The last general elections saw several senior PAP personalities lose 'safe' constituencies. While not yet a threat to the PAP's ability to form a government, the opposition has significantly increased its parliamentary representation, including controlling a Group Representation Constituency (GRC).

Another effect of Singapore's liberal immigration policies has been the skyrocketing of domestic real estate prices. Not only have prices of high-end properties in premium districts risen to record highs but resale prices of public housing built by the Housing Development Board (HDB Singapore) has soared.

There has also been a general outpouring of discontent about the impact of 'extra' people on Singapore's limited land mass. The Republic's resources and infrastructure is groaning under the weight of additional persons – literally in the case of the city's subway system. From being unheard of a few years ago, train breakdowns and system delays are now considered 'normal.' Much of the blame lies with the increased load factor and poor maintenance.

There is another side to immigration which Singaporeans have yet to fully experience: the osmosis of new and different cultures into the mainstream of the city's daily culture. The mass of new immigrants from mainland China and India – along with the odd few from 'out of the ordinary' countries like Pakistan – bring with them a different way of seeing the world.

'Mainland' Indians have different dietary habits. Their experience of the caste system's role in society is distinct from the locally born Indian. Likewise, for non-Malay Muslims, the different lens with which they view the world often provides a different interpretation regarding the traditions of Islamic faith and practice.

To be sure, contemporary Singaporeans have every right to express displeasure with any number of government policies. It is their island – they have successfully moved from Third World to First World within one generation. However, from a historical perspective, the recent wave of immigration into Singapore is just a part of the island's centuries old tradition of welcoming economic migrants onto its shores. In the process, the newcomers help transform and rejuvenate Singapore, often in ways which cannot be easily anticipated. At the very least, future Singaporeans can look forward to some interesting fusion food dishes as the most recent mass of migrants build a home for themselves.

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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. 

Singapore turns to populist politics?

Are Singapore's ruling party members losing their cool? Some of them seem to be extremely worried about losing their seats at the next elections – that is if one goes by some of the 'populist' statements which have started surfacing recently in parliament.

Populist policy ideas do not fall in line with the normal characteristics of the People's Action Party (PAP) historical ruling style. Typically, PAP MPs lead from the front and in a paternalistic fashion, i.e. as a PAP MP I am better qualified to make decisions about Singapore's future so please just trust me; it's for your own good.

These unusual ideas – clearly designed to catch the eyes of voters and popular sentiment – include a National Defence Duty for foreigners as well as providing free public transport for commuters during off-peak hours. (Do these officials remember that Singapore's train and bus companies are publicly listed entities and the Board of Directors has fiduciary obligations towards shareholders?)

To be sure, it is good that elected representatives are suddenly more responsive to their constituencies. Nevertheless, Singaporeans must be concerned about the direction some of its elected leaders appear to be taking. In fact, if such thinking reflects broader views within the ruling party then alarm bells should start to ring.

Singapore did not go from Third World to First World by appeasing all constituencies every step of the way. The political leadership demonstrated a fair balance of vision and compromise. For example, when much of the developing world embraced 'socialism' and left wing thought, Singapore turned to the right and free market policies.

It took courage to go against the grain.

Surely, Singapore faces real issues about the country's future. The city state's economic model – which hitherto relied heavily on population growth through immigration – is under pressure. Its 'true blue' citizens are disturbed as their 'traditional' way of life is disrupted by an unprecedented influx of foreigners: approximately two million in the last two decades. The 'taken for granted' yearly improvement in living standards has sputtered during the last few years.

Expectations are not being met. The traditional social contract is under stress. Singapore's leadership must put its head down and address these issues. Populist, pseudo socialist policies will take Singapore nowhere fast.

Singaporeans like having their voice heard but they still wish to be led by thinkers. Not by people who are willing to sacrifice the country's long term stability for short term gains.

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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. 

Punggol East: Workers’ Party victory or PAP’s loss?

Singapore's blogosphere must certainly be buzzing with news of the ruling People's Action Party (PAP) loss in the Punggol East by-election. The Workers' Party (WP) victory is significant in several ways. However, first one must decide if the result is primarily a victory for the WP or a defeat for the PAP. The distinction is a fine but important one.

Were Punggol East voters expressing discontent against the PAP and was the WP the only alternative available? Or do Singaporeans' voters genuinely believe the WP fielded the better candidate? The answer is a combination of both factors.

The electorate is tired of being taken for granted by the political elite and the PAP is finding it difficult to reinvent itself in line with the aspirations of a changed citizenry. Take the AIM controversy – voters smelt a rat. There may not be any criminal or legal wrongdoing on the part of AIM but in the court of public opinion the PAP fights an uphill battle to justify its behaviour. The AIM transaction may have been acceptable to voters several elections ago but not today.

The 'New Singapore' demands greater transparency.

Even if the Punggol vote was a protest vote against the PAP, the WP gains much from the results of the Punggol East by-election. WP has established itself as Singapore's only opposition party of note. Over time, other parties will most likely fade away as opposition supporters consolidate around the WP.

Success breeds success and the taste of victory is infectious. The WP's triumph in Punggol East is a positive booster shot for WP supporters. The resolve of parliamentarians, party workers, donors and supporters alike will harden. Moreover, the WP will likely find it easier to attract talent. Supporting the opposition is no longer a lost cause – a significant perception change from just a few years ago.

To its credit, the WP has played its cards reasonably well during the last few years. Understanding its limitations as a minnow in Singapore's political arena, the WP has acted responsibly to date. It has not bitten off more than it can chew.

The Punggol East by-election is one more step in the maturing of Singapore's politics. Just as the PAP is fumbling around to teach itself how to live with a parliamentary opposition, the WP is discovering the intricacies of operating within a parliamentary democracy - a process of 'self-discovery' for Singapore at the national level.

The PAP may not be in danger of losing its parliamentary majority at the next general elections. However, the seeds of a two party parliamentary system in Singapore have been planted. It only remains to be seen if these seeds will grow into a healthy plant. We will only know the answer to that question once Singapore goes through a few more general election cycles.

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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. 

Why Malaysian bus drivers should earn more than Chinese ... and get preference over other foreigners for Singapore's jobs

The recent strike by SMRT’s Chinese bus drivers has started a debate about wage levels and working conditions for foreign contract workers in Singapore. Yet a couple of questions remain untouched by the debate:

1. Should salaries vary based on a workers country of origin? Yes, absolutely, as long as the wage premium / discount is based on solid reasons.

2. Do Malaysian workers deserve a wage ‘premium’ relative to their Chinese counterparts? Yes, absolutely. Malaysia is Singapore’s neighbor and Malaysians integrate better than most into the Republic’s workforce.

Singapore's foreign labor pool encompasses the entire spectrum of jobs - from the low end street cleaner to the highly paid senior executive

Labor activists and human rights purists adhering to the principle of ‘equal pay for equal work’ might disagree. Certainly the principle applies to people working in their home country. However, when labor moves across national jurisdictions then different factors come into play. Amongst others, these factors include language, education levels and cultural norms. Collectively, these factors affect an individual’s ability to live and work within a foreign society.

Let’s call that concept integration.

During the last few years, Singapore has witnessed disruptive repercussions of varying degrees from foreign workers who are not easily fitting into local society. Yes, these foreign workers drive buses, clean streets or man stalls satisfactorily, in line with their employment contracts and job requirements. However, they also bring with them local customs and practices. Many of these behaviors: riding bicycles on pavements, spitting, not speaking English and sometimes indulging in (petty and serious) crimes to list a few, have created discontent within Singaporeans.

Moreover, as the numbers of a particular nationality grows to ‘critical mass’ levels, particularly within a specific occupation or organization, its citizens feel more emboldened to challenge the status quo in a manner detrimental to Singapore’s interests. That striking Chinese bus drivers’ have forced a political review of established labor management practices demonstrates the strength (and dangers) of such concentrations.

So, how does all this relate to paying Malaysian bus drivers more than their Chinese counterparts? The answer lies in Singapore’s recent history.

Malaysians have more in common with Singaporeans than the traumatic events of 1965 may suggest. Despite the obvious religious differences between certain segments of the two populations, being geographically contiguous and a part of the same ‘civilization’ for centuries has welded the two peoples into sharing many important cultural and social traits. Consider the continuing deep economic linkages between Singapore and Malaysia.

The commercial relationship is no accident. It is a byproduct of the cultural ease of carrying on business in either society as well as the geographical reality of being neighbors.

The two nations are not alien to each other. There is a natural cultural and social fit between the two nations. A large number of Malaysians already live and work in Singapore. They have done so for many years, and without the social disruptions associated with people of other nationalities. Likewise, droves of Singaporeans regularly visit, own properties, businesses and even retire in Malaysia.

It is this relatively seamless social integration of Malaysian workers into Singaporean society which justifies their wage premium. Maintaining social stability through a cohesive work force is worth that little bit extra.  

As a sovereign country, Singapore’s human resource policies must cater to the Republic’s unique characteristics. Political pressures from regional economic giants – an unintended consequence of hiring large numbers of people from one nation – can be minimized by pursuing a more balanced foreign labor policy. To this end, Singaporean businesses might benefit from additional government incentives to employ Malaysian citizens over other nationalities. Implementing policies to encourage a more balanced pool of foreign workers must be a strategic priority for public officials.

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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. 

Labor strikes in Singapore: another psychological barrier falls

The fault line between locals and foreigners just got deeper. Almost 200 bus drivers from China working in Singapore recently protested working conditions and grievances over pay by striking from work for just over a day. Singapore has not seen such 'industrial action' for almost three decades. The action by Chinese bus drivers is significant in more ways than one.

For starters, the action highlights Singapore's dependence on low wage earning foreign labor. They are critical to maintaining Singapore's efficient and competitive economy operating smoothly. Additionally, the bus drivers strike signals to the government problems are afoot at both ends of the 'foreign talent' spectrum.

At the upper end, Singaporeans express concerns about recruiting highly skilled foreign talent. These well paid immigrants are routinely blamed for pushing up property prices, filling up subway trains and even taking away school seats from 'born and bred' Singaporeans.

At the other end of the wage spectrum, foreign low wage earners are blamed for crime and other forms of 'anti-social' behavior, including littering and riding bicycles on the pavement, besides also straining public transport infrastructure. To this list can now be added lack of respect for local law - the bus workers strike was illegal under Singapore law - and a sense of arrogance by bringing 'Chinese' ways of protest into Singapore.

Irrespective of the merits of worker claims of discrimination and the legality of the strike, one fact is undeniable: another feather from Singapore's 'aura' cap has been plucked. Singapore's reputation as a trouble free, well oiled machine is under siege from many fronts.

First came floods on Orchard Road; then murders and loan sharks; subsequently, regular breakdowns on the city's subway system. Now another 'halo' surrounding the 'Singapore Inc.' brand is at risk, i.e. an efficient and pliant labor market.

All eyes are on the government's handling of the strike. How hard will the judiciary be on the strikers, especially with the protest organizers and instigators? Will the work stoppage result in quiet, albeit delayed, concessions to bus drivers? Will revisions to existing methods of managing labor relations be implemented to make the process more responsive to changing conditions?

The strike has exposed one more 'foreign versus local' cleavage. If a clear message is not sent to illegal strikers, there is a real danger the strikes will spread to other sectors, not only among Chinese but other foreign workers. Subsequently, work disruptions will join the growing list of 'novelties' to which today's Singaporeans must adjust. The list already includes train delays, floods, litter, crime and even riding bicycles on the pavement.

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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.