The Singaporean Wealth Gap

The Occupy Wall Street movement sounded the alarm for many around the world. The alarm rang about the failure of our current capitalist system to truly create advances in our society. The Occupy movement created a new paradigm that had not emerged in the United States since the Vietnam War protests in the 1960s and 1970s. The paradigm was one of anger and frustration and critique, where the populace, unafraid of the established powers, voiced their opinions.

Image courtesy of jjcb, © 2010, some rights reserved.

Beyond the debates about the effectiveness and long-term strategies of the Occupy movement, it did in fact produce one significant and indisputable outcome; it brought discussions of wealth and inequality—typically sequestered in government and academia—to the forefront of public political discourse. Singaporean Prime Minister Lee Hsien Loong, Massachusetts Governor Mitt Romney, and President Barack Obama have all addressed income inequality in the last year. Income inequality exists and it needs to be engaged with.

In The Spirit Level: Why More Equal Societies Almost Always Do Better, Richard G. Wilkinson and Kate Pickett examined eleven social problems: physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being.  In each of the different countries analysed, as inequality increased, social problems intensified. For example, the income inequality issue in Singapore is quite salient. According to a National University of Singapore report, Singapore’s inequality has dramatically increased in the last decade.  Although many countries have seen a rise in income inequality, the speed and level of the Singaporean increase is startling.

In Singapore, globalisation and trade have expanded significantly in the last thirty years. This economic growth has facilitated an influx of cheaper goods from more efficient suppliers. Globalisation and trade have begun to isolate the lower wage sectors of the Singaporean economy. Why is this growth problematic? On the social level, income inequality may disrupt the ingrained social fabric, leading to general dissatisfaction with the social contract. Equality, income distribution, and well-being go hand in hand. Equal incomes lead to equality and increase well-being.

Wilkinson and Pickett argue that high levels of income inequality influence all levels of society in an extremely negative way. In unequal societies, the economic elites experience more social problems than their counterparts in egalitarian societies. Wilkinson and Pickett point out that these societies can view monetary status as a justification for self-respect.  Singapore’s five C’s—cash, car, credit card, condominium, and country club membership—exemplify Wilkinson and Pickett’s argument. Inequality in Singaporean society is a systemic problem resulting from globalisation, skill-based technical change, and now insufficient domestic policies. These should be inherently worrisome for the Singaporean establishment as these practical implications cause stress, depression, drug use and criminality.  The consequences of income inequality in Singapore may prove disastrous for a nation known for its successful economy and adeptness in attracting global investment.

How can Singapore combat its inequality dilemma? If the system produces the problem, then the solution is located in the system. The Singaporean system was created for a relatively young population, a growing GDP, rising wages, and nearly full employment.

Some dramatic and alarming shifts have occurred in Singaporean society:  an aging population decreased social mobility, and less predictable economic growth. As a result, Singapore can no longer enjoy both a rapidly growing GDP and a rising well-being. The policies that have guided Singapore in the past and contributed to its development are slowly being rendered obsolete. Globalisation and rapid technological advancements have changed the equation used for calculating domestic social policies. If Singapore wishes to remain an integral state in Southeast Asia, it must address its lagging domestic policy.

This shifting socioeconomic dynamic means that Singapore must formulate a new social contract that balances equality with growth and social insurance with individual accountability. Singaporeans must shift away from their pursuit of the five C’s and consider common benefits. To depolarize the society, thinking must consider the sacrifice of short term gains to achieve long term societal improvements.

*The author wishes to dedicate this article to Dr. John Keshishoglou.

14 Replies to “The Singaporean Wealth Gap”

  1. I found this article to be an extremely well-written, concise, and cogent analysis of trends in Singapore’s economy and society. I learned a great deal from reading it. We (Americans) often think of globalization as contributing to economic growth in Asia at the expense of our own middle class. The author here shows convincingly that globalization’s impacts on income inequality extend beyond the former industrial powerhouses (the U.S., Europe, and Japan), to encompass “Asian tigers” such as Singapore. This offers a sobering reminder of complex trajectories generated by global capital. Nice job.

  2. A fascinating essay that links the philosophies of the transnational Occupy Movement with an Asian tech tiger, Singapore. Here’s my takeaway: the 5 C’s need to transmute into the the big C: Common good. Thanks for the riveting read.

  3. Years ago, when I was in graduate school, Singapore used to be held up as a shining example of the Newly Industrializing Countries (NICs) and one of Asia’s Four Little Tigers that other developing countries needed to emulate. Mr. Auyash’s review, however, makes it clear that certain models of capitalist develop–indeed, most models of ‘successful development–come at enormous social costs. Now, if only someone in the U.S. were to think seriously about adopting the solution he proposes for Singapore! Great essay.

  4. This essay strikes me as an efficient and productive sketch of some difficult and crucial issues. I wonder if most citizens of Singapore don’t believe the social contract already favors equity over growth and social insurance over individuality. Some might argue that increased social polarization provides incentives and disincentives that spur productivity and income growth. Such income, as the saying goes, “lifts all boats.” This may be especially feasible in societies like Singapore where the state imagines itself as a benevolent paternal actor. What then would be the author’s objection to the following: spur productivity via increased polarization, tax the increased growth, and redistribute to the needy. I favor the author’s goals but market fundamentalists always have their missionaries leaning on all doors.

  5. I thoroughly enjoyed reading this piece. This is a major debate within Singapore. Your piece is timely and insightful.

  6. This essay elucidates the downwards dynamics occurring between the time that I was in the “global city” of Singapore in 2008 and the present, which you argue reflect the broader conditions of globalization trajectories. Like all good essays it leaves the reader wanting to know more. Here are some questions that it raises for me: based on your research on the growing income gap in Singapore, is your sense that a movement related to the concerns voiced on the streets of the United States and Europe is due? Is the economic turmoil also stimulating aspirations for political change? How are people responding to the halting of the current systems? Your mention of the relationship between self-respect and economic status in the context of Singapore is interesting, how does this play out on an inter-local level? In Singapore I witnessed beggars on the streets, many of them women with children as well as older women–what elements in the society are the hardest hit in this so-called economic recession? What are the immigrant communities experiencing? What is the position of the current government in face of this? Looking forward to a follow-up essay.

  7. An excellent essay. Is this written by an undergraduate? Well done!
    Sean is right – there is an urgent need for a new social contract beyond the 5 Cs in Singapore.

  8. This is a really fascinating account of Singapore’s dilemma within a larger global dilemma that affects all of us (or 99% of us, as they say in the U.S.). A trenchant critique of 20th-century political faith in discourses of economic growth. Well done!

  9. Beautifully written article. John would have been so pleased to be honored by the dedication. Thank you so much. BK

  10. Illuminating and compelling writing. It reminds me of yet another country I need to visit, in an effort to understand the dynamics of globalization. In the meantime, these are terrific insights.

  11. I have read this essay over and over again because of the sophisticated style of the arguments, I saw more things each time. Your starting with the Occupy Wall Street movement put a lot in perspective for me. I thought it may be too soon to inscribe the legacy of OWS movement but I want to agree with you on their message. This aspect is an on-going task and I am an interested party. Thanks for this

  12. Interesting piece. Didn’t know about that book on inequality and social problems. Singapore is losing a lot of its earlier investment flows because now they’re being diverted to China. Its big hope is probably to focus on high-skilled labor, which it used to be able to do, but perhaps the growing inequality you’re talking about causes the elite now to downplay that need. By the way, you didn’t mention whether there’d been any Occupy in Singapore! Somehow I suspect not, which of course means the growing inequalities are less likely to be addressed.

  13. Is there any hint of an OWS movement in Singapore? It’s one thing for us to analyze their inequalities, quite another for them to recognize it and to act.

Leave a Reply