Will Singaporeans live in economic ghettoes?

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This article was first published by Yahoo! See here.

Will Singaporeans be happy living in a country comprised of economic ghettoes? That was my enduring thought as I reviewed the animated rebuttals, common and official, to last week’s revelation by the Economist Intelligence Unit (EIU, my former employer) that Singapore is the world’s most expensive city.

These sorts of surveys should be taken with a pinch of salt. Many subjective decisions influence the methodology. So it shouldn’t really matter that much who is Number 1, 2 or 5. Rather, they should be seen simply as indicative of a larger issue.

However, as we nationalistic Singaporeans tend to do, rather than asking “How can we raise wages (and hence spending power)?” or “How can we make Singapore more affordable?”, many rose in a spirited defence of our apparent affordability, seeking to poke holes in a survey that approximates and compares middle- to upper-income price baskets across major cities.

“The EIU tries to put together a basket of what they think are expatriate costs, perhaps more on the higher end of expatriates,” Tharman Shanmugaratnam, our finance minister, said. ”It is quite different from the goods and services consumed by ordinary Singaporeans.”

In conversations and on social media similar sentiments came flying. “Aiyah, there are much cheaper places to shop in Singapore,” and “The cost of a car? How many Singaporeans buy cars?”

This school of thought suggests that the cost of living in Singapore is largely dependent on “choice”—if you know where to go and how to limit your raging consumerist instincts, inflation here is actually not that bad.

Now I do not want to debate these rebuttals. Clearly they all have merit, and the EIU’s model price basket surely does not apply to many Singaporeans (or cost-conscious expats).

Rather, it is the spirit of these comments and the values they reveal that are interesting. It appears as if, with Singapore’s concerted efforts to attract the world’s rich, many in this country have simply accepted this quality-of-life divergence: that there will be one standard of living for expats and another for “ordinary Singaporeans”.

In other words, it shouldn’t matter that expats buy increasingly costly French cheese from Jason’s—as long as heartlanders can buy cheap eggs from Sheng Siong. For me, there is something deeply troubling about this narrative. It reeks of classism as well as a defeatist attitude towards efforts to raise living standards.

To be sure, in every major global city there are differences in purchasing power between high-wage expats and low-wage locals. But have Singapore’s pro-rich policies led to a higher expat:local quality-of-life differential than in other cities? Moreover, given Singapore’s small size and the lack of a natural hinterland—to which lower-income people can go—one suspects that this differential can lead to relatively higher social friction.

Thus, as Singapore becomes increasingly fractured along economic lines, we should worry about the emergence of economic ghettoes. As it is, many Singaporeans can no longer afford to consume anything in the Marina Bay area. On this tiny island, so it seems, it is perfectly acceptable for people to inhabit wildly different spheres of life. In 20 years time, how many pockets of the country will be beyond the reach of the lower-income groups? What impact will this have on social cohesion?

On a related note, the EIU survey also succeeded in eliciting some old mantras, like “Most expensive city? But Singapore has such cheap hawker food!” Many of us in the middle- and upper-classes love to cheer Singapore’s delicious cheap food.

Unfortunately for us all, it is a boast loaded with classist undertones. The main reason a country as rich and expensive as Singapore has such cheap hawker food is that many labour inputs are underpriced. Everybody from the lorry driver to the dish washer to the hawker is being underpaid. Indeed, for a country with a negligible agricultural sector, one would expect (the imported) food to cost more than in many other countries.

It is analagous to another statement I often hear from the globally mobile who choose Singapore: “One great thing is that maids are much cheaper/more available than in other big cities.” A friend who recently moved here from HK, bringing his maid along, was shocked that her wage was suddenly halved. (He has decided to maintain her HK wage.)

The fact that these two statements are celebrated in daily conceptions about Singapore is proof of how we’ve internalised the country’s drastically unequal wage structure.

In effect we are proclaiming “Hey, we are one of the richest countries in the world, with more millionaires per capita than anywhere else AND we have an endless flow of cheap labour to serve you.”

We massage our conscience by telling ourselves that we are providing jobs and opportunities for people with none, but in truth it is simply modern labour exploitation. Not just of the low-wage foreigners, but also of all Singaporeans whose wages are held down, people who would earn more in many other developed cities.

A common retort against higher food prices is that many people in the lower middle class will be severely affected. But the point is that there is a broad swathe of Singapore’s population–perhaps 30-50%–who should arguably be earning more than they currently are, i.e. with a more equitable wage structure, the lower-income people should not worry about higher food prices because they will be earning more.

Unfortunately for Singaporeans, by underpaying hawkers we are effectively sounding their death knell. All over the country, particularly in fast-gentrifying neighbourhoods such as Tiong Bahru, traditional foods are being priced out by foreign bites that can command premiums to cover ever-rising rents. Is the value of a Tiong Bahru croissant really 5-6 times a humble chwee kueh? It is a question our children may not have the luxury of asking.

Many in Singapore might believe that these inequalities and quality-of-life divergences are necessary hazards of being an open, global city. But there are also those of us who feel that with the right policy shifts—including greater redistribution and more measured immigration—Singapore can succeed in building a much more cohesive, socially-integrated society (albeit one with pricier chwee kueh). It is important that Singaporeans consider the options in front of us.

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2 responses

  1. Singapore is well on her way to being “the UAE of the East” CUM “the Switzerland of the East”.

    The former in terms of exploitation and mastery/skill degeneration ….. when China, India, Myanmar, Sri Lanka, etc, reach their next stage of economic development and our foreign workers return to their countries of origin – we won’t have local hawkers, plumbers, electricians, gardeners, packers, cleaners, etc, skilled enough in their respective fields in sufficient critical mass.

    The latter in terms of facilitating financial derivatives/speculation, estate duty exemption, tax avoidance/evasion and money laundering ….. the more the US/UK/Europe tighten their laws, regulations and policies in the aftermath of Lehman Brothers meltdown and national austerity measures for affected economies, the more these too-clever-and-too-rich amoral types will flock to our equatorial shores – whether as Foreign Talent or New Singapore Citizens (part of the 20,000+ New Mints Per Year under PAP’s 6.9mn Total Population Paper).

  2. An excellent piece. You are spot on in saying that we have internalised and accepted the country’s drastically unequal wage structure. In the long term this knee jerk reaction to explain away anything that is perceived to be negative about Singapore and inability to grasp the potential dangers of such inequality bodes ill for future generations and is a grave injustice to those pioneers who played a part in building this economic miracle we call Singapore.

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