GE2020: What fundamental socio-economic tension is at the heart of this election?

If we take a moment to try and cut through the blur of COVID-19, the uncertainty of bubble tea, and the endless stream of police reports, I believe this is it: what level of social protection is adequate for Singaporeans in the future?

All the opposition parties essentially offer a vision of a society with greater social protections than what the People’s Action Party believes is best. This is true from the well-oiled machinery of The Workers’ Party—yes, Jamus has done his math—to fledgling outfits like Red Dot United.

(I like Michelle Lee, one of the best speakers I’ve heard in the past year. But every time I hear her new party’s name, I can’t decide if she’s angling for parliament or Jalan Besar Stadium.)

Social protection broadly includes welfare (such as poverty alleviation) and social security, but importantly also public goods like healthcare, education, public housing and transportation, as well as policies that might affect their adequacy and delivery, including immigration.

Is more social protection necessarily good for Singapore? Well, that depends on your worldview.

I hesitate to ascribe a simple “free market” or “neo-liberal” label to the PAP because clearly it has a more socialistic and interventionist bent than any red-blooded capitalist might ever care for.

Regardless, the party has generally tended to hew to the interests of businesses rather than workers (or, to capital rather than labour). Critics say the dynamics of today’s world necessitate a shift, partly to ensure more equity and social mobility. The refrain from the PAP is that this would undermine the very basis of Singapore’s prior economic success.

“The opposition has long sought to moderate capital and labor inflows and engage in greater redistribution as part of an embrace of more welfare, while the PAP, nervous about perceived economic competition from regional cities, believes that would sap some of Singapore’s dynamism.”

(Apologies. Quoting myself from the piece I published last week in the Nikkei Asian Review.)

There is nothing really new in the above. You might have said the same before the 2011 election in Singapore. And we might very well say that in ten years.

The fundamental tension of our generation may not change, but the dynamics affecting it do.

Take immigration. From 1999 to 2018, Singapore’s population grew over 40% to 5.6 million, much through immigration. This is both one of the highest rates of population growth in the world, as well as one of the highest immigration rates in the world. Native-born citizens are now well in the minority.

(This is where Singapore’s natural global city versus sovereign state tension emerges. If we were only a global city, immigration wouldn’t be such an issue.)

We now know things that were not that apparent in 2011. For instance, we now, based on anecdotal evidence, have a better understanding of the impact of the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) on the local job market. (Better, but because of the paucity of granular data, still not great.)

I am not a fan of CECA’s apparent impact because, among other things, it has led to awful prejudice, including between different groups of Indians in Singapore. A more moderate flow would have been better for all concerned.

For sure, CECA is just one element in a much broader effort to attract immigrants, but I mention it because it is relevant to the politically sensitive group of “PMET”s who, rightly or wrongly, feel threatened by middle-class professionals from India. It would be wrong to pin the blame on immigration for our social ills; likewise it is also wrong to claim that immigration, especially at such a high level, is an unalloyed good. It has affected Singapore’s social compact in different ways.

Part of the problem, surely, is that citizens feel disenfranchised from the political process, from discussions about their desired demographic makeup of Singapore. Simply put, Singaporeans should decide what the future Singaporean looks like. At the moment it feels like decisions are being made high above with little transparency.

(One of the great ironies, of course, is that those playing Sim City up there do not themselves face job competition from foreigners. I guess competition is necessary only for the plebeians.)

So the fundamental tension remains—what’s an adequate level of social protection for Singapore today?—but the issues affecting it evolve. So does the makeup of the electorate and its collective desire. So do the characters involved in politics.

Many things change. The two elephants in the room, of course, are the forces of globalisation (of which immigration is part) and technological change/disruption—their impact today arguably very different than, say, in 2011.

It is very easy to get distracted by Heng Swee Keat’s apparent gaffes about the East Coast Plan or Raeesah Khan’s apparent ill-judged social media posts from two years ago.

But as a voter, ultimately it’s always good to remind yourself of the underlying issue. One thing you must do is rid yourself of the idea that there are easy answers that don’t involve complex trade-offs.

So, for instance, if somebody on the left tells you that much tighter immigration and greater welfare is the answer to all of our problems, without explaining the costs, whether higher taxes or friction in the labour market, be wary.

Similarly, if somebody on the right says that Singapore must always have high immigration and capital flows in order to succeed, and is ignorant of all the costs, whether spiralling cost of living or social tensions, be wary.

These are complex issues that should never be simplified because a leader or politician thinks the electorate is too dumb to understand.

And yes, of course, this is the same tension one finds in many parts of the world, it is the same tension that energises the Sandernistas and the right-wing nationalists in the US. Though because Singapore is a small and relatively homogenous society (mostly middle-income, well-educated and urban), the ideological poles are closer. So much so that the WP, the main competing party, is known colloquially as PAP-lite.

As Vivian Balakrishnan rightly said in the debate, as he stared blissfully into Jamus’s eyes, WP can appear like it uses the PAP as a reference point, and then takes half a step to the left. For instance, WP is eager to push for a minimum wage and redundancy insurance, so you’ll get some brief, targeted taxpayer support if you lose your job.

Who is going to pay for that? For sure, at least a large part will be borne by corporations. For example, redundancy insurance might involve higher taxes on employers. Essentially all this would involve a shift, as economists like Jamus would say, in the national income share from capital to labour.

So Vivian’s characterisation is fair. As I said in my last video, relative to the opposition, the PAP is not as worried about foreign money, foreign manpower and inequality in society. (“Relative” the operative word.) The PAP is relatively more comfortable with fewer social protections in society because its believes the costs of more outweigh the benefits.

The question for you as a voter is this. Do you like where the PAP is standing? Or do you want to take a half step to the left?

Make up your own mind.

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p.s. I have tried to articulate the socio-economic tension I see at play in this election, but it is difficult to completely extract it from the socio-political tension, having to do with substantive issues around democratic discourse, accountability and transparency. I touch briefly on them, but a great recent piece to read, which also provides a wonderful sweep of the last century’s economic ups and downs, and ideological shifts, is “Democracy will fail if we don’t think as citizens” by the FT’s Martin Wolf.

p.s. 2 I have had to be brief here. Forgive the errors and approximations, would have loved to spend more time with Yeoh Lam Keong, the one economist who helped me. Also, I think my brain, or certainly my soul, is still suffering from some post-video stress. Am trying.

For further reading on Singapore’s economy and its future, I suggest the following economists. For left of centre, Manu Bhaskaran, Donald Low, and Lam Keong. For centre or right of centre, Chua Hak Bin, Walter Theseira and—dare I say it—Tharman.

p.s. 3 Clearly not all opposition parties are the same; and not all are standing a half step to the left of the PAP. But they are generally all in that direction.

p.s. 4 Another clear socio-economic policy difference between the PAP and the opposition parties is on HDB 99-year lease policy. The PAP believes that when the leases for most properties expire, they will be worth nothing and will revert to the government; opposition parties believe in alternative proposals, including extending the leases, as has happened in other countries. Each has its own costs and trade-offs.

 

 

One thought on “GE2020: What fundamental socio-economic tension is at the heart of this election?

  1. The starting point of HDB back in the 60’s was with good intentions.
    However the ending was not planned nor discussed as years go by.
    When 99 year lease approaches(aka like HK’s 1997), a solution is needed.
    Becoming 0 value is not right from any point of view.
    Perhaps at minimum a renegotiated new lease for 50 years if ownership is not changed.
    Should the leasee sells off then a new HDB contract clearly is needed.
    This agreement will be based on compatible price to existing HDB inventories.
    HDB was and should always meant to be affordable housing through purchase or rental.
    Various solutions to extend the lease must be sought after and tried out.
    For the fortunate few who has HDB from start and moved on to private real estate,the solution is entirely different for a sole owner/occupant scenario.
    It is definitely a complex issue the opposition must address with PAP for the comfort of the citizenry
    Simply put PAP’s original intent of HDB have been lost over the years

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