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.
This year’s Singapore Budget has garnered accolades for its focus on lower-income groups and the so-called Pioneer generation. One glaring omission, however, is in efforts to redistribute wealth. That is a missed opportunity; Singapore needs to address its drastic wealth inequality in order to, among other things, reduce social tensions, improve social mobility and maintain its commitment to building a fair and just society.
The distinction between income and wealth inequalities is important. In Singapore, a person can have immense wealth—inherited property, for example—with very little traditional income. This creates the somewhat perverse situation where some very wealthy people also own HDB flats and qualify for huge healthcare subsidies while simultaneously investing in stocks and second properties, furthering their wealth advantage over the poor. In order to properly address social inequities, both inequalities—income and wealth—have to be reduced.