The Income Gap in Singapore

Monday December 18, 9:05 PM
Income gap tears at Singapore social fabric
By Geert De Clercq

SINGAPORE, Dec 18 (Reuters) - When Wee Shu Min, the teenage daughter of a Singapore member of parliament stumbled across the blog of a Singaporean who wrote that he was worried about losing his job, she thought she'd give him a piece of her mind.

She called him "one of many wretched, undermotivated, overassuming leeches in our country" on her own blog and signed off with "please, get out of my elite uncaring face".

Wee was flamed by hundreds of fellow bloggers, but when her father Wee Siew Kim -- an MP in Prime Minister Lee Hsien Loong's constituency -- told a Singapore newspaper that "her basic point is reasonable", the row moved well beyond the blogosphere.

The episode highlighted a deep rift in Singapore society and was an embarrassment for the ruling People's Action Party (PAP) and prime minister Lee, who has made the reduction of the income gap one of the priorities of his new government.

"Coming from an MP in the prime minister's constituency, these comments really were political dynamite," political commentator Seah Chiang Nee told Reuters.

"If the political arrogance and elitism get any worse, the PAP will lose more electoral ground," he added.

Singapore is Asia's second-richest country after Japan with a gross domestic product per capita of about $27,000, ranking between EU member Italy and Spain. But in terms of income disparity, Singapore is in altogether different company.

Singapore's Gini index -- which measures inequality of income distribution among households -- of 42.5 puts it between Burundi and Kenya, the UN Human Development Report 2006 shows.

"Yes, the gini coefficient is very high. Through housing, health care and education, we have tried to narrow the income gap, but not through wages," National Development Minister Mah Bow Tan told Reuters in an interview last month.

"WELFARE AS A DIRTY WORD"

Singapore pays no employment benefits, no pensions and has no legal minimum wage, but education is cheap and excellent, health care is subsidised and the government gives subsidies to first-time buyers of government-built flats.

Last month, Singapore's first parliament session since the May 6 poll was dominated by the inequality theme.

PM Lee ruled out the introduction of old-age pensions, a minimum wage or European-style welfare.

"We have treated welfare as a dirty word. The opposition, I think the Workers' Party, has called for a 'permanent unconditional needs-based welfare system'. I think that is an even dirtier five words," he said in a speech on Nov. 13.

But he acknowledged that since the Asian financial crisis in 1997, the income gap had widened, and said that his government plans to "tilt the balance in favour of the lower-income groups".

While Lee's ruling PAP is in no danger of losing its stranglehold on parliament -- where it has 82 out of 84 elected seats -- the growing income disparity has hurt its credibility.

In the May 6 poll, the Workers' Party scored its best result in years, with chairwoman Sylvia Lim winning 44 percent of the votes in a multi-seat ward. Lee lost 34 percent in his ward to a group of unknown candidates in their early thirties.

"They (the PAP) are concerned about the fallout if they don't do anything about the income gap," Lim, who entered parliament as a non-voting MP under a best-loser provision, told Reuters.

In parliament, Lee said he plans to improve healthcare and boost housing subsidies for low-income families. He added that he wants more "workfare" schemes, under which the state tops up low-income workers' pay.

On May 1 -- five days before the election -- the government paid out S$150 million to about 330,000 low-income workers, and Lee promised a similar package for next year. Details would be released in the 2007 budget on February 15.

"MARIE ANTOINETTES"

Critics say that much of the outrage about the teenage blogger's comments is due to a perception that Singapore is ruled by a privileged elite that's out of touch with the people.

The road to a top job in the Singapore government or civil service leads through elite junior colleges and prestigious government scholarships for university studies abroad.

While access to these schools and scholarships is open to all and based on academic grades, critics say the children of the elite are well represented. Wee Shu Min attends a top school, Raffles Junior College, as did her father, an MP and a top executive at state-owned arms maker ST Engineering.

In a report about "elite envy", the Straits Times daily quoted official data showing that in the last five years, one in three students on government scholarships came from families with incomes of more than $$10,000 ($6,500) a month, while such families make up just 13 per cent of all Singapore households.

Students from households on incomes of less than $2,000 made up only 7 per cent of scholarship winners, the paper added.

Colin Goh, founder of satirical website TalkingCock.com, said that while the first generation of post-independence PAP leaders was seen as close to the people, this is no longer the case.

"The source for much invective in the Wee Shu Min case is that there is a real sense the PAP is composed of people in ivory towers; that they are a bunch of Marie Antoinettes," he said.