East Asia Forum » Singapore
http://www.eastasiaforum.org Economics, Politics and Public Policy in East Asia and the Pacific Mon, 15 Sep 2014 12:00:36 +0000 en-US hourly 1 http://www.eastasiaforum.org/2014/06/20/enhancing-public-debate-on-inequality-in-singapore/ http://www.eastasiaforum.org/2014/06/20/enhancing-public-debate-on-inequality-in-singapore/#comments Fri, 20 Jun 2014 12:00:24 +0000
Authors: Mukul G. Asher & Chang Yee Kwan, NUS
The publication of Thomas Piketty’s 2014 book Capital in the 21st Century has brought the issue of income inequality to the fore of public policy debates in many countries. This is remarkable, given the book’s length (696 pages), the intricacy of the historical data series that forms the statistical foundations of the book’s main propositions, and its relatively narrow geographical focus (mainly the US, the UK, and Western Europe).
The issues of inequality, social mobility prospects, fairness and adequacy of social protection arrangements have recently risen to prominence in public policy debates in Singapore, and this is likely to continue.
According to Piketty, the key condition for increased inequality in societies is that the rate of return on capital exceeds the rate of economic growth. In Singapore, estimates of the rate of return on capital are not available, making it impossible to ascertain whether Piketty’s condition holds.
Another key metric studied in the book is the share of national income accruing to labour and to capital as factors of production. Data on the share of national income accruing to labour and to capital has been published (the capital share at around 55 per cent significantly exceeds labour share at 45 per cent, the reverse of the respective shares in most high income countries); however, it would be useful to have a longer and more consistent time series for these shares, as well as a disaggregation of each share. An expansion of the factor share trends to include labour and capital income accruing abroad, but not included currently, could also be useful as Singapore has large net external assets.
In Piketty’s book, the key indicator used for analysing household income is the share of income accruing to the top ten per cent of households. Household income from all sources and all factors of production is included.
In Singapore, the data on the distribution of household income only includes citizens and permanent residents who are employed. Furthermore, it only counts labour income, excluding capital income. The breakdown for the top 1 per cent of households is not provided. But the ratio of the income of households in the highest decile to those in the lowest decile has increased sharply from 11.5 in 2000 to 16.8 in 2013, suggesting rising inequality even for labour income, an issue that merits a considered policy response.
Even here, though, there is a need for much greater consistency: another official source, while not providing time series, reports the top 10 per cent of households receiving 24.1 times the labour income of the bottom 10 per cent in 2013. The difference between the two reported numbers is very large and requires explanation. As the share of the population that has retired increases and there are larger numbers exiting the labour force, this indicator — which, remember, only includes those who are employed — will be increasingly less informative. At a broader level, Piketty’s research culture and norms emphasising data transparency and replicability of the analysis merits greater appreciation by Singapore researchers and policymakers.
The estimates for Singapore’s Gini coefficient — a widely used indicator of household income inequality — includes only wage income in Singapore, excluding capital income that is usually much more unequally distributed. The unadjusted Gini coefficient is officially estimated at 0.47 (the coefficient ranges from 0 to 1, with a higher value implying greater inequality), and just under 0.46 after transfers and taxes. If capital income were included, the coefficient would likely be significantly higher.
The figures above pose serious questions for policymakers: is a growth strategy that requires persistently and significantly higher capital shares really desirable?
The absence of social insurance in Singapore’s pension and health care financing mechanism also impacts on the fairness and adequacy of social protection arrangements in Singapore, and also on inequality. In Singapore, all employees pay part of their wages into the Central Provident Fund (CPF), the savings from which can be disbursed to pay for medical care and as retirement income. In order that we might get a better picture of inequality in Singapore, consideration should be given to publishing the actual cash balances of all members of the CPF, classified by age and sex, as well as actual nominal and real returns on CPF balances (which were SGD253 billion in 2013, or about 68 per cent of Singaporean GDP). It would also be helpful to publish household consumption and income-expenditure surveys on a regular and consistent basis.
These would be consistent with the spirit of Piketty’s book, and would help better appreciate Singapore’s position in the current global debate on inequality.
Mukul G. Asher is Professorial Fellow at the Lee Kuan Yew School of Public Policy, at the National University of Singapore.
Chang Yee Kwan is Research Fellow at the Lee Kuan Yew School of Public Policy, National University of Singapore.
This article is part of an East Asia Forum miniseries examining inequality in Asia.
http://www.eastasiaforum.org/2014/06/20/enhancing-public-debate-on-inequality-in-singapore/feed/ 0 http://www.eastasiaforum.org/2014/05/01/singapores-smart-army/ http://www.eastasiaforum.org/2014/05/01/singapores-smart-army/#comments Thu, 01 May 2014 12:00:12 +0000
Author: Michael Raska, RSIS
Since its inception as a small city-state, Singapore has grappled with insecurity and strategic uncertainty. Traditionally, small states have experienced considerable limitations in balancing their security needs and strategic ambitions with policies directed at maintaining economic growth and social stability.
These challenges have become even more acute within the context of East Asia’s changing and progressively complex security environment. East Asia’s strategic template is shifting toward a mix of asymmetric anti-access/area-denial threats, low-high intensity conventional conflicts, and a range of non-traditional security challenges. Accordingly, Singapore must devise an adaptive defence posture that takes into account factors such as its lack of strategic depth, resource limitations, changing strategic priorities, as well as external factors, such as increasing geostrategic competition between great powers in the region.
Unfortunately, the range of policy options available to small states seeking to overcome their external as well as internal geostrategic limitations is not particularly wide.
Small states have often sought to offset their geostrategic vulnerabilities by strengthening their alliances with great powers — a form of external balancing, in which a great power defends the interests of a small state and ensures at least partial extended deterrence. The downside of this route is that it potentially leads to costly diplomatic attachments and long-term policy constraints. Accordingly in Singapore’s case, external balancing has served as a hedging strategy, allowing Singapore to view both China and the US as potentially useful strategic partners, but not allies.
Alternatively, other small states have pursued military self-reliance by maximising their internal resources. However, the potential payoffs from internal balancing are limited. Small states, especially those seeking to counterbalance their ‘smallness’ by increasing levels of military expenditure and production, invariably find that the ancillary economic and social costs associated with pursuing self-reliance are high, if not crippling.
Other foreign policy postures pursued by small states include ‘defensive isolation’, neutrality, and adaptation measures like ‘non-offensive defence’. These notwithstanding, the prevailing structure of the anarchic international system of self-help has traditionally forced most small states to adopt a defensive posture based on a mix of both external and internal balancing.
The magnitude, intensity, and impact of ‘mixed’ balancing depends on a number of factors such as the level of the small state’s economic and social development, its geographical proximity to conflict, the cohesion of its population, and, perhaps most importantly of all, its relationship with and importance to great powers.
However, small states are not necessarily weak states.
Singapore is often viewed as a small country. This is certainly the case when it is compared to its neighbours: Indonesia, for instance, has a huge archipelago and a population of 246 million, compared to Singapore’s 5.5 million. Yet Singapore’s 2013 defence budget of $12 billion is considerably larger than Indonesia’s budget of $7.9 billion. In international relations, it is the relative strength of a state which matters, rather than its size.
Singapore’s traditional security paradigm has historically been based on deterrence, and swift and decisive victory if deterrence fails. Technology plays a large part in Singapore’s security apparatus. Singapore views the integration of advanced military technologies as a primary force multiplier that is capable of providing it with an edge when it comes to coping with both existing and future threats.
But technology is only a part of Singapore’s deterrence strategy. Its deterrent posture is not exclusively military-strategic posture, but involves defence diplomacy with select strategic partners.
Singapore’s military management capacity when it comes to planning, organising, leading, and controlling armed forces and their supporting systems to adopt particular innovations has been equally important.
Accordingly, Singapore has sought to build a relatively advanced, reliable and cost-effective industrial base capable of developing and integrating selective defence technologies, niche products and services. These measures, together with the combat proficiency and training of the Singapore Armed Forces (SAF), have enabled Singapore’s military to pursue innovation at the operational level over the past decade.
Indeed, with Singapore’s ongoing military modernisation drive, SAF aims to become a ‘smart’ or networked army capable of a range of operations in peacetime, as well as wartime. This is under the conceptual umbrella of ‘3G or third generation military transformation’ that began in 2004. By 2030, the SAF envisions the integration of unmanned precision, early warning, intelligence, surveillance and reconnaissance systems. Most importantly, the SAF looks to achieve an unprecedented degree of interoperability between its army, navy, and air force platforms.
This continuity and change in Singapore’s defence strategy are directed at addressing the growing complexity of East Asian security dilemmas, particularly with respect to the deepening territorial disputes and potential crises over islands in the South China Sea and East China Sea. The convergence of these security threats, along with the growing adoption of advanced military platforms and technologies by Singapore’s neighbours, increases the SAF’s operational requirements. The SAF will have to strike a balance between preserving tried and tested strategies and structures with finding innovative operational concepts and organisational structures in preparation for multi-level conflicts. The key dilemma facing Singaporean defence planners is the question how to build a force and doctrine capable of dealing simultaneously with current security threats, while anticipating future challenges.
Michael Raska is Research Fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore.
http://www.eastasiaforum.org/2014/05/01/singapores-smart-army/feed/ 2 http://www.eastasiaforum.org/2014/04/30/singapores-history-wars/ http://www.eastasiaforum.org/2014/04/30/singapores-history-wars/#comments Wed, 30 Apr 2014 12:00:05 +0000
Author: Geoff Wade, ANU
As we move towards 2015, a year that will mark Singapore’s 50th anniversary as a nation, a battle over the past of that country is slowly gaining steam.
The increasingly frail health of Lee Kuan Yew, the man depicted in the establishment histories as the ‘father of Singapore’, is making this battle more important for both sides.
The People’s Action Party (PAP) is heavily invested in ensuring that their story remains the story of Singapore. And key to that story has been the framework provided by the two-volume autobiography penned by Lee Kuan Yew, prime minister from 1965 to 1990 and still today a member of the Singapore Parliament. The Singapore Story and From Third World to First established the base for the story, upon which have been laid down layer upon layer of hagiographic books such as Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World and One Man’s View of the World, together with Lee’s ‘collected works’ — The Papers of Lee Kuan Yew: Speeches, Interviews and Dialogues 1950–1990 and 1990–2011.
The Singapore press — entirely state-controlled — has been a necessary participant in this exercise, giving these histories acres of attention, calculated to leave Singapore and the world with a very positive image of a man who has in fact enjoyed a rather chequered reputation both domestically and regionally. Further, as with Lenin, Stalin, Mao and Deng Xiaoping, the history presented in Lee’s collected works is intended not only to perpetuate memory of the individual but also to bolster the legitimacy of the party that he led. Cadre histories such as Men in White have cemented the PAP into this story.
However, the history as presented by the PAP party-state is now being subject to unprecedented querying and interrogation. In part this has been facilitated by a weakening of the absolute power of the PAP, while the imminent demise of Lee is not unrelated. Civil society groups are also re-emerging from the destruction wrought upon them by the PAP in the 1960s and 1970s. In addition, a new generation of Singapore historians is beginning to sieve archival and oral history materials, finding stories that do not gel with the accounts fed to them through state history. New alternative histories are thereby emerging, alongside more critical blogs.
One of the most sensitive of the issues recently brought to prominence through this new history is Operation Coldstore, a police action conducted in 1963 prior to the creation of Malaysia, a state within which Singapore was soon to be incorporated. This action — planned jointly by the decolonising British and Lee Kuan Yew — eviscerated the Singapore Left through the arrest and detention of more than 130 individuals and allowed Lee to dominate politics on the island.
A recent set of volumes in English and Chinese, edited by some of the Coldstore detainees, reveals the degree to which this was as much an effort to remove Lee’s political opponents as a security operation. The volumes’ suggestion that the PAP under Lee could only survive through British assistance in eliminating his opposition brings into question much about PAP rule over the last 50 years. Responses from some establishment defenders have been scathing of the volumes and their conclusions, while state-controlled media has simply ignored the books and associated launch activities.
The 1987 round of detentions of ‘Marxist’ Singaporeans through Operation Spectrum under the Internal Security Act has also attracted renewed historical attention, with detainees such as Teo Soh Lung penning an account of her detention and continuing to write of her experiences.
In response to the new histories being penned on the Left, the PAP is employing state media and particularly television to depict the threats which it says the Singapore state faced. Responses from the revisionist historians suggest that the PAP is simply using these programmes to validate its actions against the Left over this period.
Perhaps most threatening to the PAP story is a suggestion, now gaining traction, that Lee Kuan Yew deceived all of the people of Singapore in 1957. While in most administrations a lying politician would not warrant even a yawn, the PAP is demanding more from its parliamentarians, with the current Prime Minister Lee Hsien Loong asserting that he would dismiss from the parliament anyone who had lied to the Singaporean people.
It appears now, from recently revealed documents, that Lee Senior ought to be subject to this sanction. Australian and British documents both affirm that during his visit to London in April 1957 Lee Kuan Yew colluded with the British in arrangements to preclude detained Leftists of his party from competing in upcoming elections. After returning to Singapore, Lee publicly stated that these restraints were imposed by Britain, that he was opposed to them, and that the PAP must fight to counter them. Such apparent chicanery does not sit well with PAP history of itself as a squeaky clean party.
The PAP’s reticence in terms of revealing its historical cabinet decisions is also attracting some attention. Following urging by the opposition Workers’ Party chief Low Thia Khiang that the Singapore government should release to the public cabinet records 30 years old or more, Lawrence Wong, Senior Minister of State for Ministry of Communications and Information, closed off the discussion by stating that ‘such an open policy may not necessarily lead to better outcomes’. Again, the power that derives from maintaining a monopoly on key historical sources has been underlined.
History has always been a sensitive topic in this island republic, and been almost fully controlled by the PAP. The alternative history writing now occurring reflects the resurgent influence and appeal of the Left within Singapore, represented in Parliament by the new seats won by the Workers’ Party. This new history is proving to be a key tool by which the monolith of PAP narrative and thereby the party’s arrogated legitimacy is being queried. Such questioning will prove to be an essential element of the political pluralism towards which Singapore is now moving, even if this direction is not everyone’s idea of a good thing.
Geoff Wade is a Visiting Fellow at the Crawford School of Public Policy at The Australian National University.
http://www.eastasiaforum.org/2014/04/30/singapores-history-wars/feed/ 0 http://www.eastasiaforum.org/2014/04/02/singapores-impotent-immigration-policy/ http://www.eastasiaforum.org/2014/04/02/singapores-impotent-immigration-policy/#comments Tue, 01 Apr 2014 23:00:02 +0000