Archive for March, 2013

Singapore not alone in having little or no natural resources

March 31, 2013

I refer to the Straits Times letters “Don’t rock the boat” by Mr B.H. Melwani [1] and “Planning ahead to avoid a bleak future” by Mr Sonny Ng [2].

Mr Melwani and Mr Ng reiterate what we have been told from young: that we are different from other countries in that we have no natural resources to rely on so we must rely on our people and our government.

The following is a chart of natural resources rent as a percentage of GDP since 1970 for 23 developed economies [3]. It shows that apart from Norway and perhaps Canada and Australia, all other developed economies derived less than 5% of their GDP from natural resources for much of the past 40 years. The majority of these economies derived less than 2% of their GDP from natural resources. So it is not just Singapore but nearly all developed economies have very little natural resources they can depend on so they must primarily depend on people too. It is strange that of so many developed economies with little or no natural resources, it is only here in Singapore that we commonly find people saying that we depend on the government for our success. If all the other developed economies with little or no natural resources can do well without having to depend on the government, why should we be different? It can’t be that Singaporeans are so singularly hopeless that we alone depend very much on our government’s ‘wise’ policies.

Natural resources rent as percentage of GDP

Although Singapore has no natural resources, many books lend support to the view that we are gifted by nature with a most precious geographical location which our economy and prosperity continues to depend on [4], [5], [6], [7]. It would have been quite impossible for us to achieve a level of trade that is 285% of our GDP [8] had we been tucked away in some far flung corner of the earth. Our service industries collectively account for 65% of our GDP [8] and many sub-categories of the service industry such as wholesale & retail, transportation & storage, finance & insurance and business services have links to our port [7]. Directly and indirectly, Singapore derives more than 2% of our GDP from our excellent geographical location, more so than most developed economies derive from their natural resources.

The fact that the majority of voters voted for PAP doesn’t mean they automatically endorse every single PAP policy. If voting for PAP means voting for all its policies, why do we still need parliament debates? Why do we need conversations to get buy in? Why not just pass every bill without consultation, without debate since the PAP holds the majority of seats in parliament? Whether or not we are merely satisfying the minority can be determined by holding a national referendum. In fact, a live poll on Channel 8’s Frontline Connects TV programme saw 92.5% of viewers happy to accept lower rate of economic growth if foreign population is reduced.

The people are not rocking the boat; they are the rightful owners of this boat and are merely telling the boatman where they wish the boat to be steered towards. Hiring a boatman doesn’t mean giving up our right to tell the boatman where we want the boat to be steered towards.

[1] Straits Times letter, Don’t rock the boat, 8 Feb 2013

[2] Straits Times letter, Planning ahead to avoid a bleak future, 14 Feb 2013

[3] World Bank data, Total natural resources rent as percentage of GDP

[4] Mun Heng Toh and Kong Yam Tan, Competitiveness of the Singapore Economy: A Strategic Perspective, page 101

The port of Singapore is located along the Straits of Malacca, which is the main shipping route between East and West. It was estimated by the Oil Companies International Marine Forum that over 600 ships transit the straits every day. The importance of this shipping route has not diminished over time with the introduction of new technology and improvements in air travel.

In terms of geographical features, the port of Singapore is fortunate to enjoy natural deep waters and harbours, which have allowed it to service ships with deeper draughts without necessarily resorting to extensive and expensive dredging operations. The waterways serving as entrants to Singapore allow even the larests ships to use them. Singapore does not have typhoons and other natural calamities which mae port operations and freight movements safe and reliable.

[5] Teofilo C Daquila, The Economies Of Southeast Asia: Indonesia, Malaysia, Philippines, Singapore and Thailand, page 183

Singapore’s economic viability depends on its geo-strategic position as the port of call in the Asia-Pacific linking Europe, the Middle East, the African continent, the South Asian continent, through to the Pacific islands and the Americas. It is important to view Singapore’s status as a bustling port of call.

[6] Swee-Hock Saw and John Wong, Regional Economic Development in China, page 224

The prosperity of Singapore is largely dependent on its excellent port resource. Singapore lies on the vital transport link between the Pacific and Indian Ocean. The Singapore port connects 200 shipping corporations and more than 600 ports of 123 countries, and manages 60 ships, 8,000 trailers and 50,000 containers each day. It could be said to be the world’s busiest port.

[7] Lawrence B. Krause and Ai Tee Koh and Yuan Lee Tsao, The Singapore economy reconsidered, page 2

Although lacking both natural resources and a hinterland of any sort, Singapore does have two powerful assets – its people and its geography. It was its geography, characterised by a large natural habour and a location astride the most important shipping route between Europe and the Pacific, that gave Singapore its original economic rationale as an entrepot for the entire Southeast Asian region.

Historically, the entrepot trade began because nature made Singapore a perfect transshipping point between the Indian Ocean and the South China Sea and beyond. However, with the development of rubber estates and tin mining in Peninsula Malaysia, Singapore ultimately became a full-fledged primary port and commercial city for a rich producing area.

Furthermore, entrepot activities such as trading, processing, storing, banking, insurance, repackaging, marketing, transportation and communication, provided much useful preparation for wider economic achievements. They led to the creation of certain physical facilities such as the port, to the development of certain worker skills, and to the encouragement of risk-taking by entrepreneurs. It may well be that the entrepot function, modernized and expanded into sophisticated business services, remains the backbone of the Singapore economy, and was only temporarily eclipsed for a brief period by the rapid growth of manufacturing.

[8] Singapore Statistics

Persuasive or crass?

March 29, 2013

I refer to the 28 Mar 2013 Straits Times report “Mr Lee’s speeches in new book” [1].

Education minister Heng Swee Keat reportedly said that it was Singapore’s good fortune that we had at our founding, a remarkable team led by exceptional men of rare gifts and that one of these gifts was the gift of persuasion [1].

Mr Heng may have confused our founding in 1819 with our independence in 1965. Based on our founding in 1819, the exceptional man of rare gift would be Sir Stamford Raffles. Based on the economic master plan we followed around the time of our independence in 1965, the man of rare gift would be Dr Albert Winsemius.

I leave it to Singaporeans to judge whether these are persuasive or crass remarks:

• If native Singaporeans are falling behind because the spurs are not stuck into the hide, that is their problem.

• If Aljunied decides to go that way, well Aljunied has five years to live and repent.

• …women will become maids in other people’s countries, foreign workers.

• If you asked me for my observations, the other communities have easier integration – friends, inter-marriages and so on – than Muslims… I would say, today, we can integrate all religions and races, except Islam.

• If you can select a population and they’re educated and they’re properly brought up, then you don’t have to use too much of the stick because they would already have been trained. It’s like with dogs. You train it in a proper way from small. It will know that it’s got to leave, go outside to pee and to defecate. No, we are not that kind of society. We had to train adult dogs who even today deliberately urinate in the lifts.

• No country in the world has given its citizens an asset as valuable as what we’ve given every family here. And if you say that policy is at fault, you must be daft.

• Because my posture, my response has been such that nobody doubts that if you take me on, I will put on knuckle-dusters and catch you in a cul de sac…Anybody who decides to take me on needs to put on knuckle dusters. If you think you can hurt me more than I can hurt you, try. There is no other way you can govern a Chinese society.

The following remarks makes you wonder what the point is of being persuasive without ever being true to what you preached.

• If you believe in democracy, you must believe in it unconditionally. If you believe that men should be free, then, they should have the right of free association, of free speech, of free publication. Then, no law should permit those democratic processes to be set at nought, and no excuse, whether of security, should allow a government to be deterred from doing what it knows to be right, and what it must know to be right
Lee Kuan Yew, Legislative Assembly Debates, April 27, 1955

• If it is not totalitarian to arrest a man and detain him, when you cannot charge him with any offence against any written law – if that is not what we have always cried out against in Fascist states – then what is it?… If we are to survive as a free democracy, then we must be prepared, in principle, to concede to our enemies – even those who do not subscribe to our views – as much constitutional rights as you concede yourself.
Opposition leader Lee Kuan Yew, Legislative Assembly Debates, Sept 21, 1955

• Repression, Sir is a habit that grows. I am told it is like making love-it is always easier the second time! The first time there may be pangs of conscience, a sense of guilt. But once embarked on this course with constant repetition you get more and more brazen in the attack. All you have to do is to dissolve organizations and societies and banish and detain the key political workers in these societies. Then miraculously everything is tranquil on the surface. Then an intimidated press and the government-controlled radio together can regularly sing your praises, and slowly and steadily the people are made to forget the evil things that have already been done, or if these things are referred to again they’re conveniently distorted and distorted with impunity, because there will be no opposition to contradict.
Lee Kuan Yew as an opposition PAP member speaking to David Marshall, Singapore Legislative Assembly, Debates, 4 October, 1956

[1] Straits Times, Mr Lee’s speeches in new book, 28 Mar 2013
Mr Heng noted that figures such as Mr Lee “come but rarely in history”. “It was Singapore’s good fortune that we had at our founding, a remarkable team led by exceptional men of rare gifts,” Mr Heng said. “One of these gifts, as one of Mr Lee’s closest comrades, Dr Goh Keng Swee, noted, was the gift of persuasion.”

Overall taxes not as progressive as income tax

March 28, 2013

I refer to the 12 Mar 2013 Straits Times letter “Progressive taxes: MP replies” by Sembawang GRC MP Mr Ong Teng Koon. Mr Ong refers to Singapore’s highly progressive income tax where the top 20% households pay 80% of income tax. However, income tax alone doesn’t account for all the taxes paid by the people. Already, the government collects more tax from GST than it does from income tax. So any consideration of progressiveness should encompass all taxes, not just income tax. When all taxes are considered, the Singapore tax structure is far less progressive. We do not know exactly how progressive / not progressive it is unless the government reveals the GST paid by the respective income deciles.

Perks for all citizens, regardless of contributions

March 28, 2013

I refer to the 13 Mar 2013 Straits Times letter “Perks for all citizens, regardless of birthplace” by Mr Soh Zi Quan.

In the context of citizenship privileges, Mr Soh says what matters more is a person’s contribution to the nation. That doesn’t sound right. A Singaporean cannot be more Singaporean because he contributed more or less Singaporean because he contributed less. Furthermore some contributions are undervalued while other contributions are overvalued; there is no universally objective way of valuing contributions, not even salary.

It hurts not those it’s supposed to help

March 28, 2013

I refer to the 13 Mar 2013 Straits Times letter “It hurts those it’s supposed to help” by Mr Patrick Liew Siow Gian [1]. Mr Liew feels that wages should be dictated by free market forces as it is the most productive, competitive and sustainable. Our experience has shown quite the reverse, that readily available cheap labour lowers productivity; even our government has acknowledged that cheap labour driven economic growth is unsustainable [2]. Many small and medium enterprises primarily serve the local market and so do not compete with similar small, medium enterprises in rival economies. Even if they do, all else being equal, they would be competing on even grounds under the same rules, minimum wage or not. The minimum wage merely compensates for the over-cheapening of wages due to mass labour influx. Rather than see it as being an increase in overheads, why not see it as a return to previous overhead levels without cheap labour? There is no difference as far as the consumer is concerned since savings from previously reduced overheads due to cheap labour were never passed down to consumers. Cutting off cheap labour pushes companies to upgrade and become more, not less competitive. It is a virtuous rather than a vicious circle that upgrades salaries and benefits rather than hurts lower skilled workers.

Although we do not have unemployment welfare programmes, we have underemployment welfare programmes. It can also be argued that reliance on government underemployment programmes entrenches current work practices and disincentivises productivity upgrade and thus reduces competitiveness.

The current system achieves similar outcomes as the minimum wage. The main difference is that in the current system, our workers are made to feel that they are receiving money from the government whereas for the minimum wage system, our workers are made to feel that they deserve some minimum wage level.

[1] Straits Times, It hurts those it’s supposed to help, 13 Mar 2013

[2] MTI Insights, Developing Our Industries, 13 Dec 2011
• Singapore’s economic growth in the last decade was driven largely by labour force growth. This is clearly unsustainable, and productivity will be a key driver of our economic growth in the coming decade.

[3] Budget 2012 Speech (Part 2): Sustaining Economic Growth
• However, our increasing dependence on foreign workers is not sustainable.

Correcting Mr Stiglitz’s article “Singapore’s lessons for an unequal US”

March 24, 2013

Dear Mr Stiglitz,

I refer to your New York Times article “Singapore’s lessons for an unequal US” which was published by the Straits Times on 20 Mar 2013 [1].

Your assertion that Singapore has had the distinction of having prioritised social and economic equity over the past 30 years is not supported by facts. The diagram below charts the GINI coefficient of developed economies over 30 years [2]. As can be seen, three developed economies have always stood out above all others in inequality: Singapore, Hong Kong and the United States. It’s bewildering that you could consider Singapore to be a distinction of social and economic equity when it consistently features amongst the top three most unequal developed economies over three decades. Singapore’s high inequality over 30 years means it is unlikely that curbing inequalities was one of the many things Singapore championed.

30 year GINI chart developed nations

It is also incorrect to say that Singapore attained independence in 1963. Singapore switched from British sovereignty to Malaysian sovereignty that year. When Hong Kong was handed over from the British to the Chinese in 1997, did that result in Hong Kong gaining independence? Going from being a British dependent to being a Malaysian dependent doesn’t make us independent in 1963 [3].

It is not hard to believe that Singapore could come so far since 1963. Back in 1960, we already had the 3rd highest per capita income in Asia [4]. Furthermore, if we set aside nations that struck oil or diamond, the world’s fastest growing economies over the last four decades have all been East Asian economies [5]. Singapore is just one of the East Asian economies that have come far. What is surprising is not that Singapore has come far but the fact that without exception, the entire East Asia has come far.

Country Per capita GDP multiple from 1960 to 2010 Remarks
Equatorial Guinea 22.2 Struck oil
China Version 1 21.7 East Asian
Taiwan 17.3 East Asian
Korea, Republic of 15.9 East Asian
Botswana 14.2 Struck diamond
Singapore 12.7 East Asian
Hong Kong 11.8 East Asian
China Version 2 10 East Asian
Thailand 8.4 Southeast Asian
Malaysia 8.2 Southeast Asian

It was Dr Albert Winsemius who helped solve our then high unemployment problem by coming up with the industrialisation plan that we followed.

Your assertion that our government made sure wages at the bottom aren’t beaten down to exploitative levels is again without basis since even our government has recently acknowledged that we are a First World nation with Third World wages [6].

You’re mistaken that our CPF is adequate for healthcare, housing and retirement. According to the Mercer Global Pension Index [7], Singapore scored the second lowest in retirement income adequacy. It is ironic that you are holding up severely inadequate Singapore as the lesson for the much more adequate USA.

Country Retirement income adequacy (%)
Denmark 78.1
Netherlands 77
France 74.3
Canada 74.2
Australia 73.5
Brazil 71.5
Switzerland 71.3
UK 68.1
Sweden 68
Germany 65.2
Poland 63.6
USA 58.3
China 55.7
Chile 50.1
Japan 46.1
South Korea 45.1
Singapore 42
India 37.4

One HSBC survey shows that 4 in 10 Singaporeans have not set aside a single dollar for retirement because of high cost of living [8]. Another HSBC survey [9] shows that Singaporeans are worried about insufficient retirement funds.

High level of home ‘ownership’ also means high level of indebtedness as the average Singapore household’s debt-to-income ratio is higher than most developed countries [10]:

Country 2010 debt as percentage of income (%)
Singapore 208
UK 166.4
Canada 150.5
Japan 125.7
US 123.3
France 99.3
Germany 97.2
Italy 89.5

In return for the high price we pay for our housing, we get to keep it for 99 years after which our homes must be returned to the government. This is quite different from the concept of home ownership in the US which usually means owning the land on which the home is built in perpetuity.

Government schemes aren’t as progressive as they seem. Intervention of pre-tax income merely offsets the increase in Goods and Services tax felt by those at the bottom. The tilt towards those with less economic power is after many years of tilting away from them and also after the issue has been raised by countless Singaporeans.

Universal education is universally practised by all developed nations as the UN gross enrolment rate below shows [11]:

Country Primary (%) Secondary (%) Tertiary (%)
France 111 113 54.5
Netherlands 108 120 62.7
Ireland 108 117 61
Spain 107 119 73.2
United Kingdom 106 102 58.5
Liechtenstein 106 70 34.4
Belgium 105 111 67.5
Australia 104 129 75.9
Korea (Republic of) 104 97 103.9
Japan 103 102 59
Italy 103 99 66
Germany 102 103 ..
United States 102 96 94.8
Switzerland 102 95 51.5
Hong Kong, China (SAR) 102 83 59.7
Singapore 101.8 106.9 71
New Zealand 101 119 82.6
Sweden 100 100 70.8
Austria 100 100 60.2
Luxembourg 100 98 10.5
Denmark 99 117 74.4
Norway 99 110 73.8
Finland 99 108 91.6
Canada 99 101 60

The notion that all citizens are given access to the best education should be tempered by purported education inequality that has prompted ruling party MPs to suggest nationalising pre-school education to level the playing field [12].

Contrary to what you said, the current successor to Mr Lee Kuan Yew, PM Lee has been charged by none other than his own parliamentary colleague from the same constituency, Mr Inderjit Singh of having pursued growth at all costs resulting in the overheating of the economy, rising costs and higher inflation [13], [14]. It was only after setbacks in the last election did the government finally concede to the wider needs of our society. Singapore’s higher growth rate vis-a-vis the US since 1980 is the result of us starting from a lower base. Our growth rate is not impressive when compared to fellow East Asian nations.

Retention of green spaces is due to the need for water security, a fact that all Singaporeans understand when the British surrendered at Fort Canning after running out of water, not a peculiarly PAP wisdom.

Singapore’s recent push for green roofs comes five decades after those in Germany which began in the 1960s and was partly triggered by the problem of flooding.

Institution of housing programmes for our ageing population is only quite recent and we still have a long way to go.

While Singapore is not the kind of nanny state that takes care of your needs, it is the kind of nanny state that pokes into your personal life, dictating when you should have two children and when you should have more.

Our cohesiveness as a society is increasingly frayed by tensions arising out of government policies. Our so-called dynamism is highly dependent on the continued reliance on foreign investments which seem less like dynamism and more like reliance.

Singapore’s life expectancy is nothing out of the ordinary compared to fellow First World nations. Taking Japan and Hong Kong as the benchmark for 100%, all First World nations score close to 100% in life expectancy [15].

Country Name 2010 life expectancy As percentage of highest life expectancy
Japan 82.9 100%
Hong Kong SAR, China 82.9 100%
Switzerland 82.2 99%
Italy 81.7 99%
Australia 81.7 99%
Singapore 81.6 98%
Spain 81.6 98%
Sweden 81.5 98%
France 81.4 98%
Norway 81 98%
Canada 80.8 97%
Korea, Rep. 80.8 97%
Netherlands 80.7 97%
New Zealand 80.7 97%
United Kingdom 80.4 97%
Austria 80.4 97%
Ireland 80.3 97%
Luxembourg 80.1 97%
Germany 80 96%
Belgium 79.9 96%
Finland 79.9 96%
Denmark 79.1 95%
United States 78.2 94%

The US’ lower life expectancy is commonly attributed to causes other than healthcare including gun violence, obesity, smoking and other non-healthcare reasons [16].

Our high mathematics, science and reading test scores merely reflect the high scores of East Asian nations / economies which occupy 6 out of 9 top positions in the PISA ranking [17].

Rank Country / economy Average of reading, math and science Overall reading Mathematics Science
1 Shanghai-China 577 556 600 575
2 Hong Kong-China 546 533 555 549
3 Finland 543 536 541 554
4 Singapore 543 526 562 542
5 Korea-South 541 539 546 538
6 Japan 529 520 529 539
7 Canada 527 524 527 529
8 New Zealand 524 521 519 532
9 Chinese Taipei 520 495 543 520

Singaporeans have been pointing out problems for the longest time but the government has denied them all along and explained them away with unconvincing arguments like the ones you have used here. It took the loss of a GRC (mega-constituency) during the last election for the government to finally engage in so-called ‘lively’ conversation.

While it has been fashionable for the government to blame problems on adverse global trends, research has shown that some of these problems aren’t due to inadvertent global trends [18].

It’s strange that while you celebrate the Nordic nations’ achievements in Human Development Index (HDI), you forgot to consider Singapore, the cardinal example you want the US to learn from. Singapore’s HDI score of 0.895 is lower than the US’ 0.937 and since Singapore experiences greater inequality than the US, our inequality adjusted HDI would be even lower. It’s amazing you could mention Singapore in the same breath as Scandinavia as having ensured growth with equity even though our HDI score is nowhere near Scandinavia’s and is in fact lower than that of the US’. Although the US’ HDI ranking sinks from 3 to 16 when inequality is factored in, the slide from 98% to 92% is not significant.

Country Unadjusted HDI As percentage of highest Country Inequality adjusted HDI As percentage of highest
Norway 0.955 100% Norway 0.894 100%
Australia 0.938 98% Australia 0.864 97%
United States 0.937 98% Sweden 0.859 96%
Netherlands 0.921 96% Netherlands 0.857 96%
Germany 0.92 96% Germany 0.856 96%
New Zealand 0.919 96% Ireland 0.85 95%
Ireland 0.916 96% Switzerland 0.849 95%
Sweden 0.916 96% Iceland 0.848 95%
Switzerland 0.913 96% Denmark 0.845 95%
Japan 0.912 95% Slovenia 0.84 94%
Canada 0.911 95% Finland 0.839 94%
Korea 0.909 95% Austria 0.837 94%
Iceland 0.906 95% Canada 0.832 93%
Hong Kong 0.906 95% Czech Republic 0.826 92%
Denmark 0.901 94% Belgium 0.825 92%
Israel 0.9 94% United States 0.821 92%
Belgium 0.897 94% Luxembourg 0.813 91%
Austria 0.895 94% France 0.812 91%
Singapore 0.895 94% United Kingdom 0.802 90%
France 0.893 93% Spain 0.796 89%
Finland 0.892 93% Israel 0.79 88%
Slovenia 0.892 93% Slovakia 0.788 88%
Spain 0.885 93% Malta 0.778 87%
Liechtenstein 0.883 92% Italy 0.776 87%
Italy 0.881 92% Estonia 0.77 86%
Luxembourg 0.875 92% Hungary 0.769 86%
United Kingdom 0.875 92% Greece 0.76 85%
Czech Republic 0.873 91% Korea 0.758 85%
Greece 0.86 90% Cyprus 0.751 84%
Brunei Darussalam 0.855 90% Poland 0.74 83%
Cyprus 0.848 89% Portugal 0.729 81%
Malta 0.847 89% Lithuania 0.727 81%
Andorra 0.846 89% Latvia 0.726 81%
Estonia 0.846 89% Croatia 0.683 76%
Slovakia 0.84 88% Chile 0.664 74%
Qatar 0.834 87% Argentina 0.653 73%
Hungary 0.831 87%
Barbados 0.825 86%
Poland 0.821 86%
Chile 0.819 86%
United Arab Emirates 0.818 86%
Lithuania 0.818 86%
Portugal 0.816 85%
Latvia 0.814 85%
Argentina 0.811 85%
Seychelles 0.806 84%
Croatia 0.805 84%

Your description of how economic inequality leads to political elites running the country for their own interests and where the voice of the ordinary citizens may not be fairly represented is astute. The problem is, your good example of Singapore has higher inequality than the US and should by your definition experience worse woes than those in the US you are trying to highlight.

While you lament the 23.1% poor children in the US compared to only 7.3% in Sweden, don’t forget that the corresponding number for Singapore is an estimated 35.1% [19].

Alternative models such as Singapore’s are shunned by Americans not because of pride but because they are wrongly held up as being better when international statistics show they are worse in nearly all the areas mentioned by you.

Income stagnation is similarly felt by Singaporeans from the lower deciles.

While you quibble over the US’ 13% foreign born population vis-a-vis Britain’s and Sweden’s 11% and 14% respectively, don’t forget that the corresponding figure for Singapore is a staggering 39% foreign born [20].

Country Name Percentage international migrant stock
Hong Kong SAR, China 38.80%
Singapore 38.70%
Luxembourg 34.20%
Switzerland 22.50%
New Zealand 22.00%
Australia 21.10%
Canada 21.10%
Ireland 20.10%
Austria 15.60%
Sweden 13.90%
Spain 13.80%
United States 13.80%
Germany 13.20%
Netherlands 10.50%
United Kingdom 10.40%
France 10.30%
Norway 9.90%
Belgium 8.90%
Denmark 8.70%
Italy 7.40%
Finland 4.20%
Japan 1.70%
Korea, Rep. 1.10%

America’s resolve to achieve a more equal society should not start with lessons from an even more unequal Singapore. Your article is so chock full of factual errors, unsubstantiated claims and selective comparison it’s hard to believe it came from a Nobel laureate.

[1] Straits Times, Singapore’s lessons for an unequal US, 20 Mar 2013

[2], World Income Inequality Database

[3] Although there was a two-week gap between the so-called date of ‘independence’ from the British and date of joining Malaysia, this so-called ‘independence’ was for the purpose of becoming a state in Malaysia. In other words, it was a transfer of sovereignty from Britain to Malaya, not outright independence.

[3-1] Tai Wei Tan and Lee Chin Chew, Political pragmatism and citizenship training in Singapore, Citizenship Curriculum in Asia and the Pacific, page 147
She was granted independence from Britain as a state within the newly constituted Federation of Malaysia in August 1963

[3-2] Soo Ann Lee, Singapore: from place to nation, page 123
The PAP also could not have made Singapore independent without having first joined Malaysia in 1963.

[4] Penn World Table, 1960 real per capita GDP (purchasing power parity adjusted)
1. Japan $6,101
2. Iran $4,420
3. Singapore $4,307
4. Hong Kong $3,346

[5] Penn World Table

[6] Straits Times, Prices and service levels will change with restructuring, 11 Mar 2013
Minister Tan Chuan-Jin said that although Singaporeans “live in a fairly First World developed economy, sometimes in certain sectors we are paying Third World wages”.

[7] Melbourne Mercer Global Pension Index 2012, Australian Centre for Financial Studies, page 7, adequacy sub-index.

[8] Straits Times, 4 in 10 Singaporeans not saving for retirement, blames high cost of living, 21 Mar 2013
MORE than four in 10 Singaporeans say they have not set aside a single dollar for retirement – that was a startling finding from a new survey.
The HSBC survey also learnt that people were not saving mainly because of the high cost of living.
Retirement planning has been a major headache for many Singaporeans, who continue to rely on their Central Provident Fund savings as their basic nest egg, a reliance many financial advisers say is outdated.

[9] Business Times, More Singaporeans want to save for a rainy day: survey, 23 Jan 2010
Only 30 per cent of Singaporeans said they have enough savings. 60 per cent feel they are not saving enough while 11 per cent said that they have no savings.
When asked about uncertainties that could threaten their finances, unexpected medical expenses emerged as the biggest threat for people here – 69 per cent
Insufficient funds for retirement ranked third in Singaporeans’ list of financial worries (42 per cent).
The survey also found that most Singaporeans may now have to work harder for their retirement plans.
Some 26 per cent also say that they will find it difficult to build their retirement fund and expect to delay retirement.

Data for Singapore estimated from Chart 2.4.10 Household Debt and Income, page 42, MAS Financial Stablity Review 2011

Data for the other countries obtained from OECD Economic Outlook No. 92

[11] UN Human Development Index, Gross enrolment rate 2002 to 2011

[12] Budget 2013 debate, 17 mar 2013, MP Christopher De Souza: “Quality pre-school education should not be the privilege of the well off in society but should be made available to all. We must consider the broad way in nationalising pre-school education altogether, level the playing field, that should be our focus.”

[13] Channel News Asia, MP Inderjit Singh says govt policies may have contributed to inflation, 25 Feb 2008

[14] Inderjit Singh’s speech on Population White Paper on 5 Feb 2013:

“We missed the mark the last 10 years, and are already paying a high price for that mistake. I did not agree with the rate of growth pursued and we know the consequences and the hardship Singaporeans faced as a result of the rapid growth, Instant trees cannot grow strong roots and can be uprooted in difficult times.”

[15] World Bank, Life expectancy at Birth


• Low Life Expectancy in the United States: Is the Health Care System at Fault?

• U.S. has lower life expectancy than any other wealthy nation because high murder rate and ‘too many guns stored unsafely at home’

• Warning shot: Gun violence lands US lowest life expectancy among rich nations

• Why do Americans die younger than Britons?

[17] OECD PISA ranking
All except one East Asian nation / economy in top 10 with Macau taking 18th position.

[18] Straits Times, Completing the wage revolution, 17 Jan 2012

Mr Ho Kwong Ping explained an IPS study which showed that our construction workers earned one tenth of what our doctors earned compared to one third on average for countries like the USA, UK, Germany, Australia, Japan, Hong Kong, Taiwan and South Korea.


Mr Stiglitz’s child poverty figures came from the UNICEF’s “Measuring Child Poverty” 2012 report which covers 29 advanced nations for the year 2009 but which doesn’t cover Singapore. So the figure for Singapore has to be calculated separately which Mr Stiglitz could have done but didn’t.

UNICEF defines child poverty as the percentage of children aged 0 to 17 living in a household with per capita income less than 50% of the nation’s median income. All data has to be for 2009 in order to be comparable with UNICEF’s data.

Singapore’s median income (without employer CPF) for 2009 is $2,600 (Ministry of Manpower website). Half that amount is $1,300. The result would have been worse if median income (with employer CPF) had been used.

Steps taken to obtain the table below:

• The distribution of children in various dwelling types is taken from Singapore Statistics’ “Population Trends 2009” page 26. The number of children aged between 15 and 17 is proportioned from the number of children aged between 15 and 19.

• The median household income for each dwelling type is taken from Singapore Statistics’ “Key household income trends, 2009”, page 3, Table 4.

• The median per capita household income is found by dividing the median household income by average household size. Average household size is found by dividing the population for each dwelling type by the number of households for each dwelling type. Population for each dwelling type is taken from Population Trends 2009. Number of households for each dwelling type is found by multiplying the percentage of households for each dwelling type by the total number of households in 2009. Percentage of households for each dwelling type is taken from Population Trends 2009. Total number of households in 2009 can be obtained from Population Trends 2010 (reported as 1.12 million by AsiaOne news, 30 Sept 2010, “Number of resident households in S’pore stands at 1.12 million”). This is probably the best that can be done in the absence of more specific data in public domain.

• The mid-point cumulative percentage of children for each dwelling type is found so as to correspond with the median income for each dwelling type.

• By interpolation, we find that $1,300 corresponds to the 35.1% cumulative children.

Age group 1 and 2 rm HDB 3-rm HDB 4-rm and above HDB Condominium and Landed
Children (‘000) 16.2 104 557.5 140.4
Percentage children 2.00% 12.70% 68.10% 17.20%
Cumulative percentage children 2.00% 14.70% 82.80% 100.00%
Mid-point cumulative percentage children 1.00% 8.30% 48.80% 91.40%
Population (‘000) 106.1 632.9 2341.5 599.8
Median monthly household income $650 $2,660 $5,272 $11,331
% households 4.40% 20.20% 58.60% 15.90%
Number households (‘000) 49 226 656 178
Average household size 2.2 2.8 3.6 3.4
Median monthly per capita household income $302 $951 $1,478 $3,364

[20] Migration and Remittances Factbook 2011

Peace possible regardless of declining or increasing populations

March 17, 2013

I refer to the 1 Mar 2013 Straits Times article by Mr Lee Kuan Yew [1].

Mr Lee said that World War 2 Japan and Germany were examples of growing populations that led to the desire for expansion. To support his theory, he cited the fact that Japan had a population of 64.5 million occupying 145,882 square miles of land in 1931. But Japan today has a population of 128 million occupying roughly the same 145,920 square miles. Despite being twice as populous as it were in 1931, Japan today shows no desire for expansion.

In the case of Germany, Mr Lee cited Germany’s TFR of 2.6 in 1939 to support his case. His number is fairly close to the TFR of 2.5 given in another source [2]. Mr Lee also claims that the world is more peaceful and stable today because developed countries have TFRs of less than 2.1. But Germany in the years 1963, 1964, 1965 and 1966 also had similar TFRs of 2.51, 2.54, 2.5 and 2.53 respectively [3] but had no desire for expansion as it supposedly did in 1939. Thus, Mr Lee’s theory that Germany’s TFR of 2.6 led it to war in 1939 doesn’t gel with the fact that Germany in the mid 1960s didn’t go to war despite having similar TFRs. Mr Lee’s theory that the world today is more peaceful because developed nations have TFRs of less than 2.1 also doesn’t gel with the fact that developed Germany in the mid-1960s remained peaceful despite having TFR greater than 2.1.

Mr Lee wrote of Germany in 1939 wanting lebensraum (living space) for its people. Yet, despite being more densely populated today than it was in 1939 (229 persons per square km today [4] compared to 147 persons per square km in 1939 [5]), Germany today shows no desire for more lebensraum. In fact, decades of plummeting TFR right up to the eve of the First World War did not prevent Germany from plunging headlong into that European conflict [6].

The truth is that both World War 2 Japan and Germany needed no more lebensraum than their leaders had preached. The then leaders of both nations had taken their respective peoples on the path to total destruction on the mistaken belief that they needed more lebensraum. The lesson learnt here is that we must not blindly follow our leaders without questioning the logic that they preach. Today, our government wants to continue to import population because it believes that is what it takes to grow our economy. Let us not repeat the mistakes of World War 2 Japanese and Germans by blindly following our leaders until it is too late.

[1] Straits Times, Declining populations make peaceful neighbours, 1 Mar 2013, Lee Kuan Yew

[2] Gilles Pison, Population and Societies, Number 487, Mar 2012, “France and Germany: a history of criss-crossing demographic curves”, page 2

This was partly because fertility had already increased before the war, reaching 2.5 children in 1939

[3] World Bank Total Fertility Rate (births per woman)

[4] Germany population 2011 is 81,726,000. Germany land area today is 357,021 square km.

[5] Jean-Louis Rallu and Alain Blum, European Population, Volumes 1-2, page 90

[6] Jürgen Dorbritz, DEMOGRAPHIC RESEARCH, VOLUME 19, ARTICLE 17, PAGES 557-598 PUBLISHED 01 JULY 2008, “Germany: Family diversity with low actual and desired fertility”, page 561

The overall tax schedule may not be as progressive

March 9, 2013

Mr Tharman said that our income tax schedule is highly progressive with 55% of Singaporeans not paying any income tax and with Workfare acting like negative income tax, our income tax schedule actually runs from -30% to 20%. This is accompanied by charts [2a], [2b], [2c] which show that the lower income pays less in income taxes, less in all taxes and gets more benefits.

Given that Singapore has been shifting from income tax to goods and services tax, any discussion on progressiveness would be incomplete without considering goods and services tax (GST) and other taxes. This is all the more so when we consider that the $8.82 billion [3] GST collected in 2012 was higher than the $7.65 billion [3] income tax collected in 2012.

We can work out the benefits received less all taxes paid for each population decile as shown below:

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
All taxes (%) 4% 3% 4% 5% 6% 7% 9% 11% 15% 37%
All taxes ($ billion) [4] 1.1 0.8 1.1 1.4 1.7 1.9 2.5 3.0 4.1 10.2
Benefits (%) 12% 17% 13% 12% 10% 10% 9% 8% 7% 4%
Benefits ($ billion) [5] 0.7 0.9 0.7 0.7 0.5 0.5 0.5 0.4 0.4 0.2
Benefits – all taxes ($ billion) -0.5 0.1 -0.4 -0.7 -1.1 -1.4 -2.0 -2.6 -3.8 -10.0

We can see that possibly all except the second lowest decile paid more in all taxes than they received back in benefits and that the starting point for the overall tax schedule may not be as negative as -30% [4].

Mr Tharman also highlighted the ‘quirk’ of the lowest decile receiving less benefits and paying more taxes than the second decile. He used this ‘quirk’ to contrast with the US and Europe where retirees end up better off than workers, a phenomenon which he describes as looking progressive but actually bad and unfair. But this observed difference can be due to other reasons other than the supposed superiority of our tax system over theirs. For example, all else being the same, if we compare a country where only the rich can retire against another country where both poor and rich can retire, then naturally, wealth and property taxes will lead to the lowest decile paying more in the former country but not in the latter country.

In other words, the observed difference between Singapore and the US / Europe could simply be due to the fact that in Singapore, only the rich can afford to retire whereas in US / Europe both poor and rich alike can retire.

[1] Straits Times, Progressivity ‘not for its own sake’, 8 Mar 2013

Who pays income tax

Who pays all taxes

Who gets benefits

[3] Budget 2013 Annex C, FISCAL POSITION IN FY2013 (also shows revised 2012 figures)

[4] Total up the various tax categories found in [3] and then multiply by the respective deciles’ share of all taxes paid found in [2b]. Some tax categories may be born by both individuals and corporations. Information on the exact percentages may not be publicly available so some estimation has to be made. In this case, 80% of asset taxes, motor vehicle taxes, vehicle quota premiums and stamp duties are assumed to be born by individuals. 100% of GST and 50% of betting taxes are assumed to be born by individuals. Results will differ with other assumed percentages. For example, even when GST contribution from individuals are reduced to 80% and contributions to all other tax categories mentioned above are reduced to 50%, the result will still be the same, only the 2nd decile receives more than it pays, the rest of the 90% pay more than they receive.

[5] Singstats shows there are 1,152,000 resident households and average household size of 3.53 in 2012. Singstat’s “Key Household Income Trends, 2012”, page 10, table 7 shows that the government transferred $1,336 per household member in 2012. Total transfers = 1,152,000 × 3.53 × $1,336 = $5,432,924. After that, multiply by the respective deciles’ share of benefits in [2c] to obtain the respective deciles’ benefits received.

Should be Singaporeans all, regardless of who we vote for

March 5, 2013

I refer to the 3 Mar 2013 Straits Times letter by Ms Ng Yan Ling [1].

The phrase “founding of modern Singapore” leads to the question of what constitutes modern Singapore. Singapore in 1965 is no longer considered modern by today’s standards. Similarly, Singapore today will not be considered modern 50 years from now. Luckily, there is a general consensus amongst historians on what constitutes modern Singapore. Many historians refer to modern Singapore as Singapore post 1819 and the founding of modern Singapore by Sir Stamford Raffles [2], [3], [4], [5], [6], [7]. Mr Lee Kuan Yew never founded Singapore modern or otherwise, he inherited Singapore from the British.

Dr Goh Keng Swee, Dr Toh Chin Chye and Mr Rajaratnam came to Singapore at a time when Singapore, Perak, Malacca and Seremban [8] were all part of British Malaya. We were all one and the same British family then unlike now where we belong to distinct nations with distinct allegiances. That’s why migrations didn’t constitute as much an identity crisis then as it does now.

Furthermore Dr Goh Keng Swee came to Singapore in 1920 when he was only two years old [9]. Dr Toh Chin Chye came to Singapore in 1939 at the age of 18 [10]. Mr Rajaratnam came to Singapore in 1934 at the age of 19 [11]. So although Dr Goh, Dr Toh and Mr Rajaratnam weren’t born here, they all came at a relatively young age and were gradually naturalised into Singapore over decades unlike today where citizenships are dished out in a year or even at the airport.

While it is Ms Ng’s noble belief that our forefathers came to build a democratic society for the happiness and progress of our nation, the reality was that many came simply to better their own lives just as many do today. Furthermore if democracy, justice and equality are to be the corner stones of what it means to be Singaporean, how do we consider those who practise political discrimination, differential treatment of electorates based on voting outcomes and monopoly of news as Singaporeans?

[1] Straits Times, Singaporeans all, regardless of birthplace, 3 Mar 2013

[2] Stamford Raffles Founder of Modern Singapore, AsiaPac Books, Zhou Yimin (illustrator), Geraldine Goh (translator)

[3] A History of Modern Singapore, 1819-2005, Constance Mary Turnbull

[4] Iberians in the Singapore-Melaka Area and Adjacent Regions (16th to 18th Century), Peter Borschberg, page 96
the present chapter will once again cast a critical eye on the maritime routes plied prior to the founding of modern Singapore in 1819

[5] Singapore in Global History, Derek Heng and Syed Muhd Khairudin Aljunied, page 19
the raison d’etre for the founding of modern Singapore in 1819 and its development through the nineteenth century was the changing global trading milieu in which the port of this tiny island – specifically the modern mega-port along the Singapore River – was to play a major role.

[6] World Encyclopedia of Library and Information Services, Robert Wedgeworth, page 777
The history of Singapore libraries began soon after the founding of modern Singapore by Sir Stamford Raffles in 1819 as a trading post of the East India Company.

[7] The Business of Politics and Ethnicity: A History of the Singapore Chinese Chamber of Commerce and Industry, Sikko Visscher, page 301
There were 140 years of modern Singapore history before the PAP came to power

[8] The Singapore Lion: A Biography of S. Rajaratnam, Irene Ng, page 4
His mother, Annammah, had taken the precaution of giving birth to Raja in Jaffna because of her traumatic experience at the hospital in the rubber estate a few years earlier.
At the age of six months, his mother brought him to join his father in Seremban, Malaya.
In other words, Rajaratnam essentially hailed from Seremban and Jaffna was purely for the purpose of giving birth.

Born into a middle-income Peranakan family in Malacca, he came to Singapore when he was two years old.

[10] The Short Stories and Radio Plays of S. Rajaratnam, page xxxii
At the age of nineteen in 1934, he came to Singapore to study at Raffles Institution.

[11] Straits Times, 4 Feb 2012, Remembering Toh Chin Chye: 1921 – 2012
Born in Taiping, Malaysia, the son of a bicycle shop owner came to Singapore in 1939 after he was awarded a scholarship to Raffles College.

No such implications at all

March 5, 2013

I refer to the 4 Mar 2013 Straits Times letter “Wrong to imply new citizens can’t become ‘true’ S’poreans” by Mr Sabaratnam Ratnakumar [1].

The famous and often quoted words of the late Mr Rajaratnam: “Being a Singaporean is not a matter of ancestry. It is conviction and choice.” doesn’t say anything about whose choice it is. For the many Rohingya refugees turned away from Singapore, being a Singaporean is clearly not their choice to make. For the many spouses of Singaporeans here on social visit pass, being a Singaporean is also not their choice to make. For these people, the choice lies with our government so the Rajaratnam mantra becomes: “Being a Singaporean is a matter of the government’s choice”.

While there is no guarantee that a born and bred Singaporean will know what being a Singaporean means, he or she will most certainly know that he or she is a Singaporean.

Singapore’s maturity as a distinct society and collection of people isn’t restricted to our less than 50 years of independence. Our national flag, national anthem and coat of arms were adopted in 1959, six years before independence. Our first Olympic Gold medal was won in 1960, 5 years before independence. Our identity as a distinct and unique people simply did not begin in 1965. The Singapore identity has continuously evolved since 1819, not since 1965. The Singapore Story is 194 years old, not 48 years old.

If we go by date of independence, Slovakia is only 20 years old. Yet the Slovaks have existed as a unique people for centuries already [2], [3]. Other examples of recent nations whose peoples have developed distinct identities centuries before independence include Slovenia and Moldova.

Any alleged implication that a new citizen cannot be Singaporean is imaginary and false unless proven otherwise. The legitimate concern of the impact of mass migrations on the Singaporean culture and way of life can be seen from the way European migrations forever changed the societies in the new found continents of America and very nearly exterminated the aboriginal societies that existed before their arrival.

Consideration of the Singapore identity in decision making is neither irrational nor illogical. Although Mr Rajaratnam said that cultural elements are constantly being changed, modified or discarded, he didn’t say that such changes, modification or discard should occur in a massive, forceful, big bang or disruptive way. They should occur in a natural and evolutionary pace.

Mr Rajaratnam and his colleagues weren’t Singapore’s founding fathers for Singapore was never founded by them. Singapore has one and only one founding father – Sir Stamford Raffles. The noble deed of founding doesn’t entail the mere acceptance of independence served on a silver plate which was exactly what Mr Rajaratnam and his colleagues did. The act of founding entails at the very least, the struggle for independence much like Ghandi and George Washington struggled for the respective independences of India and USA. Mr Rajaratnam and his colleagues exhibited no such struggles for independence. Independence was gifted to us by Tengku Abdul Rahman without us having to lift a finger – and without us wanting it too.

Let’s not invoke the high precepts of Mr Rajaratnam in a half-baked way or brush off cultural arguments without strong reason.


Although the history of the Slovak people as expressed in the nation state is less than two decades old, Slovaks have existed as a unique entity for about 1500 years.

Although their history dates back further, most Slovaks of the past millennium seem to prefer to trace their roots to the ninth century and the apostolic work of Saints Cyril and Methodius.