Pls there is no need to click on the link. Here is the full article which I reproduce here. Constantly they are trying to get ppl here to go to his site so that he can boast of his hits numbers.
Just to let everyone here know that Lucky Tan is the one who pointed out about this research in his blog. I spotted his post this morning. Now Temasek Review is jumping into the picture without even a mention to Lucky's post. Ingenious indeed.
Researcher from LKY School debunked MM Lee’s claims that widening income gap is “inevitable”
From our Correspondent
During the Kent Ridge Ministerial dialogue held at NUS two days ago, Minister Mentor Lee Kuan Yew stressed that that problem of a widening income gap is one that most countries – not just Singapore – have to contend with and it is “inevitable” in a globalized world.
MM Lee’s claims about the “inevitability” of Singapore’s widening income gap were debunked last year in a paper co-authored by a researcher, Mr Mukul Asher, from the Lee Kuan Yew School of Public Policy entitled “Singapore’s Policy Responses to Aging, Inequality and Poverty: An Assessment”. (read abstract here)
Besides income inequality, the paper also addressed the twin problems of aging and poverty in Singapore which may be contributed partly by the government’s policies.
The paper criticizes Singapore’s over-reliance on a single-tier mandatory savings in the form of CPF to finance retirement, housing and to a lesser extent, healthcare as well as the government’s migration policies to allow non-citizen population to triple between 1990 and 2005 to 30 per cent (it is now 36 per cent) in order to sustain growth and competitiveness at the expense of citizens.
It argues that Singapore has the fiscal, institutional, and organizational capacities for a modern multi-tier social security system instead of the current inadequate and inequitable arrangements which require individuals and their families to bear disproportionate risks in financing retirement, healthcare and short-term income support.
Short of being a helpless victim of globalization, the paper concluded that “this reflects conscious policy choices arising from a Darwinist vision of society, and the need of socio-political control…and therefore cannot be attributed to globalization phenomenon.”
In other words, Singapore’s widening income gap is largely a result of the government’s long-held policy of depriving citizens of an adequate social safety net in order to spur them to continue working harder to support themselves and families.
While globalization does contribute to income disparities, the government can ameliorate the situation by limiting the influx of foreigners and providing more social assistance to citizens like in other developed Asian countries.
Singapore has one of the highest saving rates in the world at 47 per cent. Instead of investing its vast fiscal surpluses in children which will generate a much better returns, they end up mostly in the country’s two giant sovereign wealth funds – GIC and Temasek, which suffered heavy losses lately as a result of the global financial crisis.
The limited and inadequate social security system is necessary to keep citizens on their toes at all times and to diminish their interest in politics. With Singaporeans having to work extra hard in order to pay off their ever rising loans, few will be adventurous enough to join the opposition to challenge the ruling party.
As a result, Singaporeans are continuously being held hostage by the ruling party over estate upgrading which affects the value of their flats and their CPFs which they are unable to withdraw in one lump sum now under the annuity scheme.
A subservient and apolitical citizenry makes for easy control and governance thereby enabling the ruling elite to implement unpopular policies with little fuss since the majority of the populace are too caught up with earning money than to bother themselves with politics and current affairs.
In summary, the government can do much more to reduce the growing income gap between the poor and the rich, it is not simply an “inevitable” consequence of globalization.
Though Singapore is an open economy and cannot expect to buffer itself from external shocks, the government has the resources and capacity to develop a multi-tier social protection system for its citizens.
The problem of such a system is that it will empower the citizens and reduce their heavy reliance on the ruling party thereby threatening its political hegemony.
Singaporeans must realize that as citizens of their country, they have the right to demand the government provides them with certain basic benefits such as free education up to the college level at least and easily affordable medical care which commensurate with developed countries elsewhere though not necessarily an exact replica of the welfare system in the West.
Embracing globalization fully without putting in adequate safeguards to protect the interests of citizens is not only foolhardy, but detrimental to the development of the nation in the long run.
