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A roller coaster decade for Singapore PM Lee

Publication Date : 12-08-2014

 

Lee Hsien Loong's first decade as prime minister can be summed up in one word: Challenging.

It has been a roller coaster of a ride for Lee, who became independent Singapore's third prime minister on Aug 12, 2004.

For one thing, there has been greater political contestation. Singapore saw two general elections in 2006 and 2011, and two by-elections, in Hougang (May 2012) and Punggol East (January last year).

The presidential election of 2005 saw incumbent S R Nathan, the sole candidate, returned unopposed.

But in 2011, a four- cornered fight between candidates surnamed Tan saw Dr Tony Tan Keng Yam triumph with just 7,382 more votes, or 0.3 per cent, over closest rival Tan Cheng Bock.

It was a decade of peaks and troughs. Just out of the 2003 severe acute respiratory syndrome crisis, the economy went on to record robust growth of over 7.5 per cent a year until 2007, only to face the sharpest recession since independence during the global financial crisis.

Growth plunged sharply to 1.8 per cent in 2008 and shrank 0.6 per cent in 2009.

The government responded with a whopping S$20.5 billion (US$16.4 billion) Resilience Package for Budget 2009 to guarantee bank deposits, and to fund the Jobs Credit wage subsidy.

It did the unprecedented, getting then president Nathan's assent to dip into the reserves to fund the package. Crisis was averted. A year later, the economy rebounded, growing 15.2 per cent.

Leading Singapore relatively unscathed through the global financial crisis was cited by several observers as among Lee's top achievements in the decade.

Annual gross domestic product (GDP) growth averaged 6.3 per cent from 2004 to last year, according to economist Tan Kong Yam in an essay in The Straits Times Opinion pages today. On a per person basis, GDP went up from S$46,320 (US$37,062) to S$69,050 (US455,249) from 2004 to last year.

Vibrant, but mind the gap

Before he became prime minister, Lee gave The Straits Times an interview where he spoke about making Singapore a "dynamic economy" and building a vibrant, cohesive society.

Is Singapore today a dynamic economy? Former nominated MP Zulkifli Baharudin thinks so.

"PM Lee has made Singapore one of the most compelling global cities in the world. Like his father (former prime minister Lee Kuan Yew), he has permanently changed the course of Singapore. This is an extraordinary achievement especially for a country that was never meant to be."

Singapore has opened two integrated resorts, played host to the Formula One race and Youth Olympic Games, and created the dazzling Gardens by the Bay. An Economist Intelligence Unit survey in 2012 put Singapore sixth best globally in its "Where to be Born" index, and top in Asia.

But that global buzz also comes at a price - cohesiveness.

Lee presided over a Singapore of rising income inequality. The Gini coefficient was 0.464 in 2004 and went up to a high of 0.489 in 2007. The Gini index is a number tracking income inequality from 0 to 1, with 0 representing perfect equality.

One of the signal achievements of Lee's government is the move to bridge inequality by raising the tranche of subsidies for the lower- and middle-income group in all areas: from an income supplement for low-wage workers to grants for housing to subsidies in health care and childcare.

Whereas subsidies were mainly targeted at the low-income before 2004, subsidies these days are aplenty for households with median incomes and higher. Long- term care subsidies are given to those with per capita household income of S$3,100 (US$2,480) a month - or up to the 70th percentile.

There is also more risk-pooling in health care. In 2004, the old MediShield health insurance scheme did not cover babies with birth defects. And once you reached 80 years of age, or hit claim limits of S$30,000 (US$24,004) a year and S$120,000 (US$96,017) for life, you were on your own.

This year, the new MediShield Life promises universal coverage for life with no claim limits.

In one stroke, high hospitalisation costs are done away with as a major source of angst for Singaporeans. Lee has also done much for the older generation, notably in the S$8 billion (US$6.4 billion) Pioneer Generation Package of health-care subsidies.

By last year, the Gini coefficient was back down, to 0.463. After government transfers and assistance, it was 0.412.

Taken together, the social policies rolled out under Lee, ably assisted by Deputy PM Tharman Shanmugaratnam, are reshaping the social climate in which Singaporeans live.

The momentum of change increased after the 2011 General Election. But the shift towards higher social spending started way before that. Workfare, for example, began in 2005 and was institutionalised in 2007.

There is a major reordering of the social compact. The government is not just taking care of the economy and leaving families to fend for themselves in the marketplace.

It will help families and individuals fend off the excesses of the marketplace. Trouble is, many Singaporeans do not see it that way, as they grapple with rising housing costs and feel the heat of competition for jobs.

Angst over crowding

Instead, anxieties on overcrowding abound. Over the past decade, the population went up too fast, before transport and housing infrastructure could cope.

The population in 2004 was 4,166,700. Last year, it was 5,399,200. That is a growth of 29.58 per cent over 10 years, or more than 1.2 million people - almost all foreigners, given Singapore's declining birth rate.

Housing supply failed to keep pace with population growth. Instead, traumatised by the huge surplus of 17,500 unsold new HDB flats in 2002, the government slowed its building programme mid-decade.

From an average of about 30,000 units a year, it built just 2,733, 5,063 and 3,154 units from 2006 to 2008, respectively.

Some observers consider this the greatest policy failure of the last decade. How did a government that prides itself on keeping close tabs on numbers allow an influx of foreigners beyond the housing and transport infrastructure's capacity to cope?

Individual ministers might have been more focused on meeting the aims of their own ministries, but the government as a whole would be expected to oversee this collective effort.

Lee himself did not shirk this responsibility. In the heat of GE 2011, he surprised many when he apologised to the people of Singapore for the mistakes made, in an election rally at Boat Quay.

That public mea culpa and events after GE 2011 raised widespread expectations of political change. Days after the elections, former PMs Lee Kuan Yew and Goh Chok Tong, along with other ministers, retired from the cabinet, to give PM Lee a clean slate to govern. A review later slashed ministerial salaries.

Change, but slowly

On the political front, Lee has made a series of nips and tucks that appear minor, but which add up to something larger.

Take one example: Speakers' Corner, set up in 2000 as a free speech venue, was liberalised on his watch.

He opened it up in 2004 to exhibitions and performances, not just speeches. In 2008, public protests were allowed. These are small changes. But Singaporeans took full advantage of the relaxed rules.

Today, attending a protest at Hong Lim Park - against the White Paper on Population, for example - has become pretty commonplace.

But it is in what he stopped doing that Lee has made the greatest political impact. He sought to be seen to be fair when he called for polls, reducing the surprise element in timing them.

Nor were there wholesale changes to electoral boundaries. He stopped using estate upgrading as electoral carrots.

In GE 2011, opposition candidates' views, not their personal character, were attacked. In choosing fair election campaigns, and in refraining from browbeating opposition candidates, Lee made it less risky for people to enter the opposition fray.

And they did. In 2006, 47 seats were contested. Two opposition MPs won. In 2011, 82 out of 87 seats were contested. The opposition won six.

But Lee stopped short of fundamental reforms to the electoral system that some sought, ignoring calls for an independent election commission, for example.

His world view of politics for Singapore remains embedded in that of his predecessors: that of a Singapore governed by a dominant People's Action Party as stewards of the country's long- term interests.

But it is not one that all Singaporeans share. Some hoping to see more fundamental political change under Lee are disappointed.

Former nominated MP Siew Kum Hong, for one, had expected Lee to usher in an era of political change after GE 2011.

"But three years later, it's become clear, from incidents like the Population White Paper and the new (Media Development Authority) licensing regime, that the top- down/command-and-control approach remains very much alive in the PAP," he says.

Some say one of Lee's strengths is his ability to listen to different views. But that has led to a view that he has tried to accommodate competing views to the point of the government seeming populist at times.

He has a friendly and approachable image online and off, and is arguably the PAP's biggest political asset. At public events, he is often mobbed by those wanting to meet him, and take pictures or, these days, selfies with him.

But personal popularity has not translated into a long coat-tails effect for his party: The PAP's vote share fell from 66.6 per cent in 2006 to 60.1 per cent in 2011.

What is one to make overall of Lee's roller-coaster decade?

One can take the optimistic view and say Singapore has weathered crises remarkably well and remained intact as a society, despite the train breakdowns, the Little India riot of last December, a bus drivers' strike, and the sex and corruption scandals.

Critics might say there are signs of a ship that is cruising, or even adrift, tossed about by the global winds of change.

I would say that the truth as usual lies in between.

Singapore has done well on the economic front. There is a palpable buzz about the country.

On the social front, the incremental approach, where every small change adds up, has ushered in a Big Bang shift in social policy.

But whether the feel-the- way-forward approach is enough at a time when Singapore is undergoing rapid change remains to be seen. There is every risk that just as the last decade saw a gap widen in income equality, the next decade will see a rift widen in expectations in the political arena.

- See more at: http://www.stasiareport.com/the-big-story/asia-report/singapore/story/roller-coaster-decade-20140812#sthash.DH8r3VLn.dpuf

 

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