Recession hits Singapore unevenly
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http://thestar.com.my/columnists/sto...20Down%20South
Recession hits Singapore unevenly
Insight Down South
By SEAH CHIANG NEE
While the rich few rejoice, many Singaporeans are making do quietly.
YOUNG Singaporeans, who were raised in an era of affluence, have been indulging in a spending binge that appears out of line with economic realities.
The splurge, which followed signs of a mild recovery in recent weeks, resulted in a strong price run-up in stocks, properties and cars, taking many economists by surprise.
It was so strong that people were ironically fearful of an asset bubble building up during a weak economy. This apparent over-indulgence appears to ignore repeated warnings from government leaders and economists that more job cuts are in store and the recession could return.
One of its sovereign wealth funds, Temasek Holdings, said that as far as it was concerned, Singapore is still in crisis.
Despite these, expensive restaurants are once again packed with weekend diners and private clubs, once quiet, are again buzzing.
Most of the big spenders are young professionals, married and singles, and the wealthy. Their buying has caused prices of resale public flats and private condominiums to soar.
And despite the downturn, car usage in Singapore – one of the costliest in the world – has risen at the expense of public transport.
Analysts have, however, pointed out that the consumer splashing is unlikely to last and is only one aspect of life in a recession.
It is confined largely to the upper-middle class and irrationally exuberant professionals, who appear unfazed by the severity of it all.
Growing up in a golden era with years of news screaming about more good times ahead, many Singaporeans seem oblivious to their country’s vulnerability to world turmoil.
The bigger story is of a struggling middle class (some two-thirds of the population) that is too badly affected to be able to buy luxury items.
When I mentioned it to an old friend, a businessman and former human resource manager, he said the wider picture is different.
For the majority of workers, jobs have been lost and take-home pay diminished.
Almost all Singaporeans, rich and poor, have lost out in the recession, the worst being the poorer class.
“I admire these people very much. Mostly old and little skilled, they struggle on silently. No time to talk about their plight, just carry on working,” he said.
During the past two years, almost every Singaporean had to dip into his own savings to sustain himself, like the government did with its reserves in an effort to protect jobs.
The picture is different for the rich, whose number has been growing substantially through immigration.
The crisis has decimated fortunes, but the bulk of high-asset owners have enough financial muscle (again like the country itself) to ride out the storm or even prosper from it.
It is largely the spending habit of this group that fuelled the recent indulgence.
Years later, if writers looked back at the current severe downturn to ask what lasting impact the global crisis had on this society, one answer would be the erosion of the middle class.
The trend was first detected in Japan, and to a lesser extent in Hong Kong and Taiwan, as these middle-class societies prospered.
The theory, known as the M-shaped society, was enunciated by Japanese strategist Kenichi Ohmae. He observed that in Japan’s “M-shape” class distribution, very few middle-class people may climb up the ladder into the upper class, while the others gradually sank to the lower classes.
These people suffered a deterioration in living standards, faced the threat of unemployment, or their average salary was dropping, he said. Gradually, they could only live the way the lower classes lived: taking the bus instead of driving their own car, cutting their budget for meals instead of dining at better restaurants, and spending less on consumer goods.
Kenichi said all this might take place while the economy enjoyed remarkable growth and overall wages rose. However, the wealth increase may concentrate in the pockets of the very few rich people in society.
The masses cannot benefit from the growth, and their living standard goes into decline. For many middle-class Singaporeans, these sound uncomfortably like home.
The government, which relies on middle-class voters to keep itself in power, has vowed to make the closure of the economic gap a national priority.
It is a doubly tough job given the economic crisis which is widening – rather than narrowing – the differences. Minister Mentor Lee Kuan Yew seems to find this gap an inevitable feature here.
Singapore has the second-highest income gap with a Gini score of 42.5 among developed economies after Hong Kong, according to the UN Development Programme report,
(The Gini Coefficient index measures the income gap between the poor and the rich in any country with zero denoting absolute equality.)
Lee was speaking at a forum with undergraduates when he rejected a minimum wage for workers to narrow this gap, saying it was more important to keep jobs.
“Never mind your Gini coefficient,” he said. “If you don’t have a job you get zero against those with jobs.” In other words it is better to have a job with lower pay than no job.
Such remarks would obviously be more acceptable, albeit grudgingly, to the previous generation of poorer citizens than the current one.
It was such logic that helped turn Singapore into the richest country in South-east Asia, with a per capita GDP income rising steadily in four decades to S$53,192 (RM130,048) in 2008.
But in today’s high-cost city with Singaporeans finding it harder and harder to cope with the crisis, his words have neither helped nor dispelled many concerns.
For local news from non-local mainstream media, visit singaporenewsalternative.blogspot.com -
"For the majority of workers, jobs have been lost and take-home pay diminished."
"The masses cannot benefit from the growth, and their living standard goes into decline. For many middle-class Singaporeans, these sound uncomfortably like home."
Seah Chiang Nee writes from the heart.
I read a commentary by him in another site and it was also spot-on.
Isn't he the Editor of a defunct Singapore newspaper who had a heart transplant ??
I guess he is writing for a Malaysian newspaper, The Star, as it is unlikely that he will get his commentaries / articles published in a Singapore MSM.
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First, the plight of the races had been used as being marginalised here in SIngapore. Then proven not true.
Then the poor and 'homeless' are used to attack the deficiencies of our society. That had also been proven not true by our society's funding on social spending and donations.
Now, the middle class is used to stir up pessimism. Is there no end to it all? Why all these attacks? Are they blind that we and the world are in a middle, or at least at the tail end of a crisis? I would agree that the middle class had suffered by a drop in standard of living. Crisis does that to all, and as usual, the rich, who grew rich by saving, will always be able to weather the storms. But look at their depleted amounts - even though still huge by middle class standards, it is a substantial fall to their portfolios.
So why the pessimism as if the middle class were intentionally shortchanged?Can Seah or anyone else offer anything better than derogatory pessimistic remarks with what our society are so hardworkingly and tirelessly doing by getting out of this crisis which is not of our making?
As in any crisis, having a job is paramount and critical. Everyone worries about making the wrong life choices. But the most critical mistake a person can make with life choice decisions is to do nothing and rot at home. Get a job, earn some money and the chance to move up will be there. Restructure your loans or debts. No employer will turn away talents, than sit around at home and rot.
And it is my fervant hope that employers, the minority of them whom are selfish, start behaving socially responsible to spread their wealth and not hoard it, or society and the wider circle of responsibly rich will be doomed and hated, held responsible for taking advantage of the crisis, by the less priviledge in this meantime.
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Originally posted by Annonymous Agent 007:
"For the majority of workers, jobs have been lost and take-home pay diminished."
"The masses cannot benefit from the growth, and their living standard goes into decline. For many middle-class Singaporeans, these sound uncomfortably like home."
Seah Chiang Nee writes from the heart.
I read a commentary by him in another site and it was also spot-on.
Isn't he the Editor of a defunct Singapore newspaper who had a heart transplant ??
I guess he is writing for a Malaysian newspaper, The Star, as it is unlikely that he will get his commentaries / articles published in a Singapore MSM.
That's just a comment, everyone can gives comments in everything, but coming to responsibility, it is different.
Yes, i agreed that economy is not as booming as the earlier years, so what, during that time, people also grumble and comment on high cost and low pays, now that economy is uneven with uncertainties, people still do the same, except now they got more basic with regard to the poor economic to support their comments.
My take is simple, all things changes, be it up or down, left or right, good or new....we must learn to adapt and survive, keep complaining and doing nothing to upgrade oneself and yet blaming foreigners competition here is not going to send money down from heaven to you. Be realistic, go out, look for a job, learn a trade, upgrade your skill, retrain your profession, strive to lead and dun let age, foreigners and paid affect your road to success. If you all keep grumbling and cursing, in another 10 years time, you life will be the same or even worst..so start now. 10 years is enough for you to get a degrees or skills.
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Originally posted by angel7030:
That's just a comment, everyone can gives comments in everything, but coming to responsibility, it is different.
Yes, i agreed that economy is not as booming as the earlier years, so what, during that time, people also grumble and comment on high cost and low pays, now that economy is uneven with uncertainties, people still do the same, except now they got more basic with regard to the poor economic to support their comments.
It shows the people are feeling the strain of ecomonic burden. If its already felt in good times, bad times are even worse. Probably their purchasing power has dropped. If we take into account housing loans etc, there are people in negative equity and face an even tougher time just to keep up the payments.
My take is simple, all things changes, be it up or down, left or right, good or new....we must learn to adapt and survive, keep complaining and doing nothing to upgrade oneself and yet blaming foreigners competition here is not going to send money down from heaven to you. Be realistic, go out, look for a job, learn a trade, upgrade your skill, retrain your profession, strive to lead and dun let age, foreigners and paid affect your road to success. If you all keep grumbling and cursing, in another 10 years time, you life will be the same or even worst..so start now. 10 years is enough for you to get a degrees or skills.
You are illustrating a macro problem with a micro view. This is not an individual problem. Solving unenployment and ensuring a certain quality of life of the population is the responsibility of the government. Lets keep to the topic, recession. A recession will inadvertably result in higher unemployment. People will be retrenched, money supply would drop, economy would shrink etc. Your take as above would not solve any problems, the solution would probably lie with govt policy (e.g. like england's policy that locals must be given preference for jobs, diverse economy, minimium wage etc etc. etc.).
Just a thought about your talk on adaptation with sight on foreign immigration. If sg is attacked, would you surrender without fighting and adapt and assimilate into their culture? or would you prefer to fight for your motherland? (its similar in that thats where your interests lies)
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Just while away your time at regional centres like Tampines, Woodlands and Jurong, and see the people spending. And assess for yourself the if the people thronging the malls are the upper class, middle class, or third class, or even yuppies.
No need for statistics, just go and open your eyes.
There is money changing hands, circulating. That means business can be viable, that means goods and services are being produced, that means people have employment, that means people have money.
Go and see who is spending.
Don't swallow any selective crap of others, whether the crap is agreeable to you or not.
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those who have jobs, they are not affected by the recession. only those who do not have jobs or about to be retrenched, quitted or sacked, are the ones affected.
even if your earning 1.6k a month, if you are not overspending and spend within of what you earned, you are not affected what.