Saturday August 25, 2012
Living in the richest country
INSIGHT: DOWN SOUTH By SEAH CHIANG NEE
By most standards, it would be reason to bring out the champagne bottle, but because of the extraordinary circumstances, the majority of Singaporeans are not cheering.
WHILE celebrating their 47th National Day, Singaporeans received news that people anywhere would die to hear that their country is now the richest in the world.
Technically speaking, this transformation from a poor, squatter island in less than 50 years has been impressive.
During this time, without much natural resources, the city has recorded one of the world’s fastest growth rates on per capita basis, exceeded only by Japan and Germany after World War II.
It has, like an invisible giant hand, lifted the bulk of a squalid population and moved it into the middle class. Few others with bigger natural assets have fared as well.
Yet the news has evidently impressed the world more than it did Singaporeans.
The reason is that the majority of citizens here are too concerned with the structured high cost of living that collective wealth has bestowed. It has made the city one of the most expensive in the world.
On perspective, however, most Singaporeans have benefitted from the progress over the generation. A minority has prospered greatly.
According to the Wall Street Journal, Singapore’s per capita GDP has reached US$56,532 (RM175,250) in 2010 – measured by purchasing power parity. This has beaten Norway, the United States and Hong Kong.
By most standards, this would have been reason to bring out the champagne bottle, but because of the extraordinary circumstances, the majority of Singaporeans are not cheering.
Since the report, the number of centa-millionaires – people with more than US$100mil (RM310mil) – has grown 13%, higher than the global average at 6%.
The problem is that it is predicted to grow by another 44% by 2016, which probably means higher inflation for all.
The fact is that Singaporeans – already hit by one of the world’s highest inflation rates – are too burdened by expensive housing, cars and general living expenses to be cheerful.
Yet, there is no denying that the majority of Singaporeans are living better than they ever had. Singapore has been transformed into a middle class society and now has the dubious title of being the wealthiest in the world.
But in the past five years, living standards have taken a turn for the worse for many people despite the collective affluence.
An influx of cheap-cost foreigners has resulted in acute shortage and income stagnation in many cases.
So why are Singaporeans so unimpressed with living in the richest land in the world? The reasons are as follows:
> Some 37% of residents are foreigners, quite a few of them ultra-wealthy. The import of billionaires provides little or no benefits to the average citizens except pushing up prices. Take the foreigner portion away and the city could be that much poorer; and
> A large part of the wealth is in corporate hands rather than with individuals. Not all of it ends up in big-paying jobs for locals.
As a result of the large amount of money sloshing around, prices of things like houses, cars and healthcare are rising with no sign of abating. Many loans and mortgages are increasing.
Forbes recently reported: “The latest list of wealthy Singaporeans showed lots of money sloshing around Singapore – but it may just be the tip of the iceberg.”
Good news? I don’t think so. No Singaporeans are crazy enough to pray for poverty, but extreme wealth in the hands of a few is just as bad. Without that the economic gap here is already the world’s widest.
Singapore’s richest people have a collective net worth of US$59.4bil (RM184bil), up from $54.4bil (RM168.8bil) last year. It now has 16 billionaires compared to 13 the previous year, Forbes reported.
Ten of every 100,000 households in Singapore are now classified as “ultra-high-net-worth” households, with each having more than US$100mil (RM310mil) in private financial wealth.
All these impressive fortunes are good for boasting, but believe me, I would rather wish for a more even distribution. The foreign billionaires can be here today, gone tomorrow.
Singaporeans are practical enough to realise that wealth in the form of paper notes is too transient.
Since it is measured in US dollars, part of the fast growth is due to the strong surging Singapore dollar.
Are we in fact richer than countries like Indonesia or Australia, which may not have our cash or GDP but have plenty of natural resources in the ground like oil, iron or even water that are more abiding?
This was an early reason that former prime minister Lee Kuan Yew gave for Singapore accumulating huge amounts of reserves. “It’s for a rainy day” a crisis to make up for lack of ground wealth.
As the wealth report was released, the pro-government The Straits Times reported that the number of households on short and medium-term public assistance shot up by 81% – from 5,471 to 9,911 over the past year.
This rising wealth is greeted with pride by a few elderly citizens who remember their poorer past. But, by and large, Singaporeans have reacted cynically to it.
Prominent blogger dawning bread wrote: “There might have been a time when people here would have taken pride in such an accolade.”
Now, he said, the publication of the news on page one of the major newspaper, The Straits Times, “must have annoyed a lot of people”.
“I don’t feel rich,” another Singaporean said. How could Singapore be richer than Switzerland or the US?
“Statistics can be toyed around to fit any agenda. Look around you – does this look like the richest country on the planet?” asked Invictus.