18 October 2014
Poverty in the midst of prosperity -- the case of Singapore

Poverty in the midst of prosperity -- the case of Singapore

Japan, Korea and Singapore are considered to be cases which have conquered the blight of poverty. But poverty is increasing in these economies, driven by the widening gaps between rich and poor.

Japan, Korea and Singapore are often considered to be cases which have conquered the blight of poverty. In reality, poverty is increasing in these economies, driven in large part by the widening income gaps between rich and poor.

According to the OECD, Japan has the second highest poverty rate of among the advanced countries of the OECD, just behind the US. Some 16% of Japanese citizens live in relative poverty. Korea is close behind with a poverty rate of 15%.

Any visitor to dazzling Singapore might be shocked to learn that a quarter of Singaporeans live in poverty, as GDP per capita in the city state is the highest in Asia, after the casino-state of Macao, and one of the highest in the world. And the poverty rate would be much higher if the situation of low-skilled migrants were included in analysis of the issue.

The life of Patricia, a Singaporean nurse, and her unemployed partner, Sham, illustrate the challenges of a life of poverty. Patricia works as a full-time nurse in a governmental hospital, and earns just S$1,400 a month. She pays S$850 a month to rent a non air-conditioned room in an apartment at Admiralty, in the north of Singapore, a 90-minute commute by public transport to her workplace.

Patricia's monthly rental does not entitle her to the use of her landlord's kitchen, so she and Sham must eat out for all their meals, often at McDonald's. Unfortunately, she cannot afford a small, two- bedroom condominium unit in the city centre which would cost S$5,000 or more. In 2001, Singapore was ranked 97th in the list of the world's most expensive cities. But ten years later, it was ranked sixth.

Singapore's poor can also be found selling packets of tissues outside food centres. Or spending the night on benches near their jobs to save the transport fare home -- they are known as "sleepers". Or collecting empty soft drink cans out of trash bins.

Kishore Mahbubani, dean of the Lee Kuan Yew School at the National University of Singapore wrote in 2001: "There are no homeless, destitute or starving people in Singapore. Poverty has been eradicated, not through an entitlements programme (there are virtually none) but through a unique partnership between the government, corporate citizens, self-help groups and voluntary initiatives".

This comment is plainly misleading.

Inequality and poverty have indeed been deteriorating in Singapore, according to a study of the Lien Centre for Social Innovation and the Singapore Management University. The bottom 20% of Singapore residents saw their real median incomes fall by 8% from 1998 to 2010, while those in the top 20% increased by 27%. Singapore does not have a minimum wage. Thus the rate of inequality has risen dramatically, and is the second highest in Asia, after Hong Kong, and is one of the highest in the advanced world.

The consequence for Singapore's poverty situation is dramatic. Some 10-15% of Singapore's population are unable to meet their basic needs of food, clothing, shelter and other essential expenditures, with their monthly income below S$1,250-1,500. Most of these people include "working poor", unemployed poor households and poor retires.

If the notion of basic needs is expanded to include in-school education, improving skills, and the purchase of goods like computers, Internet connection or mobile phones, about 25% of Singapore's population is living in poverty, below S$2,500-3,000 a month, sharply up over the previous decade. These expenditures are necessary to invest in human capital, and create the possibility of social mobility or a life beyond continued basic subsistence for adults or children of the next generation.

It is hard to escape the conclusion that Singapore's poor, as well as its lower skilled migrants, are there to suffer and serve Singapore's elite, which now counts 188,000 millionaires and 20 billionaires. Singapore has the highest concentration of millionaires per capita in the world.

Another sad reality is that most Singaporeans are not aware of the scale and depth of poverty in Singapore. And the Singapore government provides very much less assistance to the poor than do governments in other advanced countries.

Thankfully there are any civil society anti-poverty initiatives like "Singaporeans Against Poverty", launched by the Catholic group, Caritas.


John West
Executive Director
Asian Century Institute
Tags: asean, singapore, poverty