THE TEMASEK REVIEW

By Eugene Yeo, Consultant Editor

When Mr Goh Chok Tong became the second Prime Minister of Singapore in the 1990s, he promised Singaporeans that we will attain the “Swiss standard of living” within a decade.

In 2001, during the National Day Rally, Mr Goh said:

“I was also quietly satisfied that we realized our vision of reaching the 1984 Swiss standard of living last year.”

Have we really achieved the Swiss standard of living?

Though we do not have economic indicators for Switzerland in 1984, we have the figures in 2009 and it appears that Singapore is heading towards a Russian standard of living, rather than Switzerland’s.

Let us compare the indices for each category:

                                                                             Singapore        Moscow         Zurich

Wage level:                                                         31.3                   30.9                    119.8

Domestic purchasing power:                          39.9                   49.4                   106.9

Working time to puy iPod nano:                      27.5                   36.0                   9.0

Price of services:                                              72.5                   65.0                   110.9

 

As the above figures have shown, the Singapore worker has more in common with the Russian worker than a Swiss worker.

Like the Russian worker, the Singapore worker has low wages and domestic purchasing power which is aggravated by the relatively high cost of living in their respective countries.

In fact, the Russian worker has a higher domestic purchasing power than the Singaporean worker though his wage is slightly lower. And don’t forget Russia is a vast country. If one cannot survive in Moscow, they can move to the countryside where cost of living is lower. There is nowhere for Singaporeans to move to.

 

A greying population

Both Russia and Singapore have suffered from low birth rates though the latter is making the numbers up through mass immigration.

Russia’s population growth is almost stagnant at -0.085% in 2008. Its population could drop by as much as one third by 2050 if current trends does not improve.

Singapore will have about a quarter of its population above the age of 65 by the year 2030. A greying population is expected to place heavier burden on the younger population to keep the economy going.

With no social safety net to speak of, the Russian worker will have to support themselves in their golden years. Many of them become addicted to vodkha which results in a higher mortality rate than the European average.

The Singapore worker is not in a better position either. Their CPFs will not be enough to support their retirement needs as most of it is tied up in mortage loans to finance over-priced HDB flats.

The government has encouraged Singaporeans to work beyond the age of 80. Parliamentarians recently consider passing a bill to legislate that children take care of their aged parents.

With a high cost of living and declining wages, the future of Singaporeans is becoming as bleak as the Russian winter.

 

A modern serfdom

Not surprisingly, the economies of both Singapore and Russia are dominated by state-linked companies.

In the aftermath of the Soviet Union’s disintegration in 1991, many Russian politicians and crooks made use of the economic turmoil then to purchase national companies and assets at bargain prices.

These are the oligarchs who soon become the new aristocracy of Russia. The politicians at the Kremlin maintained their tight-fisted control of Russia with the financial backing of the oligarchs.

Like Singapore, Russia has one of the highest income gap between the poor and the rich in the modern world. Ordinary Russians are being enslaved in a modern serfdom to contribute to the state while getting very little in return.

Both states are very rich while its people have to slog daily to earn a pittance at work in order to keep themselves afloat.

Russia has Gazprom, Singapore has Temasek Holdings. The former obtain its funds from sale of natural gas which Russia has in abundance; the latter accumulated funds from years of budget surpluses. Neither channel their returns back to the people.

Russia is now returning to back to tsarist era where its people are nothing more than serfs toiling the fields for others. Ordinary Russians do not benefit from their country’s economic boom whose riches are plundered largely by corrupt oligarchs and politicians.

Singaporeans are not too far off from the Russians. The state is very rich and powerful, the politicians are the highest paid in the world, rich businessmen well connected to the elite dominate much of the economy together with gigantic state-linked companies and sovereign wealth funds but the people are poor, miserable and powerless.

 

State-sponsored repression

Though Russia and Singapore are supposedly democracies, both are authoritarian governments with little tolerance for political dissent.

In Russia, political dissidents are kidnapped and murdered. Singapore’s opposition politicians who dare to seek the truth are sued till bankrupt and barred from participating in elections.

Repressive laws are put in place in both countries to curtail freedom of speech, assemblies, and other forms of civil liberties.

The mainstream media are muzzled and becomes nothing more than mouthpieces of the regimes.

Russia’s United Democratic Party is the dominant party in the Russian Duma as in the People’s Action Party in Singapore.

The Russian Prime Minister, Vladimir Putin was Russia’s ex-President for two terms and he is now mulling a bid for the Presidency again when his current term expires.

Singapore’s two former Prime Ministers have remained in the present Cabinet with the portfolios of Senior Minister and Minister Mentor. Their exact responsibilities are not outlined.

 

Conclusion

With so much in common between them, it is no wonder that Singapore’s state-linked companies are flocking to Russia to explore opportunities of collaboration.

Not only are our standards of living becoming more and more like Russia, there is an insidious ”Russification” of our economy and politics as well.

What started out as a “Swiss dream” is fast becoming a “Russian” nightmare under continued PAP hegemony.

Isn’t it strange that Singapore, with one of the highest GDP (PPP) per capita in the world has a standard of living closer to Russia than Switzerland?

How is it possible that the state is flushed with cash and yet ordinary Singaporeans have a domestic purchasing power comparable to the Russians and way far behind the Swiss?

What went wrong? Are Singaporeans getting a fair deal from their government? Why are we paupers in a first world economy? Find out more in part 3 of this article.

 

Read also:

>> Part 1: Singapore has the lowest wages and domestic purchasing power among Asian Tigers

>> Part 3: Why Singaporeans are paupers in a first world economy

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