Elitism in Singapore

http://www.atimes.com/atimes/Southeast_Asia/HK23Ae02.html

Mixing welfare and elitism in Singapore
By Alex Au SINGAPORE Nov 23, 2006

Is Prime Minister Lee Hsien Loong moving to soften the island state's time-tested capitalist credentials with state welfare policies for the poor? Growing economic inequality has put Lee to the political test, one that is challenging his economic lieutenants to devise ways to redistribute national wealth consistent with Singapore's strong laissez-faire capitalist tradition. The formula they've arrived at, however, seems likely to widen rather than bridge the divide. In mid-November, Lee announced government plans to raise the goods and service tax (GST) from 5% to 7%. The tax hike is designed to generate about S$1.5 billion (US$960 million) annually, funds that will be earmarked to develop a more generous social safety net. "It's essential for us to tilt the balance [of spending] in favor of lower-income Singaporeans because globalization is going to strain our social compact," Lee said upon announcing the policy. It was an unusually candid admission for the leader of the ruling People's Action Party (PAP), the political machine that Lee's father, former premier and current Mentor Minister Lee Kuan Yew, founded and that has ruled Singapore uninterrupted since the country's founding in 1959. Strict adherence to neo-liberal economic prescriptions and policy promotion of an export-oriented economy contributed to Singapore's emergence as one of Asia's richest countries in the 1980s and 1990s. Now, it appears those same policies are disproportionately lifting the top tier of society while leaving a growing number of lower-wage earners in the economic lurch. That trend arguably began with the 1997-98 Asian financial crisis when, government statistics show, the wages of lower-skilled workers fell by about one-third. Despite economic recovery, the income gap has continued to widen as Singapore's past advantage in manufacturing industries has been eroded by China and other lower-cost countries in the region. Over the past five years, about 20% of Singapore's households have suffered from declining incomes. And that's arguably starting to take a toll on the PAP's popularity.

Evaluation: The widening income gap between the rich and the poor in Singapore could be one of the signs of subtle elitism present in our society.