Friday, August 30, 2013

Money not enough: some thoughts on land use and economic development in Singapore

"Jobs for foreigners, national service for Singaporeans": a Singapore Graffiti 2006.

For a long time - Singaporeans assumed that economic development and social happiness were one and the same. If the economy is doing well, the citizens will be happy.

Unfortunately this is not happening. Singapore has been recording dramatically strong rises in its economy as evidenced by its GDP and has recovered from the Great Financial Crisis of 2009. But the citizens are getting more and more miserable.

The problem with using Economic development/GDP as a benchmark of the well-being of society is that it does not take fully into account the citizen's needs: such as house ownership, natural population growth (without regard to immigration). Its also possible to artificially boost GDP growth by allowing massive influx of foreign investment into the land. Most countries in the world would welcome this - but if the foreign investment is used to corner the very small property market - that creates huge social problems.

I am very surprised that given the scarcity of land in the tiny country that Singapore possesses - we are allowing foreigners and permanent residents to purchase property and apartments. We are not like Australia, or America where they have vast amounts of land to spare. Singapore btw is only 274.1 sq miles in size.

Even in Australia, a land which dwarfs Singapore like a whale is to a guppy - the law stipulates that if foreigners purchase new property and want to sell it - they have to sell it back to Australian citizens - and also incur any capital gains tax if they made some profit. But not in Singapore. Here we allow the foreigners to park their capital... which can be a good thing if it doesn't cause massive inflation.

Its a harsh zero-sum game here in Singapore: whatever land owned by foreigners or large property companies is another precious piece of real estate that ordinary Singapore citizens cannot own - forcing them to rent or worse, migrate.

As the amount of property and free land dries up, property prices shoot upwards, a housing bubble is formed -the inevitable net effect is that the rental prices go up, and the cost of living follows suit like a carriage on a train. The majority of Singapore citizens suffer as a result as the rise in property prices has a tremendous ripple effect.

I call it the "small pond" effect. You have a small pond - its filled with your tropical fish like gold fish or guppies. Then one day the owner of the pond decides to throw in more fish - bigger fish, smarter fish, more aggressive fish. The result is inevitable. The bigger fish crowd out the ornamental fish - wiping them out.

You see the same for Singapore. The Govt lets foreigners - esp the elite rich - into Singapore. They purchase property - for the very rich, they got enough cash to buy two, three, or more. The property pool inevitably shrinks. Property prices go up. Couples postpone marriages, delay having babies. Food sellers have to decide on whether to raise prices or cut the cost or quality of food. Families suffer when not enough cash can be brought in to service the mortgage and children's education etc.. creating serious tensions.

A lot of young people are staying at home with their parents because they can't afford their own places as single adults. This really fucks up their social/ dating lives. It creates a myriad of problems for young adults.

One big player that can do something about it is the Government. They can control market forces and pass laws to combat the housing bubble; for example, restricting land ownership by foreigners or even restricting the amount of property owned by an individual or one corporation.

They could even build HDB flats that cater more for young single people. I mean whats the fucking point in doing your 2 years of national service + years of reservists - which means you can't earn enough cash to buy your own home?

If you think this is not feasible. Remember that a great deal of government owned land (HDB estates, Changi Airport, the military) were land forcibly acquired from private landowners. My grandfather owned land in Ponggol, Jubliee, etc.. and they were all forcibly acquired by the government at rock bottom prices. A family friend's father owned land in Changi, Jurong, and even Pulau Ubin - they were also acquired by the Men in White - for next to nothing. To add insult to injury, I think they were even taxed at current market prices when the properties were acquired.

Hey, it makes some moral sense if government used the land to build cheap affordable public housing that benefited the mass citizenry - socialism at work! :D

But when the Government run by overpaid pollys decide to make a fat profit out of the sale and control of public land and the properties gets owned by foreigners or very rich individuals - I think the citizens, meaning all Singaporeans, have a right not to feel happy about it.

At issue is what the Government is doing with the profit, ie. the citizens' money. If it is using the cash to build schools, fund public hospitals/ public medical insurance, build more affordable public housing, helping to retrain retrenched workers - I think that's money well worth spent.

But the problem is we don't really know. How can we tell if there is a lack of transparency and hence accountability in the government?

The problem is when we talk about the Govt's surplus or Govt reserve - I think the PAP believes that it is actually "their money", they earned "it", they made the policies which got "it".

This is evidenced by the cavalier way they treat Opposition wards - withholding public work upgrades.

They don't think it is the people's money. They think its their money. Hence, they have no problems rewarding themselves with increasingly high levels of pay - even junior MPs like an infamous 20+ year old politician gets $10k a month. Money well worth spent?

And you can see that arrogance reflected when PAP politicians say that Opposition constituencies have to repent and will not be entitled to the same "upgrading" (the building of public utilities like the train, bus services, housing development renovations) as other areas which voted in the PAP. This bald faced "Fuck You in your face" attitude may have worked back in the 1960s when most of your citizens were improvised and poor. But you can't go on treating your citizens like an old school Chinese father treats his children. This sort of overbearing paternalism doesn't work anymore. Its a global economy and a lot of Singaporeans are migrating.

The PAP government is fond of telling its citizens to work harder, adopt Spartan lifestyles, have more babies, be smarter, more innovative, talk less, work harder, etc.. but when the leaders and top civil servants are rewarding themselves with the highest salaries in their categories - worldwide - earning more cash in a month than what many ordinary Singaporeans earn in a year - you are creating a huge class divide.

A "Brahmin class" is created - people who have access to wealth, top education, health, power. They don't seem to be aware why couples are postponing marriage, babies, etc.. Sitting in their luxury cars, or landed properties they are mystified when citizens complain about the problems of public transport. They urge Singaporeans to work harder, do longer hours and accept cheaper wages while they reward themselves with massive salaries. You might as well get turtles to get advice from eagles.

Cocooned in their own little world, they are shut off from the noise of the street, from the ordinary citizens. Anyone who offers a dissenting point of view or complain about the problems are told plainly that they can "quit", leave, "get out of my uncaring elitest face (llike Wee Shun Min)", and migrate - go to Perth. One Minster is famous for saying, "Quiters go to Perth"  which is ironic considering that Western Australia is now one of the richest lands in the world where a truck driver can earn over 100k a year.

The tragedy is that a lot of Singaporeans have migrated. For a small population, every single person that leaves is a lost of part of the fabric that makes us uniquely Singapore.

A good friend of mine said, "Ten years ago, when you sat next to an Indian or Chinese at a Hawkers centre, you knew who they were, you shared common cultural grounds, you could chat with them about Singapore's chances in the Malaysian cup, the taste of the Laksa. Now you probably can't. They are quite likely from India, China. They aren't my people, and I feel like a stranger in my own land."

The Govt of Singapore is committed to ensuring the economic progress of the nation - building up that statistical number called the GDP -but it seems its forgotten how to take care of the needs of the people. So when Singapore seems to face an employment shortage - it increases the number of foreign workers allowed into the country.

The Govt leaders are so far removed from its citizens that they actually expect them to compete against workers whose families are being raised in 2nd or 3rd world countries where the cost of living is dramatically lower than Singapore.

Not only that, but they are awarding citizens and PR status to foreigners who are probably not going to stay in the country for long anyway. I've met a few newly-minted Singaporeans and they bluntly told me that the only reason why they are in Singapore is so that they can get a passport which would enable them with easier access to Australia, NZ, America, etc.. Moreover, these same people (if they are over a certain age) are under no obligation to comply with the duties of serving their National Service.

Singaporean families have to send their sons to do this 2 years of compulsory military/civil service (and later on decades of reservist training). Its not a cake walk. Not everyone can go in, train for a few years and rise to become a Brigadier General. A number of NS boys actually get killed or are badly injured during national service. During my NS stint, if a soldier got killed in accident- the Govt would award the family a small sum of a few thousand dollars as compensation. Worse, if you got badly injured, the Govt offered very little to help pay for long term medical expenses. And tragically, the boy is probably the only son/child in the family - thanks to the Govt's Two is Enough policy. Tough shit - it seems to be the govt's attitude.

And what's the point? The young Singaporean boys serve and meanwhile watch as they see increasing numbers of foreigners allowed into the country to take the jobs, not to mention the girls.

LKY is fond of saying that Singaporeans need to buck up, be more like the ancient Spartans (who also perished due to a declining birth rate and a constrictive culture), and face the "hard truths".

The hard truth is that Singapore is a tiny nation and its govt are allowing too many foreigners into the country to take up jobs, property - leaving an increasing number of Singapore citizens alienated in their own tiny country.  

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