Exit the sacred cow
A change appears imminent to cope with the deteriorating plight of the jobless and a widening income gap.
Sept 30, 2001

The horrendous terrorist strikes against USA may have one unexpected impact: The weakening - if not slaughter - of Singapore's sacred cow that NO public funds be given to help the jobless.

The government will soon introduce a scheme to give assistance to tide over the plight of the growing number of unemployed and their families.

Nobody is calling it the dole - a dirty word here - or anything close to it because that would entail a European-type welfarism which is not the case.

Indication came from Prime Minister Goh Chok Tong when he said: "We will be working out programmes to ensure that those who will be retrenched in the months ahead will at least have their living expenses taken care of."

That means putting money into suffering households as temporary relief rather than making it a way of life.

This will probably be just enough to provide for their minimum necessities, like food, children's education, medical needs, and so on.

Question is where is the money coming from? Answer: probably from budget surpluses. The details will be known along with the second economy-boosting package in mid-October.

Unemployment assistance will need getting used to. It is unlikely to be a permanent feature of life here. Neither will it change Singapore's corporate culture.

Unlike in other countries, the Republic has always frowned on unemployment dole as something that kills work ethics, promotes laziness and a crutch mentality.

As a long-term policy it is unsustainable without raising taxes which will drive out wealth and investment.

This idea of temporary relief is born out of necessity to preserve Singapore's competitiveness.

For many companies to survive the severe downturn, they need to shed staff, including government-linked corporations. The government does not discourage such corporate decisions.

With shrinking investment in the next year to 18 months, the government is concerned about the impact of 20,000-25000 unemployed. This means 100,000 family members.

Ministers have repeatedly said that extraordinary times required extraordinary measures. In times like these, capitalism needs a human face.

Socialism, a history in reverse

Mr. Goh also announced that a special "New Singapore" type of shares to be distributed to Singaporeans - more to the lower-income - that could be converted to cash.

Morgan Stanley Research said it could be potential substantial. "Based on our estimated, giving away half the fiscal surplus (US $4.5 billion or S$8 billion) to 1.5 million eligible Singaporean citizens would amount to about US $3,000 person." it said.

The biggest beneficiary will likely be the older unskilled people who are excluded by the New Economy.

Distributing wealth to the poor has long gone out of fashion in Singapore, which has long advocated that assistance should best come from family, not the state.

Since formation, the ruling People's Action Party (PAP) has called itself a democratic socialist party, but it had rarely been very ideological.

Over the years, however, the "socialist" part steadily declined in the face of corporatisation and privatisation. Subsidies fell in most state activities until today when they are found in three areas - housing, health and education.

Returning the surplus cash to the people - with special preference to the poor - is a partial return to the "socialist" part that it has long been cutting down.

This fundamental rethink is compelling. In the past few years, the world has changed into a dark, gloomy place with no light in sight.

Unemployment is not just a passing cloud in Singapore but a long-term way of life particularly for the older, less-educated.

Apart from the recession, global Singapore is finding itself living in a changed world, a poor business environment.

An air of despondency hangs over the state. Describing the mood, The Economist magazine in London describes Singapore as a city that is suffering the torture of a thousand cuts.

Social Comtract

There's another reason for the move.

For years in the old world, the PAP had promoted a "social contract" between the governing and the governed.

Under the concept, each had an obligation to the other.

The government was to provide jobs and other welfare to the people; if it fulfilled this, then it was the duty of the electorate to vote for it.

In 1984, when there was a sharp 12.5 per cent swing of popular votes against the PAP, some of its leaders accused these voters of breaking the contract. Jobs were plentiful but the voters voted opposition.

With the new economy, the world has changed.

Even in the wealthiest countries, no government can promise lasting jobs to their peoples.

At best, they can only mitigate the impact of unemployment which is what is about to be done here.

The government is supplying some balm on the nation's wounds.

Besides, general elections widely tipped to be held in the next three to four months. These popular measures will help boost the government's prospects.
Seah Chiang Nee

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