Socialism Revisited
NO unemployment dole! In these extraordinary times, some sacred cows are being slaughtered.
Oct 20, 2001

The horrendous terrorist strikes against USA may have one unexpected casualty in Singapore - the sacred cow that forbids using public funds to help the unemployed.

Unemployment dole has always been a forbidden word, but with a changing world economy and rising hardship, this sacred cow is about to be slaughtered - at least temporarily.

For the first time, the government is using public funds to help unemployed and their families to tide over a prolonged recession.

Any one who loses his job now gets an immediate S$200 plus - if he attends a retraining course - an allowance of three-quarters of his old salary up to a maximum $1,200 a month - for the crucial months ahead.

Until now, the official policy had been looking after the unemployed was the responsibility of families and private bodies - not taxpayers' money.

At any rate shortage of labout, not unemployment was a problem until now. In a changing world economy, unemployment will be perpetual and - for many years - high, probably reaching 4.5 per cent by year-end.

A return to socialist practices

The centrepiece is the New Singapore Shares - worth S$2.7 billion - that will be given to all citizens above 21 years old.

The number depends on a fixed income and the value of housing assets.

Those who earn more than S$4,000 a month or, if they are self-employed, who own a landed property, get 200 shares (worth $1 each).

On the other hand of the sliding scale are Singaporeans who earn less than S$1,000 a month or who live in 3-room Housing Development (HDB) flats. Each will get the maximum of 1,400 shares.

In the old days, every one will be given the same number of shares.

A huge S$11.3-billion stimulus-and-rescue package has been put up to create jobs and provide relief for what the opposition calls "The New Poor" - low income citizens and the retrenched.

Every Singaporean above 21 years old will benefit from it. On average, each of the 2.04 million citizens will get S$5,540 in cash, shares and reduced taxes and fees.

The biggest beneficiaries are the poor, less educated and senior citizens.By helping the poor more than the rich, Singapore INC is readapting some socialist tenets it had been cutting down since independence.

Under its constitution, the ruling People's Action Psrty (PAP) still calls itself a democratic socialist party. But over the years, the "socialist" portion had been declining in the face of corporatisation and privatisation.

Past pains or rewards dished out by the state were distributed, with a few exceptions, equally to the rich and poor.

Subsidies fell steadily until today they are found only in a few public services - housing, health and education.

Returning the bulk of the surplus cash to the people - with special preference to the poor - is a re-embrace of its "socialist" past.

In a changing world, no sacred cows can last. Singapore is, in fact, re-looking all policies and pushing for a change of mindsets in order to stay ahead.

All this will not change the corporate culture in Singapore or lead Singapore towards a Western-type welfarism.

Social Conmpact

In the old world, the PAP had worked on a concept of a "social compact" between itself and the citizens it governed which works in this way:

It is government's duty to provide meaningful jobs to the people and when it does, it is the people's obligation to vote for it.

In 1984, when there was a sharp 12.5 per cent swing of popular votes against the government, the leaders were upset that so many voters had unilaterally broken the contract.

In this new globally competitive world, such a social contract can't work; no government can promise lasting jobs to its people.

That makes the alternative, mitigating the impact of unemployment as the $11.3 billion is doing, so crucially important.

But Senior Minister Lee Kuan Yew pledged Singapore would not follow American-type competitive capitalism, where the winners take all and the losers nothing.

At the end of the day, the losers must be able to go home with something. It's called the acceptable face of capitalism.

Seah Chiang Nee
(This article updates a previous one entitled "Exit the sacred cow" posted on Oct 2.)