Most expensive city
People will need to work longer years to cope with daily living and save for old age. By Seah Chiang Nee
Mar 8, 2014
Synopsis: Will rising costs chase away investors and skilled foreigners (the real ones)?
SINGAPOREANS will likely huddle around their TV sets in June to watch
World Cup soccer – but only if they pay, once again, a fee higher than
anyone else on earth.
To cynics, this is merely in keeping with their newly declared status of belonging to the world’s most expensive city.
In 2010, the cable companies bid so high for the telecast rights that they charged fans S$70.50 to watch.
Negotiations are still on, but the costs are likely to be at least as high.
This World Cup TV cost is probably the best way to describe how ordinary Singaporean lives are affected.
That we are a top high-cost place has been known to us for some time,
but few Singaporeans – if any – had imagined we would be Number One.
Global research criteria, of course, do not always find universal acceptance among governments, particularly if the news is bad.
But what is not in contention is that global Singapore has been steadily climbing to the top of the totem pole of high costs.
Ten years ago, we were in 18th place.
In 2009 alone, Singapore jumped five places from 15th to 10th position, overtaking Hong Kong, its traditional rival.
This year, we overtook leader Japan and several other expensive Western cities.
Aggravating the rise was the opening of the floodgates for foreigners
such as struggling workers and billionaires to flock here, thus
creating demand and stretching resources.
Days before the Economist Intelligence report, eight Town Councils
managing public flats announced an increase in service and conservancy
charges from April onwards.
The hikes ranged between S$1 and S$15 a month for each flat, depending on its size and type.
Then the annual 2014 budget was announced, resulting in government levies and thus prices being raised for cigarettes and beer.
A fast food chain raised the price of a cup of coffee from S$2.10 to S$2.30.
All these changes hardly raised a groan.
Singaporeans appear to have become so numb about price hikes that when they take place, it is just routine.
The first-generation government worried much more about inflation.
Its trade unions actually started a supermart to force traders to lower the price of rice and other necessities.
For someone born here 74 years ago, my journey from wooden shacks to
international high-cost notoriety should have been one of pride.
Few countries have been able to accomplish it.
Yet this near-miracle is marred by the fact that income has lagged far behind costs and inequality has soared.
Runaway inflation, both imported and domestic, has been a cruel master cracking its whip.
An important factor is Singapore’s lack of space and natural resources, making it vulnerable to world market swings.
Last week, the Economist Intelligence Unit (EIU) said that Singapore
tops 130 cities in terms of costs of living, including Paris, Oslo,
Zurich and Tokyo.
The people of these cities, however, enjoy higher wages and welfare benefits than Singaporeans.
How do ordinary Singaporeans cope?
Over lunch yesterday, my young son, who earns a normal graduate wage,
confessed to me that he had not been to Orchard Road for a long time.
This tourist shopping zone is one of the world’s most expensive shopping belts.
Other youths, I was told, avoid even shopping malls in housing estates where prices are escalating.
Instead, they are now increasingly turning to cheaper online shopping.
Among the contributing factors of Singapore’s dubious promotion are
cars (world’s most expensive), property (fifth highest) and military
spending (highest on per capita basis).
My Japanese car costs three times more here than in Malaysia.
Transport costs are almost three times higher than in New York, said the report.
In addition, Singaporean political leaders remain by far the highest paid in the world despite a pay cut two years ago.
Even an environment minister here is paid more than the US President, said an opposition supporter.
“And the latter has his finger on the nuclear button,” he remarked.
The ranking is particularly bad news for potential investors and genuinely skilled foreigners who may be put off coming here.
“For the ruling party, the rising cost of living is fast becoming the
number one grouse,” said a People’s Action Party grassroots official.
“It will increase its difficulties in fighting the next election,” he added.
The most pressure has fallen on the shoulders of Finance Minister Tharman Shanmugaratnam to stop the rout.
In his first comment on the EIU rankings to Parliament, he dismissed
the findings as reflective of costs for expatriates and not locals.
The survey compares prices across 160 products and services in 140 cities.
While the minister may be right in being specific, it has become harder
to separate the two since the population in today’s global Singapore is
It is becoming harder to separate them – just like World Cup viewing.
Whether they are foreigners or Singaporeans, fans will pay the same high price.
(This article was first published in The Star)