The decline of Singapores middle-class and what it means for us By K L Tan In emerging economies such as the BRICs, the emergence of a middle-class has been regarded as the backbone of the economy; their consumer spending will then go about to propel future economic growth. On the other hand, the exodus of the middle-class could lead to the collapse of a once-prosperous economy such as Zimbabwe in the 1980s These may be largely contrasting examples, but the middle-class segment of the population is clearly an important part in any modern economy. By virtue of the definition of middle (which can be taken to be a multiple of mean and median), this group comprises from half to three-quarters of any society and has substantial influence over its state. Today, we see the disappearance of middle-class Singaporean society no thanks the flawed social engineering of the PAP. Not only does the Gini coefficient keeps increasing in Singapore, one needs to look beyond the statistics to understand how the former middle-class in Singapore is struggling in the new norm created by the PAP. Consider the impact of mass immigration: The PAP let in 145,000 foreigners in Singapore in 2008 while building only 3050 units of HDB flats resulting in a resale price index of 15%. Sustained over more than 5 years, 9 in 15 youths these days can no longer afford a HDB flat. And the issue does not end there. While the middle-class has no doubt benefitted from the inflation increases, they are no better off in real terms since they are affected by having to buy another property at a high price should they sell their existing place. On the other hand, the rich who own multiple properties have made tremendous wealth at the expense of the middle class as they sell their properties to the middle-class. Moving ahead, these foreigner import puts strains on the infrastructure as well as the labour market has also worked to the detriment on the productivity of the economy and the liveability of the country. All in all, this backstabs the notion promoted by LKY that citizens will only have loyalty should they afford their own property. Can the foreigners make up the new middle class then? It is highly unlikely given that they are here only for the middle term to take advantage of the strengthening Singapore dollar and the higher pay: their ultimate goal is to either use Singapore as a stepping stone abroad or either retire at home. What does this mean for Singaporeans then? Judging by the sentiments on the ground - which is evidentially not sensed by the PAP - the middle-class Singaporeans are declining and resenting the PAP for a good reason. Most certainly, the future does not look bright for us unless the PAP is voted out.
Posted on: Fri, 24 Oct 2014 08:33:47 +0000
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