Posted by: bigtalksingapore | September 15, 2008

Rich Poor divide, what else can be done ?

We keep hearing “The rich are getting richer while the poor gets poorer”.
We see it all around us and we all know it’s happening, including Singapore.

Many said that it’s the effect of a free capitalize market and society.
Like the saying goes “Capitalism make everyone unequally rich while communism make everyone poor.”
And it seem inevitable.

Are there something else we can do to reduce this widening gap in Singapore ?

Let us take a look at the problems.
I will be using some articles from Newsweek 12 November 2007 (Attachment #1 to 13) to illustrate.

Human Nature “Greed”
Everyone wants a good life and more money in their bank account.
There’s nothing wrong with it cos “君子爱财,取之有道”, as long as it is ethical and lawful.

The poor need more of it for basic survival, the rich want more to maintain their lifestyle and the disappearing middle class is somewhere in between.

It stand to reason that the rich will do everything in their power to maintain their wealth (See Attachment #1). And the hard truth is that, sometime it may mean keeping the majority as poor as possible but still survive-able.

Gini Coefficient
This is a number (From 0 to 1 where 1 represent the highest level of inequality) that reflect the rich-poor divide (Click here for detail of Gini Coefficient

The general trend for this coefficient in a capitalize society is that it is going up (See attachment #2 and 3).

According to report from Singapore of statistic, our Gini coefficient increased from 0.472 (2006) to 0.485(2007) (See attachment #14).
The figure was adjusted downward to 0.46 (2007) with the GST offset package. Meaning to say that if there are no more similar packages, the figure is probably expected to be rising and will exceed 0.485 in 2008.

Tax Regime
Lets face it, the rich is enjoying unprecedented bargaining power.
If they don’t like what they see in Singapore, they can always transfer their money oversea with the touch of a few keystrokes.

That is why Singapore government is going all out to attract them to put their money here. And that may mean offering tax regime (less progressive) that is catered for the rich (See attachment #4).

But that will mean a drop in government revenue, right ?
This is where the creative thinking start, things like GST, ERP, Property tax and etc will do the tricks.

Middle Class disappearing act
There’s been talks of our society morphing from a normal distribution ( to a M-distribution.
But so far, I’ve not seen any statement from our Singapore authorities if it has happened.

This will mean that the middle class is disappearing (See attachment #5).
Eventually, it may come to pass that there is the rich and the poor only.
“I’m not stupid” and I don’t think it will be healthy for our country.

Public Policies
As with my point on “Tax Regime”, public policies will be made with the rich as first consideration.
The middle (if it survive) and poor will be the hardest hit in term of public policies (See attachment #6).

But with the rise of internet, Singapore government can no more ignore the little voice that may accumulate into a gigantic wave.
So, we’ll have to wait and see how this turn out eventually.

I don’t have to elaborate this, just look around the globe (See attachment #7 and 8).

Tiger to change its stripe
Singapore, Hong Kong, South Korea and Taiwan used to be called the “Tiger”.

The “Tiger” started its roar with the help of industrialization.
But like America, the age of industrialization or manufacturing for the “Tiger” is ending (See attachment #9).

So, it’s time to change its stripe.
And this is probably why Singapore is starting its first casino business.
How this will pan out remain a mystery to me, as it may be to you.

Public housing and facilities
Singapore used to pride itself with providing affordable housing to its citiizens.
I think all that is going to change real soon (See attachment #10 and 12).
Because the flood gate of migrant has opened, and many are coming in an alarming rate.

Added to it, Singapore is becoming a very attractive place for world rich.
And the best investment to buy in Singapore is properties.
Housing and facilities will be increasingly built for the rich.

Will the middle and poor enjoy it ?
Yes, to a certain extend, I think….I hope… (See attachment #11).

Family values
Family value has changed.
Don’t believed, just look at the dwindling baby born each year.
I think it is the first symptom of the change.
A good place to learn about this change is Japan (See attachment #13)

My Proposal
My proposal are as followed…..

  • I like to believe that there are many rich people in Singapore who was not born rich.
    People who build their business from scratch and know the hardship of commoner like us (Example like Mr Chew Hua Seng, see attachment #15 and 16).
    Government should put more effort to encourage people like Mr Chew to come forward to help the poor.
    If these rich people are reluctant to come out in the limelight, Government can acknowledge their effort (with a plaque) in private session and donate their money on their behalf. And the donation can be mentioned in public media as “Anonymous businessman/doctor etc”.
  • Charity organization can help to reduce the rich poor gap.
    But Singapore charities came under a lots of fire due to fund miss-management (Eg. NKF, Renci and etc.).
    There should be a system to ensure transparency.
    We should introduce a “Freedom of Information Acts” for charities organization.
    Any Singapore citizen has the right to request any information from charity organization.
    Citizen will need to fill in an application to the government agency, pay a little admin fee and the information will be release to the individual.
    This will serve as a counter check mechanism on charity fund.
  • Male Singapore citizen need to go for 2 years national service plus reservist after that.
    The salary paid to a NS man is well below the market rate, in fact it’s really peanut.
    For NS man who came from poor families, it is really not helping at all.
    We should introduce a “Hardship allowance” for NS man from poor families, the amount should be considerable enough to help these families.
    “Hardship allowance” should also be considered for reservist. That is to say, reservists from poor families will be paid an additional “Hardship allowance” on top of their make-up pay for recognition of their sacrifice.
  • Singapore education system should introduce and emphasize the importance of financial management from young, especially those from the poor families.
    Poor families can sign up for some sort of “Free textbook” scheme that include some sort of cash flow management technique.
    Parents will put their children’s allowance into an account whereby the student and teacher can use to monitor their spending.
    In this way, children cultivate the habit of prudence spending within their mean.
    This will help them to get out of poverty when they grow up.


Attachment #1: Newsweek, 12 Nov 2007,
Page 34 Column 1
(Note: The “Synchronous growth” refer to Hong Kong)

Attachment #2 : Newsweek, 12 Nov 2007,
Page 35 Column 1
(The Gini Coefficient below refer to Hong Kong)

Attachment #3 : Newsweek, 12 Nov 2007,
Page 35 Column 2

Attachment #4 : Newsweek, 12 Nov 2007,
Page 35 Column 2

Attachment #5 : Newsweek, 12 Nov 2007,
Page 34 Column 3

Attachment #6 : Newsweek, 12 Nov 2007,
Page 37 Column 2

Attachment #7 : Newsweek, 12 Nov 2007,
Page 39 Column 1

Attachment #8 : Newsweek, 12 Nov 2007,
Page 39 Column 1

Attachment #9 : Newsweek, 12 Nov 2007,
Page 40 Column 2
(The “Tigers” refers to Singapore, Hong Kong, South Korea and Taiwan)

Attachment #10 : Newsweek, 12 Nov 2007,
Page 43 Column 1

Attachment #11 : Newsweek, 12 Nov 2007,
Page 43 Column 2

Attachment #12 : Newsweek, 12 Nov 2007,
Page 43 Column 2

Attachment #13 : Newsweek, 12 Nov 2007,
Page 47 Column 2

Attachment #14: Data from Singapore Department of Statistic

Attachment #15: My Paper, 12 Sep 2008, Page A4

Attachment #16: My Paper, 12 Sep 2008, Page B4


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