Monday, June 27, 2011

Politics and Policy in Singapore post-May 7 elections

Jun 25, 2011

Getting all on board in steering S'pore

The Government has long prided itself in being swift and nimble in steering the Singapore boat forward. But now, citizens have made it clear they want to be consulted and heard. What happens when different groups grab at the oars?

By Li Xueying

IN FOUR weeks, there were 11.

Eleven blog entries - straight from the keyboard of the new National Development Minister, to Singaporeans anxious about housing matters.

The missives - chatty, informative, accessible - from Mr Khaw Boon Wan were remarkable, and not just for the style and speed with which he communicated with Singaporeans.

To many, they also showcased quick and flexible rethinking on certain housing policies - from how flats would be built 'ahead of order' to clear the demand backlog, to a review of the Housing Board's monthly income ceiling for buyers of new flats.

But some were discomfited by how Mr Khaw was writing on major policies without clear indications of whether his blog posts were the result of internal government discussions. Mr Basskaran Nair, who oversees marketing and communications for developer CapitaLand and also teaches a course on 'Marketing Complex Public Policies' at the Lee Kuan Yew (LKY) School of Public Policy, is among those who are less enamoured.

'I think it is unsustainable to have public policies articulated this way, which is almost rumination and in a stream-of- consciousness style,' he says.

'Good for poetry, not public policy recital!' he adds.

These varied responses give a sense of the challenges policymakers face in a new, post-May 7 environment.

There is the advent of social media that transmits information rapidly and fluidly. A more educated and diverse electorate has also come to the fore. With the emergence of more credible opposition candidates to give the ruling People's Action Party (PAP) a run for its money at the polls, voters feel more empowered than before. As a result, they have become more vocal in how policies are made.

In other words, 'normal politics' has returned to Singapore, after a long break.

For decades, Singapore has been described as a policy haven.

For better or worse, the stable political climate insulated the PAP government from messy, short-term political exigencies. The city-state's government prided itself on policy planning geared towards the long-term good of the country - even at the cost of immediate discomfort for the populace. The track record of the PAP since 1959 also endowed it with moral authority in the eyes of older Singaporeans, who gave the party their implicit trust.

While the party's loss of Aljunied GRC and historically low vote share of 60.1 per cent in the recent General Election do not a political tsunami make, they did mark a subtle but sure shift in the relationship between the state and citizens.

Hours after the votes were in, Prime Minister Lee Hsien Loong observed: 'All Singaporeans of different strata and groups have higher aspirations and expectations, and many of them wish for the Government to adopt a different style and approach to government, in keeping with a new generation and a new era which we're living in.'

He later pledged that all policies will be up for review.

Some Singaporeans laud the responsiveness of the PAP government; others are unsettled. What does this new environment mean for governance? In becoming more responsive to citizens' immediate concerns, will it become more populist? If so, is that bad?

And as the Government accedes to public desire for a greater level of engagement, would that compromise efficiency?

What are the trade-offs - if any - that will need to be made?

A critical juncture

FOR some, the new environment - and the pressures it brings - is an inevitable development that, if handled well, can be positive for Singapore.

Dr Vu Khuong Minh, an economist at the LKY School, argues that Singapore's development has reached a 'critical juncture' at which fundamental changes are unavoidable.

'Policymaking will need to shift its main focus from economic achievement to sustainable prosperity, from operational improvement to strategic transformation, from an excellent government to a robust society, from a vibrant country to a great nation,' he says.

Public policy academic Eduardo Araral says it allows for a 'fresh look at problems raised by voters ranging from transport, housing, education, foreign workers issues, among others'.

This, in turn, could lead to 'more creative, out-of-the-box solutions'.

More responsive, more populist?

ONE sure trend is that the pendulum looks set to swing towards being more responsive to citizens' immediate concerns.

Health Minister Gan Kim Yong says the Government 'can do more to soften the impact (of policies), especially the short-term impact, on those who are affected'.

He adds: 'Some of the changes may have to be introduced in smaller steps to allow more time for people to adjust.'

Echoes Education Minister Heng Swee Keat: 'We need to be more responsive to some of the immediate concerns.'

Some worry that there are downsides to this, with possible costs to the quality of policymaking.

In 2004, PM Lee, in spelling out Singapore's principles of governance, stressed that its leaders do 'what is right and not what is popular'.

With finite resources, trade-offs sometimes have to be made between the concerns of today's citizens and the needs of the future. The question then arises: If politicians are keeping an eye on the next election five years down the road, would they succumb to short-termism, with popular, albeit unsustainable, policies?

Some wonder if the quick succession of events that unfolded post-election - the retirement from the Cabinet of former prime ministers Lee Kuan Yew and Goh Chok Tong, of three ministers who oversaw hot-button matters; and the review of ministerial salaries - signal the beginning of populism aimed at appeasing the majority.

Dr Araral notes that as long as there is open political competition and low barriers to contestation, 'there is always a pressure to respond to short-term, populist voter preferences'.

Adds Mr Heng: 'Between the short term and the long term, it is always easy to be populist about it and say, okay, let's do all this and then we stall dealing with problems for the longer run and let someone else deal with it.'

Thus, even as measures are deployed to deal with short-term considerations, care must be taken that they are not at the expense of long-term sustainability, say the PAP ministers.

Says Mr Heng: 'If we say, let's spend more resources on this area, many of these projects have a very long tail. So are we able to sustain this in 10, 20 years?'

Another risk policymakers have to contend with: society's expectations change. So, can the cost of policies keep pace?

For now, the risk of Singapore going down the populist route appears to remain low.

For one thing, the PAP government - likely to remain in power for decades to come - is unlikely to succumb to the temptation.

Deputy Prime Minister Tharman Shanmugaratnam has already made it clear that while one risk is policy paralysis, the other is 'trying to deliver change just for the sake of being popular and trying to please as many people as possible'.

Yet, on another level, while the idea of populist policies has pejorative overtones for some, what is right in the short term, may also be right in the long run.

Mr Nair cites the changes Mr Khaw has made to housing policies, including speeding up the supply of new HDB flats, as an example. He is 'righting a wrong' and therefore he is being pragmatic, says Mr Nair. 'He is not being populist.'

Concurring, governance expert Neo Boon Siong says the new direction is a 'corrective action', for the pendulum had previously swung too far in the other direction.

'Trade-offs imply that it's one or the other. The more appropriate term is balance. It's about fine-tuning the balance.'

For instance, the economy may have done blisteringly well, but the capacity of the infrastructure has yet to catch up, leading to stresses in the system.

He says: 'Being populist means that you are responding to the expressed needs of the people.

'If you can't survive the short term, what is the point of the long term?'

Indeed, contrary to popular rhetoric, populist measures, while not its mainstay, are not entirely alien to the PAP.

Prof Neo notes various Budget goodies, such as the Singapore Shares that were dispensed ahead of the elections. 'They have been giving money back to the people. These are calibrated populist measures.'

Looking ahead, the PAP's brand of 'tough love' will diminish, postulates Dr Araral. It will 'become just one - and no longer the dominant - criteria for policy decisions', he anticipates.

More engagement, less efficient?

MEANWHILE, as Singaporeans clamour to have a more active role in policymaking, one concern is that the country's famed fleet-footedness in just 'getting it done' would be compromised.

Singapore has been likened to a nimble sampan that can change direction quickly in response to capricious winds.

But what happens when more people want to grab at the oars? Throw in the fact that Singapore society is increasingly diverse, with different segments wanting to move in different directions, and the situation looks dicier.

Indeed, there may be less efficiency in the short run, says Prof Neo, adding: 'We will take a longer time to make decisions. We will have to do more to get a consensus, it will cost more, and we will spend more. So yes, less efficient.'

But he and others interviewed say this is a necessary process. More consultation - while tedious and even painful, would work out for the best in the long run. In fact, one might say that it was failure at this process that led to criticisms of the PAP as being somewhat tin-eared to the rumblings on the ground.

Former PAP MP Hong Hai, now a fellow at the Nanyang Business School, says: 'Low consultation rates can lead to erroneous decisions that have to be modified subsequently, making the process less efficient in the long run.

'Proper consultation, on the other hand, could lead to better decisions that can be implemented efficiently with fewer hiccups.'

This is especially since voter preferences, needs and beliefs do not stay static; they evolve and such changes can be missed out on if policymakers are not adequately in touch with the ground.

At the same time, efficiency is not the end-all-and be-all of policy-making.

Dr Araral says: 'People want to be respected as individuals; they expect to be consulted on matters that directly affect their interests and they want their voices to be heard.

'Consultation affirms the belief that government - as agents of citizens - has the duty to consult, and citizens - as sovereigns - have the right to be consulted.'

He adds: 'Consultation, therefore, has to be pursued, both for its own sake and for utilitarian reasons.'

Steering forward

THE key to making this new chapter work for Singapore depends on both the Government and the citizenry playing their parts.

Policymakers will need to find that balance between doing what is right and what is popular. Sometimes they are one and the same - and the job is easier. But many times, they are not, in which case political leadership and acumen are needed to explain and persuade.

And so, trade-offs are not simplistic black-and-white equations.

Consultation, for instance, may mean time and resources expended. But if done well and when people feel that their views have been genuinely considered, it can earn politicians the capital to bring the masses along when the need calls for unpopular policies.

On the other hand, Singaporeans would have to understand that what they want is not necessarily what the larger society can afford. As individual citizens summon the courage to speak up, what policymakers may have to contend with are five million voices - each clamouring for his own interest. All will have to learn how to compromise.

Things may take longer to get done. The process will be messier.

The new way may not become Singapore, Inc as well but it may well pave the way for Singapore, the country.

Additional reporting by Rachel Chang

[I hope that the voices and views are reasonable and rational. If the comments online are any indication, they mostly are not. At a time when governments need to make hard decisions about the environment, energy, resources, population growth and ageing population. irrational, unreasonable, and selfish demands will make the right decisions harder and more politically costly.

This is already happening in the US. The worry is that even if we try to do the right thing, the fact that we are a small country with a negligible impact on the environment may well lead the voters to say, why should we be reasonable and rational when the rest of the world is not?]

Resolving policy dilemmas

By Li Xueying

THE People's Action Party (PAP) Government is undergoing what Prime Minister Lee Hsien Loong has said would be a 'soul searching' review of its policies and approaches.

On the process, Health Minister Gan Kim Yong tells Insight: 'We will still have to ensure that we adopt the right policies, whether manpower or health policies, but we can re-look at the trade-offs and see if we can fine-tune the policies to achieve a better balance between the trade-offs.'

What are the competing considerations? Here's a closer look at some policy dilemmas.


Maximise growth opportunities or slow down for social balance?

POLICYMAKING in Singapore has often been described as pragmatic and non-ideological.

But one concern was whether Singapore had, in recent decades, become too enthralled with the growth dogma - pursuing all-out economic growth and giving free market forces full play.

Among others, the opening of the integrated resorts and a liberal immigration policy that fed businesses' appetite for labour propelled the economy to stratospheric heights.

But even as gross domestic product (GDP) growth last year hit a high of 14.5 per cent, so did the Gini coefficient - at 0.425, the second-highest among developed economies, according to the United Nations Development Programme. Social stresses resulting from high property prices, crowded trains and gambling problems also arose.

Outside Singapore, the Organisation for Economic Cooperation and Development (OECD) has developed new measures of progress that go beyond GDP growth. Within the country, some have also called for a recalibration, in favour of more even and balanced growth. This would have repercussions on policies ranging from the foreigner population to how resources, such as land, should be allocated.

Mr Heng Swee Keat has advocated that economic efficiency should not be the be-all and end-all, and called for a refocus on the 'socio-cultural aspects of our society'.

Says the Education Minister: 'We have to be very careful that we don't swing the pendulum to the other extreme and say that everything is about social values. But not everything needs to be hyper-efficient.'

So, for instance, hawker centres and mom- and-pop shops need not be scrapped just because they are not as competitive as air-conditioned foodcourts or hypermarts. More green spaces can be created as social spaces.

'If we plan well enough we can provide for these sorts of social spaces,' he says, but he warns that 'where it involves the core of the economy, then we have to be very careful about that trade-off'.

The biggest trade-off would come from tightening the inflow of foreign workers, he says. Already, some companies are complaining that they are missing out on orders because they lack manpower.

One way to mitigate against this is to boost labour productivity. Here, there is much room for improvement. Economist Vu Minh Khuong notes that Singapore's labour productivity is equal to only 40 to 70 per cent of the United States' in most industries. However, this strategy comes with its own set of trade-offs.

The income gap could widen further as a result of the productivity drive, wrote Credit Suisse economist Wu Kun Lung in a report. When production is shifted towards more capital-intensive and higher productivity sectors (such as the biomedical sector), the benefits will largely accrue to the investors for their capital investments, he argues.

Dr Vu says this is a risk but it is 'far worse if MNCs consider Singapore as a convenient place for investing in cheap labour projects to exploit the favourable access to foreign workers'.

Mr Heng also points out that based on the experiences of OECD countries, productivity growth would plateau off after a certain level.

'So as a country, we have to decide what is the kind of economic growth that we want and it's not just the distribution issue, it is also the extent to which some of that growth will trickle down.'

He adds: 'It's something that we have to discuss - if we were to significantly change our economic model, there must be costs associated with it.'

For former PAP MP Hong Hai, a former dean of the Nanyang Business School, it is a trade-off he would gladly make.

He says: 'We are too wedded to the idea of GDP growth as the sole indicator of economic progress. If we miss a few GDP growth opportunities because we have other economic priorities, that is not necessarily a bad thing. China is going through some soul searching as breakneck growth rates have resulted in social inequities and mounting unrest, which may eventually lead to political instability.'

He adds: 'If instability sets in, all bets are off on economic growth.'


Spend more now, or spend more later?

LEAN and mean, Singapore is prudent about social development spending. This financial year, $4.1 billion from government coffers was allocated to the Health Ministry, while the Community Development, Youth and Sports Ministry received $1.83 billion. In contrast, defence got a generous $12.08 billion - 6 per cent of the GDP.

Another $4 billion was returned to the reserves to replace the amount drawn down in 2009.

The budgets allocated do not include endowment funds. Future-oriented social spending, such as on education, is also larger - for instance, the Education Ministry received $10.9 billion.

But can more be done to strengthen the social safety net in the present, especially as the population ages and more low-skilled workers are at risk of falling through the cracks? At the same time, can more be done for the broad middle class who feel squeezed by rising costs but are not poor enough to qualify for many government help schemes and subsidies?

Yes, if Singapore shifts away from using GDP growth as the main indicator of economic progress, says Professor Hong. 'Distribution of income, quality of life and the provision of basic services like medical care, tertiary education and housing for first-time buyers at affordable subsidised rates would be the other key economic factors to make up the new economic progress basket.'

If so, who foots the bill? One, the burden returns to taxpayers. A restructured income tax system is one possibility. Another route is to hit selected pockets by taxing items such as fuel, alcohol and tobacco.

Or balance the Budget by taking funds from elsewhere. Make cuts in the 'more peripheral areas' like the Youth Olympics, suggests Prof Hong.

But the trade-off might not be so stark. One way is to encourage those who are able to give more back via philanthropy and volunteerism, suggests Mr Heng.

Governance expert Neo Boon Siong suggests Singapore spend more and not salt away so much at every Budget: 'We have surpluses. If we have a decent level of reserves, why not use the Budget? We don't have to keep accumulating more.'

Singapore, as a society, would have to come to a consensus on what its values are first, says Mr Heng.

'As a society, do we agree that we should do more for those who are less fortunate? And if our social values do change in that way, then we can all have some agreement that that's the way to move.'

This, however, has to be weighed against the risk of people developing a welfare mentality.


Faster building of HDB flats, or potential glut?

THE build-to-order system means that a project is built only after confirmed orders are garnered for 70 per cent of the flats. What it also means though is that there is a lag between demand and supply - a situation that led to spiralling prices and long waits.

To clear the backlog of demand for flats, National Development Minister Khaw Boon Wan has said that he would build 'ahead of demand'.

One potential trade-off is that if there is a miscalculation or the market cools unexpectedly, the Government could end up with a supply glut of unsold flats on its hands, a situation that happened after the recession in 1998. This, in turn, means stagnating home prices for all.

Another popular policy that Mr Khaw had announced is to build flats in mature estates. One possibility is that land hitherto meant for private homes would now be given to public housing instead, suggested PropNex chief executive Mohamed Ismail.

While this move would meet the aspirations of young couples, the trade-off is less money for government coffers.

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