Sunday, September 21, 2014

Real solutions needed to deal with income inequality, says PM Lee at Singapore Summit

Sep 20, 2014

By Tham Yuen-C

SINGAPORE - Income inequality has become a fashionable topic, with many articles and books written about it, but the way to deal with the gap between the rich and the poor is through concrete solutions, said Prime Minister Lee Hsien Loong on Saturday.

Among these are to equip people with skills that are in demand by the economy, and to redistribute wealth so that everyone can have "chips to play with".

These are the things that individual governments can do, he said.

Mr Lee made these remarks when answering a question about what Asian governments can do about income inequality, during at a wide-ranging dialogue during the Singapore Summit conference here.

Elaborating on these solutions, he said making sure that people have the necessary skills to succeed - and not just those with a degree, but those who took the technical route too - can help to generate growth and jobs.

Redistributing wealth, by making sure that people have access to housing, a good education and high quality health care, will also help people level up and "enable a greater sense of equity and justice in the system", he added.

Acknowledging that income inequality causes social tensions and unhappiness, and that something has to be done about it, he noted that it has also become the "fashionable thing to talk about".

A book on the topic by French economist Thomas Picketty had become a best-seller, he said, adding: "(It) is quite amazing for a subject like that."

But he cautioned against theoretical solutions to the problem, such as having a global wealth tax or global income tax.

"I don't think those are going to happen, and I don't think if you try to do that you will make the world happier," he said.

He added: "What is possible to do within individual countries, we can do. The income inequality will be there, but in absolute terms we can improve lives for nearly everybody in the society, provided they work and are prepared to make the effort."

On whether income equality is the result of rapid growth, he said he did not think so.

He noted that this was a trend in European countries, in the United States, and in Japan, where growth has slowed.

Rather, he said, globalisation and technological advancements were feeding the trend. He noted that workers now have to compete with the hundreds of millions of workers joining the global economy from countries such as China and India, and also with robots and computer programmes that can handle skilled jobs.

During the 45-minute-long dialogue, he was also asked about the rising nationalism of countries in Asia, the threat posed by the Islamic State of Iraq and Syria (ISIS), the viability of Scotland being independent, and the Trans-Pacific Partnership mega free-trade pact.

No comments: