21 October 2016
Serious breakdowns have become more frequent on Singapore's MRT system, which has become increasingly crowded as the city state continues to import foreign labor. Photo:
Serious breakdowns have become more frequent on Singapore's MRT system, which has become increasingly crowded as the city state continues to import foreign labor. Photo:

Singapore voters to assess economic performance of govt

Singapore voters will give Prime Minister Lee Hsien Loong a report card at the Sept. 11 election on his government’s economic policies.

Lee will find out if he’s done enough to stem a decline in support that in 2011 gave the ruling People’s Action Party the smallest share of the popular vote since independence.

As campaigning starts this week, the PAP’s management of the economy will be assessed through the prism of bread-and-butter issues like living costs and train breakdowns, as much as through gross domestic product numbers, Bloomberg reported Monday.

The government’s performance in managing the inflow of foreigners, housing affordability and the cost of living were ranked most poorly among 20 issues, a survey of 2,000 voters conducted from July 11 to Aug. 6 found.

Here are five issues that have captured public debate in the island state in recent years.

1. Property prices

Lee’s administration started introducing residential property curbs in 2009 as low interest rates spurred demand from foreign buyers.

These steps included a cap on debt repayment at 60 percent of a borrower’s monthly income and higher stamp duties on home purchases.

The measures have worked: home prices fell for seven consecutive quarters to June after rising to a record in 2013, though they remain 51 percent higher than in June 2009.

The government is closely watching the domestic housing market, which is in a correction phase, Finance Minister Tharman Shanmugaratnam said Aug. 14.

2. Pension funds

Last year, Singaporeans staged at least four protests against how the country’s mandatory savings fund is managed.

Criticism of the program, one of the biggest national savings funds in the world, has included allegations of a lack of transparency over how money in the fund is invested and restrictions on withdrawals.

The government said in its budget this year it will make changes to the pension system to benefit older and middle-income workers.

3. Living costs

While Singapore’s consumer prices fell for a ninth straight month in July amid falling oil prices and government subsidies for healthcare, the Economist Intelligence Unit said the city remains the most expensive in the world.

Lee announced plans this month to boost grants to make public housing, in which more than 80 percent of Singaporeans live, more affordable.

The PAP has boosted spending on lower-income families and the elderly in recent years to help them cope with the cost of living.

4. Transport strains

Singapore’s SMRT Corp., named the world’s best metro operator in 2009, angered commuters with two breakdowns in its rail network in 2011, the most disruptive in its 25-year history.

The disruptions prompted protests against fare increases and forced the company to boost spending on upgrades amid the government’s biggest transport-related inquiry since 2004.

Most recently, Singaporeans vented on social media after a power fault froze evening commutes across two major train lines and stranded thousands on July 7.

5. Foreigner inflow

The government has imposed higher levies for overseas labor and set tighter limits on employing non-Singaporeans in some industries since 2010 amid unhappiness over an influx of foreign labor that strained infrastructure and pushed up property prices.

It faced a public backlash in 2013 over a proposal to increase the population by as much as 25 percent by 2030 through immigration.

Singapore will defer increases in foreign worker levies to give companies more time to adapt to years of restricting the supply of overseas labor, Shanmugaratnam said in his budget speech in February.

The next scheduled increase was to take effect in July this year and will now be postponed to at least 2016.

State of the economy

Lee is trying to transform the island into a global center for research and innovation as he seeks new drivers of growth while traditional ones like electronics exports falter.

The city state is in the midst of a 10-year economic restructuring plan that includes reducing reliance on cheap foreign labor and boosting productivity.

Singapore’s export-driven economy has been damped by a commodities slump, China’s slowdown in economic growth and uneven recoveries in the United States and Europe.

The economy contracted the most since 2012 in the second quarter of this year, and annual growth has slowed since a record high in 2010.

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