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Some Thoughts on the PE

Pragmatism v Populism: A Deliberately Misleading Choice

In his remarks on the Presidential Contest*, Emeritus Senior Minister Goh was quoted as saying that Singaporeans must choose between pragmatic and populist politics:

“In pragmatic politics, Singaporeans will accept measures with short-term pain but long-term gain. In populist politics, they want immediate gratification and ignore the long-term costs. Which way will Singapore politics go?”

This put me in mind of the remarks of our government leaders after the 1991 election in which the PAP lost an (at that time) unprecedented four seats. Then they said they were at a loss to explain how this could have happened other than that Singaporeans had a low threshold of pain.

It is funny how gratification delay is always something that should apply to ordinary Singaporeans and not to our government elite. For example, their salaries are explicitly linked toGDPgrowth which incentivizes them to boost growth in the easiest and most short-term way possible, by opening our doors to cheap foreign labour on a massive scale, as well as employ tax breaks and holidays as well as subsidized inputs to steer foreign investment to Singapore which is likely to decamp once the subsidies end.

A good case in point is the casino industry.  It is taxed significantly more lightly here than inMacaoorLas Vegas, despite its negative externalities. Another is the biomedical manufacturing cluster, responsible for much of 2010’s extraordinary growth. So we appear to have short-term growth, vulnerable to changes in other countries’ tax policies, as a deliberate policy of this government which spends so much time advising us to eschew populist policies. This short-termism is at the root ofSingapore’s productivity problem. This is why our economy has grown so much without the majority of us getting richer.

In fact this message to eschew populism for pragmatism (which I have also seen sung in the chorus of one Opposition camp) is simply a direct repetition of the original PAP message that Singaporeans need to be toughened up. No iron rice bowl for us and a spur in our hinds is a cry which has travelled down in a direct line of descent from father to Holy Goh to son.  It is why I called my blog after the porcelain rice bowl, explaining that we need new economic ideas for new economic times.

But one thing we can be certain of. This is that when growth reverses and turns negative, as it probably will this year, will our leaders share in our pain? Will they have to give back part of the gratuitously excessive salaries that they were paid during the boom years? Why despite all the supposedly long-term thinking of our leaders, has no long-term compensation plan been put in place focusing on raising median real incomes rather than just raw economic growth? The Finance Minister promised to raise living standards by 30% by 2020. Is that really achievable given the skewed incentives?

There is apparently one rule for our leaders and another one for us. We must be “pragmatic” and understand the need to keep running huge surpluses and accumulating reserves in our two sovereign wealth funds. How much has the valuation of our overseas assets dropped in recent weeks? How much will we lose should markets drop another 20-40% as global recession looms? In 2010 all we heard from our state-controlled media was how well the managers had done in clawing back the losses from 2008, not any honest reckoning and holding to account of those responsible for the losses in the first place.

If we are all “pragmatic”, as the government would like, I am sure we will all be able to understand why it was not our government’s fault or the fault of the managers they appointed. Also, we will agree like the animals in George Orwell’s Animal Farm that we must tighten our belts and continue to scrimp and save to rebuild what has been lost, while never asking uncomfortable questions as to what exactly are the reserves or where they are invested. I don’t know about you but it grates on me every time they talk about the reserves as a sum that they the government have accumulated. It’s your tax dollar. You provided it. The government’s idea of pragmatism seems to be that we behave like children who can be easily bought off with a populist vote-buying budget giveaway of a thousand dollars each which induces amnesia about the pain we have suffered before.

We must be “pragmatic” and understand why our jobs should be taken away by expatriate workers who would be paid a fraction of what they can earn in Singapore in their home countries and who do not have to do National Service even if they come as students on scholarships paid for by our taxes.

We must be “pragmatic” and understand the necessity of our men to give up two years of their lives doing NS without anything approaching adequate economic compensation while new immigrants escape any contribution.

We have to be “pragmatic” and accept that we can never own the freehold of our HDB properties. Without home ownership there never will be a fat middle class. Your HDB unit’s price has soared out of our reach due to our government’s pursuit of economic growth through uncontrolled population growth.  Meanwhile we can be moved around like serfs and told where we can live. The extension of our HDB leases is dependent on government upgrading policies and the link between this and voting for the PAP was explicitly reinforced in the last election byPMLee.

Meanwhile it is “populist” to believe that we are entitled to policies that directly benefit us, such as universal free education and health coverage. Policies that are taken for granted in other countries with our level of income, even in Asian success stories likeJapan,South Korea andTaiwan. We are told that taxes will have to go up if we want these things. Even if taxes had to rise, which is debatable, we are not told that in fact the cost of replicating the same degree of insurance privately would be much more expensive and probably impossible for the ordinary Singaporean.

Life is an uncertain business and brings risks with it. Life in the PAP’s economy means no safety net to cushion to against those unexpected risks.  We’ve been tough and pragmatic for 5 decades now. As an economist once said, “In the long run we are all dead.”  It is time for Singaporeans to decide whether being “pragmatic”, in the PAP’s sense, means allowing ourselves to be taken for a ride!




  1. Given the choice between populist and pragmatic, i will go for the latter having lived in this safe environment for the past 46 years. One must understand and accept that no government in this world can satisfy every citizen of theirs. Most important is that the Country is safe to live and basic needs of one is looked into; e.g. no one is homeless except by their own choice. For this coming PE when putting pur pen to the vote pls remember that our reserves which can feed the country for at least two generations will be at stake if under the hands of a populist.


    • But what are the reserves exactly? No one knows. And if they are lost through incompetent speculation or risk taking or empire building then we end up having sacrificed consumption now for nothing in the future. A good analogy is if you had invested in the US stock market in 1999 only to see it lower in 2009 then it was ten years ago. That is why I have called for the public listing of Temasek and GIC so that the market can value their performance.


  2. still waiting to see the gain from the last 20 years of pain.
    perhaps i need to wait another 20 years…. also, can’t
    understand why a well-received and liked policy is so
    terrible. are only policies which cause pain good? are
    policies which people believe are helpful to them bad?
    doesn’t seem logical. just like it doesn’t seem logical that
    the only way to do anything is the the govt’s way.

    pragmatism is all well and good, but a little impracticality
    breathes colour into the starkness of life. like the person
    who is late for an important appointment but still stops to
    help a lost child find his parents or an old person who
    has tripped and fallen.

    i wonder how much money the government would ‘lose’ if
    it removed GST from medical treatment and medicines, if
    the handicapped could travel free on public transport and
    had free education, if….


  3. “In pragmatic politics, Singaporeans will accept measures with short-term pain but long-term gain. In populist politics, they want immediate gratification and ignore the long-term costs. Which way will Singapore politics go?”

    GCT’s statement above is a scam. He is talking about a pragmatism which only benefits a select group of people. The elite always gain…be it in the short term or in long term. Pragmatism always works for them. It makes a lot of sense for kids from these families to do a 2 year NS or a 3 year NS because they are defending the accumulated wealth of their parents. Boys however from the struggling classes of the nation should only do maybe a year or less of NS. What do they have to protect in Spore? What are they dying for?

    The poorer sector of our society endures pain…be it short term and in the long term. These people are not into immediate gratification but survival. The middle class see some gains from the nation’s wealth but they also PERMANENTLY cope with so called short term pains. Working toward a just society based on a measure of sharing the wealth of the economy is not populism nor is it short term gratification, but a manifestation of human decency, a just society, and a celebration of our common citizenship as Sporeans.


  4. LOL, first change the public’s way of thinking be more open-minded and less impressed with status or the profession that you are in who cares if you have a law degree but don’t have sincerity & compassion perhaps we’ll have new ideas… in fact i ask myself if I have this everyday, change starts with me…


  5. This is PAPism Vs. democracy. 2.5 million Singaporeans is very few people to provide welfare for; just that PAP is not a generous enough government and envy those on welfare, when actually the welfare in Singapore is just minimal subsidies.


  6. country gets richer but is the citizens any better other than a small minority?? this called progress for all or only for a selected few.
    the pap asks sporeans to b independent but our cpf is not given until we are 65 years old.what type of pragmatism is this ??.
    how can the citizens be independent even when we become ah kongs but cpf still managed by govt:.


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