We have been given a preview of LHL’s National Day Rally speech when Lawrence Wong gave an interview to the BBC a week ago. (The BBC should be given the title of honorary Singapore state media since it seems to be very keen to play up the Government’s achievements, perhaps in return for subsidised or free rent on their studio in Singapore or other tie-up agreements).

According to Wong, LHL’s speech “will look at the full range of measures to continue uplifting the incomes of Singaporeans, especially those at the lower end” The use of the word “continue” is strange because the PAP have essentially done all they can to depress the incomes of Singaporeans, except for the tiny handful of people at the top (essentially themselves and their spouses, relatives and/or friends).

As I have written since 2011, the PAP’s development strategy is based on a simple economic model, first put forward by the Saint Lucian economist and Nobel Prize winner W. A. Lewis in the 1950s, “Economic Development with Unlimited Supplies of Labour”. Since the days of Winsemius and Goh Keng Swee, PAP policies have focused on keeping wages down to encourage foreign investment. That was the reason they put forward for making independent unions illegal (the main reason was of course to ensure there were no independent power centres that could challenge LKY’s absolute rule, in accordance with the standard totalitarian leader’s playbook).

Once the surplus labour had been used up and women entered the labour force in sufficient numbers wages should have risen. This had started to occur in the 1980s when there was also a push to replace expats and FTs with Singaporeans. However natural evolution to a higher wage higher productivity economy did not suit the PAP presumably because the state’s ownership of the economy meant that the Government was more interested in increasing the profit share in national income and accumulating assets. As LHL’s family, PAP Ministers’ and MPs’ spouses and their relatives (Ho Ching being the most egregious example) and cronies managed most of these companies, they could pay themselves higher and higher salaries, usually in secret and without Singaporeans being able to find out.

So instead the Government opened the gates to employing foreign labour, from a trickle in the 1990s to a flood from 2000 onwards until foreign workers and PRs comprised nearly half the workforce. With no minimum wage and competition from workers from very poor countries carrying high levels of debt that they had to pay off and unprotected by any effective labour laws or enforcement mechanisms, consumption and wages were depressed below 40% of national income.The PAP achieved their aim of posting high economic growth numbers, helped also by aiding and abetting MNC tax avoidance. (This resulted also in fake foreign investment figures, which Lawrence Wong is still trying to bamboozle gullible foreigners like BBC journalists as investment was driven by artificial booking of revenues in Singapore).

But the Government’s strategy of becoming a low-cost low productivity economy did not help Singaporeans, who were essentially only able to make a living income by working the longest or second-longest number of hours in the developed world. Goh Chok Tong famously promised Singaporeans a Swiss standard of living in the 1990s Today many of our workers earn around a fraction per hour of the Swiss minimum wage. My back of the envelope calculations, based on Singapore’s statistics, suggested the median Singaporean worker earns less than half of what the median worker in London earns per hour and less than a third per hour of the median New York worker. In 2011 UBS’s survey suggested that Singaporean workers had the same purchasing power as workers in KL or Moscow and the PAP Government had UBS drop Singapore from its survey of global cities because it was too embarrassing.

Going back to the 2009 Budget, I have criticized the PAP’s low productivity low cost long hours model which has been to the detriment of Singaporeans. Apart from the PAP elite and those with wealth from property the only people who have done well economically appear to be the expats and FTs, who of course do not have to do NS. Even an average mid-level PMET expat earns in excess of $300,000 p.a., while the median (admittedly lower than the average) gross monthly income from work (including Employer CPF which arguably should not be included) of Full Time Employed Singaporean Residents (including PRs who include many expats and other high earners) is only $4500 or about $60,000 p.a. including 13th month bonuses. Many of these so-called FTs will be less well educated than Singaporeans or have dubious degrees. Benjamin Glynn is just one example.

I am winning the policy war since only last month the head of MAS, Ravi Menon, in a speech at IPS, called for Singapore to abandon its low-cost low-productivity model and recognise that it needed to become a high-productivity high-wage economy even if that involved higher costs for some services.

So at the National Day Rally on Sunday, don’t expect PM Lee to admit that the PAP economic policies of the last 40 years have been a failure. Don’t expect him to say they have entrapped Singaporeans in a spiral pf low wage competition and ever longer hours with cheaper foreign workers and that they have served no purpose other than to build up the reserves, Government finances and the incomes of himself, his wife, PAP Ministers, MPs, spouses, relatives and cronies. Instead expect him to stealthily shift policy and steal the Reform Party’s policies on raising the cost of employing foreign labour and strengthening the Singaporean core though he is unlikely to take the most significant step of announcing a minimum wage. Instead expect his speech to have the usual breathtaking arrogance and presumption that his family owns Singapore in perpetuity coupled with fake facts and statistics to show how well you are doing. Don’t be fooled! The single most important step you can take to improve your lives is to get rid of the PAP clown car of LHL and his 4G Ministers.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam