• Fri
  • Aug 22, 2014
  • Updated: 8:42am
PUBLISHED : Sunday, 29 June, 2014, 5:27am
UPDATED : Monday, 30 June, 2014, 2:43pm

Why Singapore is a poor role model for Hong Kong

Philip Bowring says Hong Kong should care little for a social economy propped up by dominant state enterprises and foreign companies, and an underclass of low-skilled migrants

BIO

Philip Bowring has been based in Asia for 39 years writing on regional financial and political issues. He has been a columnist for the South China Morning Post since the mid-1990s and for the International Herald Tribune from 1992 to 2011. He also contributes regularly to the Wall Street Journal, www.asiasentinel.com, a website of which he is a founder, and elsewhere. Prior to 1992 he was with the weekly Far Eastern Economic Review, latterly as editor.
 

So much - often nonsense - is written about how Hong Kong should follow Singapore in assorted ways - economic, political, social and so on. It is time to set the record straight.

First, the good things about Singapore. The most prominent and least controversial are its efforts to be in the van of environmental improvement, whether reducing air pollution, limiting private car ownership and taxing its use, or recycling water.

The reason Singapore has done these things is not because it has an authoritarian government but because it has strong political and bureaucratic leadership, which is relatively impervious to narrow business interests, of the sort with which Hong Kong is all too familiar. It also knows that most of these policies meet with public approval. That helps sustain the People's Action Party in power.

The downside of Singapore's authoritarian system is plain to anyone with the remotest interest in free speech and assembly, and keeping the noses of the government out of personal affairs and private business. That difference indeed remains the cornerstone of Hong Kong. However, it has yet to find a way of marrying these freedoms with a government that is both effective and reflects the interests of the majority.

In Singapore, the ruling party used state power to build an economy in which state enterprises and foreign companies were pre-eminent, and often provided with tax breaks, effectively curtailing the influence of big private businesses and disadvantaging small businesses.

There should be real concern in Hong Kong not only about the political power of a few, mostly property-related business, but also the use of government regulations to favour select mainland state enterprises in key areas such as telecoms and power. The push for Hong Kong to become "more like Singapore" is all too evident.

One bizarre aspect of this was a recent claim by an academic that Singapore's economy is now growing faster than Hong Kong's, partly because Hong Kong is slowed by an increase in public housing. In fact, public housing construction was at its height when Hong Kong was growing fastest - the 1970s and 1980s.

These opponents of public housing in Hong Kong prefer to forget that 80 per cent of Singapore's housing is controlled by the government's Housing Development Board. Though owners can sell, the board has many restrictions which make a nonsense of real private ownership.

Likewise, the compulsory savings system, the Central Provident Fund, not only enforces a high level of savings but ensures that much is directed into low-yielding investments, and HDB housing, so that retirees face at least as problematic a future as their counterparts in Hong Kong. The only advantage Singaporeans enjoy is that lower inflation has meant that savings deposits have not been eroded so rapidly as in Hong Kong, where negative real interest rates have contributed to income inequality.

Not that Singapore has been doing better on that score. Inequality over the past decade has been increasing just as fast.

Singapore's performance would probably be even worse if comparative statistics reflected its huge reliance on temporary, low-paid workers. It has over 200,000 foreign domestic servants - more than Hong Kong does relative to population size. In a population of 5.4 million, only 3.3 million are citizens.

The number of foreigners on various types of employment pass now stands at 1.3 million. Some 336,000 of these are skilled people who have helped raise productivity. But 985,000, or nearly 30 per cent of the workforce, are low-skill employees with work permits.

In other words, Singapore's economic growth has recently outstripped Hong Kong's largely because of this cheap, disposable labour. Is this the sort of society Hong Kong wants to be? One which does not just welcome skilled people from around the world but relies on an army of serfs who subsidise the rest of the population by providing cheap labour but are not allowed to bring families and so make no demands on educational and social services?

Both cities face dangerously low fertility rates, the result of money concerns overwhelming the so-called "Asian family values", of which Singapore used to boast.

Bizarrely, the same commentators who say Hong Kong is slipping in terms of factor productivity growth also demand entry of more unskilled labour. Surely they should see Singapore as an example of what not to do. For sure, Hong Kong needs some immigration to offset an ageing population. But let it be of skilled people with ambition from anywhere, not those decided by some opaque mainland system. Low productivity in sectors ranging from construction to petrol stations is a result of low wages deterring investment.

But Hong Kong does not share Singapore's reliance on foreign capital and labour. Despite its huge foreign exchange reserves, Singapore's gross national income is less than its gross domestic product. Hong Kong is the opposite.

The bottom line is that we have little to learn from Singapore. Hong Kong - even the current government - already knows its own failings. But does it have the means of correcting them?

Philip Bowring is a Hong Kong-based journalist and commentator

Share

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive
 
 

 

78

This article is now closed to comments

grosvenor2007
Another nonsense piece from Mr. Nonsense Bowring..... how typical of his sour grape colonial attitude now that China is improving and growing stronger.
If SCMP is so desperate in getting audiences, go search at Castle Peak, there are plenty like Nonsense Bowring.
53b3d308-2388-44c7-9fab-742a0a320969
Just another example of a blinkered Westerner's condescension towards Singapore's success. Take this paragraph for example:
"One which does not just welcome skilled people from around the world but relies on an army of serfs who subsidise the rest of the population by providing cheap labour but are not allowed to bring families and so make no demands on educational and social services?"
Yes, because the Western economies absolutely and willingly open their arms wide to migrant workers and all their dependents.
So it is now a bad thing to create a land of opportunity for others to voluntarily seek prosperity and success which they can't find at home? (And therefore they are 'serfs'?) What is this ridiculous implied expectation that if someone goes overseas to work, he must be allowed to bring his family along with him?
I think saying that Mr. Bowring is 'biased' is giving him far too much credit. This article positively reeks of hypocrisy.
53b3cdef-41cc-4a1e-a263-08d40a3209ca
Please deport those ugly South Indian tamils and all Indians from all your countries. Those guys bring poverty to the country they migrate to. We have so many Indian beggars in UAE begging on streets especially during Ramadan.
shuike
Given the large amount of derogatory comments on Bowring, it would only be fair he come out to clarify & counter some of the comments here. That would be democracy in motion rather than giving a sh_t what you say - now that's authoritarian, just like the PAP?
shuike
Given the large amount of derogatory comments on Bowring, it would only be fair he come out to clarify & counter some of the comments here. That would be democracy in motion rather than giving a sh_t what you say - now that's authoritarian, just like the PAP?
KimLian
Philip , looking at your content, purely show you are very bias
5350d1cb-8e9c-4d8a-bd1c-08da0a3209ca
Maybe India is a good model?
michaelhctam@gmail.com
Yes, I would like to brush my teeth 1 meter away from a rotting corpse floating down the same river water I use to rinse my mouth.
539abd27-5a34-4193-a861-52640a320968
I find this article uninformed and highly suggestive (particularly the unflattering photograph and labeling of low-skilled workers as "serfs"). As a foreigner who has lived in both Hong Kong and Singapore and who has seen protests in both cities, I don't think it is fair to label Singapore "authoritarian." The media restrictions and self-censorship of the Singapore press certainly result in a media and citizenry that is less raucous than that of Hong Kong, but in many ways Singapore is more democratic in Hong Kong. You can debate whether Singapore truly has judicial independence from the PAP, but at least the PAP (and whatever allegiance the judiciary may owe to it) ultimately answers to voters. Singapore's last election saw the narrowest PAP margin of victory in history and as a result the PAP responded by revising its immigration policy.
Simply taking a rush-hour stroll through Central and Causeway Bay and comparing to Raffles Place and Marina Bay will tell you which city is more crowded and which is better managed. Average flat size and price per square foot in Singapore vs. Hong Kong is even more telling. Singapore will ultimately remain the better managed city because its policies are decided by the local electorate, not by an elite 7-person politburo that is above the law and is 2,000 km away. With the current controversy around the "occupy" movement and the white paper, it sounds like many in Hong Kong wished their city had Singapore's universal sufferage.
teshan123
Indeed, to achieve universal "sufferage", we need GRCs, NMPs and NCMPs here.

Pages

 
 
 
 
 

Login

SCMP.com Account

or