• Thu
  • Nov 27, 2014
  • Updated: 4:36pm
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

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This article is now closed to comments

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.
SimonH
It's so comical. People in the Singapore wish that they are in Hong Kong, while people in Hong Kong wish that they are in Singapore. Singaporeans admire Hong Konger's freedom of speech, lack of National Service and Army reservist liability that persists until they are 40 or 50 years old; Hong Kongers admire Singaporeans' relatively cheaper housings and greener environment.
There is simply no best of both world!
Daniel Lee
When Philip Bowring says Singapore is a poor role model for Hong Kong what he didn't say but actually meant is that HK is better of being slaves of the British and remaining colonials allow the British to continue exploiting the people of HK. Quite shameless! Very hard for an old dog to learn any new tricks!
mjqhkg
Very interesting article. I've just landed in HK after a quick visit to Singapore, I had a startling conversation with a taxi driver on the way to Changi airport. He was an older man, roughly 68, a lifetime resident and very effusive about Singapore and how wonderful everything is - the virtually free housing, the vast income from tourism and gambling, the general fabulousness of the social services. The fact that gambling was not a problem in Singapore, because 'the tourists gamble, not the locals (because they have to pay $100SIN to enter a casino). The fact that compulsory national service 'hardens people up'. Then he went on to say that "many people say that Singapore is the world's 'second Israel': we need to have a strong military, because we are surrounded by enemies!" I didn't press him on it, but I wondered why that was a good thing. That conversation, and several others with citizens boasting and bragging about how great the place is and how strong the military is, and how much better Singapore is than anywhere else left me with one overriding impression: 'creepy'. For all its success, in my opinion, it's a realllllly creepy and insecure place. I absolutely agree that it's a poor role model for HK.
535a25da-bbe4-4f8d-bbe3-34f60a320969
Singapore's economy is built by the brains and minds of Singaporeans and its leaders who know how to capitalise on external resources and use them to the fullest potential to achieve the best optimal results. It is not correct for Bowring to say that Singapore's economy is built by low-skilled foreign workers which is just an ingredient. The chef is Singaporeans. Bowring perhaps have forgotten that he is comparing an apple to an orange - Singapore is an independent country while Hong Kong is a city of China, where it can relied and count on Beijing. In contrast, Singapore has nobody and nowhere to count on. I do agree that relying on low-skilled foreign workers should never be a permanent strategy and in fact Singapore's leaders never plan to rely on foreign workers forever. Since 2010, Singapore has decided to reform and restructure its economy under a 10-year plans to move towards a truly high-productive economy. In fact low-skilled foreign workers is just a temporary measure which the Singapore leaders have successfully capitalised on since the 1990s till 2010 - that allow the incomes and quality of all Singaporeans to improve rapidly in a mere short 2 decades. In contrast, Hong Kong continues to remain the puppet of Beijing and relies on British expats as leaders for its economy success. Freedom of speech? Bowring should know that what people want is peace, stability and harmony where their children's bright future is assured. Can Hong Kong remain stable? Singapore can!
virokick
We should 'not' role model Singapore on areas like
1)Singapore HDB= HK sub divided flat / cage homes
2) Singapore CPF= HK useless MPF
3) Singapore Healthcare Medi shield = HK endless queues.
4) Singapore poverty technically zero= HK card box collectors
5) Singapore average flat size 900sqft= HK 490 sqft
6) Singapore Lee Kuan Yew= HK Tung Chee Hwa/ Donald Duck Tsang
7) Singapore Casino= HK Sasa , Chow sang sang
8) Singapore National service ( youth ) = HK youth occupy Central
I rest my case.
pangkf
If I have to emigrate, I will not choose Singapore no matter how high GDP they are. GDP is not everything. Their weather is always hot and it is such a boring place. Life is short and why don't live in a place we can fully enjoy and relax. But one thing I like Singapore is they are an independent country while Hong Kong is not. We are being controlled by an unopened-minded regime.
honger
Another piece of misinformation by Bowring, with plenty of axes to grind with the city state.
Just to mention one - the CPF pays at least 3 percent guaranteed interest. Compare this with our MPF which not only robs contributors by chariging sky high fees, but also rewards them with dismal performance, often registering negative yield.
Just been there last week - the place is buzzing, well run and inflation in check compared to neighbour M'sia and dear HK. As for housing, Bowring is in denial of what is happening in S'pore vs HK, so won't waste my time.Their art museum was really good, HK nowhere near that.
As for brainwashing, who is trying to brainwash who now with BNO passports and talk of freedom and democracy for Hkongers while condoning foreign intervention in Iraq, etc? The record shows, dude!
kongshan2047
"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?"
These labourers knew right from the beginning that they will not be able to bring their families along with them to Singapore and that they are unlikely to get PR afterwards. Yet they still decided to come because they are well aware that they will earn many more times than they would back home. Nobody forced them to come to Singapore at gunpoint.
gimwee
Quite obviously, this ang moh doesn't understand the concept of '取长补短‘.

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