Progressive policies allow Singapore to surpass Hong Kong

Our competitiveness and our quality of life have been surpassed by those of the Lion City.

The Singaporean government, since Lee Kuan Yew's time, has implemented populist, but practical, policies. Intervention and control were vital to ensure the People's Action Party retained power, by first providing livelihood imperatives to the masses, ensuring stability and prosperity. Singapore's redistributive measures include affordable home ownership, where property is sold at a price minus its land cost; affordable and good education and health-care systems; and an excellent Central Provident Fund (CPF) retirement scheme.

We adopt an obtuse, non-interventionist policy, as doing more is termed "welfarism" and dependence.

Big business and tycoons uphold free markets and low taxes, making their fortunes by rent seeking. The crony-capitalism index in The Economist magazine recently rated Hong Kong as number one in crony capitalism.

China's state-controlled capitalism has done better, transforming its middle class into a consumer society. Our competitiveness is due largely to low and stagnant wages, long working hours and an artificially undervalued Hong Kong dollar, which reduces wage earners' purchasing power and savings. Another factor is the lack of taxation; even Singapore and China have a goods and services tax and value added tax respectively.

Our productivity gains are reflected in increased asset prices and not currency appreciation.