The Stingy Nanny

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THE STINGY NANNYFeb 13th 2010

The city-state stays strict with the needy

FOND of having the last word, Singapore's government can neverthelessbe flexible. Who would have thought it would be building casinos? But

one policy that shows no sign of reversing is Singapore's antipathytowards public welfare. The state's attitude can be simply put: being

poor here is your own fault. Citizens are obliged to save for thefuture, rely on their families and not expect any handouts from the

government unless they hit rock bottom. The emphasis on family extendsinto old age: retired parents can sue children who fail to support

them. In government circles "welfare" remains a dirty word, cousin tosloth and waste. Singapore may be a nanny state, but it is by no means

an indulgent nanny.

The aftershock of a deep recession, which pushed unemployment among

citizens up to 4.1% in September--high for Singapore--has not alteredthe popular belief that the dole is bad for society. The casinos, whichopen on February 14th, have already helped reduce unemployment, which

by December had fallen back to 3%, seasonally adjusted.

The government does run a handful of schemes directed at some of theneedy, from low-income students to the unassisted elderly. But these

benefits are rigorously means-tested and granted only sparingly. Themost destitute citizens' families may apply for public assistance; only

3,000 currently qualify. Laid-off workers receive no automaticbenefits. Instead they are sorted into "workfare" and training schemes.

Applicants complain that the process of seeking help is made tiresomeand humiliating. Indeed that could be the point, supposing it detersfree-riders. Officials take a dim view of European-style welfare

systems, which are said to beget laziness. The Ministry of CommunityDevelopment, Youth and Sports (MCYS), which administers the various

schemes, says theirs are designed as a "springboard" to self-reliance.Getting people back to work takes priority over relieving any temporary

drop in income. In a fiscal stimulus unveiled a year ago in response tothe financial crisis, S$5.1 billion ($3.6 billion) was allocated for

employment measures, including grants to companies to retain staff.Those who remain out of work can join a government training scheme; by

December, 169,000 unemployed workers had done so.

Many Singaporeans are wedded to their jobs and look askance at idlenessof any kind. The government is leery of generous handouts, fearing they

might undercut the work ethic while burdening taxpayers. But thethinness of the safety net also reflects a widespread article of faith,

recited and reinforced over the years. Even among the social workerswho work in hard-hit communities there is surprisingly little

frustration at the meagreness of the handouts on offer or at thelengthy application process. One explains that Singapore needs to weed

out undeserving claimants and shakes his head at the potential cost of 

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a comprehensive welfare service. Yet in his next breath he mentions anumber of local families who have been forced to sleep rough since

mortgage lenders foreclosed on their flats.

Nobody doubts that wealthy Singapore could be more generous. In 2008the World Bank rated it the third richest country in the world, in

terms of GDP per head at purchasing-power parity. And the idea that itsBig-Brotherly government might be outfoxed by conniving welfare queens

seems odd. When a visiting news crew filmed an elderly woman scavengingin Chinatown and bemoaning her homelessness, the government promptly

identified her as a miserly flat-owner who did not need to beg. Indeed,acute poverty is hard to spot in Singapore. Public housing is in good

shape; no slums are allowed to fester. Soup kitchens do exist, butforeign labourers are often first in line.

But Singapore still faces the challenge of rising inequality in a

society that is also rapidly ageing. By 2030, says MCYS, one in five

Singaporeans will be over 65 (UBS, whose largest shareholder isSingapore's sovereign-wealth fund, has estimated the date at 2020).

Incomes have stagnated or even fallen at the bottom of the spectrum, asthe rich pull further ahead of the middle classes. Long-termunemployment among middle-aged professionals, who do not qualify for

workfare, is on the rise, says Leong Sze Hian, a financial expert andblogger.

Native resentment is also growing against the influx of migrant

workers: 35% of the workforce of 3m is now foreign. It is often cheaperfor companies to import semi-skilled and unskilled workers--there were

680,000 at last count--than to hire locals, who require pensioncontributions. Official reassurances that migrants create growth do not

convince those competing for scarce jobs. Lee Kuan Yew, Singapore's

founding father and still its "minister mentor" has maintained thatambitious migrants help to keep citizens on their toes. In an interviewgiven to NATIONAL GEOGRAPHIC last July he said that if native

Singaporeans lag behind "hungry" foreigners because "the spurs are notstuck on [their] hinds", that is not the state's problem to solve.

This nascent backlash may eventually soften the anti-welfare tone set

by Mr Lee. The Economic Society of Singapore (ESS)--not exactly aradical cell--recently proposed to a government committee that it

should build a more robust safety net, starting with unemploymentinsurance. This would promote social stability and help muster public

support for Singapore's open-door migration policies, it argues.

Properly designed, such measures would not create disincentives to work

and thrift. "While self-reliance is a good principle in general, it maybe neither efficient nor just if taken to extremes," noted the ESS.

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