7 - Inequality and the Social Compact in Singapore: Macro Trends vs Lived Inequalities

Summary

INTRODUCTION

Increasingly divisive levels of inequality are a global problem with profound consequences. With many countries in both developed and developing contexts seeing increasing disparities between the haves and have-nots alike, the potentially disastrous consequences for society and politics and their impact on businesses and productivity can no longer be ignored. Against this backdrop, Singapore’s developmental context is shifting as the rate of economic structural transformation slows. The city-state finds itself at a turning point where hard choices must be made to safeguard the social stability previously upheld by breakneck growth speeds. With its policies historically being an object of study for China, Southeast Asia, and other developed and developing economies, the learnings from how Singapore tackles inequality will resonate beyond its shores.

Addressing parliament in February 2018, Singapore’s Prime Minister Lee Hsien Loong bluntly observed that if widening income inequalities were allowed to create “a rigid and stratified social system”, “Singapore’s politics will turn vicious, its society will fracture, and the country will wither”. Sounding the exact same warning in her inaugural speech three months later, President Halimah Yacob noted that inequality had broken the social compact in many countries and Singapore “must tackle inequality” before the problem became entrenched (Yacob 2018). The recasting of inequality as a serious societal problem in Singapore has become increasingly prominent in recent years, including during the 2020 General Elections.

Although few would question the seriousness of inequality, there is far less consensus on its extent and how to mitigate it. This paper contributes to this debate by juxtaposing empirical trends against the emerging realization that while the normative commitment to meritocracy in Singapore has never slackened, its increasing tension against the lived realities of unequal opportunities is posing a jarring contrast to the narrative of equal life chances, taking an increasing toll on Singaporeans’ belief in the system’s ability to arbitrate life chances based on talent and effort.

There are three takeaways. First, inequality for Singapore has become a matter of national survival, tied to the larger social compact of a functioning meritocracy in spite of constructive efforts by the government towards mitigating the ills of what I call “time two meritocracy”.