On National Strategy

Over the past years, issues of housing, inflation and real household income growth/decline have been increasingly central in the public discourse, pointing to the deeper issue of what national strategy is appropriate going forward.

Traditionally, we have pursued a high rate of growth which has, unfortunately, been accompanied with a rising cost of living relative to income, which in turn has led to many Singaporeans feeling left behind. While one must acknowledge that billions are spent on targeted aid to speed up the trickle-down process, which usually takes decades in other countries, targeted aid is a reactive solution to a side-effect of our pursuit of growth.

Our first generation leaders presciently pursued the strategy of growth while building an umbrella of security. The execution of this strategy raised the average standard of living and kept Singaporeans safe, and is now well studied by both governments and corporations as a textbook case study of well-crafted and implemented national strategy.

Empirically, economists have observed that high growth in a country is often accompanied by rising prices and increasing concentration of income with the richest, in turn leading to decreasing purchasing power of the poorer segments of that country. This leads to the question of whether high growth and increasing income inequality is, on balance, the best option for Singapore. In a related sense, is the growth chasing hot money a risk to our financial system? We have to make an informed decision on how to pursue growth and to what end. After all, the pursuit of growth should be a means to increasing the welfare of the citizenry.

Key to designing an appropriate national strategy is the articulation of our national objectives in terms meaningful to Singaporeans. Such objectives might include ensuring, by 2020, than no more than 1% of adults in a certain age bracket fall below a set income threshold (as pegged to a representative basket of goods and services), which, under the CPF scheme, would ensure sufficient retirement funds for most Singaporeans. National objectives might also include a list of privileges we would like Singapore citizens to enjoy, such as substantially longer paternity leave with job security or free tertiary education. Such examples represent a consolidation of the gains that generations of Singaporeans have labored for. With a clear sense of what we want to achieve, Singapore will be better able to negotiate the trade-offs necessary to realize her objectives.

As PM Lee as emphasized, this coming election is about the future. As such, and our nation’s long term objectives and strategy should be debated.