SINGAPORE has had a good run of it in the past half century. But there are now headwinds, both domestic and external.
Despite having one of the highest per-capita incomes, Singaporeans in the lower income brackets feel squeezed by an influx of foreign migrant workers depressing wages. Highly-skilled expatriates, on the other hand, make housing more expensive for many Singaporeans. Uncertain global growth has also hit exports. Centennial Asia Advisors CEO Manu Bhaskaran says Singapore needs a new economic model if it is to narrow the widening income disparities.
He tells StarBizWeekthat while there will not be any sea of change in the economic fundamentals of the country following the elections, adjustments are needed in the economy, as in the previous half century, the economy was powered by foreign multinational companies (MNCs).
Now, policymakers must build up the local companies and focus on the local labour force instead of bringing in foreign talent, which has caused friction in the crowded Singapore, where property prices have soared.
Manu points out that foreign MNCs absorb more than half of the composition of profits in the economy, with Singaporeans’ share being low. Income distribution has also been affected, with the disparities widening. —ANN/The Star
Published in Dawn, Business & Finance weekly, September 14th, 2015
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