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Hard work in the millionaires’ playground
Singapore offers a good insight into future trends in Asia.
As the country with the most millionaires per capita, and skyrocketing property and living costs, Singapore is a touchstone for both the rich and the ordinary person.
For the rich, the Boston Consulting Group’s latest wealth survey showed Singapore had more than188,000, or 17%, millionaire households, based with at least $US1 million in investable assets, excluding primary residence, collectibles and consumer durables.
A local company incorporation firm, Rivkin, estimates the number of millionaires has increased 14% since 2010 and shows no sign of allowing. This is also good news for immigrants.
“[Singapore] has an open door immigration policy to attract foreign talent, which is an invaluable asset to a competitive economy. That's why Singapore has, amid a war for talent, made concerted efforts in courting and retaining foreign talent through various schemes,” says its head of operations, Satish Bakhda.
I spent a few days there this week and this type of news dominated local media reports:
• A Ministry of Trade and Industry report said key industries such as the biomedical science and the marine and offshore sectors could not develop without foreign manpower.
• The same report said Singapore has three choices when faced with growth issues – raise the existing population’s productivity; increase the resident labour force participation rate (this is limited by already high rates: 92.1% of males aged 25-64 are already employed); and increase immigration for both for high-skilled and low-skilled workers.
• The ideal population (now 5.3 million) was the key issue in an hour-long televised forum with Prime Minister Lee Hsien Loong, He said: “In the future, six million or so should not be a problem. Beyond that, we’ll have to think more carefully.”
The problems of prosperity
Singapore is famous for it high-pressure lifestyle and Mr Lee faced questions that were linked with prosperity and lifestyle – much different thase New Zealanders would ask John Key..
When he polled the 30 forum participants about the need for immigrants to offset the low birth rate, two-thirds were in favour and a slightly higher number agreed more foreigners were necessary.
Mr Lee has called for less stress on children and more games-based learning at pre-school level. This is a response to the “tiger mother” phenomenon, which is the favoured method of parenting.
Western parents are usually horrified at the pressure the tiger mums exert on their children to get better grades or become concert violinists, preferably before puberty.
Mr Lee agrees and
berated parents for coaching their three- or four-year-old children to give them that extra edge over the five-year-old competition. And he added:
“Please let your children have their childhood…Instead of growing up balanced and happy, he grows up narrow and neurotic. No homework is not a bad thing. It’s good for young children to play, and to learn through play.”
If that debate has yet to be resolved, there is little doubt about the strength of Singapore’s economy, which rose 10% in the first quarter over a year earlier, when the economy had slumped.
The growth rate has since moderated and expectations are for an annual GDP rise of 2-3%. The key influences are inflation running at just under 4% and slowing global demand.
India goes off the pace
Singapore is a good place to compare the giant economies of China and India. This was reflected in a couple of articles by two Indian commentators in the Singapore press.
One was a comparison of growth and other indicators over the two decades to 2009. It was a hands-down win to China, prompting the other commentary into worrying about a return to “Hindi rate of growth.”
In 1980, China was 60% of the Indian economy. But because of differing liberalisation and foreign investment reforms, the Chinese economy is now three time bigger than India’s.
Human development factors are even more startling. China’s child mortality rate (under 5s) has dropped from 48 to 20 per 1000, while India’s has gone from 115 to 65, well above China’s rate in 1990.
Poverty rates, measured by a headcount ratio based on $US1.25 a day, are just 16% of the population in China against 42% in India (2005 figures).
In the other commentary, the former head of the Confederation of Indian Industry argued that India had lost its self-belief and self-confidence.
“Today, in the sharply divided political atmosphere…it has become almost impossible to pass new legislation. Even the adoption of new policies is beset with differences and opposition.”
This is a reference to attempts to introduce foreign retailers into India, such as Wal-Mart. While the government has approved joint ventures in principle, strong opposition and protests could mean it will takes years to happen.
Pulling the tiger’s tail
Perhaps the strongest evidence will remain anecdotal.
When I first visited India in the 1980s, it was a better bet than going to pre-Deng reform China.
Today, there’s no comparison with vast urban high-rise complexes of Chinese cities, relative cleanness of the streets and western-style efficiency in most areas that tourists demand.
A new book on India provides the contrast. Dunedin writer Lisa Scott’s Travels With My Economist (David Bateman, $30) is in many ways shocking, though not a surprise to anyone who’s been to India.
It may not encourage many to do so. Like most good travel books, it is a mix of the highly personalised and factual.
From her arrival in “slobbering humidity,” Ms Scott finds it hard to adjust her feminist tendencies to the social and economic realities, which she marks off in chapters on hygiene and sanitation (non-existent), treatment of women (universally bad), the caste system (also bad).
Among encounters of the worst kind, she describes an indecency performed on her on bus, a beauty treatment, the opulence of an upper class dinner party and the double standards of morality.
The latter includes the high level of ignorance culled from sex advice columns in the vociferous India media, “which revels in gory pictures of violent crime, accidents and self-immolation.”
On the positive side, she praises the modern hospital where Lasik surgery was performed on the Economist’s eyes.