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Rich Singapore resists welfare reforms

The recent recession has exposed the vulnerability of Singapore have-nots. Critics say the city-state should provide a better social safety net. 

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For decades, Singapore’s government has sought to script the lives of its citizens, earning a reputation as an authoritarian democracy that delivers the economic goods.

On paper, it has become wealthy – in nominal terms, per capita income was $39,000 in 2008, on par with Japan – and has the highest rate of home ownership in the world.  

But over the past year, deep recession has exposed the vulnerability of those left behind. Though headline growth has recovered, job creation is lagging, with 5 percent unemployment in September. That's the highest level since 2003, when the SARS (severe acute respiratory syndrome) epidemic took a toll on Asia travel. 

A common refrain here is that while the country is rich, ordinary Singaporeans are not. Critics point to a widening income gap, stagnant wages at the bottom, and competition from low-paid foreign workers as reasons why the economic gloom has yet to lift, even after the recession officially ends.

Another factor is that Singapore’s government, despite its interventionist zeal, is stingy when it comes to welfare spending. It is at pains not to describe its social programs as welfare, which smacks of free lunches and laziness. As a result, workers here have no right to unemployment benefits and only the most destitute can apply for short-term financial aid.

Critics say the system is cumbersome and inequitable. “More and more people are finding it hard to make ends meet. This filters down to create problems in society,” says Leong Sze Hian, a financial adviser and blogger.

Government officials argue that European-style welfare systems would undermine Singapore’s work ethic, be abused by claimants, and become a burden on taxpayers. Instead, the government focuses on workfare training and top-up schemes, and gives grants to specific categories of needy citizens, including deprived students and low-income elderly.  

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