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Dr Chua Beng Huat
Senior Minister, Lee Kuan Yew, turned 80 on 16 September. Before his birthday party attended by 1,000 guests, Lee gave an interview with the Straits Times. Singaporeans paid heed for they were keenly interested in one question: will he retire from active politics when his son, Lee Hsien Loong (now publicly declared as the Prime Minister designate by incumbent Prime Minister, Goh Chok Tong) takes over as the third Prime Minister? This is expected to take place sometime before the next general election in 2007. Senior Lee surprised many when he said that he will stay on for as long as he has something to contribute. He was nonchalant about possible negative effects that his continuing presence in cabinet might have on his son’s performance as Prime Minister, something that Singaporeans worry about on the latter’s behalf. Furthermore, he suggested that even when out of the cabinet, he would continue on as an MP and have his say in the nation’s affairs. This might have prompted a local journalist to ask, ‘What would Lee Kuan Yew be without Singapore?’
The birthday provided a temporary distraction from economic concerns. Faced with what is likely to become sustained structural unemployment, the government has reluctantly initiated ‘welfare’ programmes for the poor and unemployment assistance for the unemployed. The wider population is concerned with the across-the-board wage cut of 3 per cent, in the form of reduced employer monthly contributions to employees’ Central Provident Fund (CPF) savings. The greatest worry is the ability of some households to meet their monthly mortgage payments, which are largely paid out of their monthly CPF savings. As in the past, the government continues to provide different financing schemes to assist any household which needs financial help. Housing security is absolutely assured by the state for all Singaporeans living in public housing estates, as this is a cornerstone of the government’s legitimacy. Meanwhile, job-matching agencies are being set up by public bodies to help the unemployed get jobs. The very high level of public debate and the anxieties generated might strike citizens of developed economies in the West as being excessive when overall unemployment is expected to fluctuate between a respectable 4 to 5 per cent. However, this is the first time in forty years that sustained unemployment has become part of the expectations of everyday life. For ordinary Singaporeans, the government’s Midas touch in generating economic growth appears to have gone and its promises that the economy will turn around ring hollow as Singaporeans face what will be a comparatively bleaker future.
WATCHPOINT: There will be pressure to expand welfare provisions as the economic outlook for the next two years looks less robust. A point of interest will be Goh Chok Tong’s plans for his own future once he also steps down as Prime Minister.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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