Singapore: Gearing Up for Election Year 2006


Dr Terence Lee

The Singaporean economy grew by a stronger than expected 5.7 per cent in 2005. This was a significant outcome in view of several 'threats' that could have derailed economic growth in 2005. These included rising oil prices, a soft property sector, regional terrorism and slowdown in the US economy, just to name a few.

In his New Year's Day message to the nation, Prime Minister Lee Hsien Loong took the opportunity to claim some credit for the strength of the economy by declaring that the growth is due not just to favourable regional factors, but also because Singapore's own economic 'restructuring and upgrading policies are working'.

Compared with previous years, economic growth and recovery in 2005 has been broader-based, with the all-important manufacturing and service sectors delivering growth of 8.6 per cent and 5.4 per cent respectively. This solid growth momentum enabled PM Lee to voice his optimism that 2006 will again be a good year for Singapore - barring unexpected shocks, of course.

Given the overall positive climate, most analysts expect the PM to call for a general election within the first half of 2006. While talks about a soon-coming election have already been gathering pace in Singapore during the last quarter of 2005, there are signs that the election will take place very soon - even though it is not due until mid-2007. For one, the Elections Department have reportedly been active in reassessing electoral boundaries over the past month, even calling for tenders for 'operationally ready' computers - or systems that can be activated within 5 days - to be used in polling stations.

While critics tend to dismiss elections in Singapore as non-events, since after all, the People's Action Party (PAP) is bound to get re-elected by a significant margin, the up-coming election is worth watching not least because it will be Lee Hsien Loong's first as prime minister. In seeking a mandate for his leadership, he is likely to emulate his predecessor by asking Singaporeans to vote with an eye towards endorsing his premiership. This is astute politics because the vast majority of Singaporeans prefer to have the PAP in charge of governing the nation.

The signs of an impending election will become clearer after the annual budget is announced by PM Lee, who also wears the hat of Finance Minister, in February 2006. Many economists expect the upcoming Budget to be full of fiscal goodies, with handouts for most Singaporeans, especially those who continue to struggle despite the stronger economy. Money is also likely to be handed out for estate renewal projects alongside incentives to develop or boost certain industries. In short, an election budget is expected.

WATCHPOINT: The annual national Budget is due next month. The size and scale of handouts and other fiscal returns should send a clearer signal as to whether the General Election will be due shortly after.


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