Thursday, 11 April 2013

PAP will continue to have Economic Profits in 2016

[Generic Competitive Position Analysis 2/2]

In this second part of Generic Competitive Position Analysis, the PAP has good chance to retain two-third majority in 2016.  However, their huge economic profits will be reduced, no more 90% parliament seats. 2016 will also see one big PAP circle, one mid-size WP circle and few small circles.      

Table 2 Performance of PAP and selected opposition parties in GE2011 (% of valid votes in contested wards)

GElection
PAP
WP
NSP
SDP
GE2011
60.14%
46.6%
39.3%
36.8%
GE2006
66.6%
38.4%
-
23.2%
 Source: Singapore-election.com

Table 3 Credibility of Selected Political Parties (IPS Post-GE Survey)

Mean
PAP
WP
NSP
SDP
2006
4.1
3.6
-
2.3
2011
3.9
3.6
3.0
2.9
 Source: Institute of Policy Studies, Singapore

Table 2 and Table 3 show that the main challenge for the PAP is WP. The average percentage votes that WP received in their contested wards in 2011 were quite close (46.6%) to the PAP and it is well ahead of other opposition parties.  In term of credibility, WP is also catching up (3.6 against 3.9 for the PAP).  Again, WP’s credibility is also ahead of other opposition parties.   

WP’s weakness is it is a regional party. It has yet to reach out to the whole of Singapore. It only contested 23 seats in the parliament in 2011.  By 2016 or 2017, it is very unlikely they will contest all the (87) parliament seats. The party has clearly stated that they are not ready to take over the government and wants to concentrate on building their power base in the eastern part of Singapore with plan to buy a space for its headquarters. WP seems to admit they have yet to realize the full benefits of learning curve. 

The generic competitive position for WP, strategically speaking, will be continued to be in focused low-cost and niche markets in 2016.

As a strategy consideration, as they don’t want to form the government, they will most likely not contesting more than 51% of the seats, i.e. 44 seat under the current 87- seat parliament. In 2016, WP will certainly contest more wards than 2011 but may purposely choose to contest less than 50% of the seats.  

The two recent by-elections (http://www.singapore-elections.com/parl-2012-be/ and http://www.singapore-elections.com/parl-2013-be/) in 2012 and 2013 were won by WP.  This clearly shows the popularity of the party in the eastern side of Singapore. The 2013 by-election showed a swing of 10% towards WP making the party capturing one more parliament seat.

Besides WP, the other opposition parties will need to catch up in average percentage votes obtained, credibility and popularity. There is a wider gap between the PAP and these opposition parties. They may have some ‘wildcat’ breakthroughs but the impact will be limited. This is why freak election result may not happen in the next election.

The political strategic maps in Singapore in the next election in 2016 will look like the followings:
(Assuming the x- and y-axis as average percentage votes and credibility, and the third factor is number of seats contested)
    
PAP is the only big circle contesting all the seats, with high average percentage votes and credibility. They are adopting integrated strategies and want to maintain cost leader and differentiation competitive position. 

WP is the only mid-size circle contesting less than half of the seats, coming closer and matching the PAP in average percentage votes and credibility. But their competitive position will be different from the PAP. They will look for niche market and low-cost focused segment.

Other opposition parties will form different small circles with weaker positions in average percentage votes and credibility. Some may contest as many seats as WP and as a result, the election may see more multi-corner competitions.      

One thing to note, Singapore parliament election is “first pass the post’ system.  There is only one winner in the contested constituency.  Candidates backed by parties with lower average percentage votes and credibility will have disadvantages in winning a contest, no matter how many candidates they are sponsoring in the election.     

Assuming WP only contests in 40 seats in the next election and they manage to improve their average percentage votes to 50% in their contested seats, this will give WP 20 seats in the parliament.  In addition to some ‘wildcat’ breakthroughs by other opposition parties, the total seats lost to the oppositions may be 26.  

The PAP’s average percent votes will reduce to below 60%, say 55%. A 55% popular votes produces 70% seats in the parliament, the PAP is still enjoying economic profits. If WP contests fewer seats than 40 or bring in low quality candidates, then the seats lost to WP will be less.  The PAP will regain more economic profits, with less than 60% popular votes but enjoying 80% of the parliament seats.       

Table 4: Possible PAP majority and seats in the parliament

PAP Majority in parliament
Total seats
PAP MPs
PAP MPs %
Oppositions MPs
2011
87
81
93%
6
Two-third 
87
58
66.7%
29
70%
87
61
70%
26
75%
87
66
75%
21
80%
87
70
80%
17
85%
87
74
85%
13
# assuming there are no change in total seats in 2016

A win-win situation (?) may be the PAP having economic profits at 75%-80% level of parliament seats with slightly few than 60% popular votes. The PAP still has the two-third majority and the oppositions start to gain substantial seats in the parliament. From here, they can work out broader strategies to deny the PAP in the next election.

The evolving process for Singapore politics is incremental. Although it is marching towards normality, however, it is yet to achieve full open competition environment and so normal profits are still a distance away in 2016.        


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