Monday, 30 December 2013

2013 Year of Re-think, from Riot to Rentier Economy

Inside or outside Singapore, even it is an isolated case as claimed by the government, the Little India riot is a piece of international news.   It presented the other side of Singapore to the international audiences, that a stable country can also have violence.

So, we need to rethink the possible reasons for the Riot, beyond the official version.  Besides riot, the whole of 2013 is a year of re-thinking, re-consideration, re-assessment and re-evaluation of our past, present and future. The PAP is re-thinking and re-introducing democratic socialist.  Why?  It is because our very successful model is mainly based on the rentier economy and rentier capitalism.  So, the PAP is re-examining its glory past and tries to re-fine the model.  Will it work?  It is too early to tell.

Rentier economy

Rentier economy usually refers to oil rich producing countries but it can also refer to countries that have certain characteristics of a rentier state.

There are four characteristics that would determine whether or not a state could be identified as rentier#1: 
1. if rent situations predominate
2. if the economy relies on a substantial external rent – and therefore does not require a strong domestic productive sector
3. if only a small proportion of the working population is actually involved in the generation of the rent
4. and, perhaps most importantly, which the state’s government is the principal recipient of the external rent.[2]

How well does Singapore fit into the above characteristics?

1.   Yes. For example our location, our big government business, our special designed election system, etc.
2.   Yes. For example, our trade is many times our GDP, the tourists arrival is more than the local population, etc.
3.   Yes. For example, the emphasis on scholars and foreign talents and now even the casinos are only open for foreigners etc.
4.   Yes. For example, the CPF monies, official reserves, GIC and Temasek Holdings etc.  

Rental incomes

If we have the characteristics of a rentier economy, then where are the rental incomes?

These rental incomes can come from COE and ERP; work permits; casino licences; Singapore Pool; sale of state lands; the difference between CPF interest rate and investment returns of GIC/Temasek;  in elections through media control and boundary design; etc.

Singapore has no natural resources, but using administration measures, the PAP government can achieve the level of rentier economy for its own consumption.   

Besides the state having renting income, in a personal capacity, individuals can also enjoy profit above normal level.  One very clear example is the highly paid ministers.  Administration decision can be taken without public consultation to award ministers salaries above international standard. 

One of the reasons that rich becomes richer in Singapore is due to rentier economy. For example you can see them in property investment, in personal tax rates, or not to forget there is no capital gain (e.g. shares) and real estate duty.  

The unique rentier structure in Singapore can also benefit some individuals who dare to take risk.  For example, false marriage, false IC or lending of IC, illegal application of HDB flats, illegal subletting, etc.

With the rentier income in national and individual level, we now recall 10 events in 2013 that are related to this.  You can see from these events that how the PAP re-thinks and re-evaluate its position in a rentier economy.

The Top 10 Re-thinks in 2013

The ten 2013 things for thought for Singapore are as follows:

1 Punggol by-election: Why did voters reject the PAP? Are they happy with the current distribution under our rentier state?

2 Population: Why did the first ever large scale legalized peaceful protect in Singapore taking place in Hong Lim Park? Are they happy with the population distribution under rentier economic model?

3 Social media: Is ‘Free My Internet’ movement necessary? How do things change in the new media era? Can a rentier state continue to control the media?

4 Housing: Is getting a HDB flat first before marriage a new trend? Will the new housing policy make a fairer distribution of state estates?

5 Democratic socialism: Is this a re-think of the PAP? Is this a clear signal to move away from the rentier practices?

6 llo llo: How important are maids in Singapore society and the problems of children growing up under this environment? Like Little India Riot, is there an urgent need to re-think the foreign workers policy in the new democratic socialist arrangement?

7 MedicalShield: This medical insurance is now compulsory for all Singaporeans. You can’t even opt out. Is this the result of our rentier economy after a review of the past mistakes?

8 Legal and court: There are some challenges (Hougang by-election, gay right, death penalty etc.) to the interpretation of our constitution. This, perhaps, is the most important of all the events.   How does the court maintain its position in a rentier state?  

9 AIM and town council management: Will the story continue to the next election? How do public view the government using its rentier power to score points or lose points?

10 Prime Minister: Do we need to re-think his performance during the year? Is his high salary, due to the rentier capitalism, matching his performance over the years?


For further reading:
Britain is recreating a rentier society fit for a baby royal

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