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More diverse voices in politics, but policy constraints remain

The ruling People's Action Party won 61.24 per cent of the votes, a sharp decline from the 69.9 per cent it achieved in 2015. It also unexpectedly lost Sengkang GRC, along with three office holders.

THERE will be - in all probability - a greater diversity of voices in Singapore politics, but economic policy constraints will not go away just like that.

By now, the results of GE2020 have been dissected many times over. The ruling People's Action Party (PAP) won 61.24 per cent of the votes, a sharp decline from the 69.9 per cent it achieved in 2015, and only slightly better than the record low of 60.1 per cent it obtained in 2011. It also unexpectedly lost Sengkang GRC, along with three office holders. Meanwhile, the opposition Workers' Party (WP) boosted its standing, adding Sengkang to its successful defence of Aljunied GRC and Hougang SMC. By most standards, it is a comfortable win for the government, but most in Singapore, used to one-party dominance, would see this as a watershed of sorts.

Much has been put forward to explain this outcome: the differing approaches of the various parties; the appeal of individual candidates; some unpopular policies; and the coming of age of a younger electorate. And in the backdrop, the raging Covid-19 pandemic and its devastating impact on businesses and individuals.

The emerging plurality can be welcomed - diversity is after all a stated objective in many aspects of life, including business - but there also needs to be a continued understanding of the constraints Singapore faces in its economic and social policies.

There are some things politics will not change: a tiny, island nation with no natural resources; a limited domestic market; a small population, with an ageing profile and a falling fertility rate. A city that is also a country, without a hinterland. Whatever the changes that may come in political style or tone, the policies emanating from it all have to face up to these limitations.

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Some of the issues raised in GE2020 rub against these constraints. Take the debates over foreign workers (and talent) and the impact on Singapore labour and wages, population size and immigration, taxes and minimum wage. These debates are healthy, but the unique realities binding Singapore should also not be forgotten: a population not large enough to produce all the manpower - in numbers and skillsets - necessary for the economy, and reproducing so slowly that the door can never shut tight on immigration, and a small tax base that will be strained to support sharply increased social spending.

Unlike bigger economies, Singapore cannot also look inwards. Without a domestic market of viable size, it has always earned its keep by being a hub, be it for trade, shipping, aviation, finance, tourism or education. While the hub strategy may be challenged - by a less globalised world or other hubs - it remains for the foreseeable future a valid strategy. Being a hub implies openness - to the flow of not just goods and services but also people. Being a hub also means attracting investors and companies.

For this reason, being business and investor friendly and keeping a lid on cost is a policy necessity or a constraint - depending on how one looks at it. So while most will agree on the need to strengthen social support systems, for instance, there must be a keen awareness of the price this will impose; and which will be paid for - if not by the individual, by business directly or through higher taxes. Of course, there are the reserves, but those are held against another constraint - the lack of natural resources and strategic depth.

This is not to say that debates over such core issues should not take place. The constraints should also not be reasons on their own to end the conversation. But recognising these constraints will help sharpen the discourse.

Some will argue that Singapore has grown so used to framing things a certain way that only impediments and not possibilities are seen. That may well be true, but even if a re-imagination is to take place, a good grasp of the unchanging constraints Singapore faces will be a useful starting position.


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