Reform Party, PAP, Singapore, economy

For years, the consensus has been that although the PAP is evil, at least they've done a heck of a job managing the economy. It doesn’t matter if they are metaphorical vermin that would theoretically torture a hypothetical cute fluffy rabbit to death, and won’t hesitate to sue a blogger that accuses them of being literal vermin that will torture an actual cute fluffy rabbit to death. At least they provide us with our daily bread while doing so.

It is upon this premise that the Singaporean social contract is based. Singaporeans are willing to accept the PAP's encroachment on their civil liberties and the perpetuation of its power into virtually every sector of life so long as it is seen to be competent at managing the economy. At the point where the PAP stops being good at handling the economy, the social contract begin to unravel….

Enter the Reform Party.

Advocating economic rationalization, the party appears to have a concrete grounding. It also avoids the kind of populist rhetoric which allowed the PAP to caricature others as profligate parties leading Singaport to economic ruination.

 More importantly, the Reform Party poses a viable challenge to the economic policies of the PAP. I attended a recent discussion (which can be found here) where the party managed to come up with some recommendations:

1. Increasing productivity and reducing income inequality through a minimum wage

The Reform Party suggested that enforcement of the minimum wage, while likely increasing labor costs, will force employers to use workers more efficiently instead of simply hiring more foreign workers who are cheaply available. The rise in productivity that will follow the rise in wages will not harm employers while it raises the living standards of employees.

2. Oversaving, increasing domestic consumption

The culture of saving in Singapore, brought about partially by the mandatory CPF scheme, has reached the point of excess saving or oversaving. Excess savings have not been used productively, and have been funneled into unprofitable investments overseas, much of which disappeared during the sub-prime crisis. The lack of consumption due to oversaving has also hindered a rise in living standards. Consumption, even of foreign imports, increases living standards and hence ought not to be treated as an enemy.

3. Increasing productivity through higher education spending

The party points out that there is a glaring lack of investment on education in Singapore relative to other developed countries – Singapore only spends 2.8% of its GDP on education while the UK and US spend over 5%, with Sweden topping the charts at 8%. The Reform Party proposes that more ought to be spent, especially on universal pre-schooling, tertiary education, and on the disabled who can, and usually do, opt out of the Compulsory Education Act.

The interesting thing about the Reform Party is that it has managed to come up with economic policies that are sound, at least to me, a novice in economics. By relying on economic justifications, they have distinguished themselves from other political parties which derive their economic policies by way of moral reasoning; a quick look at how the various parties have advocated for the very same issue of minimum wage, but with very different reasoning, will confirm this.

Now that the Reform Party has managed to show that the bread is not only buttered on the side of the PAP, but on both sides, will the opposition fare better?