Singapore has always emphasized high value added economic activities when soliciting overseas investment and devising development programmes. I am aware of the various theoretical arguments behind it and have no quarrel with them, especially as I was myself recruited to NUS because of one such push, to promote the widespread use of IT in society and economy. But I wonder.
If a new programme is so sophisticated and advanced that very few local people are available to take part in it, and its results are more useful overseas than locally, what exactly is its benefit to the country financing it? If the programme educates local students, or has clear technology transfer components, as most programmes in NUS do, then the question is easy to answer. It is much less so with some research programmes.
Another question in my mind was: surely Singapore requires brawn as well as brain? How many of the highly qualified people recruited from overseas would send their sons into National Service? Most of them would probably be around for just a few years; others may stay longer, but send children outside Singapore for college education.
Recently Local Transport Authority announced that it wishes to promote higher usage of public transport in the next phase of transport development (previously there was the idea of letting more people become car owners by reducing the tax on buying cars, but increasing charges like electronic road pricing for using them); now a simple way to get more people to take MRT is to provide free or very low cost shuttle minibus (similar to those in HK) between HDB neighbourhoods and MRT stations. It would also generate employment for local people, more brawn inclined than brain inclined. Are ideas like this too low level, too welfare oriented, too... to make sense? Whatever the objections, the idea is not unaffordable, and its cost would be negligible relative to the total budget. It depends on the meaning of sense, does it not?
Singapore government's official policy is to have no comprehensive welfare provisions, based on the premise that welfare encourages dependence, reduces incentive to work hard, and saps a country's economic competitiveness. This makes the country very different from the "first world" where old age pension, medicare, child endowment ("milk money)", unemployment insurance, negative income tax, etc are familiar features. The argument is that whereas these countries have abundant natural resources making it reasonable for the governments to guarantee a minimum standard of living to the people, Singapore is not in that situation. Where welfare assistance is provided, it is done so on an individual case basis with people with demonstrable need seeking help from government or private welfare agencies.
I believe there is also a second consideration: the unwillingness to foster an attitude of entitlement among citizens, causing the government budget to be pre-committed to various social programmes leaving the decision makers limited room to invest in future economic development initiatives. In other words, the anti-welfare policy goes hand in hand with the wide control of the government over the national economy, rather than being paradoxial "why a rich government cannot give more".
I have no wish to start an ideological debate on this issue here, but would like to make a couple of points of a pragmatic nature.
First, we now live in a world where divorce rates are much higher than they used to be. A typical situation is that the husband gets involved with a younger woman, possibly starting a new family, leaving the wife to cope on her own with the earlier children. While in most cases the divorced wife and her children would have sufficient access to financial resources, such as the wife's own salary, division of family assets, and assistance from grandparents and other relatives, to provide for their own needs, a significant portion of such single mother families are badly off, and this number can be expected to keep increasing. Providing adequate financial resources in such situations not only alleviates current sufferings, but also generates future social benefits in giving the children a better chance to be educated and to develop normally.
Second, a social safety net makes it less likely that temporary economic setbacks, such as loss of job or major sickness, would lead to long term adversities putting people into desperate frames of mind. People would be less likely to go to loan sharks or engage in minor fund misappropriations, activities that have a tendency to snowball into more serious crimes in time. A small amount of assistance at appropriate moments can have very significant long term benefits by preventing small misfortunes from turning into major ones.
A third issue is that welfare payments generate expenditures in the poorer regions, because the recipients would spend the money in local shops, hawker centres, etc, helping other people who might otherwise be struggling. These are areas that do not benefit from increased government expenditure on research, high tech, etc, nor from foreigners buying expensive condos and raising property prices/rents.
Finally a comment on immigration: immigrants are suposed to generate economic benefits, by removing certain manpower bottlenecks blocking economic expansion and investment, and by reduing the expenditure for certain types of education and training. It also deals with the problem of aging population due to low births: in other words, to ensure enough young people work to help suport the retired people, who need to live on rent, dividends, interest income from the active economic participants, or from welfare payments from the government tax collected directly or indirectly from the active workers for those who do not have enough enough savings and investments to support themselves. In however, there is little welfare provision then this last point does not get across; in fact, people only see immigrants taking jobs that might otherwise been availble to retired people who need a job.
