Wealthy Nations Daily Update - Singapore

For the first time in Singapore’s short history its leadership may come under serious contention. Today’s general election may no longer be about loyalty to Singapore’s founding father Lee Kuan Ywe (LKY) who passed away in March this year. His People’s Action Party (PAP) has dominated the governing of the country for the entire 50 years of its independence; over which LKY ruled for half and with his son, Lee Hsien Loong, now incumbent. PAP’s popularity and the public’s reverence for the Lee family over that time has waned little, at least until now as concerns over living costs, immigration and inequality take grip.

Yet from an external perspective the leadership hasn’t really deteriorated or given cause for the apostasy of at least 40% of the voting public. Indeed the continual success of the country has bred multiple generations whose life experiences teaches them to expect the same high standards; standards that may be unattainable in current circumstances. One example that Singaporeans no longer deify their leadership was the pressure a few years ago for Mr Lee to take a pay cut. Nobody minds having the highest paid prime minister if they transform your country from “a third world to a first world country in a generation”; but now the people may just want more value for money and perhaps a more balanced democracy - where the increased political competition helps strengthen leadership beyond what it already is. A significant concern for Mr Lee politically but not financially as his salary still amounts to around USD 2m and failing that he can always fall back on his wife’s earnings as the CEO of Temasek.

Although the current parliament suggests only a flicker of support for an opposition who hold 7 of the 87 seats, the underlying vote statistics was much less favourable. PAP managed to attain 93% of the seats with only 60% of the vote. This year some speculated that the nationalism surrounding the half-centenary would boost support for the standing leadership but recent polls suggest otherwise. A slight swing in votes from last year could mean a significant change in seats won.

Historically LKY was known for strong arm tactics against competition enacting lawsuits and publicity wars. Correspondingly leading up to this election his son Mr Lee warned that the country would be “finished” were the opposition to win. We’ll wait to see whether the public believe Mr Lee or see his comments as a sign of insecurity.

Anyone who’s even glanced at Singapore on Google Maps, and the crowded straits around it, knows just how important a trade and shipping hub it is for the whole of Asia. But it is also an example to the rest of Asia of a flourishing democracy and today’s probably close result, even if uneventful, is a reminder to its neighbours that the public voice is a powerful one and demands ongoing effectiveness even from the likes of the PAP with legacies of accomplishments. It also contrasts with the electoral uncertainties in debt laden Europe and is another reason why historically Singapore has been a source of strong credits offering value.