Governance of a City-State
NDR 2014: Reaffirming our egalitarian ethos

“We have all contributed to the Singapore story; at the heart of the Singapore story is our belief in Singapore: Belief that we can turn vulnerability and despair into confidence and hope; belief that out of the trauma of separation, we could build a modern metropolis and a beautiful home; belief that whatever the challenges of this uncertain world, we can thrive and prosper as one united people. Let this belief and spirit burn bright in each one of us and guide us forward in the next fifty years and more. Together let us be the pioneers of our generation; together let us create a brighter future for all Singaporeans.”

Prime Minister Lee Hsien Loong
National Day Rally Speech, 17 August 2014

The Prime Minister’s National Day Rally Speech of 17 August 2014 was not an annual report delivered by the chief executive officer of some commercial entity.

It was full of heart and soul yet it was undergirded by a sense of informed realism about what it will take for Singaporeans to see that their lives improve and the nation prospers.

The focus on the values that our nation is built on and fleshing them out in public policy is the translational work that political leaders must perform. But it is in the articulation of what they think those values are to begin with, that convinces citizens that their leaders speak for them, stand with them and truly serve them.

The PM did that in the NDR2014 speech. It didn’t start and end with just defining the problems we face. It started and ended with how we have overcome past problems and that we have the resources within us to do more.

From the personal tales of “resolve, strength and character” through the lives of Divesh Singaraju, William Tay and Wong Ah Woon, to a reminder of Singapore’s first President Yusof Ishak’s belief in a multiracial Singaporean society living in peace and harmony, the speech spoke of hope, security and what it means to be rooted here. It also spoke of how much more the government must do, too.

The stories of the three Keppel Corporation employees anchored the idea of hope. The PM said that Singapore should be a place where your earlier years will not be held against you – your merit at the age of 16, 18 or 25, or lack of it, will not prejudice your chances of making progress through the rest of your life. In fact, the PM pledged that his government will ensure that performance and contribution will draw their rewards. His Deputy, Mr Tharman Shanmugaratnam, had referred to this system as “continuous meritocracy” in 2012. The true measure of the quality of our society will be how progress is being experienced from the bottom-up. When many more find it is true, the common criticism that “meritocracy” is really only a fig leaf for “elitism” in Singapore will be debunked for many generations to come.

This desire to provide hope that “anyone can improve his life if he works hard” and that opportunities to upgrade will remain open throughout one’s career has been anchored by the government’s effort to level up the vocational education track from being a poorer cousin to the academic one, to one that is on par with it. It is time to give greater traction to this commitment – DPM Tharman, a former education minister, is to head the effort to implement the recommendations of the Applied Study in Polytechnics and ITE (ASPIRE) committee.

At a seminar that IPS held with Swiss think-tank, Avenir Suisse in October 2013, we learnt that the education and training system in Switzerland is guided by the principle of “permeability”. Swiss youths and workers, recognised for making up a world-class workforce known for its productivity, innovation and creativity, are able to toggle between three different paths through their lifetimes. These paths are the baccalaureate system that leads to university; the upper secondary specialised school system that leads to training for specific professions like teaching; and the vocational education and training track that incorporates career-shaping apprenticeship programmes. People on the third track[1] are not severely disadvantaged by way of pay or career progression compared to the others and they enjoy equally high standing in the sectors they are found in, as people who have taken the other two tracks.

One of the Singaporean commentators at the seminar, Mr Ang Kiam Wee, who is incidentally, the Principal of ITE College Central said that it is those three “Ps” – pay, progression and pride – that had to be addressed to make a system like the Swiss one a reality in Singapore. Perfect parity between the vocational and academic tracks may be difficult to attain but with the blurring of lines through the mainstreaming of practice-oriented degree studies in our universities on the upside and sadly, the degree inflation that is taking place in the more “popular” academic courses globally on the downside, trends in the world of work may close that gap.

What must also change is the Singaporean practice of human resource management or talent management. The practice in performance appraisal, development of all manpower as talent and the ability to integrate talent of all backgrounds – vocational, academic, degree-holders and non-degree-holders must be sharpened. At an IPS Corporate Associates meeting earlier in July this year, a leading HR practitioner, Ms Karen Cariss, explained that the old Western talent management rule of 70/20/10, where 10% of skills development comes from formal training, 20% from feedback and 70% from on-the-job experience, should be replaced in younger, dynamic, Asian settings with a 50/30/20 rule. This should apply to Singapore too, with 50% of skills development expected from on-the-job training, 30% from feedback and 20% from formal training. Even then, past surveys suggest that human resource and management practices between multinational firms and local ones based in Singapore can be very different but most certainly can be improved upon. These should be in the areas of structured programmes to ensure learning-on-the-job is effective, that mentoring is available, and that it provides precious guidance for career development and effective integration of one’s workforce as mentioned above.

Moving on to the message of security – old-age security to be specific – the PM has shown that he is responsive to the calls to help low-income seniors; to allow for larger lump sum payouts from CPF savings upon retirement; and to expand the options for retirement funding.

At the recent IPS Forum on CPF and Retirement Adequacy, there was a consensus that low-income seniors as well as the disabled, caregivers and homemakers who may not have participated fully in the labour market, may not have much by way of CPF savings to take them through their silver years. There was a call to provide a minimum pension to people who fit these profiles. Short of doing that, the PM has announced that there will be a Silver Support Scheme to supplement payouts from the CPF to people who do not have sufficient savings, do not own their flats and have no family support. These supplements are to be paid from the government budget.

Presumably, the disabled, the caregivers and homemakers should continue to depend on their families to make contributions to their CPF savings and take full advantage of the multipliers that the system offers – the interest payments and the MediShield Life and CPF Life schemes.

Extending the Lease Buyback Scheme to owners of four-room HDB flats in addition to the current pool of three-room HDB flat owners provides another option for retirement funding, although one speaker at the IPS Forum said that the take-up rate to this scheme would improve if potential applicants were told that the scheme would take them to their final days, should they live beyond the current 30-year lease period.

The leeway to consider some lump sum withdrawals for those aged 65 and above to do something they might have always wanted to do – like going on the haj, or pilgrimage to Mecca – is another indication that the government will build more flexibility into the CPF system. But this should be paired with serious financial counselling so that members will do so only in full knowledge of how it will erode their future stream of retirement income.

It is also good that there will be an advisory committee to study and propose changes to the CPF system. One of the speakers at the Forum, Donald Low, explained the many ways in which it is behaviourally challenging for most people to set aside a large enough sum for retirement because they focus much more on current consumption and discount future interests very heavily. So, what seems like a paternalistic CPF system is a sound one. As the PM played “financial planner”, he demonstrated that the “Minimum Sum” is not a misnomer because at $155,000 it would not translate to a payout of $2,000 a month. This amount was what the audience thought the fictional Tan couple in his speech would need for monthly expenses, if their HDB flat was fully paid for and their two children were financially independent when they reached retirement age.

Mr Low had argued that a body – presumably comprising the best of actuarial science experts and financial planning professionals – drawing on realistic projections of life expectancy and morbidity patterns of the aged in Singapore, should make independent judgements of the adequacy of CPF payouts for Singaporeans of different income groups and generations, like the Tans and many others. It will increase the level of trust citizens have in this important system and cast away suspicions that the government is profiting from them when it sets CPF policies.

Overall, the tenor of the speech was a positive one. It spoke of how our leaders and the government will seek to encourage, enable and empower Singaporeans to rise above what they think is currently possible as individuals and as a nation. It re-affirmed our egalitarian ethos. It promises to help us transcend the mind-forged manacles that hold other societies back – there is no right caste, class or race that you have to be born into to succeed in Singapore; nor will past infirmities or disability stop you. Good politics and good policies intermingle to make every Singaporean vital to the life and success of our country, and root us to this nation.

Dr Gillian Koh is a Senior Research Fellow at the Institute of Policy Studies studying politics and governance in Singapore. An excerpt of this piece appeared in The Straits Times on August 20, 2014.

Photo credit: PM Lee’s Facebook

[1] Just to give a flavour of how this has translated in practice, what follows is a list of Swiss business titans who are recognised as having emerged through the vocational track of education and training:

  • Adolf Ogi, Swiss politician pursued a commercial apprenticeship.  He was a member of Swiss Federal Council between 1987 and 2000 and twice as President of the Confederation, in 1993 and 2000.
  • Marcel Ospel, former Chairman of the Board of Directors of UBS AG between 2001and 2008 ­did a commercial apprenticeship before climbing the ranks of the UBS and its predecessor banks.
  • Christoph Blocher, Swiss politician and industrialist closely associated with Ems-Chemie AG did an agricultural apprenticeship and studied law later on.  He was former member of the Swiss Federal Council between 2003 and 2007 and was Vice-President of the Swiss People’s Party.
  • Sergio Ermotti, Group CEO of UBS AG ­ did an apprenticeship as stockbroker first before earning a diploma and degree subsequently.
  • Monika Walser, former CEO of FREITAG lab. Ag, a famous Swiss designer, did an apprenticeship as dressmaker before attending secondary school and university later on.  She stepped down as CEO of FREITAG in January this year and is now CEO of the Swiss furniture company de Sede AG.
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