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22 June 2017, Gateway House

Singapore family feud: no impact, yet

Singapore Prime Minister Lee Hsien Loong’s siblings last week accused him of putting self-interest before good governance. Yet, his personal popularity remains untarnished. The Singaporean economy may no longer be the powerhouse it was and the country’s cost competitiveness may have declined, but the government has been working to regain its edge

Adjunct Senior Fellow, Geoeconomics Studies

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Ever since Singapore’s founding father and former Prime Minister Lee Kuan Yew passed away early in 2015, there were signs of disaffection brewing within the ‘first family.’ But last week, matters came to a head. In March 2016[1] Lee Wei Ling, the sister of Singapore Prime Minister Lee Hsien Loong, and a well-known neurologist herself, used her Facebook (FB) page,[2] to accuse her brother of trying to hijack their father’s legacy for his own benefit. Her criticisms led to no major fallout then and faded from public memory, but on 14 June 2017, Lee Hsien Yang, the Prime Minister’s brother and the youngest of the three siblings, made further, major allegations.

Lee Hsien Yang who had headed SingTel, one of the three major telecom firms in the island, and who currently heads the Civil Aviation Authority of Singapore, put out a six-page statement in the public domain accusing the prime minister of appropriating the Lee brand name for personal gain, of letting his wife Ho Ching interfere in administration and of trying to pitchfork his son into politics so he could succeed him. The prime minister’s son has since issued a denial, saying he was not interested in politics. Lee Hsien Yang said that he and his wife[3], a practising attorney, were fearful for their safety in the island and planned to leave the country. When this came out in public, the prime minister was vacationing overseas.

The details of the dispute concerning the family property and the manner of its disposal, as per the deceased father’s wishes, have been widely publicised. The more important question is whether this spat will have an impact on Singapore’s economy and governance.

The short answer, for now, is no.

The prime minister remains personally popular—and there are several reasons for this. The ruling People’s Action Party (PAP) fared badly, in comparison to its past performances, in the national elections in 2011 when Lee Kwan Yew was alive. Its vote share barely held at 60%. However, the party bounced back smartly in the elections in 2015 and did better than expected. The vote share improved to 69.9%, cementing the standing of the prime minister with citizens and party members.

Singapore is no longer the economic powerhouse that it has been in the last 30 years. After the global crisis of 2008, the economy revived briefly, and since 2011, with the slump in global trade, it has struggled to grow. In the last five years, the growth rate in the real economy (measured in 2010 prices) has averaged 3.3%. As is the case with all affluent societies, its cost competitiveness has eroded over the years. Various surveys have ranked it one of the costliest cities in which to live, both in Asia and globally[4]. This is largely due to its high price for automobiles, with the government imposing an additional charge to acquire the right to own a car, and to the high cost of real estate in Singapore, making housing unaffordable.

But, Singapore can still be competitive and the country is tackling these two issues better than most. Public transport infrastructure is being built all over the island. By 2020, no Singapore resident will need to walk more than 200-250 m to gain access to the city’s metro rail network. In housing, the Singapore government has also taken many administrative and regulatory measures to let the air out of the housing bubble. Over the last four years, apartment and home prices have dropped by more than 10%[5], and compared to many other countries, Singapore’s real estate prices look attractive and no longer pose a threat to economic stability as they do in Hong Kong, China, Canada, Australia and New Zealand.[6]

Further, the Monetary Authority of Singapore has curtailed credit growth and Singapore’s credit gap – the difference between the actual and trend ratio of credit to private non-financial sector to GDP – has narrowed, but remains somewhat elevated.[7]

Finally, the government heeded the message of the election results in 2011 and clamped down on immigration. The number of immigrants has been restricted as Singapore voters had expressed their discontent over the unequal distribution of the fruits and costs of globalisation in that year, well before voters in Britain and America did. The annual average growth in Singapore’s non-resident population in the five years ending 2011 was 9.8%. In the five years ending 2016, it had dropped to 3.7%[8]

So the current family quarrel has not besmirched Prime Minister Lee Hsien Loong’s reputation. There is a perception in some quarters, though, that he has mishandled the relationship with China, a perception that China has adroitly nurtured. A recent article[9] after the family dispute broke out noted, in a stroke of delightful irony, that there was an increased need for democratisation and political reforms in Singapore!

The halfway mark for the current term of the government is approaching. The next elections are not due before 2020, but in the past, the government has called early elections on many occasions. The longer the family feud continues—or worse, escalates–concerns will emerge over its potential impact on the party and its fortunes in the next elections. Speculation over Singapore’s political arrangements and the continuity of the Singapore model will mount, especially as the country has prided itself on its high standards of governance, including merit-based appointments to public office.

Singapore’s image changed, if marginally, last week. The world will be watching with hope and anxiety for predictability and stability–its very hallmarks–to return to its public affairs.

Dr. V. Anantha-Nageswaran is Adjunct Senior Fellow, Geoeconomics Studies, at Gateway House.

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References

[1] For a timeline of the dispute, see “A timeline of Singapore’s Lee family feud”, Yahoo News, 14 June 2017, <https://sg.news.yahoo.com/timeline-singapores-lee-family-feud-081641941.html>

[2] For a timeline of the dispute, see “A timeline of Singapore’s Lee family feud”, Yahoo News, 14 June 2017, <https://sg.news.yahoo.com/timeline-singapores-lee-family-feud-081641941.html>

[3] For more information on Who’s Who in the Lee family, follow this linkJaipragas, Bhavan, “Who’s who in the Lee Kuan Yew family feud”, South China Morning Post, 21 June 2017, <http://www.scmp.com/week-asia/opinion/article/2099349/why-lee-kuan-yew-family-feud-metaphor-singapore>

[4] See “Singapore world’s most expensive city for expats for 4th year running: Survey”, Channel NewsAsia, 21 March 2017, <http://www.channelnewsasia.com/news/singapore/singapore-world-s-most-expensive-city-for-expats-for-4th-year-ru-8572606>

[5] See Department of Statistics Singapore, Singapore Government, Private Residential Properties Price Index, accessed on 20 June 2017, <http://www.singstat.gov.sg/statistics/visualising-data/charts/private-residential-properties-price-index>

[6] “Daily Chart: Global house prices”, The Economist, 9 March 2017, <http://www.economist.com/blogs/graphicdetail/2017/03/daily-chart-6>

[7] Bank for International Settlements, Credit-to-GDP gaps, Basel, Switzerland, 2017, accessed on 20 June 2017, <http://www.bis.org/statistics/tables_j.pdf>

[8] Department of Statistics Singapore, Singapore Government, Table Customisation and Chart Plotting, accessed on 22 June 2017, <http://www.tablebuilder.singstat.gov.sg/publicfacing/createDataTable.action?refId=1347>

[9] Sheng, Yang, “Lee family feud rocks Singapore”, Global Times, 15 June 2017, <http://www.globaltimes.cn/content/1051967.shtml>