Selena Ling is the Chief Economist at OCBC Bank.

In 2015, she wrote an essay titled "Two Milestones for Singapore in the Next 50 Years", expressing her hopes that tackling income inequality will become a national priority. In her essay, she also highlighted some concerns she had regarding the education system.

This was originally published in the book Singapore: 2065, a thought-provoking collection of perspectives on the future of Singapore, published by World Scientific.

Ling's essay is reproduced in full here:

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By Selena Ling

As an economist watching the Singapore economy for the last two decades, there were already a couple of big “game changer” steps in my view.

These included the Workfare Scheme and the Pioneer Generation Schemes which illustrated that policymakers are not as averse to traditionally defined “social welfare” as typical official rhetoric would suggest.

In addition, the quickstep of healthcare reform and other policy responses to improving longevity and tackling the challenges of an ageing population revealed that public policymakers were profoundly rethinking the socioeconomic goals and probably also acquiescing to the demands of an increasingly vocal populace.

The next 50 years will likely mark a great transformation of Singapore as we know it — not from a growth miracle to another economic miracle, but more likely the maturing of a still young and restless society in search of an identity anchor in an ever-changing global world.

In particular, the incorporation of pressure release valves and the reassurance that civil society advocacy and political activism are not incompatible with economic success, may help to narrow the perceived distance between the man on the street and the ivory tower of policymakers amid the embrace of globalisation, technology, and the efficiency of markets.

It may be foolhardy, to say the least, to forecast what Singapore will look like in 2065, but there are two key milestones that I will be looking out for in the next 50 years.

#1: Wealth and income inequality: a national priority

First, tackling income inequality as a national priority. Recall that Singapore’s deep-seated ambitions as a fledgling nation and our economy was to become the Switzerland of the East.

While the original intention was noble and to achieve the economic wealth associated with Switzerland, will taking this ambition to its logical conclusion also mean the continued rationalisation of financial rewards over other less-quantifiable goals like improving the lives of low-income workers and reducing the Gini coefficient?

Will rising inequity, for instance, denoted by top corporate CEOs making more than 200 times the lowest paid worker like in some developed economies like Switzerland, be an inevitable outcome?

The case of Switzerland

“The market economy is very good at wealth creation but not perfect at all about wealth distribution,” as Jonathan Sacks, Chief Rabbi of the UK, observed.

Note that as part of its own soul-searching, there was a proposal in Switzerland in late 2013 to introduce a basic income of 2,500 Swiss francs per month, which, in a departure from other welfare programmes, was unconditional and does not require beneficiaries to document that they are unable to work, but is aimed at providing a financial safety net for the population and eliminating poverty.

While this may be the equivalent of building castles in the air, audacious (even if populist) proposals should be given some airtime and seriously consulted and studied rather than summarily dismissed as unworkable.

The fact that Swiss law allows citizens to organise popular initiatives and hold referendums on such issues is not to be sneered at.

Balancing economic growth and encouraging bottom-up conversations

Instead of a top-driven approach to tackle the issue of income inequality, it may be better to find a balance between ensuring economic growth and encouraging bottom-up conversations and consensus-building ideas on how to tackle the inequality gap.

For instance, let the people decide if they want to have a higher tax regime or even to have mandatory contributions to a pool for this purpose to subsidise the poorest in the society.

The trade-off should be among the various stakeholders in the Singapore economy, and not simply reduced to a fiscal responsibility of the state.

Benchmarks for mitigating inequality

That said, it may be worthwhile thinking about setting a national KPI (Key Performance Indicator) for the Gini coefficient that is in line with our medium-term GDP growth targets to ensure that the policy mindset is correctly aligned with this thinking rather than subject to the whims and fancies of the electoral cycle.

Having a social value revolving around the equity issue could soften the perception of an all-out materialistic society.

Should Singapore target a levelling of the Gini coefficient back to around or even below the 0.40 handle, or is the direction of change more important?

Or is the relative standing of Singapore’s Gini coefficient vis-à-vis our ASEAN neighbours the right yardstick?

Or would the OECD average serve as a better benchmark?

These are also important considerations to ponder as we strive to avoid the over-stratification of Singaporean society.

#2: Surrendering unhealthy mentality on rankings

Second, surrendering the “Singapore must be the best/first” mentality.

Will Singapore continue to breeze ahead as the world’s business-friendly bastion, a top investment destination, the most welcoming nation for foreign trade and investment, the easiest place to do business, the most competitive city, the least corrupt economy, the most transparent business regime, the best quality of life in Asia, producing the top PISA scores, so on and so forth, 50 years down the road?

History generally counts against such a track record over an extended period.

Any obsession with Singapore’s competitiveness rankings or rankings of any sort, while useful and purposeful in the short term to building the economy and the nation, could be ultimately detrimental in the long run.

Education system: breeding "kiasuism" in S'pore

One example of this could be the current education system where Singapore has chalked up an impressive performance across a wide range of education league tables, and is usually held up as an exceptional case study for the rest of the region, if not the rest of the world.

It is admirable that the government walks the talk when it comes to education spending and the single-minded focus on achieving bold results in the drive for academic success whether in education or lifelong learning.

But one unintended consequence is that young students and their parents are now embroiled in this high-stakes game called the Primary School Leaving Examination (PSLE), and the attendant flourishing private tuition industry that caters to the associated exam anxieties that arise from “kiasuism” (the fear of losing out).

While there have been policy efforts to ensure “true meritocracy” and “social mobility” over the last five decades, the complicated system of school affiliations, “through train” schooling, and the concentration of “good” schools in select neighbourhoods, contribute to many parents believing that paying for their child’s education is the best investment they can make.

Private tuition as a consequence

The consequential result is excessive private tuition, and the “neurotic obsession” with exam results and paper qualifications as the key benchmark for “success”.

There must be something wrong with the psyche when private tuition is seen not as help for struggling students, but a must for top students to ace all subjects in top schools, and tuition centres see exponential growth in demand — the number of tuition centres registered with the Ministry of Education has surged from 700 in 2012 to 850 in 2014.

Preschool sector not spared

There are currently 94 primary schools, but the competition to get onto the parent volunteer scheme of the more popular schools may seem absurd to an outsider.

The preschool or early childhood education sector, on the other hand, was largely left to the private sector until recently, which seems to me such a wasted opportunity to ensure a level playing field for all Singaporean children to receive a head start in education regardless of their family background.

Instead of disparate fees being charged by private providers and the current perceived “pay peanuts, get monkeys” mindset, mandating a free and high-quality preschool education on a national scale, regulated by the Ministry of Education, could help uphold the ethos of being an open and inclusive society where every Singaporean child can begin their learning journey at the same starting line so that those from less advantaged backgrounds do not feel shortchanged later in life.

An insatiable chase for higher education degrees

At the other end of the spectrum, the relentless pursuit of paper qualifications especially for higher education degrees also appears insatiable, despite the establishment of six universities providing 14,000 university places in 2014.

Although the MOE’s target is to offer publicly-funded university spaces for 40 per cent of every cohort by 2020 and there have been substantial policy efforts to open up additional education pathways through polytechnic and ITE options, parents still willingly fund private or even overseas university educations, with the belief that it is critical for good job opportunities.

Singapore should be careful not to go down the path of South Korea, where there are more college graduates than available good jobs in the quest for tertiary education.

While this is largely a generational shift in educational standards, creating sufficiently high-skilled and well-paying jobs to satisfy all the graduates will be an uphill task if the Singapore economy is not vibrant enough to attract investments and groom companies to create good jobs.

Education and the future of S'pore

Then-Education Minister Heng Swee Keat highlighted that in the next chapter of Singapore’s education story, the challenge for teachers will be to help students develop values and strength of character amid the more volatile, uncertain, complex and ambiguous environment in the next 50 years.

Like Martin Luther King Jr. once said, “Intelligence plus character — that is the goal of true education.”

To further advance along the educational continuum, a persistent meritocratic approach, with liberal doses of creativity and innovation, is critical.

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Looking at the rise and fall of great nations, it would be presumptuous to proclaim with certainty that what worked well in the past — be it great infrastructure, a clean and efficient government, good corporate governance, and a well-educated workforce — will continue to be the success factors for the future.

Future-proofing may seem like an exercise in futility, but preparing for a changing and uncertain world with tenacity and careful planning have underpinned Singapore’s success story to date.

Indeed, one key ingredient that is unlikely to diminish with time is the adaptability of the Singapore economy and Singaporean workers.

To quote Napoleon Hill, “the strongest oak of the forest is not the one that is protected from the storm and hidden from the sun”; it is the one that stands in the open where it is compelled to struggle for its existence against the winds and rains and the scorching sun.

Singapore, as a small, open and dynamic economy, continues to fit this bill well.

Top photo via.