Sunday, June 19, 2011

Singapore's Gold-plated Ministers

America’s Secretary of Defense Robert Gates, who oversees a budget of about $700 billion, makes approximately $157,000 a year. His counterpart in Singapore, Defense Minister Ng Eng Hen, who supervises a budget of about $15 billion and roughly 70,000 troops, earns the equivalent of $1.2 million a year. Is something askew here?

It is no secret in Asia that Singapore’s government ministers make outrageously generous salaries. Prime Minister Lee Hsien Loong pulls in the equivalent of $2.4 million annually, or six times the $400,000 salary of President Barack Obama. Cabinet ministers earn in excess of $1 million, with equally generous retirement benefits.

These imposing salaries have long been a source of disquiet among the island republic’s five million citizens, but it was a disquiet that the ruling People’s Action Party (PAP), which held every one but two seats in the 87-seat parliament, could safely ignore. As a result of last May’s watershed general election, which saw the opposition triple its strength in parliament, that may no longer be the case.

Singapore’s government salaries have been rising fast since 2007, when parliament adopted new guidelines, which peg the salaries of Singapore’s ministers and top civil servants at two-thirds of a composite of the top professionals in the republic, including lawyers, bankers and multinational corporate CEOs.

Since it is not uncommon in the United States for salaries of major CEOs or the heads of major financial houses to earn $30 million or more a year, President Obama would be paid about $20 million a year if the United States operated under the payment parameters that Singapore has set for itself.

Singapore’s founding father and long-time prime minister, Lee Kuan Yew, has justified Singapore’s generous salaries as necessary to attract honest and competent leaders. Indeed, in his view, Singapore needs more than just competent leaders to guide a small republic with no obvious resources other than its own people to independence and prosperity.

He brushes aside comparisons with other countries, saying there is, no such thing as an international standard for setting ministers’ salaries, although almost every other democracy in the world from Britain to Australia pays their leaders far less than does Singapore. Some of them, such as Denmark or Switzerland, actually score better on international rankings of governmental corruption. That is irrelevant, he argues. Singapore exists in that sea of corruption called Southeast Asia; Denmark and Switzerland do not.

“Ministers who deal with billions [of dollars] cannot be paid low salaries without risking system malfunction” argued Lee Kuan Yew in the past. “Low salaries draw in hypocrites, who ‘sweet talk’ their way into power in the name of public service.”

But are the ancient Confucian values of honesty and efficiency enough in themselves in a modern democracy? Is the PAP’s ideology of authoritarian meritocracy fully justified? What about empathy, a sense of public duty or even a sense of sacrifice? Are these foreign values that are not suitable or necessary for a properly working Asian democracy?

Workers’ Party parliamentarian Shirley Lim addressed these questions head on when the current system of adjusting ministerial salaries was first tabled in 2007. She argued that the exorbitant salaries widened the gap between government and average citizen it served, undercut the concept of public service as a noble calling and actually failed to attract the brightest and best into government service.

“Can we say that each and every minister in the cabinet would become a top earning banker, accountant or CEO [if he left office]?” she asked. “Other countries favor a more moderate use of taxpayers’ money for salaries, and they do not seem to have run their countries into the ground.”

She noted that Singapore is a beneficiary of globalization, but she added that globalization tends to favor the top wage earners while depressing average earnings. If this trend continues and if the current salary review system remains in place, she argued, Singapore could be seeing ministers earning $3, $4 or even 5 million dollars a year.

Lim was then speaking as a Nominated Member of parliament. That is a curious position, unique to Singapore, in which the top three losing opposition candidates are appointed to parliament but have no vote. Ironically, it was Lee himself who first proposed the nominated members, worried that his own younger party members lacked street smarts and debating skills.

However, Lim is now speaking as a full-fledged voting member of parliament. She was part of the five-member Worker’s Party slate that captured the Aljunied Group Representative Constituency, in the May 7 general election, the first time that any opposition party had won a GRC since they were created in 1988. One other Workers Party candidate took one of the few remaining single-member seats.

The GRC is another dubious Singaporean contribution to democracy. The GRCs ostensibly ensure minority representation in parliament as one candidate on the slate must be from a minority, usually Malay or Indian. Critics maintained that it was a device to perpetuate the PAP lock by making it harder to recruit candidates and pay deposits, while minimizing the chances that weaker PAP candidates losing in head-to-head races.

For the opposition, winning one of the GRCs was like scaling Mt. Everest. It will get easier next time. Meanwhile, opposition members of parliament will no longer feel so lonely. Adding three new no-voting members, the opposition now has a sizeable bloc.

The PAP sought to boost its electoral chances by sprinkling famous party leaders and senior ministers in different slates. This backfired when Foreign Minister George Yeo went down to defeat in Aljunied, the first cabinet minister ever to lose an election in Singapore (the pain may have been ameliorated by a $2 million annual pension.)

Singapore may be virtually a one-party state, but the government takes election results seriously. When the PAP vote total falls below about two-thirds (last month it was 60, a record low in 18 consecutive elections) it is usually an occasion for soul searching. This election was no different.

Prime Minister Lee reshuffled the cabinet, trying to bring in new faces more appealing to the younger voters. Two famous old-timers, Lee Kuan Yew and former prime minister Goh Chok Tong, resigned from the cabinet where they had served as “Mentor Ministers” without portfolios.

Lee acknowledged the public unease with ministerial salaries by immediately appointing a new committee to review the present method of setting salaries. “You can expect that in all probability, salaries will be cut,” said the committee’s new head Gerard Ee, who is chairman of Changi Hospital.

The opposition to high ministerial salaries is more than just a reflection of public envy. It is a manifestation of a deeper malaise over widening gap in wealth between the people at the top and the average Singaporean workers, a situation that is by no means unique to Singapore.


Blogger Raghav Chaudhary said...

Nice post thanks for sharing with me it is really very helpful for me thanks for this.

June 8, 2013 at 8:20 AM  

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