1H2017 Review: Singapore

Singaporean politics was rocked in June by Prime Minister Lee Hsien Loong’s siblings, who accused him of abusing his power. Their main grievance concerned what they considered the prime minister’s efforts to acquire and preserve the family home. His actions, they argued, ran contrary to the dying wishes of their father, Lee Kuan Yew, who had expressed in his will that the house should eventually be demolished.

The prime minister’s brother, Lee Hsien Yang and sister, Lee Wei Ling, posted their accusations on Facebook in mid-June. The gist of their public statement was that Lee Hsien Loong’s corruption was eroding the values of Lee Kuan Yew, prime minister of Singapore from 1959 to 1990 and the country’s guiding visionary.

The public statement also suggested that the prime minister’s wife, Ho Ching, possessed undue power in government and that Lee Hsien Loong was grooming his son, Li Hongyi, to eventually take the helm of a Lee family dynasty. The overwhelming media coverage of the accusations prompted the prime minister to rebut the accusations in a parliamentary hearing on July 3.

The prime minister’s statement cleared the air “by and large”, said Alan Chong, associate professor at the S. Rajaratnam School of International Studies in Singapore, but one mere address to parliament was not sufficient to allay fears he may have abused power, he added.

Chong said Lee’s response to the public relations crisis shows he “is adapting to a climate of transparency which perhaps his father did not have to deal with consistently”.

The two siblings turned to Facebook as a way to circumvent the country’s government-regulated news media. Chong said the dispute is the latest example of a “slippage” regarding the Lee family’s reputation, as well as the deteriorating credibility of the ruling People’s Action Party to effectively govern the city state.

In foreign affairs, Singapore has improved its relations with China, even while some Singaporeans are concerned by the latter’s increasing clout in Southeast Asia, Chong said.

Bilateral relations were strained earlier this year due to South China Sea tensions -- Singapore appeared to back an international tribunal ruling against Beijing’s territorial claims – and Hong Kong’s seizure of nine Singaporean military vehicles en route to the city-state following military exercises in Taiwan. The relationship eased following Hong Kong’s release of the military vehicles and June’s World Economic Forum event in Dalian, China, where Singapore’s Deputy Prime Minister, Tharman Shanmugaratnam, met with Chinese officials.

During the meeting, the two countries pledged to enhance cooperation in five key areas of finance, especially in those areas that will help promote China’s Belt and Road infrastructure initiative.

Singapore’s trade-based economy is projected to grow over two percent this year, in step with a gradual recovery in the global economy, according to a second-quarter review by the Institute of Chartered Accountants in England and Wales.

Trade continues to improve due to growth in manufacturing, which at this point is driven mostly by electronics and precision engineering, said Ng Weiwen, an economist with ANZ Banking Group in Singapore. He cited June’s Purchasing Managers’ Index (PMI) - up 0.1 from May to 50.9 - released by the Singapore Institute of Purchasing and Materials Management (SIPMM), the organization that calculates the index.

Ng said the rise signifies a “potential tentative sign of maturing” in the country’s technology cycle. This most recent PMI increase represents the 10th consecutive month of growth and can be attributed to new orders, exports, inventory and factory output. The PMI could have been higher if not for a continuing trend of overall decline in employment, said the SIPMM report.

Singapore’s economy also faces low wage growth because of low productivity. Lackluster increases in wages means that household consumption “will be subdued” in the second half of 2017, said Ng, adding that productivity must greatly exceed wage growth if pay is to rise significantly.

Jonas Kelsch is a master's degree candidate at the University of Hong Kong's Journalism and Media Studies Centre.