At 4:09 a.m. on May 12, Chinese national Ma Chi sped through a Singapore stop light in his $1.4 million Ferrari 599 GTO and slammed into a taxi, killing himself and two others and sparking a wave of anti-foreigner sentiment.
The crash, caught on camera by another cab and viewed more than 7 million times on the Internet, prompted ministers to try to defuse public anger over immigration policies and the rising wealth gap that caused the ruling party’s worst performance since independence in last year’s general election. Within days of the crash, Deputy Prime Minister Teo Chee Hean urged people on his Facebook page not to “blame all foreigners.”
With 3.3 million citizens and 1.9 million foreign residents, the government is under pressure to placate voters without disrupting the influx of talent and labor that helped forge the only advanced economy in Southeast Asia. Tomorrow, the first by-election since last year’s national poll will test whether Prime Minister Lee Hsien Loong’s efforts to win back support are succeeding.
“The mood in the country a year after the elections is not good,” said Bridget Welsh, a political science professor at the Singapore Management University. “It’s a barometer of how the government has performed in the past year. The foreigners are becoming the punching bag.”
Government policies to attract wealth and boost economic growth gave Singapore the world’s fastest-rising number of millionaires in 2010, while adding about 1 million foreigners since 2005. Public discontent surfaced when the strain on the rail system caused its worst breakdown in December, while a tax on car ownership linked to demand rose to S$92,050 ($72,083) this month and increasing property prices boosted inflation.
Tomorrow’s poll is for the Hougang district that the opposition Workers’ Party has held for 20 years. After Lee’s People’s Action Party won the general election last year with the smallest-ever margin of popular votes, he introduced stricter immigration policies and cut ministerial pay. Lee said in December that tighter limits on immigration will mean forgoing business opportunities and accepting slower growth.
About 23,000 people are eligible to vote tomorrow, 1 percent of the island’s electorate. The seat is vacant after Yaw Shin Leong, who won 64.8 percent of votes last year, was expelled from his party in February for “indiscretions in his private life,” said the Workers’ Party, which nominated 50-year-old businessman Png Eng Huat.
The candidate for the People’s Action Party, co-founded by the prime minister’s father, Lee Kuan Yew, is Desmond Choo, 34, a trade union official and former police officer. While he has campaigned on local issues such as upgrading public housing, a survey of 50 residents carried out by Today newspaper this month showed a majority of residents are looking at national policies including the cost of living and the influx of foreigners.
The island is ranked by the World Bank as the easiest place to do business, attracting the likes of Facebook Inc. co-founder Eduardo Saverin, who renounced U.S. citizenship in 2011 to work and live in the Southeast Asian nation. Foreigners are in every industry, from construction workers to hedge-fund managers.
The Boston Consulting Group said in a May 2011 report that Singapore’s millionaire population expanded the fastest globally, rising by almost 33 percent. The city had the highest proportion of millionaire households at 15.5 percent.
“These rich foreigners have come in, and driven up our property prices, especially the Chinese,” said Sebastian Tan, a Singaporean salesman in the construction industry. “Just see how our property prices have shot up in the last few years since the government became so welcoming towards foreigners.”
An index of private residential home prices in the city has risen 80 percent in the past seven years.
Ma, 30, from China’s Sichuan province, paid S$3 million for his two-story, sea-view penthouse, his wife He Ting Ting was cited as saying in the Chinese language Lianhe Wanbao newspaper. She said Ma was a “self-made tycoon” who bought the Ferrari for S$1.8 million for his 30th birthday last year and also owned a S$400,000 BMW. She did not want to answer questions, according to a person at the apartment who wouldn’t give his name.
Income inequality in Singapore has risen since 2000. The average monthly wage for the poorest 10 percent of households increased by S$250 to S$1,581 in the decade to 2011, compared with a S$10,400 jump to S$27,867 for the top 10 percent.
This week, the government-appointed National Wages Council recommended a salary increase for low-wage workers of at least S$50 a month. The increase amounts to 5 percent for workers earning S$1,000 a month, less than the 5.4 percent inflation rate in April. Price gains are forecast by the central bank to average 3.5 percent to 4.5 percent in 2012.
In the past year, the government raised property taxes for non-Singaporeans and speeded up construction of public housing. Lee also made permanent a program to provide cash, utility rebates and medical funds for the elderly and low-income households. The government is subsidizing bus companies’ purchases of new vehicles to reduce crowding on public transport and adding hospital beds.
Still, efforts to reduce the inflow of workers since 2010 have had little effect. The foreign workforce has grown 7.5 percent annually over the last two years, Finance Minister Tharman Shanmugaratnam said in February as he imposed new rules on the percentage of overseas labor that companies are allowed.
‘Blamed for Everything’
“If Singapore decides to offer opportunities to foreigners, I don’t think foreigners should be blamed for everything that goes wrong,” said Justin Li, a store manager at a Hush Puppies shoe outlet in Singapore, who comes from China’s Hubei province.
SMRT Corp., named the world’s best metro operator in 2009, has attracted 50 percent more customers in the past five years as population growth accelerated and tourism increased. The company promised to spend S$900 million to upgrade its network and signaling after the December breakdowns.
While tomorrow’s poll will be a barometer of support for government policies, it won’t alter the balance in parliament, where the People’s Action Party has 81 of the 87 seats. The PAP has governed the country since 1959.
Of the 122,600 jobs created in Singapore last year, about 70 percent, or 84,800 positions, went to foreigners.
“Maybe some lower-income earners feel resentment to foreigners because they may feel that their jobs have been taken away,” said Loh Wai Meng, a Singaporean sales manager at IPG Photonics Corp. “Foreigners are an easy target to blame when something goes wrong.”