This article first appeared on BeautifullyIncoherent blog.
The Return to Normal Office Life Symbolises the Return to an Economic Model that was Losing Value
Went to the office this morning to find that the train system was on the blink again. People were having to leave the MRT stations to get onto buses to send them back to their favourite place – the office. The breakdown in the train system coincides with the announcement that Singapore will be taking yet another step to returning to “normal” and that “work-from-home” systems that had been in place, would no longer be the “default” mode.
I guess people are happy to return to normal. After all, working home and going into endless Zoom meetings did give people stress. In China, the birthplace of the virus and the concept of lockdowns, there was surge in divorce cases as couples couldn’t take the stress of being with each other 24/7. I guess, to many, returning to the office had a feel of returning to that safe and familiar life.
However, for me, the broken train system coinciding with the return to “normal” of going back to the office, made me realise one thing – our “normal” pre-covid economic model was pretty much like the train system – still functioning but increasingly faulty and instead of trying to fix the fundamental problem, the powers running the economic model were behaving like the train operators arranging for emergency buses – slapping on a band aid instead of fixing the fundamental problem.
Like our train system, the economy looks good on the outside and still hums along nicely when compared to quite a few other places. However, like the MRT system, a large part of the economy was built for a different era and there have been notable breakdowns in the economy in the same manner that there have been notable breakdowns on the MRT. Our economic managers have behaved in the same way as the MRT managers rushing emergency buses to the stations – slapping on band aids instead of looking for fundamental problems and fixing them. As a small nation, Singapore cannot afford to rest on “The system is still better than elsewhere.” This thinking is a recipe for future problems.
The problem with the MRT is simple. The original system was built back in 1987 when our population was a shade under three million (2,775,000) and it grew to around 3,047,000 in 1990, which is an increase of 272,000 people in three years. This is roughly 90,000 a year or less than a percent a year. In 2004, when a new Prime Minister came into power, our population was 4,167,000 and in 2007, our population reached 4,589,000 or 422,000 in three years. Our population grown between 2004 and 2007 was steeper than Hong Kong (which has an influx of migrants from China, which is a stone’s throw away) and Kuala Lumpur.
The majority of the population growth came from migration. The logic behind opening the doors to migration was simple – economic growth. Logic was simple, with more people, there would be more money. More people would give local businesses more customers and a larger labour force and so on and so on. While the logic works on paper, the MRT system was built to withstand the influx of people and instead of choosing engineers to fix the basic rail system, successive SMRT CEO’s were given a mandate to make more from the retail operations, which benefited the shareholders (the largest shareholder at the time being Temasek Holdings, which has since bought SMRT).
Call it a coincidence but how is it such that there were no breakdowns when Covid restrictions were in place and less people used the system, then it breaks down when the restrictions are lifted and people rush back to use the system.
Something similar could be said about the economy. Our economy was built on being the centre of everything. First it was manufacturing, where the key was to attract multinationals to build big factories. Then it was finance, where multinationals were encouraged to set up huge, gleaming offices to be regional headquarters. This model did provide lots of jobs for a while. It gave Singapore plenty of shiny buildings and made vast fortunes for Singapore’s landlords (the largest being the government, Far East Organisation and Hong Leong Group).
However, just as our MRT system was not prepared for an influx of customers, the economy never factored the rise of cheaper manufacturing centres in the region like China and increasingly Vietnam as well as rival financial centres. The economic solution has consistently been the same – tax breaks and credits for investors willing to set up shop to build big factories and/or to rent expensive properties.
Unfortunately, there are limits to this. Covid-19 forced businesses to work differently. Remote working had to become a fact of life and suddenly, there was no need to house people in expensive offices. Entrepreneurs found that they could work without interruption. Small time start-ups, who are the backbone to any economy had a way of doing things without having to take on the crippling cost of criminally high rentals to unproductive organisations.
Instead of encouraging this movement to develop, the government remained focus on the glamorous parts of the economy that centred around big offices. Sure, I can understand that there was a need to help businesses get through the early stages of covid-19. However, instead of trying to encourage the return of normal, more could have been done to create an economic model that worked for Singapore and as many as her residents as possible. Missing that opportunity to create something new is a pity.