BUREAUCRACY AND LOCAL GOVERNMENT IN SINGAPORE

LOCAL GOVERNMENT IN SINGAPORE

Singapore has only one level of government--national government and local government are one and the same. The form of the government reflected the country's unusually small area and modest total population of 2.6 million. Below the national level, the only recognized territorial divisions are the fifty-five parliamentary constituencies. Members of Parliament thus perform some of the same functions as municipal aldermen in foreign cities and often win political support by helping to find jobs for constituents or doing other favors requiring intercession with the powerful civil bureaucracy. The single-member constituencies vary in population from 11,000 electors to as many as 55,000; some of the variability reflected population movement away from the old urban core and out to new housing developments. [Source: Library of Congress, 1989 *]

Administrative Divisions: Singapore is a unitary state with no second-order administrative divisions. Provincial and Local Government: Singapore has no provincial or local government although there are some advisory bodies based on the 23 electoral divisions.

Bureaucracy and Public Service in Singapore

There were about 60,000 public servants in Singapore in 2009. [Source: AsiaOne]

Describing the mindset of Singapore’s top bureaucrats, Seah Chiang Nee wrote in The Star, “One of Singapore’s (retired) top bureaucrats, Ngiam Tong Dow, recently said some civil servants had behaved like mini-Lee Kuan Yews but without his achievements. The current crop of highly-paid bureaucrats comes from elite colleges through government scholarships to study in the best universities. The consistent top two have been Raffles Junior College and Hwa Chong Junior College. Their academic results have been breathtaking because the crème de la crème in secondary schools scramble to study there. Some 80 percent of all government and government-linked scholarship awardees are from the top five junior colleges (2002) – Raffles, Hwa Chong, Victoria, National and Temasek. But if the debate is reflective of our best scholars and potential leaders, it doesn’t offer much hope for optimism in the future. Many come across as arrogant and self-centred, looking down on others who are less academically capable. They seem to have a jaundiced view of life, believing that their distinctions somehow guarantee them success. [Source: Seah Chiang Nee, The Star, February 15, 2004 ^^]

The public services included the Singapore Armed Forces, the Singapore Civil Service, the Singapore Legal Service, and the Singapore Police Force. A Public Service Commission (PSC), consisting of a chairman and no less than five nor more than nine other members, was appointed by the president, with the advice of the prime minister. The PSC acted to appoint, confirm, promote, transfer, dismiss, pension, and impose disciplinary control over public officers. A Public Service Division, established within the Ministry of Finance in 1983, managed civil service personnel. It was headed by a permanent secretary who was responsible to the minister for finance. [Source: Library of Congress, 1989 *]

A Legal Service Commission, with jurisdiction over all officers in the Singapore Legal Service, was composed of the chief justice as president, the attorney general, the chairman of the Public Service Commission, a judge of the Supreme Court nominated by the chief justice, and not more than two members of the Public Service Commission nominated by that commission's chairman. The Legal Service Commission acted to appoint, confirm, promote, transfer, dismiss, pension, and exercise disciplinary control over officers in the Singapore Legal Service. *

The investigation of corruption in both the public and private sectors was under the sole authority of the Corrupt Practices Investigation Bureau, part of the prime minister's office. The Auditor General's Office, an independent agency functioning without interference from any ministry or department, monitored Parliament to ensure its compliance with laws and regulations and to identify irregularities in its disbursement of government resources. *

Bureaucracy in Singapore

The government played an active role in managing the society and developing the economy and was the country's largest single employer. Government bodies and their employees fell into two distinct categories. The regular ministries and their civil service employees concentrated on recurrent and routine administrative tasks. The three ministries of education, health, and home affairs (including police, fire, and immigration) employed 62 percent (43,000) of the 69,700 civil servants in 1988. Members of the civil service in the strict sense of the term were those public employees who were appointed by the Public Service Commission and managed by the Ministry of Finance's Public Service Division. Active projects in economic development and social engineering were carried out by a large number of special-purpose statutory boards and public enterprises, which were free from bureaucratic procedures and to which Parliament delegated sweeping powers. As of 1984, there were eighty-three statutory boards employing 56,000 persons. About 125,000 members of the 1987 total work force were public employees. [Source: Library of Congress, 1989 *]

The two branches of the public service served different functions in the political system. The civil service proper represented institutional continuity and performed such fundamental tasks as the collection of revenue, the delivery of such goods as potable water, and the provision of medical and educational services. The various quasigovernmental bodies, such as statutory boards, public enterprises, commissions, and councils represented adaptability, innovation, and responsiveness to local conditions. The constitutional framework of Singapore's government, with its Parliament, cabinet, courts, and functional ministries, resembled that of its British model and its peers in other countries of the British Commonwealth of Nations. The particular collection of boards and councils, which included everything from the Central Provident Fund to the Sikh Advisory Board, reflected the successful adaptation of the British model to its Southeast Asian environment. *

Public service employment carried high prestige, and there was considerable competition for positions with the civil service or the statutory boards. Civil servants were appointed without regard to race or religion, and selected primarily on their performance on competitive written examinations. The civil service had four hierarchical divisions and some highly ranked "supergrade" officials. On January 1, 1988, there were 493 supergrade officers, who included ministerial permanent secretaries and departmental secretaries and constituted less than 1 percent of the 69,700 civil servants. Division one consisted of senior administrative and professional posts and contained 14 percent of the civil servants. The mid-level divisions two and three contained educated and specialized workers who performed most routine government work and who made up the largest group of civil servants, 33 and 32 percent of all civil servants, respectively. Division four consisted of manual and semiskilled workers who made up 20 percent of employees. In 1987, there were 3,153 appointments from the 9,249 applicants for positions in divisions one through three; 2,200 (some 70 percent) of the appointees were women. *

The Singapore public service was regarded as almost entirely free from corruption, a fact that in large part reflected the strong emphasis the national leadership placed on probity and dedication to national values. The Corrupt Practices Investigation Bureau enjoyed sweeping powers of investigation and the unreserved support of the prime minister. Official honesty was also promoted by the relatively high salaries paid to public officials; the high salaries were justified by the need to remove temptations for corruption. In a system with clear echoes of the Chinese Confusian tradition, and the British administrative civil service, which recruited the top graduates of the elite universities, Singapore's public service attempted, generally successfully, to recruit the most academically talented youth. The Public Service Commission awarded scholarships to promising young people for study both in Singapore and at foreign universities on the condition that the recipients join the civil service after graduation. Young recruits to the development-oriented statutory boards were often given substantial responsibilities for ambitious projects in industrial development or the construction of housing estates. Officials had greater social prestige than their peers in business; power and official title outranked money in the local scale of esteem. *

Statutory Boards in Singapore

The eighty-three statutory boards were a distinctive feature of Singapore's government. In law, a statutory board was an autonomous government agency established by an act of Parliament that specified the purpose, rights, and powers of the body. It was separate from the formal government structure, not staffed by civil servants, and it did not enjoy the legal privileges and immunities of government departments. It had much greater autonomy and flexibility in its operations than regular government departments. Its activities were overseen by a cabinet minister who represented Parliament to the board and the board to Parliament. Statutory boards were managed by a board of directors, whose members typically included senior civil servants, businessmen, professionals, and trade union officials. The chairman of the board of directors, who was often a member of Parliament, a senior civil servant, or a person distinguished in some relevant field, was appointed by the cabinet minister who had jurisdiction over the board. The employees of the board were not civil servants, as they were not appointed by the Public Service Commission. The salary scales and terms of service of employees differed from board to board. Statutory boards did not receive regular allocations of funds from the public treasury, but were usually expected to generate their own funds from their activities. Surplus funds were invested or used as development capital, and boards could borrow funds from the government or such bodies as the World Bank. Statutory boards included the Housing and Development Board, the Central Provident Fund, the Port of Singapore Authority, the Industrial Training Board, the Family Planning and Population Board, and the Singapore Muslim Religious Council (Majlis Ugama Islam Singapura). [Source: Library of Congress, 1989 *]

The statutory boards played the major role in the government's postindependence development strategy, and their activities usually served multiple economic and political goals. The Housing and Development Board (HDB) provided a good example. The HDB was established by the first People's Action Party (PAP) government on February 1, 1960, to provide low-cost public housing. The Lands Acquisition Act of 1966 granted the board the power of compulsory purchase of any private land required for housing development. The prices paid by the board were about 20 percent of the estimated market value of the land, which was in fact if not in form being nationalized. Between 1960 and 1979, the percentage of land owned by the government rose from 44 to 67 percent, increasing the government's control over that scarce resource and benefiting lowincome voters, who supported the PAP, at the expense of the much smaller number of private landowners. Rents for Housing and Development Board apartments were subsidized, and selling prices for the apartments were set below construction costs and did not include land acquisition costs. Purchase prices for board apartments in the 1980s were 50 to 70 percent below those of privately owned apartments. By 1988 Housing and Development Board apartment complexes were home to 86 percent of the population, and construction of new apartments continued. * The HDB succeeded in its primary goal of building large numbers of high-quality apartments. Its success depended on several factors, among them: access to large amounts of government capital; sweeping powers of land acquisition; the ability to train its own construction workers and engineers; the freedom to act as a building corporation and develop its own quarries and brick factory; the opportunity to enter into partnerships and contracts with suppliers of construction materials; and the ability to prevent corruption in contracting and allocation of apartments to the public. The government raised the capital for housing construction from the Central Provident Fund, a compulsory savings plan into which all Singapore workers contributed up to 25 percent of their monthly incomes, and from low-interest, long-term loans from such international development agencies as the World Bank. *

By providing adequate housing at low cost to low-paid workers in the 1960s, the PAP delivered a highly visible and concrete political reward to the electorate and laid the foundations for its unbroken electoral success. In the 1960s and early 1970s, before the growth of export-oriented industry, housing construction provided much employment and an opportunity for workers to learn new skills. By controlling the pace and scale of housing construction, the government was able to better regulate the economy and smooth out cycles of economic activity. The result of rehousing practically the entire population was to make the government either the landlord or the mortgage holder for most families and so bring them into closer contact with the state. The government used resettlement to break up the ethnic enclaves and communities that had characterized colonial Singapore. It put its policy of multiracialism into practice by seeing that all apartment buildings contained members of all ethnic groups in numbers that reflected their proportion of the national population. The program kept the cost of housing in Singapore relatively low and helped to avert pressure to raise wages. Because access to subsidized housing was a benefit extended only to citizens, it served to promote identification with the new state. Providing most of the population with low-cost housing gave the government and ruling party much favorable publicity, won public support, and was used as evidence for the correctness of the government's policies of centralized planning and social engineering implemented by experts on behalf of a passive public. *

In a similar fashion, the Central Provident Fund benefited the citizens by providing them with secure savings for their old age and the satisfaction of having their own account, which could be used as security for the purchase of a Housing and Development Board apartment, for such expenses as medical bills, for college tuition, or to finance a pilgrimage to Mecca. The government benefited by gaining control of a very large pool of capital that it could invest or spend as it would and by removing enough purchasing power to limit inflationary tendencies. Furthermore, the proportion of the wage contributed to the fund by both workers and their employers could be adjusted at any time, enhancing the government's ability to control the economy. In 1988 the Fund took 35 percent of all wages up to S$6,000 per month; 25 percent was paid by the worker and 10 percent by the employer. Among its other functions, the Central Provident Fund was one of the major instruments used by the government to control wages. *

Public Enterprises and Parapolitical Institutions in Singapore

Apart from the statutory boards, which met general development and infrastructure goals, the government owned or held equity in many businesses that operated in the private sector. The government asserted that such businesses received no special subsidies and would be liquidated if they proved unprofitable. The wholly government-owned Temasek Holdings (Private) Limited was the country's largest corporation. Operated as an investment and holding corporation, its offices were in the Ministry of Finance, which provided the corporation with free accounting and secretarial services. Some government enterprises included former government departments, such as the Government Printing Office, which in 1973 became the Singapore National Printers Limited and offered its services to the private sector at market rates. [Source: Library of Congress, 1989 *]

Most government enterprises either provided key and potentially monopolistic services, such as Singapore International Airline or Neptune Orient Line, an ocean shipping firm, or they met strategic and defense needs. The Ministry of Defence wholly owned or had large equity shares in a range of companies engaged in weapons production, electronics, computer software, and even food production. In some cases the government banks, holding companies, or corporations were partners or had shares in local operations of multinational corporations. In such cases, the goal was both to attract the corporations to Singapore by offering investment funds and the promise of cooperation from government departments and to ensure that the corporations transferred proprietary technology and training to Singapore. The strategic nature of much government enterprise was acknowledged by the January 20, 1984, passage of the Statutory Bodies and Government Companies (Protection of Secrecy) Act. The law barred the unauthorized disclosure of confidential information by anyone associated with a statutory board or government enterprise and was considered necessary because the Official Secrets Act did not cover those bodies. *

After independence, Singapore's rulers perceived the population as uncommitted to the new state and as lacking a common identity. Accordingly, the government devoted much effort to fostering popular identification with the nation and commitment to the government's goals. In 1985 the Ministry of Community Development was formed by combining the former Ministry of Social Affairs with activities previously administered by the Office of the Prime Minister and by the Ministry of Culture. The new ministry coordinated a network of grassroots agencies intended to promote community spirit and social cohesion. These were the People's Association, the Citizens' Consultative Committees, the Residents' Committees, and the Community Center Management Committees. The People's Association was a statutory board established in 1960 and until 1985 a part of the Office of the Prime Minister. Its primary activity was to manage a system of 128 community centers, which offered recreational and cultural programs, along with such services as kindergartens and a limited number of day-care centers for children of working parents. The members of the various consultative and management committees were volunteers who received prestige but no salary. Each parliamentary constituency had a Citizens' Consultative Committee, whose members were in frequent contact with their member of Parliament. All Housing and Development Board apartment complexes had Residents' Committees, headed by volunteers and intended to promote neighborliness and community cohesion. The committees' activities included organization of neighborhood watch programs and tree-planting campaigns, in which the committees were assisted by the civil servants of the Residents' Committees Group Secretariat. In 1986 the government began organizing Town Councils in the larger housing estates. Though not official government bodies, the councils' immediate purpose was to take over some responsibilities for management of the complexes from the HDB. Their larger purpose was to promote a greater sense of community and public involvement in the residents of the clusters of high-rise apartment buildings. In March 1985, the government inaugurated a Feedback Unit, a body intended to collect public opinion on proposed government policies and to encourage government departments to respond quickly to public suggestions or complaints. *

The various advisory committees and the Feedback Unit provided functions that in many countries are provided by political parties. In Singapore the parapolitical institutions, which had the clearly political goal of generating public support for government policies, were presented as apolitical, inclusive, communityoriented bodies, headed by people motivated by a selfless desire for public service. Such an approach reflected a decision made by the country's rulers in the 1960s to avoid trying to organize a mass political party, in part because many less-educated citizens tended to shy away from partisan and overtly political groups. Others habitually avoided government offices and officers but would participate in community-oriented and attractive programs. The ruling elite had had serious problems both with opposition parties and with left-wing opposition factions within the PAP and apparently found the controlled mobilization offered by the parapolitical institutions more to its liking. Members of all the advisory and consultative boards were appointed by the government and were carefully checked by the security services before appointment. The government closely watched the performance of the leaders of the community organizations and considered the organizations a pool of talent from which promising individuals could be identified, promoted to more responsible positions, and perhaps recruited to the political leadership. *

High-Paid Singapore Bureaucrats

AFP reported: “Singapore’s ministers are among the world’s highest paid, earning millions of dollars annually as the government benchmarks their wages against salaries of chief executive officers and other top earners in the country. The government says such earnings prevent corruption and help attract and retain talent. Opposition parties have decried the amount of ministerial compensation and compared their wages to those of ordinary Singaporeans who are facing a rising cost of living and depressed wages as a result of an influx of foreign workers. [Source: Shamim Adam & Weiyi Lim, AFP, May 18, 2011]

Seah Chiang Nee wrote in The Star, “Minister Mentor Lee Kuan Yew often says that giving high salaries to government ministers and officials is the best way to keep graft at bay. Even a junior minister in Singapore earns more than $1mil a year, with the Prime Minister and other senior leaders making at least twice the amount. By comparison, the US President earns US$400,000 or about S$700,000. [Source: Seah Chiang Nee, The Star, June 26, 2005 +++]

Seth Mydans wrote in the New York Times, “Singapore’s pay system was created in 1994 by the nation’s founding prime minister, Lee Kuan Yew. It pegged the salaries of government ministers and top civil servants to the money they might earn at the top of the private sector. Under that formula, ministers are to be paid two-thirds of the median of the top eight earners in each of six professions: accounting, law, banking, engineering, multinational companies and local manufacturing. [Source: Seth Mydans, New York Times, April 10, 2007 *-*]

“It is true that Singapore has one of the most efficient and corruption-free governments in the world. Transparency International, a private monitoring agency, recently listed it as the fifth most corruption-free nation of 163 surveyed. It is Asia’s second-richest country after Japan. The first Prime Minister Lee said it could well afford to pay its leaders top dollar. The average Singaporean earns roughly $3,000 a month, and the government has voiced concern over a widening gap between rich and poor. The ministers’ pay was approved three months before the sales tax is to be increased by 2 percent. *-*

Singapore’s Highly Paid Officials Get Richer

In 2007,Seth Mydans wrote in the New York Times, “How much money does it take to keep a government minister in Singapore happy? The government says a million dollars is not enough, and it announced a 60 percent increase in ministers’ salaries, to an average of $1.9 million Singapore dollars, or about $1.3 million, by next year. Prime Minister Lee Hsien Loong’s pay will jump to about $2 million — five times the $400,000 earned by President Bush. In this nation where the bottom line truly is the bottom line, the argument goes, you have to pay to get them and you have to pay to keep them clean. [Source: Seth Mydans, New York Times, April 10, 2007 *-*]

“If we don’t do that, in the long term the government system will slowly crumble and collapse,” Defense Minister Teo Chee Hean told reporters last month. “Corruption will set in, and we will become like many other countries, and face the problems that many other countries face,” The Straits Times, Singapore’s largest-circulation newspaper, quoted him as saying. In announcing the pay increases, Mr. Teo, who also oversees the civil service, said: “We don’t want pay to be the reason for people to join us. But we also don’t want pay to be the reason for them not to join us, or to leave after joining us.” *-*

Defending the system against an unusual public yelp of pain, Mr. Lee, whose title is minister mentor, painted a horrifying picture of a Singapore governed by ministers who earn no more than ministers elsewhere. “Your apartment will be worth a fraction of what it is,” he said. “Your jobs will be in peril, your security will be at risk, and our women will become maids in other people’s countries.” *-*

“Talk of the pay raise drew criticism here that included letters to newspapers and an online petition that has more than 800 signatures. “I am sure Enron and Worldcom paid more than top dollar for their top executives, and look where their companies are now — six feet under,” Mohamad Rosle Ahmad wrote to the editor of The Straits Times. The elder Mr. Lee said naysayers needed a reality check. “I say you have no sense of proportion; you don’t know what life is about,” he said. “The cure to all this talk is really a good dose of incompetent government,” he added. “You get that alternative, and you’ll never put Singapore together again.” The Straits Times quoted him as saying his current salary as minister mentor was about $1.8 million. *-*

“Some Singaporeans suggested that other motivations should also come into play for government jobs. “What about other redeeming intangibles such as honor and sense of duty, dedication, passion and commitment, loyalty and service?” asked Hussin Mutalib, a political science professor at the National University of Singapore, in a Straits Times online forum. Carolyn Lim, a prominent writer, suggested in an essay that Singapore needed a little more heart to go along with its hard head. “To see a potential prime minister as no different from a potential top lawyer, and likely to be enticed by the same stupendous salary, would be to blur the lines between two very different domains,” she wrote. The minister mentor brushed aside such concerns. “Those are admirable sentiments,” he said. “But we live in a real world.” *-*

Singapore Leaders and Officials Brace for Cuts

In January 2012, Chun Han Wong and Shibani Mahtani wrote in the Wall Street Journal, “Singapore's government leaders and lawmakers face sizable pay cuts, as the ruling People's Action Party seeks to placate public discontent over ministerial salaries that rank among the highest in the world. The reductions were proposed by a committee established last year to review political salaries, after the PAP won May's general election by a historically narrow margin. The salary issue is seen as helping to undercut support for the party, which has long held power in the tightly controlled city-state. [Source: Chun Han Wong and Shibani Mahtani, Wall Street Journal, January 5, 2012 /=\ ]

“The government-appointed committee said it recommended broad changes to pay structures for political offices, including cutting Prime Minister Lee Hsien Loong's annual salary by 28 percent from its 2010 level to 2.2 million Singapore dollars (US$1.7 million). President Tony Tan—who holds a mostly ceremonial post—may see his annual salary cut 51 percent to S$1.5 million. Other recommendations include reducing the yearly wage for a new minister by 31 percent to S$1.1 million, while most elected lawmakers could take a 3 percent cut, reducing their yearly wages to S$192,500. /=\

“Even after the proposed cuts, government leaders here would remain among the best-paid globally. Prime Minister Lee would still draw an annual wage more than four times that of U.S. President Barack Obama, who receives US$400,000 a year. New Zealand Prime Minister John Key, whose country is ranked the world's least corrupt by Transparency International, gets about US$310,000 a year. /=\

“Opposition politicians cautiously welcomed the report. "We see the recommendations as a good first step," Singapore Democratic Party spokesman James Gomez said. However, the government hasn't changed its fundamental philosophy of pegging political pay with corporate salaries, and "we hope to see more being done to bring political salaries here in line with international levels," he added. /=\

Arguments that high salaries for government officials attract talent and prevent corruption “didn't sway many voters in May 2011, as unhappiness over high political salaries dovetailed with other issues, such as rising income inequality. The PAP won that election with its lowest winning margin since Singapore's independence in 1965, and has since signaled a willingness to tweak the remuneration policy championed by former Prime Minister Lee Kuan Yew since the 1980s. "Corruption is not a function of salary beyond a certain income," said Manu Bhaskaran, an academic at the Lee Kuan Yew School of Public Policy, suggesting that because officials would still receive generous salaries after the proposed cuts, the reductions weren't likely to open the door to misconduct. /=\

“The proposed salary structure uses a benchmark based on the median income of 1,000 top-earning Singapore citizens, but with a 40 percent discount applied, the committee said. It also recommended adjustments linking ministers' bonuses to measures of the socioeconomic well-being of lower-income citizens, removing an existing bonus pegged to Singapore's gross domestic product growth. Pensions for ministers would also be removed; ministers would instead participate in a compulsory national-savings plan. /=\

“The move is "purely a result of political dynamics," but nonetheless marked "a step in the right direction and a recognition that the salary issue should be based on accountability," said Bridget Welsh, a professor of political science at the Singapore Management University. "They are public servants, but were being paid like CEOs of multinational corporations," Ms. Welsh said, though she added that even if the proposed cuts are adopted, "in the context of what an average Singaporean makes, they are still overpaid." Singapore last cut pay for ministers and top civil servants in 2009, during the height of the global financial crisis, as the economy faced a contraction. /=\

Corruption and Singapore

Transparency International ranked Singapore as the fifth least-corrupt nation on its Corruption Perceptions Index 2011. Least corrupt nations in 2013: 1) New Zealand and Denmark; 3) Finland; 4) Sweden; 5) Canada; 6) Norway and Singapore; 8) the Netherlands. Least corruption in 2002: 1) Finland; 2) Denmark; 3) New Zealand; 4) Iceland; 5) Singapore; 6) Sweden. [Source: Transparency International]

Singapore has strong anticorruption laws, including the right to detain suspects of corrupt practices without trial. Singapore’s low corruption sets it apart from other Southeast Asian countries. Transparency International labels most other Southeast Asian nations—including Indonesia, Vietnam, the Philippines and Myanmar—as "highly corrupt."

In 2001, AFP reported: “Singapore, Hong Kong and Japan are the least corrupt economies in Asia, where the problem remains embedded despite being a key trigger for the regional financial crisis in 1997, a report said. Vietnam, Indonesia, India, Thailand, the Philippines and China were perceived the most corrupt, with Malaysia, South Korea and Taiwan falling just below the average, the Political and Economic Risk Consultancy (PERC) said in its latest survey on corruption. "One would have hoped that the economic crisis that hit the Asian region in 1997 would have been a wakeup call to the problem of corruption," PERC said. "Unfortunately, our survey indicates that the problem, as those working in the countries of the region perceive it, has not really improved very much during the past four years," the Hong Kong-based consultancy said. [Source: Agence France Presse, March 18, 2001 <^>]

“Surveying more than 700 expatriate businessmen working in 12 Asian economies, PERC found that "the perception is clearly that corruption remains a serious problem in most countries." While graft exists in almost every country in the world, a country can distinguish itself in the ability of its legal system to fight the problem, the government's willingness to lead the effort and the attitude of the local population toward corruption, it said. <^>

“Grading countries from a scale of zero to 10, with zero being the best grade possible and 10 the worst, PERC said tiny but affluent Singapore maintained its squeaky-clean image with a score of 0.83. Singapore's grade beat the 1.77 mark for the United States and 1.72 for Australia -- two countries surveyed by PERC for purposes of obtaining an outside benchmark on how corruption is perceived as a problem in developed economies. PERC noted that the fight against corruption in Singapore was a long and sustained campaign beginning in 1959 when the People's Action Party came to power through elections. "It has never let up this campaign and the country's leaders had the wisdom to apply the rules indiscriminately, i.e. to themselves as well as to others, and in a very public manner," it said. <^>

“Japan was in second place with a score of 2.50 and Hong Kong came in third with a grade of 3.77, deteriorating from 2.49 last year. Hong Kong's political, economic and geographical links to China, where corruption is much more rampant, remain a challenge for the special administrative region, PERC said.At the other extreme of the corruption scale was Vietnam, with a grade of 9.75, followed by Indonesia with 9.50, India with 9.25, the Philippines with 9.0, Thailand with 8.55 and China with 7.88. <^>

Singaporean Official Charged in Rare Sex-Corruption Case

In June 2012, Shibani Mahtani wrote in the Wall Street Journal, “A former top Singapore government official was charged with accepting sexual favors from women seeking to influence government contracts — a rare corruption case in the city-state, which prides itself on transparency in government and business. Peter Lim, who was removed as the head of the Civil Defence Force (SCDF) earlier this year, "corruptly obtained sexual gratification from two female vendors and one potential female vendor to the SCDF on 10 occasions" over the course of more than a year, according to a statement released by the country's anticorruption agency. [Source: Shibani Mahtani, Wall Street Journal, June 6, 2012 ***]

“Mr Lim's case is the first involving a senior government official in decades. The women involved in Mr Lim's case, who have not been charged, were "advancing the business interest of their companies" with the Civil Defence Force, the statement said. Mr Lim could face a fine of up to S$100,000 and up to five years of jail time if found guilty. In February, Singapore's government said it was suspending both Mr Lim and, separately, Ng Boon Gay, the former director of the Central Narcotics Bureau, for allegations of "serious personal misconduct." ***

"Our zero-tolerance approach to corruption in the public and private sectors can only work if Singaporeans continue to be imbued with the right values and recognize that whilst corruption may be a fact of life, it is not our way of life in Singapore," said Teo Chee Hean, deputy prime minister and minister for home affairs and minister-in-charge of the Civil Service, at a parliament session in March this year. "We also require good leadership by example at the top, as well as a population which rejects corruption and does not accept any form of corruption at all." ***

Government Budget, Public Debt and Taxes in Singapore

Government Budget: revenues: $42.47 billion; expenditures: $39.97 billion. Expenditures include both operational and development expenditures (2012 est.). As reported by the Ministry of Finance for fiscal year (FY) 2005, Singapore’s revenues were US$17.4 billion, and expenditures were US$18.2 billion. In FY 2006, operating revenue was projected at US$18.3 billion and expenditures at US$19.4 billion.[Source: CIA World Factbook =]

Budget surplus (+) or deficit (-): 0.9 percent of GDP (2012 est.), country comparison to the world: 29/ =

Public debt: 111.4 percent of GDP (2012 est.), country comparison to the world: 13' 106 percent of GDP (2011 est.). Singapore’s public debt consists largely of Singapore Government Securities (SGS) issued to assist the Central Provident Fund (CPF), which administers Singapore's defined contribution pension fund; special issues of SGS are held by the CPF, and are non-tradable; the government has not borrowed to finance deficit expenditures since the 1980s. In 2005 cumulative domestic government debt totaled US$126.7 billion, or 108 percent of GDP.

Taxes and other revenues: 15.4 percent of GDP (2012 est.), country comparison to the world: 187. =

In November 2006, Singapore announced a plan to raise the goods and service tax (GST) from 5 percent to 7 percent. Alex Au wrote in Asia Times, “The tax hike is designed to generate about S$1.5 billion (US$960 million) annually, funds that will be earmarked to develop a more generous social safety net. "It's essential for us to tilt the balance [of spending] in favor of lower-income Singaporeans because globalization is going to strain our social compact," Prime Minister Lee Hsien Loong said upon announcing the policy. [Source: Alex Au, Asia Times, November 23, 2006]

Singapore has a corporate tax rate of 17 percent. It was 20 percent until 2008 when it was lowered to 18 percent and then lowered again to 17 percent in 2010. To justify the corporate-tax cut, Prime Minister Lee said that developing Baltic nations such as Latvia and Lithuania levy a flat 15 percent tax on corporations. More to the competitive point, Hong Kong's top personal income-tax rate is currently 16 percent.

Countries with smallest tax evasion problem: 1) Singapore; 2) New Zealand; 3) Hong Kong; 4) Switzerland; 5) United Kingdom. [Source: Executive Survey of 60 countries in 1996]

Singapore Cuts Top Personal Income Tax

In February 2005, AFP reported: “Prime Minister Lee Hsien Loong said the top personal income tax rate will be cut two points to 20 percent in a move to boost the wealthy city-state's attractiveness to foreigners. Delivering the national budget in parliament, Lee, who is also finance minister, said rates for top earners would be reduced from 22 percent to 20 percent over two years. Those earning more than S$320,000 (US$200,000) annually will pay 21 percent in taxes for income earned this calendar year, with the rate dropping to 20 percent in 2006. Rates for those earning $160,001 to $320,000 will be cut from 19 percent to 17 percent, while cuts for the lower income brackets would range from 0.5 to 1.0 points -- all staggered over two years. People earning $20,000 and below per year do not pay income tax. [Source: Agence France Presse, February 18, 2005 ><]

“The cuts will result in taxpayers' savings totalling $460 million over two years. "With this change, Singapore will have one of the most competitive personal income tax regimes in the world," Lee said. He added the tax cuts will make Singapore "more attractive to internationally mobile talent," referring to foreign workers. ><

“The government trimmed corporate tax rates last year but deferred cutting personal income taxes due to an uncertain economic outlook. However, the economy expanded 8.4 percent in 2004, its strongest growth in four years. Although growth is expected to moderate to 3-5 percent this year, the government regards that pace as a more sustainable expansion. ><

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© 2008 Jeffrey Hays

Last updated June 2015

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