Singapore elections are over with a big win for the ruling PAP but what is the future for Singapore and what is the biggest challenge for the PAP?
The new government to be formed by Prime Minister Lee Hsien Loong will have another five years to fix some pertinent issues.
They will also have the five years to push forward with their strategies to keep Singapore attractive and profitable for investors.
Right now, the key companies in Singapore are facing the full brunt of the COVID-19 economic slowdown.
SPH just released a report indicating its challenges, which can be listed as follows:
Due to Covid-19, SPH is facing an accelerated decline in print ad revenue, a sharp drop in shopper footfall for its retail malls, and uncertainty over international student enrollment for its purpose-built student accommodation (PBSA) business.
This is one example of the challenges the Singaporeans will be facing in the next six months.
However, we believe the country is now stuck with a rise in nationalism (which is apparent in most of Southeast Asia and is not unique to Singapore).
The PAP will have to deal with the rise in nationalistic sentiments. No doubt this is a big issue for a country where the foreign legion is a must to push both its investments drive and keep its malls and spaces clean!
The anti-foreigner sentiments grew with the number of foreign workers contracting the coronavirus after the outbreak in Singapore.
The country was one of the places where the COVID-19 was sufficiently contained with the government locking the country down.
But the outbreak of the virus among foreign workers—perhaps due to the immense number of them in the country and a total lack of expectations the outbreak will hit them—set the PAP and the country backward in its fight against COVID.
Nevertheless, the locals were forgiving and did not punish the PAP for the handling of the foreign workforce hit by the virus.
They were happy with the handouts given to them and to companies employing Singaporeans in particular.
This alone wiped out any dissent that could have existed in Singapore against the PAP for allowing ‘too many’ foreigners to work in the Island state.
Some political parties (in the opposition) tried to get some mileage from the handling of foreign workers, but it was to their detriment. They lost badly.
Nevertheless, we believe the nationalistic sentiments will be on the rise in Singapore now that the economy is not going to see any rapid recovery.
It will be about the share of the wealth the locals are getting and the jobs they are willing to take to keep their households going.
ASEAN TIGER NO MORE?
Whether we like it or not, Singapore is the Asean tiger but the rise in nationalistic sentiments and the faltering economy could turn it into a paper tiger.
The country needs to reinforce its policies to bring in more high quality investment.
What made Singapore such a secure place to invest and grow your investment? Surely the security and protection the government offers to investors are paramount to the success of the state.
This is only one aspect that makes the Island an attractive destination for business. There is also the freedom for foreign companies, and local ones too, to employ foreigners.
This has become a main issue of contention for the PAP with rising concerns from job seekers that they are not getting value for money with their hard-earned degrees.
With more people becoming vocal on the issue, the government now needs to tackle this problem in the smoothest way to keep the integrity and the image of the country intact in the eyes of both the locals and the foreign companies.
However, Singapore also depends a lot on the Asean.
The borderless Asean offers investors a haven where they can grow their money with the Singapore brand.
But nationalism is never a comfortable situation certainly when locals start staring at the huge wages of the foreign ‘consultants’, like in the old days of colonialism.
Unfortunately, the rise of nationalism entails the risks investors would face with the government constrained to take steps to redress the situation in favour of the locals.
We believe this will be the PAP’s biggest challenge in the coming five years, along with issues related to housing and of course the growing geopolitical concerns in the South China Sea.