Is World Bank promoting free-market system or exploitation?

July 16, 2007
Singapore Democrats

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The recent survey entitled Governance Matters 2007: Worldwide Governance Indicators 1996-2006 conducted by the World Bank ranks the PAP Government highly on “government effectiveness”, “regulatory quality”, and even the rule of law.

This is no cause for pride or celebration.

For one thing it must be noted that the report is conducted by big business, focused on big business, and for the consumption of big business.

It stands to reason that as long as the PAP continues to make policy that benefits big business, these surveys will continue to keep up the accolades.

Whether such policies benefit local small- and medium-sized entrepreneurs and, more importantly, whether Singaporeans gain from such policies is quite another matter.

Consider the following: Singapore leads the world in the growth of the number of millionaires much of which, according to several reports, stems from money-laundering.

Yet low-income workers such as office cleaners and labourers, many of whom are made up of the elderly, saw their wages plunge 25 percent from S$800 (US$500) to $600 a month between 1996 and 2006!

It hardly comes as a surprise that the income disparity in this country is at an all-time high and one of the highest in the world.

And even as the PAP Government trumpets the overall increase in wages of the population, inflation (exacerbated by the recent 2 percent increase in the Goods and Services Tax) wipes out much of this gain and continues to make life a toil for the ordinary person.

As a consequence the plight of the homeless in Singapore, which the state-controlled media calls “sleeping in the city”, has suddenly become “popular”. Either that or they are destitute by choice, according to a ruling party Member of Parliament.

The hungry and poor scavenging for scraps of leftover food at hawker centers have multiplied all over the island.

Financial hardship continues to be the main cause of divorces and suicides, which at last count stood at an average of one per day.

The Central Provident Fund withdrawal age will be raised from 62 to 65, denying senior citizens their hard-earned savings. This has come about because of the Government’s insistence that the elderly continue to work to 70 and beyond – with reduced pay.

Through all this, Singaporeans have no means of affecting policies that run, many say ruin, their lives.

Poverty in Singapore is not just in economic terms but political as well. This is captured by the low score for the factor of democratic accountability in the World Bank survey, something that should be of deep concern to the institution.

But its Singapore representative, Mr Peter Stephens, was quoted by the Straits Times as saying that the survey “reaffirms Singapore’s position as a top business spot for investing and locating major operations.”

Nothing was mentioned about the political situation, at least nothing reported by the newspaper. It seems that the lack of openness and democratic accountability has been relegated to an anomaly, to be discussed in academic circles.

The SDP reiterates its stand: We advocate a free-market system for Singapore, one that guarantees genuine and free competition for local as well as foreign companies.

And it must be a system where prosperity is shared by all, where globalisation does not become code for exploitation.

For this to take place, there must necessarily exist an open and democratic political system.

What exists in Singapore at the moment is a political-economic arrangement dominated by one political party. This, no matter which way one cuts it, cannot be presented as a free-market economy.

In case anyone gets excited by the World Bank praise, the following should serve as a sober reminder of how the institution has failed the very people it claims to serve:

During Suharto’s reign the World Bank had spent $25 billion in development projects over a 30-year period during which the Indonesian dictator claimed poverty in the country had been reduced from 60 percent to less than 11 percent.

The Bank, at that time, actively promoted Indonesia “as one of the great success stories” despite Suharto’s despotic and nepotist ways.

This was before the 1997 Asian financial crisis. After 1997 the Bank admitted in its now infamous report that its assessment was wrong because it paid “too little attention to a sick banking system and Suharto’s refusal to reform the legal system and open up the political system.”

The report also concluded that the World Bank knew of many problems but did not want to offend Suharto’s government, knowing full well that Suharto was using World Bank assessments as weapons against criticism of its undemocratic practices.

The hind-sight was cold comfort for the ordinary people who were stripped of their political rights by Suharto. While big business fled the country at the first sign of trouble, ordinary Indonesians were left helplessly stranded and paid for the economic mess with their lives.

Many of these were the ethnic Chinese who were made the scapegoat of the economic turmoil and massacred in the horrific aftermath.

Is the World Bank’s memory so short? Must democracy, which enables the Singaporean people to demand transparency and accountability from the PAP Government, continue to take a back seat to “government effectiveness” and “regulatory quality” assessed by big business?

And according to the institution, Singapore adheres to the rule of law. The Bank has, obviously, also a humorous streak about it.

Instead of giving the Singapore Government a collusive pat on the back, the World Bank, and other similar institutions, should call attention to the lack of democracy in this country and the dangers it poses to economies around the region.

Only then can institutions like the World Bank claim to genuinely support a free-market economy that serves the common good instead of the avaricious few.

This statement has been sent to the World Bank’s Singapore office