Singapore struggles with "new poor"

By Jason Szep

SINGAPORE, Sept 5 (Reuters) - Cynthia Goh doesn't fit the usual profile of being poor.

The 25-year-old lives in a clean, if cramped, two-bedroom apartment in Singapore, Southeast Asia's wealthiest nation. Her furniture is modern and she enjoys the luxury of cable TV.

But pregnant with a second child and jobless, the shy high-school dropout is part of a fast-growing underclass surviving just above the poverty line in a nation accustomed to one of Asia's highest standards of living.

The number of Singaporeans earning below S$400 ($230) a month or S$13 ($7) day has jumped 40 percent since a financial crisis rocked the region in 1997, swelling to 180,650 workers by 2002, or around nine percent of the workforce, government data show.

That is four times the growth in Singapore's labour market in the same period, according to the Ministry of Manpower data.

"You actually have quite a large number of people entering that income bracket," said Joseph Tan, an economist at British investment bank Standard Chartered.

Goh (not her real name) does slightly better than that, surviving on her husband's S$1,100 monthly wage from fixing air conditioners, about a third of the average Singapore salary.

But her lack of education and marketable skills freeze her out of the worst job market in 17 years in a country with one of most educated workforces in Asia - where taxi drivers are often sacked, middle-aged plant managers.

"I wonder whether we'll be able to afford this new child," she says. "I never thought it would be this tough."

After three decades of prosperity, many of Singapore's four million residents have been sacked or demoted or are living in constant fear of losing their jobs.

Unemployment, at two percent in the early 1990s, has more than doubled as the manufacturers and big multinationals at the heart of the economy shift jobs and production to China and other low-cost regions such as Malaysia and India.

Currently around 90,000 people are out of work.

RISING DEPRESSION

Suicide prevention group, Samaritans of Singapore, will open a 24-hour phone line next week dedicated to the unemployed after a deluge of calls by depressed people out of work.

Dr Adrian Wang, psychiatrist at the Institute of Mental Health, says about half to three quarters of his patients complain of employment-related issues.

"Many patients that have seen us for depression, anxiety or stress-related problems in the past year or so are expressing concerns over retrenchment or unemployment issues," he said.

Managing growing public anxiety over wages and jobs is a major challenge for the long-ruling People's Action Party (PAP), whose power has been based on a social pact of delivering economic benefits in return for acceptance of its semi-authoritarian government.

An overhaul announced last week to the nation's state-run pension scheme that will reduce wages by three percent nationwide provoked a rare groundswell of public criticism in the forum pages of the Straits Times newspaper, one of the few places Singaporeans feel comfortable speaking out.

"In historical terms, obviously this is new to us," said labour economist Chew Soon Beng of the Nanyang Technological University. He expects the government to respond by shrinking the pool of foreign workers.

A growing part of the problem is China. Of all jobs lost in Singapore due corporate relocation last year, nearly half went to China - up from two percent in 1999, government statistics show.

VICTIM OF OWN SUCCESS

But Singapore is also a victim of its own economic success.

Between the 1970s and 1990s, the island was Asia's economic, juggernaut, growing eight percent a year on average. Wages rose just as fast, and the cost of living now nearly rivals London, a survey in August by the Economist Intelligence Unit shows.

A Singapore factory now worker earns US$7.14 an hour, compared with 53 cents in China and US$2.68 in Malaysia, according a report this year by the Economic Review Committee.

Battered by the SARS virus, Singapore suffered its biggest quarterly economic contraction on record in April to June, pushing it to the brink of its third recession in five years and highlighting its growing vulnerability to global markets.

The sight of vagrants sleeping rough remains rare, however. The streets are immaculately clean, and 90 percent of the nation live in heavily subsidized homes, usually two to three bedroom flats in dense apartment blocks spread across the island.

Even those who cannot afford to buy or rent are found a temporary home by the Housing Development Board, while state-run neighborhood Family Service Centres provide financial help, along with a web of government safety-net programs.

"There is no reason in Singapore ever to be homeless," said Chua Beng Huat of the National University of Singapore.

"You can stay in public housing forever for free. The moment you are on the streets, the publicity cost to the government would be huge," said Chua, a sociology professor.

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