Life in the world’s most expensive city

Updated: Saturday March 8, 2014 MYT 7:24:08 AM

Life in the world’s most expensive city

BY SEAH CHIANG NEE

SINGAPOREANS will likely huddle around their TV sets in June to watch World Cup soccer – but only if they pay, once again, a fee higher than anyone else on earth.

To cynics, this is merely in keeping with their newly declared status of belonging to the world’s most expensive city.

In 2010, the cable companies bid so high for the telecast rights that they charged fans S$70.50 (RM181) to watch.

Negotiations are still on, but the costs are likely to be at least as high.

This World Cup TV cost is probably the best way to describe how ordinary Singaporean lives are affected.

That we are a top high-cost place has been known to us for some time, but few Singaporeans – if any – had imagined we would be Number One.

Global research criteria, of course, do not always find universal acceptance among governments, particularly if the news is bad.

But what is not in contention is that global Singapore has been steadily climbing to the top of the totem pole of high costs.

Ten years ago, we were in 18th place.

In 2009 alone, Singapore jumped five places from 15th to 10th position, overtaking Hong Kong, its traditional rival.

This year, we overtook leader Japan and several other expensive Western cities.

Aggravating the rise was the opening of the floodgates for foreigners such as struggling workers and billionaires to flock here, thus creating demand and stretching resources.

Days before the Economist Intel­ligence report, eight Town Coun­cils managing public flats announced an increase in service and conservancy charges from April onwards.

The hikes ranged between S$1 (RM2.50) and S$15 (RM38.60) a month for each flat, depending on its size and type.

Then the annual 2014 budget was announced, resulting in government levies and thus prices being raised for cigarettes and beer.

A fast food chain raised the price of a cup of coffee from S$2.10 (RM5.40) to S$2.30 (RM5.90).

All these changes hardly raised a groan.

Singaporeans appear to have become so numb about price hikes that when they take place, it is just routine.

The first-generation government worried much more about inflation. Its trade unions actually started a supermart to force traders to lower the price of rice and other necessities.

For someone born here 74 years ago, my journey from wooden shacks to international high-cost notoriety should have been one of pride.

Few countries have been able to accomplish it. Yet this near-miracle is marred by the fact that income has lagged far behind costs and inequality has soared.

Runaway inflation, both imported and domestic, has been a cruel master cracking its whip.

An important factor is Singapore’s lack of space and natural resources, making it vulnerable to world market swings.

Last week, the Economist Intel­ligence Unit (EIU) said that Singapore tops 130 cities in terms of costs of living, including Paris, Oslo, Zurich and Tokyo.

The people of these cities, however, enjoy higher wages and welfare benefits than Singaporeans.

How do ordinary Singaporeans cope?

Over lunch yesterday, my young son, who earns a normal graduate wage, confessed to me that he had not been to Orchard Road for a long time.

This tourist shopping zone is one of the world’s most expensive shopping belts.

Other youths, I was told, avoid even shopping malls in housing estates where prices are escalating.

Instead, they are now increasingly turning to cheaper online shopping.

Among the contributing factors of Singapore’s dubious promotion are cars (world’s most expensive), property (fifth highest) and military spending (highest on per capita basis). My Japanese car costs three times more here than in Malaysia.

Transport costs are almost three times higher than in New York, said the report.

In addition, Singaporean political leaders remain by far the highest paid in the world despite a pay cut two years ago.

Even an environment minister here is paid more than the US President, said an opposition supporter.

“And the latter has his finger on the nuclear button,” he remarked.

The ranking is particularly bad news for potential investors and genuinely skilled foreigners who may be put off coming here.

“For the ruling party, the rising cost of living is fast becoming the number one grouse,” said a People’s Action Party grassroots official.

“It will increase its difficulties in fighting the next election,” he added.

The most pressure has fallen on the shoulders of Finance Minister Tharman Shanmugaratnam to stop the rout.

In his first comment on the EIU rankings to Parliament, he dismissed the findings as reflective of costs for expatriates and not locals.

The survey compares prices across 160 products and services in 140 cities.

While the minister may be right in being specific, it has become harder to separate the two since the population in today’s global Singapore is 40% foreigners.

It is becoming harder to separate them – just like World Cup viewing. Whether they are foreigners or Singaporeans, fans will pay the same high price.

> Seah Chiang Nee is an international journalist of 40 years, many of them reporting on Asia. The views expressed are entirely his own.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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