Singapore leaders advocate inclusive growth to tackle income disparity

08:16, January 24, 2011      

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Singapore leaders have recently flagged the issue of widening income gap as a main concern for the country, and they have been calling for inclusive growth through measures like workers' skill upgrades.

The issue has been making headlines in local media since Prime Minister Lee Hsien Loong said in a new year message that it was "a broader issue" shared by other economies including both the developed and the developing.

"We are striving to ensure that the broad majority of Singaporeans benefit from growth, including lower-income, less-skilled workers, and the middle group who feel sandwiched in between," Lee said.

Minister Mentor Lee Kuan Yew and Senior Minister Goh Chok Tong also talked about the issue recently.

LIVING COSTS

Some in Singapore have complained of the squeeze of rising living costs.

Lee Swee Hoon, a housewife, said the prices for some food items, like coffee powder, increased significantly over the past few years.

"A larger chunk of household expenditure is now going to food," she said.

The Singapore economy rebounded strongly from the economic downturn to grow a record 14.7 percent last year but inflation momentum is also picking up. Consumer prices rose 3.8 percent in November, the highest increase in 22 months.

The poorer tend to be affected most by the rising costs of living, pushed up by rising housing prices and spendings on other necessities. Economists said the group earning the most usually benefits more from the asset price rises that come along with an economic boom, whereas the group at the bottom earning a stable salary benefits less.

Official projection is that the consumer price index inflation will average 2 to 3 percent this year.

The inflation rate "is expected to rise further in the first quarter of this year before moderating in subsequent quarters," Finance Minister Tharman Shanmugaratnam said earlier this month.

However, analysts said food cost was not something to worry about as the Singapore dollar has strengthened against foreign currencies recently, mitigating exported inflationary pressures on the city state.


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