Lessons from a crisis for Singapore

SINGAPORE recorded its first Covid-19 infection on Jan 23. More than six months on, the virus shows no signs of abating as it continues to infect thousands every day around the world. The Republic's initial response to the novel coronavirus was held up by many as a model, but a surge in cases within crowded foreign worker dormitories soon proved to be its greatest challenge.

Since then, Singapore has also witnessed an election like no other - one which was widely expected to be a cakewalk for the incumbent People's Action Party, but in which the party fared its third-poorest showing, in terms of vote share, since independence.

This National Day, BT takes stock of lessons gleaned from Singapore's fight against Covid-19 thus far, and how they can fortify the country for future battles.

In a health crisis, experts call the shots

Most observers felt that the Singapore authorities responded deftly to the health crisis in the initial stages, but subsequently faltered in decision-making and public communications.

Infectious diseases specialist Hsu Li Yang notes: "You will remember that (in the early days) almost every day, in fact, sometimes twice a day, there will be new directives coming out about what can or cannot be done, how many people could go out, and so on."

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Dr Hsu, who was formerly clinical director of the National Centre for Infectious Diseases, widely regarded as ground zero in Singapore's Covid-19 battle, continues: "I think many people were confused and there was an impression that things were out of control. It almost felt like a relief when the prime minister announced that we were going to start the circuit breaker." Singapore went into partial lockdown from April to June, when only the most essential services were allowed to remain open.

Now, about two months into the second phase of reopening, most activities have resumed but are still subject to safe distancing measures.

Dr Hsu cites New Zealand and Taiwan as countries which communicated well in the crisis. The former was swift and resolute in implementing a strict lockdown early on during its outbreak in March, and has maintained a relatively low number of active cases since lifting restrictions in June.

Taiwan, on the other hand, managed to stay ahead of the infection curve without a lockdown through strict quarantine and contact tracing measures.

Some also felt the government could have better tapped the medical fraternity's expertise in responding to the crisis - even as they acknowledged that the virus' trajectory is defined by uncertainty that even the World Health Organisation had difficulty keeping up with.

At end-January, Singapore convened a multi-ministry taskforce co-chaired by Ministers for Health and National Development Gan Kim Yong and Lawrence Wong,to tackle the virus, which had not landed on its shores at that point. Singapore's Director of Medical Services Associate Professor Kenneth Mak has been present at press conferences held by the taskforce.

This demonstrated foresight, but nevertheless, infectious diseases expert Ooi Eng Eong feels the leadership lacked "deep medical expertise".

"My opinion from my vantage point is that decision makers have not tapped on those with deep knowledge in virology... Instead, 'expert committees' are often formed by people holding administrative leadership positions, rather than those with technical expertise," says Dr Ooi, who is deputy director of the Duke-NUS Medical School's Emerging Infectious Diseases Programme.

"I think the people making decisions need deep expertise. And to me, we're lacking that. You know, I'm not sure that we have strong data scientists looking at all the data and sieving out what's probably true evidence from that which is just noise."

If Singapore is to respond more effectively to the next infectious disease crisis, it will need to invest in and develop such specialists, so as to design a response that is informed by science, while also keeping in line with the other government policies, says Dr Ooi.

Flatten the social ladder

On the economic front, most observers feel the Singapore government has stepped up to the plate, by rolling out a combination of wage support measures for employers and direct social assistance to those who have been laid off or suffered income losses.

It has also shown the value of the Republic's deep reserves, says Yeoh Lam Keong, the former chief economist of Singapore sovereign wealth fund GIC.

With four support packages announced in less than four months, Singapore is setting aside close to S$100 billion - close to one fifth of its GDP - for its Covid-19 war chest. Over half, or S$52 billion, will be drawn from past reserves.

"The pandemic has demonstrated our ability to tap on resources built up over the years. Many countries that do not have the reserves, unless they have the ability to borrow or print money, cannot really step up to this level," says Mr Yeoh.

Government-linked companies and large corporations here have also stepped up to help combat the fallout.

State investment fund Temasek, for example, is acting as a lifebuoy to Singapore Airlines, supporting the flag carrier's bid to raise up to S$15 billion. Temasek, which now owns about 55 per cent of the airline, has pledged to take up any remaining shares and bonds that are not subscribed.

Temasek and infrastructure consultancy Surbana Jurong, which it owns, were also tasked by the government to quickly set up a large-scale community care facility at the Singapore Expo, used to isolate Covid-19 patients with mild or no symptoms until they are past the infectious stage.

The local banking trio of DBS, OCBC Bank and UOB, all major employers in Singapore, also pledged no retrenchments, with the former two further committing to 5,000 local hires this year.

Still, the pandemic - resulting in the immediate health crisis and looming recession - has also unveiled, and worsened, existing inequalities in societies across the world.

In Singapore, the crowded quarters that low-wage migrant workers live in became a hotbed for infection. Migrant workers make up over 90 per cent of Singapore's Covid-19 cases, which now totals over 50,000.

Commentators here and abroad regard this as a failure of public policy.

"We owed these human beings a duty of care in which we failed," says Manu Bhaskaran, founding director and chief executive of consulting agency Centennial Asia Advisors.

Had the government acted promptly on feedback from non-government organisations, Singapore could have softened the extent of health and economic damage, he says.

By the time the government moved to lock down dorms in April, the number of cases here had surpassed that in neighbouring Indonesia and the Philippines at the time, both of which have far larger populations.

Over the last 10 days of April, cases in Singapore more than doubled from 8,014 to over 16,000, primarily due to outbreaks in the dormitories.

Mr Bhaskaran adds: "At another level, the shocking conditions in the dormitories should never have been allowed in the first place."

This state of affairs has, again, shone the spotlight on the Republic's foreign workforce quagmire. Whether Singapore has to be so dependent on the transient workforce is a question that policymakers have to revisit, Mr Yeoh says.

"This is a longer term control problem. What's happening in the dormitories now is a residue effect of policy mistakes in the past, that of letting our economy be so dependent on foreign workers," he says.

Elsewhere across the social ladder, too, the pandemic has unveiled the low wages that those at the lower rungs but providing the most essential services, like cleaners and nurses, have been surviving on.

These long-standing challenges are now compounded by the threats of job insecurity, says social policy researcher Ng Kok Hoe, who is also a senior research fellow at the Lee Kuan Yew School of Public Policy.

Singapore should consider extending its progressive wage model - which sets out the minimum pay for different job levels and pegs wage increases to a skills ladder - across all low-wage sectors, as soon as economic conditions allow, he suggests.

This model is currently in place for cleaners, security officers and landscape workers.

"We have missed opportunities to do so in the past, and must not make the same mistake again," he says.

Mr Ng had argued in an earlier commentary, co-written with sociologist Teo You Yenn, that there is no better time than in this crisis to look at structural reforms that go beyond emergency measures.

"The existential threat of disease has shown, more obvious than ever, that the wellbeing of people across the class spectrum are interconnected... Addressing gaps in policy that leave parts of society behind would be a powerful expression of such unity," they urged.

Agreeing, economist Walter Theseira says that current assistance schemes aim to help people get by, but will not replace lost income meaningfully. "While people won't have to worry about feeding their family, all the other usual expenses of living - childcare, tuition, mortgage - will still be piling up, as the (payouts) are really only enough to cover basic living expenses," he says.

The economic impact of Covid-19 will be with us even after the payouts expire, stresses Associate Professor Theseira, who lectures at the Singapore University of Social Sciences.

The former Nominated Member of Parliament says: "We are already seeing signs that some employers are holding out only because of the jobs support packages and won't have the fiscal ability to keep workers on after those benefits expire. So we too face the challenge of whether to extend such programmes or to accept the consequences on the labour market."

He adds that these support schemes often tend to rely heavily on means-testing and specific qualification criteria, which can sometimes form barriers for a sizable group of Singaporeans.

Tighten governance to sift chaff from grain

The pandemic has also exposed poor corporate governance structures, say observers, pointing to the recent string of commodity trading company failures in the Republic.

At least four Singapore-based trading firms have collapsed since the initial months of the outbreak. Hin Leong - one of the country's largest independent oil traders - filed for bankruptcy protection in April, while Zenrock, a smaller firm, was in May placed under independent management by the courts as part of efforts by banks to recover debts of around US$166 million.

The local arm of Chinese independent oil trader Hontop, as well as Singapore palm oil and coal trading firm Agritrade, collapsed in February.

"Covid-19 has contributed to their unravelling, together with the fall in oil prices," says Mak Yuen Teen, an accounting professor at the National University of Singapore.

"Such companies are better able to continue to hide fraud when the economy and sector is going strong, as they can continue to do things like round-tripping, or falsifying invoices, bills of lading, amidst trading activity. When trading volume collapses, banks and third parties will know if everyone else is suffering and you are the only one still going strong," he says.

This unravelling has in turn highlighted weaknesses in areas like bank lending practices, and regulation and audit of private companies.

"I think while many know that the Hin Leong Group is huge, few would know that its annual revenues totalled around US$20 billion, which is larger than most listed companies here," says Associate Professor Mak, noting that major companies within the group did not have to make their financial statements publicly available.

"While banks who lend to them can demand audited financial statements, smaller suppliers and creditors won't be able to, and this makes them vulnerable. So I think regulation of private companies needs to be looked into," he said.

Reeling from an extensive credit hit, banks are stepping up vigilance, with many turning to technology such as blockchain to limit fraud.

Bright spots and silver linings

With the charlatans it has unveiled, the Covid-19 crisis may in turn spur institutional and private equity investors to push for higher ESG (environmental, social and corporate governance) standards in companies.

Speaking at a briefing ahead of the biennial DBS Asian Insights Conference in July, chief of South-east Asia's largest lender Piyush Gupta also noted, in particular, that many countries have incorporated environmental considerations in their economic revival plans. He cited as an instance the European Union's green recovery plan, which seeks to tackle the threat of the climate emergency while rebuilding coronavirus-ravaged economies.

In Singapore, a taskforce convened to spearhead post-Covid-19 recovery has also been deliberating on how to put environment priorities and green recovery at the heart of future job creation.

Mr Gupta said: "This is an opportunity for us to think differently about the kind of world we want. What will the planet allow us to do? How do we define a value prism which is different from 'growth at all costs'?"

While evoking risks of supply chain disruptions, the pandemic has in turn expedited some moves in the Republic to live up to its climate commitments. For instance, an earlier goal to produce 30 per cent of the nation's nutritional needs locally by 2030 is now being considered with greater urgency. In April, a new S$30 million grant was launched to help local farmers increase their food production over the next six to 24 months.

Perhaps another silver lining is the resilience and unity that Singaporeans have demonstrated amid the Covid-19 cloud of uncertainty. From the groundswell of monetary donations, to ground-up initiatives offering support for frontline health workers and vulnerable members of the community, to the repertoire of local art shows (including some creatively designed for this age of safe distancing) offered online - our spirits are buoyed by these acts of generosity.

Myth of national exceptionalism

That said, Covid-19 has also led countries around the world - Singapore included - to relook the myth of national exceptionalism. "Singapore was on track to be an exceptional country in how we dealt with Covid-19, until the migrant worker outbreak happened and we also lost control over imported cases," says SUSS' Assoc Prof Theseira, who also points to the mishandling of the crisis by global superpowers like the United States and China.

"So all our political and economic systems have been shown to have flaws. That is not a problem - we can fix these issues. What is a problem is if we believe too much in our own national myths of exceptionalism and take our eyes off addressing the real challenges and shortcomings that we have," he says.

When Singaporeans went to the polls on July 10, in an election described by Prime Minister Lee Hsien Loong as one "like no other", the outcome was a surprise to most.

Rather than voting for a flight to safety as many had expected, there was a significant swing towards the opposition, which some observers attributed to the desire for a fairer and more compassionate society. Voter turnout was robust, even amid concerns around the coronavirus and grumblings of queues and two-hour long waits to cast votes.

Law don and political watcher Eugene Tan says the pandemic led to an interrogation of how wealth creation and economic growth are attained in Singapore, and exposed the soft underbelly of Singapore society.

"So, in more ways than one, the crisis unveiled the not-so-good aspects of our society. It was a harsh reality check. To be sure, it was not that things were in a rotten state but it opened the eyes of many to the divides in our society," says Associate Professor Tan from the Singapore Management University.

The opposition was thus able to capitalise on varying degrees of concern during the election, over whether complacency and arrogance have set in the government and advocated a more even-handed approach to both material and post-material well being, he says.

That Prime Minister Lee subsequently officially recognised Workers' Party chief Pritam Singh as Leader of the Opposition, hence carving out a bigger role for the opposition post-crisis, was also a significant first both for Singapore, and for the ruling People's Action Party.

Political analyst Woo Jun Jie said Singapore's response to the pandemic has generally been strong, driven by the government's ability to mobilise its resources, be they financial reserves, the national stockpile, or community care facilities that were set up to reduce hospital case loads. Most individuals have also been cooperative.

However, Dr Woo, like many others The Business Times spoke to, felt the single largest blindspot was the large clusters that emerged from the foreign worker dormitories.

This brings to mind the National Day theme of 2002: "Remember the times, so fine, when we thought that / Nothing could stand in our way?"

The hope is that when the dust finally settles on this crisis, the bright spots will shine even brighter, paving the way for systemic change, so that we, as fellow Singaporeans, can be better for each other because of the worst.