Singapore Confidence Barometer: Clouds on the Horizon?

By June 15, 2022 June 23rd, 2022 Research Publications

An Uncertain Forecast

Like much of the world, Singapore is facing a number of concurrent challenges, and the approach we take in tackling these may well define our future. As COVID-19 has become more widespread globally, Singapore has emerged from months of restrictions and decided to transition to an approach that recognises the virus as endemic.

Singapore is also hoping to maintain the strong economic recovery of 2021 in the face of a number of headwinds. The global economy is yet to resolve some of its supply chain interruptions that resulted from the economic downturn during the pandemic, and the war in Ukraine has contributed to rising inflation and higher energy and food prices.

To plan for the future and prepare the country for these challenges at this critical juncture, Singapore’s governing party, the People’s Action Party (PAP) has appointed the Finance Minister Lawrence Wong as the leader of its 4th generation (4G), laying a path for him to take over as Singapore’s next prime minister at the next general elections.

We conducted a survey to measure the public sentiment on these issues, their optimism for the future, and their confidence in the new leadership in addressing their needs.

Catching Waves

Singaporeans were overwhelmingly in agreement with authorities managing Covid-19 as an endemic disease, with 79% in favour. This is possibly a consequence of its current widespread nature and the lockdown fatigue which took its toll over two years. Most (65%) also find the current restrictions sufficient for the said strategy.

There was, however, wariness of new developments emerging in the pandemic, such as waves of new variants, that may alter public health needs. A large majority of 69% felt stricter measures would be necessary in such a scenario, suggesting Singapore may be more accepting of social restrictions for public health as compared to other societies around the world.

Looking Forward: Covid-19

While the number of Covid-19 cases have barely abated, it is clear that the shift in strategy towards managing it as an endemic disease has correlated with a shift towards optimism in the public attitude. A strong majority of 68% felt positive about the prospects of Singapore’s management of Covid-19.

Dark Clouds with Dollar Signs

The global economy as a whole is currently struggling as businesses and investors re-adapt to the post-pandemic reality, and Singapore, as expected, feels the effects keenly. With many Singaporeans already having their spending power affected by curtailed career progress, wage freezes or job losses during the Covid-19 lockdown, it may be unsurprising that 77% considered themselves to have been affected by the economic situation of high inflation and rising food and fuel prices. 3 in 4 from this group had had to tighten their belts to adjust accordingly.

Since 2020, the government has provided support for households to manage the impact of the disruptions to the economy. This has come in the form of GST Vouchers, utilities rebates as well as grants for lower-income households and workers. A majority of 57% found these measures to have been insufficient, raising the question of whether a similar level support would be sufficient if the economy falls again into recession.

A Tide of Support

One of the factors weighing heavily on the economy is the war in Ukraine. Singapore may be far removed from the war, but its cost is far-reaching. In addition to dampening business confidence, perhaps the most significant impact is the soaring oil and gas prices, which heap further cost pressures on individuals and businesses.

Despite the contribution of the war to the economic challenges, respondents generally supported (57%) the sanctions levied on Russia by the government, even if such actions may also be detrimental to economic growth. Most of this group (74%) would still support the sanctions even if they negatively impacted Singapore’s growth – this translates to roughly 42% of the total who would support sanctions regardless of potential negative effects.

Singaporeans were generally split on whether the sanctions will impact Singapore positively or negatively, and the largest group (36%) felt that the effect with be neither positive nor negative. Nevertheless, in the case of the war in Ukraine, it may be that a sizable section of the Singapore population prioritises respect for international laws and norms over economic outcomes.

Looking Forward: The Economy

A large majority (70%) felt that the economic situation will worsen over the next year, pessimism that one might expect to be replicated in many other places around the world. High levels of government stimulus issued across the world have contributed to a high-inflation environment, and central banks are pondering taking action that would reduce inflation but also potentially cause recession.

Support is less likely to be forthcoming in the short term future as governments look to balance their budgets, and the Singapore government has already announced plans to increase the GST (Goods and Services Tax) from 7% to 8% from the start of 2023, and from 8% to 9% from the start of 2024.

GST hikes have historically been highly unpopular, and with government support over the last two years being generally perceived as insufficient, it remains to be seen if the government can convince Singaporeans of their commitment to addressing the public’s cost-of-living issues.

A New Helmsman

Both the newly anointed 4G leader, Lawrence Wong, and the rest of his 4G cohort commanded strong confidence among respondents, with 78% moderate to high confidence for Lawrence Wong and 75% for the entire 4G team.

Given the strong support the PAP has historically received, a high level of confidence in the PAP’s fourth generation is little surprise. While the proportion of the respondents who express high confidence are only slightly more than a third than the total (36% Lawrence Wong, 34% entire 4G), it is still worth noting that this number would far exceed that for other incumbent parties in government elsewhere around the world.

The slightly increased confidence in Lawrence Wong may be a result of the leading role he played in the Covid-19 task force, which may have led some to perceive him as a suitable candidate for leading the next generation of Singapore’s leadership. At the same time, the overall similarity in numbers suggests the public may have to see contributions from the new leader over a longer period of time before distinguishing him from his counterparts.

Setting the Course

Almost half of the respondents (49%) considered the economy to be their top priority for the next three years, a statistic that reinforces the concern among the public over the current economic outlook and the pressure that many are facing.

Social issues (27%) outweighed health (19%) as the issue that was second-most likely to be considered the top concern, despite Covid-19 dominating the international agenda for most of the past two years. This may point to a growing acceptance of Covid-19 as an endemic disease that will have to be accommodated. It may also indicate a growing emphasis on points of tension that have been a source of discord in society during the strains of lockdown, such as cases of racial intolerance and discrimination.

Despite the war in Ukraine and growing tensions in Asia on the back of cooling relations between the United States and China, national security (4%) still lagged behind other issues as an area of priority.

Looking Forward: New (4G) Leadership

On the whole, respondents expected their new leaders to perform roughly as well as their predecessors. The largest group expected that the 4G team will perform neither better nor worse (45%) than previous generations, while slightly fewer thought the 4G team will perform better (26%) than those who thought they will perform worse (28%) than previous generations.

This result may reinforce indications of strong trust in the PAP given the popularity of its previous generations of leaders. Nonetheless, the 4G team and future generations of leaders will likely have to face challenges different to that from their predecessors as the needs and attitudes of society change. How well these new leaders perform will depend how capable they are of adapting they capabilities to meet the new demands that arise.

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