Singapore tries to strengthen disillusioned middle class ahead of elections

Singapore's National Day rally is traditionally an opportunity for the prime minister to outline his domestic policy plans, but Lawrence Wong used his first address this year to strike an unusually threatening tone.

“We have seen what happens in other countries when the broad middle falls behind,” said Wong, who took office in May as Singapore's fourth prime minister and only the second not from the founding Lee family. “The middle doesn't hold. Societies start to fracture and collapse.”

“Don't assume this can't happen here,” he added. “It can – and it will – unless we take decisive action to prevent it.”

Wong's warning this month reflected the government's concerns about the political impact of rising living costs ahead of elections, which must be held by November 2025 and will usher in a post-Lee political era.

Growing disillusionment among Singapore's middle class, under pressure from high property prices, is threatening the fragile consensus that has underpinned the city-state's growth and stability for decades, analysts say.

“The top is not very big, but the middle is huge,” said Gillian Koh of the Institute of Policy Studies at the National University of Singapore. “It is the core of [the government]It is in the interest of humanity to create a broad, strong, healthy and stable middle class.”

Economic sentiment dominates public opinion. According to the latest quarterly survey conducted by local pollster Blackbox Research in June, 52 percent of respondents said the cost of living was the most important issue, followed by salaries and wages at 16 percent. Immigration, often a sensitive political issue in the city-state of 6 million inhabitants, was mentioned by only 5 percent.

Singapore is widely hailed as an economic success. According to the IMF, it ranks fifth in the world in terms of GDP, behind countries such as Luxembourg and Switzerland. And despite Singapore's reputation as a market economy, according to government figures, over 80 percent of the population live in social housing, and 90 percent of them own their own homes.

But not everyone has kept pace with rising prosperity. “Nobody in Singapore is going to die of hunger, but there is food insecurity,” said Robin Lee, executive director of the charity Food from the Heart, which fed about 60,000 low-income people in 2023. “It's shocking to some people that we still have to do this in a country like Singapore.”

Before an election, “you definitely look at the cost of living,” he said. “It's really, really high, and while wages are high, too, that's relative.”

Singapore's ruling People's Action Party, which has ruled the tightly controlled country continuously since 1959, is struggling with these economic challenges while facing declining vote shares, including in the 2020 election in which the opposition made significant gains.

The PAP's dominance is so great that even the opposition Workers' Party balks at the thought of it coming to power. Its leader Pritam Singh demanded a correction to an April Straits Times article claiming his party was seeking to form a government. He clarified that its medium-term goal was simply to “play our part in ensuring that at least one-third of Parliament is not in the hands of the PAP”.

“The WP seeks an evolution and not a revolution of our political system,” he said.

With the PAP almost certain to win the election – and Wong remaining prime minister – he faces the challenge of winning over an electorate disillusioned by the defection from Lee's party.

Wong was recruited by the party after Lee Hsien Loong, the son of founding chairman Lee Kuan Yew, resigned as prime minister in May. He had led the city-state since 2004. Lee Hsien Loong remained loyal to the government as a senior minister and secretary-general of the PAP, following his father's example.

Wong served as private secretary to Lee Hsien Loong before holding a series of ministerial posts. To appeal to ordinary Singaporeans, he has emphasised his abilities as a common man, often touting his non-elite education.

In his speech at the campaign rally, he distributed a series of information materials and populist promises, including support for the unemployed in training and retraining, measures to maintain affordable public housing, improved parental leave and training grants for Singaporeans aged 40 and above, covering 24 months of full-time training.

The 2024 budget announced in February also plans to expand the government's cost-of-living adjustment scheme with vouchers, cash payments and rebates worth 1.9 billion Singapore dollars (1.5 billion US dollars).

Wong's government has also promised to set up an institute of Islamic studies to support Muslim leaders and another to improve the level of spoken Mandarin. These initiatives reflect an effort to maintain harmony among Singapore's multi-ethnic population, which is 15 percent Malay, 7.6 percent Indian and 75 percent Chinese.

Because Singapore is heavily dependent on imports, it has limited scope to cut costs. But recent economic data points to an improvement. Annual core inflation fell to 2.5 percent in July, the lowest in more than two years. Non-oil exports rose 15.7 percent year-on-year, the first annual increase since January.

The Monetary Authority of Singapore, which Wong chaired until May, kept the currency's strength against the U.S. dollar at levels near 10-year highs, partly to keep the cost of imported goods low.

This focus on affordability seems more important to Wong than tensions over foreign workers or balancing geopolitical tensions between the U.S. and China. “This is something the government needs to address very carefully,” said Robin Lee of Food from the Heart.