Millionaires in Singapore–A success story?

millionaires in Singapore
Will the owner of the yellow Lambo, please move elsewhere?

Contributed by ANDY WONG

Singapore has been making headlines recently as the country with the highest proportion of millionaires. Is it something we should be proud of? Is it an advert for the economic success story that is Singapore?

It is worth talking about this briefly as it says something important about how the world sees us.

On the surface we appear to have a small government and rich citizens and many observers, particularly the right-wing and libertarian[1] segments of the American population, see us as having the best government in the world. Of course, this point of view is ridiculous, we have neither small government nor, for the most part, rich citizens.

So let us ask, should Singapore be proud of having the most millionaires in the world? Is our high density of ultra-wealthy residents indicative of the quality of our government’s economic policies?

Will the owner of the yellow Lambo, please move elsewhere?
Will the owner of the yellow Lambo, please move elsewhere?

To shed light on the matter, let’s look at the most recent article to put this theory into writing – “Wealth Over the Edge: Singapore” in the Wall Street Journal. It mentions many millionaires or even billionaires living in Singapore. For each of the people mentioned, I copy below how they are described.

A veteran of Manhattan nightlife and descendant of blue-blooded socialites

Facebook co-founder Eduardo Saverin gave up his American citizenship in favor of permanent residence

Australian mining tycoon Nathan Tinkler

Bhupendra Kumar Modi, one of India’s biggest telecom tycoons

New Zealand billionaire Richard Chandler

U.S. investor Jim Rogers, who set up shop there in 2007

Gina Rinehart, one of the world’s richest women,

Indonesian-born millionaire Frank Cintamani

one of Mongolia’s richest men

millionaires in Singapore
Foreign millionaires living the high life in Singapore

That’s it. All the ultra-wealthy people mentioned in this article about Singapore are as described above. Is it obvious what the problem is? Not one of these people made their money in Singapore. They are all not just foreign-born but more importantly they made their money overseas. It is fair to say these people are not an advert for Singapore’s economic model. In fact I think it is fair to say none of these people made their money in countries with an economic model even remotely like Singapore.

millionaires in Singapore
Does the economic model in Singapore facilitate the accumulation of wealth?

Is the government a monopoly land owner in the US, Australia, New Zealand, Indonesia or Mongolia? Does the state account for at least 50% of the economy in any of these countries? Do state controlled monopolies or duopolies or similar dominate the industries in which these people made their money? Probably not. Although of course, with the right connections, one can become very rich in a country with a state dominated economy.

Who Are The Local Millionaires In Singapore?

There in lies the rub.  Of course, there are many. Lee Kuan Yew is probably one. Lee Hsien Loong another. In fact we can infer from their cash-only purchases of condominiums during the “Hotel Properties Scandal”[2 Must Read] that all of the extended Lee family are probably cash millionaires. Who else? Probably every member of parliament is or soon will be a millionaire. A lot of former and current civil servants are probably millionaires too.

Just to give an example, I’ll let you in on a secret. The man who was Director of the ISD during the time of Operation Spectrum, Mr Tjong Yik Min, is now the CEO of beverage producer Yeos. His annual salary is declared to be in a range above one million per year. He has been on the board of Yeos since 2002. Do you think he is a millionaire?

The previous CEO of SMRT, Saw Phaik Hwa had a basic salary of 700k, including bonuses her annual income was over 1.8 million in 2011. So government connections can be very lucrative in state-run Singapore.

The list goes on. I won’t even mention all the corrupt Indonesian politicians that bring their ill-gotten wealth to Singapore but mysteriously cannot be extradited [3]. Clearly Singapore is overflowing with wealthy people, but so what? They just contribute to inflation, the high cost of living, the crowded roads, the increasing COE etc. But what do they add to our society?

millionaires in Singapore
Welcome to tax haven where you may “park” your wealth…

Are Millionaires Here To “Park” Their Money?

Mongolia’s richest man, I would guess, made his money in natural resources. Australian mining tycoon Mr Tinkler obviously did. Can they bring their expertise in these fields to Singapore to enrich the nation? I doubt it.

The Wall Street Journal article makes it clear – these people come to park their money and have fun – which is reasonably fine, the rich should be allowed their fun after all. Except the negatives are something of a concern for land scarce Singapore – we don’t have the space or the infrastructure to support large numbers of people who do not contribute. We don’t have land to build freeways for their cars. We don’t have enough land to build houses for our own citizens, let alone landed properties for the ultra wealthy.

With no inheritance tax and no capital gains tax, what do these people give back, if anything? Are they an advert for the success of Singapore? Or an advert for the fact that money can be made more easily in other countries – countries with sensible economic policies and government?


By Andy Wong

This article first appeared in the author’s blog here.