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| Devjyot Ghoshal: Gross salary? |
| Devjyot Ghoshal / Singapore Jan 28, 2012, 00:09 IST |
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Some of the world’s best-paid lawmakers sit in a plush chamber, with slick electronically-operated lecterns, housed in a stone-lined colonnaded building — bound on one side by an iconic river, and under the gaze of the numerous skyscrapers that embellish one of Asia’s most powerful financial districts.
Singapore’s Parliament is a sturdy, grey-faced building on the outside. On the inside, it is a well-designed, unostentatious space that belies the wealth that this small city-state has accumulated since Independence in 1965 and after having vigorously transformed itself into a first-world nation.
Inasmuch as the island-nation’s Parliament symbolises its fascinating growth story, in recent weeks it has played host to a somewhat curious debate on what exactly is suitable – and publicly acceptable – remuneration for its influential occupants. Singapore’s ministers are, and have been for some time now, among the world’s highest-paid politicians. To set the context – and this is an oft-used comparison, but one that remains highly instructive – the country’s Prime Minister, Lee Hsien Loong, is said to have been paid about S$3.07 million (approximately $2.39 million) in 2010.
US President Barack Obama, on the other hand, takes home about $400,000 every year, while Indian Prime Minister Manmohan Singh, according to a report by The Economist, is paid a meagre $4,106 annually. But it’s not just the top of the pyramid. Even new ministers in Singapore are paid in excess of S$1 million annually, much more than US Secretary of State Hillary Clinton, or even her president.
To be fair, these extravagant political salaries have been a constant in the Singapore system, and are nothing new. The country’s founding prime minister (and the current prime minister’s father), Lee Kuan Yew, proposed and subsequently enforced a system of pegging ministerial pay to private sector salaries in 1993. The benchmark for political office holders was then set at two-thirds the median income of the top-eight earners in six professions.
Lee’s steadfast logic, re-enunciated in a memoir published last year, has been that Singapore’s limited talent pool – drawn out of a total population of only 3.26 million citizens – makes it mandatory for the government to trawl the private sector for suitable ministers, and high ministerial salaries are essential for attracting and retaining able individuals.
Concurrently, such remuneration has also ensured that Singapore has one of the cleanest, most efficient and graft-free governments in the region. But as Lee himself acknowledges in the memoir, the system will need “adjustments” as the environment evolves.
Earlier this month, the younger Lee, clad in a pink shirt and grey trousers, stood in Parliament hard-selling just such an “adjustment”, albeit in a vastly different political atmosphere compared to when his father first introduced the paradigm. The People’s Action Party (PAP) has governed Singapore since its establishment as a sovereign republic and in last year’s elections, after decades of being firmly in power, its iron grip slipped somewhat as it won by the narrowest margin of votes since Independence. The country’s Opposition rode a wave of discontent to post its best-ever performance, winning six of the 87 elected seats in Parliament.
The numbers may not seem significant to most, but they reflect the disaffection that many Singaporeans feel. Though the gains of successive pro-growth governments cannot be underplayed, there are concerns over a widening income gap, rising living costs and the influx of immigrants, apart from criticism of high ministerial wages.
Partly to assuage this popular discontent, the PAP government has moved to set a new benchmark against which Singapore’s ministers will be paid. Prime Minister Lee and his team will now be paid at about 60 per cent of the median income of Singapore’s 1000-top earning citizens.
Effectively, the prime minister will take a pay cut of about 36 per cent – but still earn about S$2.2 million ($1.7 million) every year – while a new minister will face a cut of over 30 per cent, with salaries starting at S$1.1 million. There is, however, emphasis on the fact that this is a “clean wage”: what you see is what you get, unlike the now infamous parliamentary expenses regime in the UK.
By most comparisons, the remuneration is still inordinately high, yet the government feels that salaries should be commensurate with the private sector to get the right people. “Be honest, not hypocritical about pay,” Lee told Parliament bluntly, even as the miniscule Opposition held its line that such astronomical compensation should not be the primary driver for people joining politics.
But the question of political remunerations is intensely debatable, both inside and outside the Singapore context. Even after a year of unprecedented disgruntlement in India, mainly led by Anna Hazare’s anti-corruption movement, few have queried whether India’s ministers, and indeed much of its civil administration, would perform better with higher salaries.
There can be little doubt, though, that Singapore’s high-paying political system has worked well, so far. But the jury is still out on whether this is the right formula for the future, although some believe it may well be the case.
“If you look at the most open and clear society in the world, which is Singapore, where every minister gets a million dollar a year and the prime minister a lot more, there’s no temptation and it is the cleanest society you would find anywhere,” media baron Rupert Murdoch notably told British lawmakers last year before being hit in the face with a foam pie.
Then again, Murdoch himself doesn’t stand up to much scrutiny either.
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