As the world recovers from COVID-19 and countries regain their footing, conversations look towards the post-COVID-19 future. From migrant workers' living conditions to social discrimination, the pandemic has revealed inequalities in our society that need to be addressed.
Governments worldwide are rethinking economic policies in the wake of the pandemic, but how should we move forward from here?
In the first episode of a special "Asia Thinker Series: Talkback" session, Professor Danny Quah and Associate Professor Walter Theseira gaves their takes on these issues.
Inequality is not the main problem
Professor Danny Quah, Dean and Li Ka Shing Professor in Economics at the Lee Kuan Yew School of Public Policy, drew attention to the disproportionate impact of COVID-19 on the poor and disadvantaged.
He believed the current narrative of inequality, while correct, is insufficient because of blind spots. While crowded migrant worker dormitories prove to be prime locations for the spread of COVID-19, it is not the only channel that spreads the virus. Regardless of wealth, any crowded areas also pose a risk, such as naval aircraft carriers and rich gated communities.
Instead of inequality, he cited the lack of social mobility as the main problem. The issue surrounding foreign workers, for example, came about because of a lack of opportunity and resources for them to buy into better living and working conditions.
But there is a silver lining in this pandemic.
According to Prof Quah, the pandemic has removed society's current obsession with maximising efficiency in the economy at the expense of our welfare. It has made societies rethink the structure of the economy and pointed us towards a more communitarian approach.
"COVID-19 will teach us that we lift ourselves by raising the people around us," he said. "By removing this obsession and fetishism with superstar efficiencies, by allowing people to think more about society [and] act in a more communitarian way... COVID-19 might actually bring about, on its own, a more egalitarian society, which would be a good thing all around."
Systemic failure of the government
Associate Professor Walter Edgar Theseira, Nominated Member of Parliament and Associate Professor of Economics, School of Business, Singapore University of Social Sciences, continued with a discussion about structural causes of inequality.
"What the response to the COVID-19 pandemic by governments worldwide has really shown is that there's been a systematic failure in many governments to actually understand and account for the effects of excessive inequality in policy making," said Prof Theseira.
He broke this down into two problems. The first is their understanding of how certain work and living conditions hinder people's ability to make meaningful choices. With the burden of reducing costs often borne by low-wage workers — these workers have little choice but to compromise on their health to make a living.
The second problem is being aware of how policies aimed at containing COVID-19 have worsened unaddressed inequalities in society. For example, the circuit breaker hurt the poor in Singapore disproportionately, especially those who could not work from home.
He cautioned governments against focusing on economic recovery and employment without addressing underlying structural problems in the labour market, because it's these that have subjected many workers to poor pay and insecure work.
While Prof Theseira recognised the necessity of improving employment, he enforced the need to look beyond that. "In the long run, the pre-existing weaknesses that made many of our societies vulnerable to COVID-19 are not going to be addressed," he said.
The current inequalities must be addressed to improve public welfare. "Some inequality might be inherent to the way that the global economy and many societies are organised," he said, but that's where public policy comes in. "The job of public policy is to address the consequences of these inequalities in a way that improves public welfare."
Metrics for fairness
In a social media poll by Global-is-Asian, 71% of voters agreed that countries should focus on building a stable and fair economy over economic growth. Yet, what is "fairness" and how can it be measured?
According to Prof Quah, fairness is tied to democracy and we need to level the playing field by offering opportunities to everyone.
"The solution is not to eradicate inequality or to lower it, but to give the poor and vulnerable the opportunity and resources to allow them to be able to choose [and] buy out of that situation," Prof Quah said. The social contract should not solely be focused on mitigating inequality; rather, it should focus on improving the well-being of the poor, weak and vulnerable.
Prof Theseira also brought up the differences between people's principles of fairness and market fairness. While it would be difficult to measure fairness directly, he believed that it has to contribute "to our sense of societal well-being".
But given that Singapore has sufficient resources, he felt that it would be a shame if we were not willing or able to direct more resources towards providing more protection to our society's most vulnerable. "I think it's about addressing the real weaknesses and the real challenges that people, especially foreign workers, face in society."
The need for government policies
According to Prof Theseira, even though some people blame globalisation for changes locally, there is no direct connection. The global drive for efficiency is not the only reason for inequality; inequality might simply be an inevitable feature in human society as people try to exploit each other.
Instead, the solution to inequality is social connectedness and treating each other as equals. "Without that, I think we cannot rely just on local production [and] employment."
In terms of government policies, Prof Quah said that COVID-19 will be the pushing forces "in the other direction", but concrete plans and policies were needed to realise a change against inequality.
"Health [and] emergency sectors can only be repaired by governments, state, civil society, and [the rest] of the community coming together. No single agent will be able to fix this by themselves," Prof Quah said.
While there is a need for government policies to reduce inequality , policies that restrict freedom, such as imposing high income taxes for redistribution and punitive welfare, are not the best for society. Instead, policies should "open up people's freedom", for example by subsidising job opportunities and creating more opportunities for reskilling and upskilling.
The challenge also lies in aligning incentives for people "so that individuals end up doing what's good for the society". According to Prof Quah, the level of trust citizens have in the government becomes an important factor in determining their conformity to safety measures and policies.
Mindsets in society
Prof Theseira acknowledged the importance of individual actions and community support. For example, individuals could step in to fill the gaps in areas that the government was not equipped to handle or were unable to customise the services for.
But there are limitations to what individuals can do for society-wide issues. "I think it's a bit problematic if we're relying on all [these] small efforts to actually fulfil basic social needs," he added. Some information and actions must first come from the government.
However, even though there is an increase in good individual behaviours, Prof Thereisa also noted the rise of a mindset of moral relativism against fairness.
Some Singaporeans adopt different standards of fairness towards different groups of people, such as against migrant workers. And this same idea of people being deserving of different treatment could easily be applied onto other Singaporeans in different categories, he cautioned.
Meritocracy and inequality
Prof Theseira raised the point on the importance of social narratives for understanding inequality. "People have systematically biased views on the extent and impact of inequality, and the causes of it."
While Americans systematically overestimate the chances of social mobility, Singaporeans tend to use meritocracy as an explanation for many things, including inequality.
However, he believed that the logical connection between "having people do the tasks they are best suited for" and "having people in some of those tasks take a huge share of the gains [in] society" is weak. Meritocracy is not the solution to the problem of inequality.
Prof Quah also touched on the importance of maintaining our social and human capital throughout circuit breaker. "We need to keep all of that economic engine [ticking]. We need to [maintain] our instincts on how to work appropriately [and] do business," he said.
Even as Singapore figures out which sectors will continue to be active, the country should continue upskilling and preparing for more digital and technological changes.
According to Prof Quah, defining our challenges and priorities, finding better ways to measure fairness, ensuring a level playing field and equal opportunities for everyone are crucial to keeping the social contract and coherence strong in Singapore.
Rethinking Singapore's economy
Lastly, Singapore needs to rethink its economy to prepare for the potential of de-globalisation, said Prof Theseira. A concern is that the work Singaporeans do "can be easily offshored". Businesses with regional headquarters in Singapore heavily depend on easy business travel.
"That's why we have prioritised trying to get travel arrangements back for essential business." If we do not, companies might shift their headquarters to neighbouring countries to save on costs and Singapore might then lose its status as a key global hub. "Therefore we need to rethink global supply chains and industries such as the tourism and travel sectors," Prof Quah said.
Trust will also be necessary to retain Singapore's centrality in the world. "Trust in [our] expertise, governance, [and] public management," Prof Quah said.
Going forward, Prof Theseira believed that more centrism in politics and stakeholder engagement is needed to ensure genuine structural change towards a fairer economy. "We need much more participation from civil society, from think tanks, and from academics, in building ideas for Singapore alongside business workers and the government."
Prof Quah concluded with a more positive outlook towards our future. Good can come out the pandemic, despite the numerous setbacks and harm it has caused. "I do feel that [the pandemic] is really shaking up the system, and will move us forward — if we are sensible and wise about it — to something better."
Watch the full recording of After the Pandemic: Building a Fairer Post-COVID-19 Economy below: