People have often joked that PAP means ‘Pro-Alien Party’ for their policies which benefit foreigners more than Singaporeans. Let’s compare 2 middle-class boys with average performance who are both polytechnic classmates: Andy (a Singaporean) and Ben (an ASEAN scholar).
Shortly after their graduation, Andy spends the next 2 years of his life serving the nation while Ben works as a junior operations executive earning $2200 a month. For all the freedom and financial sacrifices Andy makes, he is left with no savings while Ben builds his bank account.
By spending $500 on renting a room near his office and $400 on food and transport, Ben is left with $1300 savings each month which is saves in cash and invests in ETFs. At the end of 2 years, he has almost $30,000 after putting aside bonuses. Because of his time and work in Singapore, he also gets PR.
By the time Andy finally starts work, Ben has already gotten a promotion. While Ben continues to live cheaply and saves substantially, Andy is unable to do so because he decides to settle down and get married. Even though there is a grant for his BTO, he takes up huge loans because of his wedding, renovation and honeymoon.
Ben and his wife (also a PR) rent a room in Singapore and have substantial CPF savings from contributions and interest since they do not have a mortgage to service while Andy uses all the monies in his OA to service his HDB mortgage, leaving him with pittance in SA.
As time goes by, Ben continues to save more and more while Andy barely survives with all his loans. 30 years has passed in the blink of an eye and it is time to semi-retire.
Ben and his wife decide to give up their PR status and withdraw close to $600,000 each to move back to their country at 55 and live lavishly for the rest of their lives without a worry. They have no loyalty to Singapore whatsoever even though they have benefitted greatly from the system.
Andy finds that he has little savings because of the high costs of living while his CPF is entirely used to pay for his house. In the end, after setting aside the minimum sum, he can barely withdraw a few thousand. At 55, he has no choice to work because of his school-going children and cannot slow down because of the intense competition and financial insecurity.
This is the problem with how PAP’s policies are affecting Singapore. While the landscape my look very impressive, the truth of the matter is that low interest rates of our CPF system + High costs of living – lack of social security = financial hell for locals while foreigners can make use of our system to grow rich!