Living with the EX FACTOR

This story was first published in The Straits Times on March 7, 2014

"TO BRIE or not to brie" - that is now a financial consideration of living here, quipped a friend after learning that imported cheese was an item in a much talked-about cost-of-living survey listing Singapore as the world's costliest city.

Cheese or no cheese, mention "cost of living" and "price hikes" to anyone here and you are very likely to evoke a strong response, especially in the last few years.

The events of recent days certainly proved this, following widespread media reports on Tuesday of Singapore being ranked as "the world's most expensive city" by the Economist Intelligence Unit (EIU) in a study aimed at helping companies work out pay packages for expatriates.

Observers were quick to note that the EIU report came just a few weeks after a Budget which focused on fostering inclusive growth, with the much-praised Pioneer Generation Package as its cornerstone.

The study provoked a host of responses online and offline, ranging from those who called the survey "completely irrelevant" to ordinary Singaporeans while highlighting its methodology, to others who used it as a convenient trigger for government bashing.

The buzz also spread to Parliament on Wednesday, when Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said such surveys which focus on expatriates do not reflect the living costs of Singaporeans.

First, currency. The strengthening of the Singapore dollar has made this place pricier for expatriates paid in foreign dollars but not for locals.

Second, the kinds of goods and services included in the survey are "quite different" from those used by average Singaporeans.

A close look at the 400-odd items in the EIU consumption basket throws up several which will not apply to a vast majority of Singaporeans - Burberry-style raincoats, international school fees and Cointreau liqueur being the more obvious. But the basket also includes a substantial number of everyday items such as chicken, cinema tickets, toiletries, Coke, fresh fruit and vegetables, and taxi fares.

Basket contents aside, I believe the EIU report attracted such widespread attention because it strikes a chord with locals for whom the cost of living is probably foremost in their minds.

The price of my baby's milk powder rose from $39.90 to $47 in six months.

Now, I pay nearly $20 for a KFC meal for two, compared with just over $10 several years ago.

I saw the neighbourhood noodle stall raise its price from $2.50 to $3 while reducing the number of wantons.

Shrinking hawker food portions coupled with rising food court prices and soaring medical bills - my infant daughter's bout of viral fever cost $200 to treat - mean I feel increasing pressure for my income to grow to keep pace with price hikes.

Rising costs are part and parcel of positioning ourselves as a global city, which also results in better job opportunities as more large corporations expand here.

As Singapore grows in prominence regionally and internationally, the law of supply and demand will result in soaring prices as demand rises and incomes go up.

Moreover, economists note that Singapore has also emerged stronger from the global financial crisis relative to other major cities such as London, New York and Tokyo.

Several readers have also noted that there are aspects of the so-called "expatriate life" to which many ordinary Singaporeans aspire, such as owning a car, living in private property, dining in good restaurants, watching a concert or play, and being able to afford branded clothes.

Tied in to these aspirations is the overriding goal of our pioneer generation: that their children and grandchildren can lead better lives than they did.

But the rising cost of living results in the growing realisation that the Singapore dream of the five Cs - a pile of cash, credit cards, a car, a condominium and a club membership - is increasingly out of reach.

A new car can easily set one back by $100,000 or more, while even a modest condo unit will cost more than $1 million.

This recent reality seems harsh for a generation which finds that securing a good university degree and landing a decent-paying job no longer guarantees the finer things in life.

Law and Foreign Minister K.Shanmugam said last year during a Singapore International Chamber of Commerce lunch dialogue that the "step-up ladder progress" from small flat to condominium to private landed property is "not so easily available" any more.

He said: "At one time, 5 per cent went to university. So if you had a degree, you're guaranteed that you'll have a nice house, to put it in very simple terms.

"Today, 27 per cent go to university, and our landed stock is less than 5 per cent."

I recall interviewing a couple in their early 40s last year who bought a five-room flat in Serangoon in the mid-1990s with a Housing Board loan of around $194,000.

They were able to pay it off in seven years without scrimping and sacrificing their spare cash, while still being able to afford overseas family holidays with two children and own a car.

These days, with HDB flats in mature estates that easily cost above $400,000, paying off a mortgage in under 15 years without compromising one's quality of life has become much more difficult. And it is more likely to require two incomes instead of one.

I recognise that there are limits to what any government can do as Singapore becomes a global city and competes with the likes of Hong Kong, Tokyo, London and New York for talent.

But bearing in mind local aspirations while growing Singapore as a prominent city is something policymakers here have to grapple with.

As for me, I reckon it's about finding my level of contentment in an increasingly cosmopolitan and costlier country, and recognising that I can be contented without being complacent or lazy.

There is a story of a rich businessman who was troubled to find a fisherman sitting beside his boat after a hard day's work.

"Why aren't you out there fishing?" he asked.

"Because I've caught enough fish for today," said the fisherman.

"Why don't you catch more fish than you need?" the wealthy man asked.

"What would I do with them?"

"You could earn more money and buy a better boat so you could go deeper and catch more fish. You could purchase nylon nets, catch even more fish, and make more money. Soon you'd have a fleet of boats and be rich like me."

The fisherman asked: "Then what would I do?"

"You could sit down and enjoy life," said the businessman.

"What do you think I'm doing now?" the fisherman replied as he looked placidly out to sea.

"I'm already enjoying my life."

This story was first published in The Straits Times on March 7, 2014

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