Each week, TODAY’s long-running Big Read series delves into the trends and issues that matter. This week, we look at the increasing number of ultra-high-net-worth individuals in Singapore, and whether this has any social consequences. This is a shortened version of the full feature, which can be found here.
The retiree is one among a growing number of UHNWIs in Singapore.
According to a report by real estate consultancy Knight Frank released late last month, Singapore’s population of UHNWIs saw a 6.9 per cent increase to 4,498 in 2022, up from 4,206 in 2021.
This, even as the global population of such ultra-rich individuals declined by 3.8 per cent in 2022, compared to the year before.
The report also predicts that Singapore will witness a 17.7 per cent growth in its UHNWI population to around 5,300 by 2027.
WHY IT MATTERS
Economists said that the ultra-wealthy are drawn to Singapore due to well-known factors such as the island’s continuing stability, even at the height of the Covid-19 pandemic, and the lack of an explicit wealth tax compared to other jurisdictions.
Certain government incentives for the UHNWIs to expand their business activities here also serve as a magnet for them.
From an economic standpoint, the Government has signalled that the ultra-wealthy who come here should preferably create jobs and opportunities for Singaporeans, and on a large scale.
For one, the Government has tightened requirements for eligibility to the Global Investor Programme (GIP), which allows individuals to apply for permanent residency (PR) under the scheme.
The GIP, first introduced in 2004, used to grant PR status to eligible foreigners who invest at least S$2.5 million in a new or existing business, but this figure has been raised significantly to S$10 million, inclusive of paid-up capital, since March this year.
The higher investment requirement is indicative of how seriously the Government views the UHNWIs’ potential to contribute to Singapore’s economy, said CIMB Private Bank economist Song Seng Wun.
“Clearly, the Government wants to see track records,” he said. “If an individual says that he can contribute to the Singapore economy, then show me.”
However, the most effective way that these UHNWIs can help Singapore is not just in creating jobs for Singaporeans, but also in helping the less-fortunate.
Should their businesses create jobs only for the upper-middle class for instance, this would mean that only one segment of society progresses, while others are left behind, said Mr Song.
“Finding the balance is making sure that not just one or two segments of society benefit, but across the board, including the lower income benefit as well,” he added.
This can be done through not only creating jobs for diverse segments of the population, but also via philanthropic work and setting up of charities or scholarships for the less fortunate.
THE BIG PICTURE
Despite the economic gains, having a significant number of UHNWIs among the population may, from a sociological perspective, give rise to several challenges.
Given Singapore’s size, sociologists said it is inevitable the ultra-rich and the average Singaporean will interact often, and there is a risk that some of these encounters may not be pleasant.
While the ultra-wealthy retiree appeared to get along well with the shopkeepers at Empress Road Market & Food Centre, not all of the ultra-wealthy are as friendly, said the stall owners.
Though most of their high-net-worth customers treat them with respect, there are a few “bad apples”, they added.
For instance, Mr Chan Teck Chye, an owner of a vegetable stall at the market, said that there are some affluent customers living around the area who behave rudely.
He claimed that some of these customers would also engage in name-dropping, boasting about their connections to well-known people, or turn snobbish by saying things like “do you know who I am?”
However, Mr Chan added that such rude customers are few and far between.
Singaporeans whom TODAY spoke to said it is imperative that the UHNWIs do not flaunt their wealth, and also treat those around them with respect regardless of financial status.
“I think the (UHNWIs) should not exacerbate their class differences because they have to empathise with those less fortunate around them,” said Ms Sandra Choong, a resident at d’Leedon, a condominium along Farrer Road close to several landed property estates.
“Maybe they can’t help to wear branded goods and drive nice cars, but at least they should not put down others, the way they talk is the most important,” said the 44-year-old.
It is hence important for the UHNWIs here to note that there is a prevailing “culture of restraint” in Singapore, said sociologists.
Prime Minister Lee Hsien Loong said in Parliament in 2018 that the general tone of Singapore regarding the flaunting of wealth is “one of restraint”.
“We must discourage people from flaunting their social advantages. We should frown upon those who go for ostentatious displays of wealth and status, or worse, look down on others less well-off and privileged,” he had said.
“We should emphasise our commonalities, not accentuate our differences.”