Monday 18 November 2013

Tackling poverty the 'kuih lapis' way

A multi-layered approach tailored to the diverse needs of poor families can lift them from their 'dark valleys'.
By Robin Chan And Ong Hwee Hwee, The Straits Times, 16 Nov 2013

BLUE, green and red pen markers in hand, Minister for Social and Family Development Chan Chun Sing drew up a chart on a big sheet of paper, like an economics professor explaining a concept to his class.

He had called for the interview at the office of his ministry last Friday in the hope of resolving once and for all a contentious debate over how best to help the needy.

First, he makes it clear, any measure - be it the Gini co-efficient that tracks income inequality, or an absolute or relative poverty line to measure the number of poor - has its flaws or quirks and can give a very false picture of the situation in a country. So approach with caution.

Second, any solution to helping those in need must go far beyond the numbers as each individual and family has complex problems that numbers cannot decipher.

Singapore's approach too cannot be too simple. A single definition of poverty such as a poverty line based on a fraction of median income may create more problems than it solves, he says.

Instead of a single poverty line or even a single layer of assistance, Singapore favours giving multiple lines of assistance to help Singaporeans across the spectrum, in help schemes that are layered and overlapping with one another.

Pointing to the chart which he had just drawn judiciously, he pronounces matter-of-factly: "The kuih lapis."

In front of him are 18 layers of different sizes - from the largest running the entire length of the x-axis to the smallest, representing how many Singaporeans benefit from the myriad government schemes.

Each layer represents the various types of benefits handed out by the Government to Singaporeans from different income groups.

Going down the list, he says: "100 percentile for education, 80th percentile for housing, 67th percentile for some of our schemes like childcare subsidies." He is referring to the proportion of Singaporeans who qualify for each of these subsidies.

"Next, you have Workfare. Then you have the national ComCare assistance scheme, followed by Public Assistance."

Workfare tops up the income of workers earning less than $1,900 a month and ComCare provides short- and medium-term assistance for those who are temporarily unable to work and have a monthly household income of $1,700 and below or a per capita income of up to $550.

Public Assistance (PA) is for those who cannot work and have no family support, usually the elderly. A single adult gets $450 a month, while a household of two adults and two children gets $1,480.

What this all means is that while Singapore has no official measurement of what constitutes poverty here, there are in fact many yardsticks as indicated in his hand-drawn, rainbow-coloured kuih lapis.

"This is our philosophy of having multiple lines of assistance across the entire spectrum rather than having one line," he says.

Does the line help? THE "one line" refers to the poverty line, a topic which has generated renewed interest after Hong Kong - often compared with Singapore - said yes to it after resisting such a move for years.

In September, the Hong Kong government drew its official poverty line at half the median household income level. In one stroke, about 1.3 million people, a fifth of its population, are now deemed to be living under it.

The poverty line is HK$7,700 (S$1,240) a month for a two-person household and HK$14,300 for a four-member household.

The question of the poverty line has also been raised no less than three times in the last two months by different MPs - Non-constituency MP Yee Jenn Jong, and Nominated MPs Laurence Lien and Tan Su Shan.

On Monday, the Lien Centre for Social Innovation released a paper that called for more measures of poverty, using absolute, relative and subjective methods.

The paucity of data, in their minds, raises the question of whether sufficient government resources are being targeted at the right people who need them most.

Mr Chan does not disagree with them philosophically, but he does not care for "all the academic definitions".

"Does it help you to identify who are the poor who really need help? And does it help you to focus your resources? That's my acid test."

His answer is that one line does not present the best way to do so.

Armed with charts drawn on the spot and meticulously prepared tables loaded with data, the economics-trained minister builds his case.

To him, one line does not help because "who is poor and why they are poor is a multi-dimensional issue". The line can also result in mathematical quirks.

A line that is defined as 40, 50 or 60 per cent of the national median income, will, by mathematical definition, always yield one "magic number" under which everyone is considered poor.

But if the median income rises very quickly because the whole economy is doing very well, then Singapore ends up with more relative poor by the definition of the line, he says. "So now does that mean that in that situation, we should have more resources spent on that?" he asks.

On the other hand, if the median income is declining because the economy is contracting, then Singapore actually ends up with fewer poor as defined by the poverty line.

"Then does it mean we need fewer resources to take care of these people?" he says.

"It's paradoxical. So I'm not saying that it's not useful. I'm just saying that before we use it, we must know the quirks and interpret the thing."

Rather than one figure, Singapore's approach is to look beyond the numbers when identifying who needs help, to understand the causes that lead to people needing help, otherwise "you don't get any policy prescription that treats the symptoms and the root cause".

"That's my fear," he says.

In fact, in countries like the United States and Britain, where an official poverty line has been drawn, he says, the line has yielded more problems than solutions.

The US tried to define a line but found that it has no practical value because it did not help the authorities to identify who are the poor or help them to know what to spend more on, said Mr Chan.

Neither has it helped the British government be more varied and more targeted in its assistance, he says.

"They realised that actually (having multiple lines) is the correct thing to do. And if that's the case, actually every society requires multiple lines."

The US has an absolute poverty threshold set at three times the cost of a minimum food diet in 1963. This is updated annually for inflation. But this absolute measure has been criticised for being outdated and a simplistic statistical exercise as it has also tended to have fluctuating numbers of poor, depending on recessions and economic booms.

Who are the poor?

BUT having debunked the usefulness of the poverty line, questions still remain: Who exactly are the poor in Singapore and how many of them are there?

To that, Mr Chan says there are two groups that need help the most.

One is the temporary poor, those who for different reasons fall into hardship. They can be helped out of poverty through some temporary assistance such as ComCare.

The second group is the one that is more worrying and most challenging for the Government. These are the people who are poor for a very long time and have a problem getting out - the chronic poor.

Here, the problem is much more complex to understand because their poverty could be because of many factors such as drug abuse, poor financial management or ill-health.

And it is more worrying if they are young, Mr Chan says, because they and their children could get stuck in a cycle of poverty.

"You can be poor in one generation, but you must not be poor in every generation," he says.

Stabilising these families is not just a matter of transferring money to them, but requires a multi-faceted approach from sorting out their housing situation, to helping them get a job and making sure their children go to school.

This is to give them "holding power" so that they do not fall back into the cycle, he emphasises.

"We are not talking about a one-year or two-year problem. These are the people that require five to 10 years of assistance to get them out of the dark valleys", he says.

"And on top of that, we are not talking about just money... We are talking about having enough volunteers to come and hand-hold them and mentor them out of the situation. That is our greatest challenge."

Which is why his ministry will be launching a coordinated approach to package help for this group of what the Government calls "vulnerable families".

They will start with "the most intense cases", such as families who end up in trouble because of drug problems. Help will be extended to others.

But when asked how many such families there are, Mr Chan declines to give a figure, saying he would rather not draw a line at where the help will stop.

Complicating matters is that there are still people who likely need help but fall through the cracks and do not show up in any statistics - the "false negatives" or people wrongly identified as not needing help, who would actually benefit from it.

"You try to reach out to as many as you can but there will be some who don't want your help for pride or other things. Then you have got to be very careful," he says.

"But you don't want to end up in a situation whereby people are saying, 'Okay, I can't get help because the system is very complicated or I can't get help because it's not coordinated or people complain that the help is going to a group of people who are less deserving from the rest.' But those are value judgments that you have to make."

He admits that having a poverty line or focusing on numbers might actually be more politically palatable, but he says it would be simplistic and disingenuous.

"Let's say today we have 3,000 PA candidates, and tomorrow I have 2,500, should I pat myself on the back? It gives you comfort, right? But is it true? Overnight. Is it true? Where did the 500 go? Have they died?"

And if a group of people has moved out of a particular line of assistance, it does not mean they no longer need help, he adds.

"I don't want to be politically expedient. I understand it is easy to have a (politically) correct headline, but that is not what I am here for, and I hope I never get into that position. We continue to do useful things, continue to do purposeful things for the people, whom we care for, not just because it's expedient to do so."

Instead, his true mark of success is in continuing to raise the middle-income level and prevent people from falling into poverty in the first place.

"Your question is how many people are there (in poverty)? My question is how many people have I avoided getting there because they have jobs, because they have housing, because they have medical care. That is the real big question to ask."

Not "social astronomers"

MR CHAN says while he welcomes the debate on how to better reach out to those living with less, he hopes that Singaporeans will not lose sight of other challenges confronting the nation, some of which are driven by global forces such as competition and technology.

The critical challenge, he says, is looking for ways to grow the income of the middle class, so that "today's middle income" will not end up as "tomorrow's bottom".

Calling it a problem faced by most countries in the developed world, he notes: "If you look at the middle class in the United Kingdom, the real median income has not changed... In Taiwan, it has slowed down. And in Hong Kong, it has stagnated. Singapore has done relatively better. There is still some growth."

While there will likely always be an income gap - a fact of life given Singapore's fate as a competitive city-state attracting top talent - he acknowledges that "if the gap opens up too big, it makes for an unstable society and it is not good for people".

The Government's approach to this is five-pronged - providing jobs, education, health care and transport, and using social transfers as the "last line of defence".

But Mr Chan also hopes that the debate on the plight of the poor here will go beyond just talk as his concern is in finding enough hands to help.

Asked about the Singaporeans Against Poverty campaign led by Caritas, the charity arm of the Catholic Church, which aims to raise awareness of the situation of those living with less, he says: "I have no issue with people creating more awareness but I hope it does not stop at that. I say don't be social astronomers.

"Go beyond discussing the one line or many lines. Come forward and do something, and understand how we have structured the system to take care of our people.

He says that it is not an indictment on anybody that Singapore has poor people - every society has them.

"But the circumstances don't define us. Our responses to the circumstances define us. That's the message we want to give. So I hope people don't ask, 'Are you hiding (poverty), do you not dare to define it?' No, what's there to hide? You want to know, I will tell you everything."

Does it help you to identify who are the poor who really need help? And does it help you to focus your resources? That's my acid test.

- On whether the one poverty line is the best way to help those in need

They realised that actually (having multiple lines) is the correct thing to do. And if that's the case, actually every society requires multiple lines.

- On what the Americans and the British learnt after drawing an official poverty line

You can be poor from one generation but you must not be poor in every generation... We are not talking about a one-year or two-year problem. These are the people that require five to 10 years of assistance to get them out of the dark valleys... That is our greatest challenge.

- On the need to prevent children of poor families from getting stuck in a cycle of poverty

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