Whether in closed Hong Kong or open Singapore, the rich have economic immunity to Covid-19. It’s the poor who suffer

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  • The two cities have opposite tactics in fighting the pandemic, yet face parallel problems: growing frustration at their restrictions and increasing rich-poor divides
  • While blue collar workers battle job losses and inflation, the middle classes spend their way out of frustration. In Singapore, they book trips abroad. In Hong Kong, they paint the town red

Singaporean father of three YJ works as a warehouse supervisor and used to earn an additional S$1,000 (US$730) a month setting up banners and dismantling fixtures at trade shows and events. That vanished when Covid-19 hit and international travel stalled last year.

With Singapore now opening its borders to 21 places – offering vaccinated residents and tourists the option of quarantine-free travel – and the return of large exhibitions and conferences, the 49-year-old is hopeful that the lost work will return.

Meanwhile, the sole breadwinner of his family is clawing back lost income through food delivery shifts and his family is cutting back on expenses by eating home-cooked meals, dining out only “on special occasions” and going to the beach for recreation. Travelling – via the vaccinated travel lanes to places where returnees do not need to serve quarantine – to escape stop-start domestic curbs is not an option. For about five months this year, social interactions were limited to two people. Now, people can gather in groups of up to five and receive five visitors at home each day.

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In Hong Kong, where there are minimal restrictions on social interactions but international borders are essentially closed, single mother Chau Ching, 52, is wondering when she can return to a job she loves. The former tour guide who used to earn over HK$20,000 a month, found herself out of work after the anti-government protests that roiled Hong Kong in 2019 put off mainland Chinese tour groups. Then Covid-19 hit, destroying the inbound tourism industry that used to contribute roughly 3.5 per cent to the city’s total GDP.

She is now a freelance events security guard, standing for up to 12 hours a day to bring home around half her usual monthly pay cheque. The amount is just enough for her to pay the rent for her public housing flat, meet food costs that are inching upwards in Hong Kong and elsewhere and support her family. Her 23-year-old daughter is still at school, and her elderly parents live across the border in Shenzhen.

“I’m miserable,” Chau admitted.

“Working as a security guard is very tough for me. I miss the times when I could happily escort mainland tourists and chit-chat with them. But I have no choice. I need to survive.”

© Provided by South China Morning Post A restaurant in Kwun Tong, Hong Kong. The city does not have the same restrictions on eateries as Singapore. Photo: Winson Wong

YJ and Chau’s stories reflect how the rival business hubs’ divergent approaches to managing Covid-19 have exacted a similar mental and emotional toll on residents, albeit in different ways.

Singapore’s border reopening efforts offer hope for a broader economic recovery but its months-long domestic restrictions to prevent an explosion of cases that would overwhelm the health care system have weighed heavily on its 5.45 million residents. The city state has an average of 1,600 to 2,000 new infections a day.

In contrast, Hong Kong has offered residents more freedoms with hardly any local cases in months. But its border restrictions through lengthy hotel quarantine requirements on returnees have sparked exasperation and angst from foreign residents, who make up almost 10 per cent of the city’s 7.5 million people.

Inevitably in both cities, blue collar and service industry workers are facing both income and inflation pressures, while those with steady jobs and incomes have found outlets to release pent-up frustration. About 94 per cent of eligible Singapore residents are double-jabbed and can jet off to places from Switzerland to Italy to South Korea, where they can eat in larger groups and wander around without face masks. In Hong Kong, which has struggled to boost its vaccination rate (now at 70 per cent), dining establishments can seat up to 12 people if both staff and patrons are fully or partially-vaccinated, bars and karaoke bars have reopened, though at reduced capacity, and there are no rules on the size of gatherings at private spaces like homes.

Singapore still hoping for travel bubble with Hong Kong

With temperatures dipping into the teens this past week, Hongkongers have flocked to country parks and gathered for hotpot dinners. Thousands have since visited the new Ocean Park Water World that opened in September with nine action-packed water slides. The retail scene has changed from catering to tourists to local tastes. While luxury retail chains have been steadily closing down in core shopping districts, the number of restaurants and food and grocery outlets has grown nine per cent during the same period, according to the research arm of real estate agency Midland IC&I Ltd.

A Bloomberg report this month found the number of restaurant reservations booked in September in Hong Kong was up almost 250 per cent compared to the same month two years ago, before the pandemic hit. This was according to data from SevenRooms, a restaurant management platform that works with more than 350 of Hong Kong’s high-end eateries. In Singapore, where the restaurant industry has been rocked by stop-start curbs on dining in this year, reservations were up 76 per cent for the same period. The city state now has a third three-star Michelin restaurant and this year won the most number of restaurant stars since the guide began doing rankings there in 2016.

© Provided by South China Morning Post Passengers from Singapore arrive at Melbourne International Airport. The Southeast Asian city state has opened its borders to 21 places, unlike Hong Kong which remains largely closed to the world. Photo: EPA

Economic immunity, for some

Hong Kong resident May Chan, 50, knows she has had it relatively good. She runs a small consultancy firm providing communications and training services to clients such as listed companies and public organisations and has managed to maintain an income of over HK$50,000 a month. She’s paid off the mortgage on her flat and has an extra property for rental investment. Business would be better if borders were open, she mused, as her events could involve professionals from the region.

But, she conceded: “I am doing OK. At least I’m not worse off than before.”

The lack of mainland Chinese and other tourists – Hong Kong was visited by 55.9 million tourists in 2019, a figure that dropped to 3.57 million in 2020 – has also offered Chan the opportunity to “rediscover” Hong Kong’s museums and malls that used to be packed with people.

“I used to stay at home on weekends and wouldn’t dare to go out because it was so crowded. But now, I’ve taken this opportunity to go around Hong Kong and enjoy good food. I can still lead a comfortable life here despite the restrictions,” she said.

A closed Hong Kong is poorer than it thinks

Similarly, Singaporean tech firm worker Lee, 25, who travelled at least twice a year before the pandemic, has been quick to embrace her country’s “living with Covid” plan. When Singapore announced that one of its first two vaccinated travel lanes would be with Germany, Lee, who declined to give her full name for privacy reasons, immediately bought an S$800 air ticket to Frankfurt. She is in southern Germany for a two-week holiday with her parents, and expects to spend another S$1,500 on the holiday.

“Ultimately, I’m just excited to have a change in scenery for a short while,” said Lee, who was looking forward to winter weather and Christmas markets.

It is really quite obscene that fine dining restaurants are fully booked … while some people are not able to eat three meals a day
Stephanie Chok

A report by Singapore non-profit group Beyond Social Services this February said it was clear the privileged in the city state had some “immunity” against the severe disruption of economic activity during the pandemic. Swiss investment bank Credit Suisse, in its 2021 Global Wealth Report, found that 5.5 per cent of Singapore’s total population last year were millionaires, the second-highest in Asia after the 8.8 per cent figure in Hong Kong.

For “communities already on the margin” though, movement restrictions had had a large financial impact.

For example, when the city state had its circuit-breaker or partial lockdown from April to June last year, most shops were shut and residents remained at home. But staying safe comfortably, eating regularly and working from home were “marks of privilege” that were out of reach for families on the margins, the report said.

Most of these people were engaged in low-paid and precarious forms of work, such as cleaning, retail and food delivery, and were more likely to be laid off or placed on unpaid leave.

The Singapore government stepped in with four budgets last year, committing close to S$100 billion in support measures to tide businesses and residents over, including grants for those who lost their jobs. While more community initiatives to distribute free food have sprung up in Singapore, donation rates decreased by almost 20 per cent compared to pre-pandemic levels, a recent study found, with former donors saying that financial constraints were a barrier to giving.

© Provided by South China Morning Post Travellers near the Rain Vortex at the Jewel Changi Airport mall in Singapore. Photo: EPA

Independent researcher Stephanie Chok, the lead author of the Beyond Social Services’ report, said the situation for lower-income families this year had not improved substantially because the disruptions had not ceased.

The fluid loosening and tightening of curbs, she said, had affected low-wage workers more.

“It is really quite obscene that we are seeing reports about fine dining restaurants being [fully booked] for months or how the luxury car market is soaring … while at the same time, there are people who are not able to eat three meals a day,” she said.

She was concerned that the widening rich-poor divide – the Gini coefficient, a broad based measure of wealth inequality, was 78.3 per cent last year, higher than Japan’s 64.4 and South Korea’s 67.6 – would further entrench and cement these inequalities.

Nelson Chow Wing-sun, emeritus professor of social work and social administration department of the University of Hong Kong, said there was a growing trend of Hongkongers moving down the career ladder by taking up lower-level positions or unskilled jobs with lesser pay.

“Some young flight attendants lost their jobs and then they switched to being a waitress at a local restaurant. The same goes for tour guides, many of whom have become security guards now while older security workers are now doing cleaning jobs,” he said.

“This is a growing phenomenon where educated people now give up on their expertise to look for lower-paying and unskilled jobs. Amid the pandemic and a restrictive policy, people’s choice of work is very limited.”

The gap between the poor and rich has remained large. In the second half of this year, some 11 per cent of the city’s 3.64 million workers earned less than HK$5,000 per month while 11.7 per cent earned over HK$50,000, according to government statistics. The median or midpoint of monthly household income is HK$26,200.

The poverty issue

In the Beyond Social Services report, Chok had proposed several policy changes, including implementing a minimum wage. While the country currently has a so-called progressive wage model policy, she pointed out that there were several gaps, such as how it only covers Singaporeans and permanent residents, leaving out low-wage foreign workers. She also called for greater rental and debt relief for the less well-off.

In Hong Kong, Chow suggested the government look not just at short-term relief measures – such as a HK$36 billion scheme earlier this year offering one-off cash handouts to permanent residents to encourage them to spend locally – but move to address the larger problem of poverty. More than one in five Hongkongers, or 1.65 million people, were living in poverty last year, the most since record-keeping began 12 years ago.

The government should reconsider introducing a universal pension scheme for Hong Kong
Nelson Chow Wing-sun

“The government should reconsider introducing a universal pension scheme for Hong Kong to address the poverty issue,” said the academic, who has advised the government on retirement issues since the 1980s. “There is a big loophole in the existing Mandatory Provident Fund scheme where housewives and the jobless are excluded.”

Chow said the Hong Kong government should also increase the statutory minimum wage for workers, now standing at HK$37.5 per hour. Workers earning the minimum wage usually have a monthly salary of slightly over HK$8,000. “A worker should have earned at least HK$12,000 a month to be capable of coping with his or her living expenses,” he said.

Community organisers have also urged the government to redraw the poverty line, saying it is now set too low – at HK$4,500 for one person and HK$10,000 for two-person households respectively. Coupled with the effect from school closures in the past two years, younger people from poorer families would find it harder to catch up, they said.

Selena Ling, an economist at OCBC Bank, said the outlook for next year was more positive and the move towards regional border reopenings and relaxation of lockdowns could “lend itself to an improvement in overall business and consumer confidence within Asia”.

The question now was whether governments would be able to pivot back to addressing medium-term structural challenges, including growing income inequality, she said.

Economist Simon Lee Siu-po, co-director of the international business and Chinese enterprise programme at Chinese University, said Hong Kong’s economic recovery, though proceeding apace, had slowed slightly.

In the first nine months of 2021, Hong Kong’s gross domestic product (GDP) grew 7 per cent year on year, exceeding the government’s forecast of between 5.5 per cent and 6.5 per cent on a full-year basis. But growth in the third quarter decreased to 5.4 per cent year on year.

“The robust growth in exports has tapered off while other self-sustaining sectors such as the financial, service and catering industries have hit a bottleneck,” he said. “Due to the lack of tourists to Hong Kong, relevant sectors such as tourism, aviation and retail, have been stagnant and struggling for survival.”

While unemployment in the city – which peaked at 7.2 per cent between December last year and February this year – has since come down to 4.3 per cent, the figure remains higher for the retail and catering sectors, that together employ about one in eight of all Hong Kong workers.

People are becoming less tolerant of anti-Covid-19 measures
Simon Lee Siu-po

The “Come2HK” scheme, launched in September for up to 2,000 mainland travellers to enjoy quarantine-free entry into Hong Kong, had only limited impact. Danny Lau Tat-pong, honorary chairman of the Hong Kong Small and Medium Enterprises Association, said his members who lived across the border were not as enthusiastic about the scheme given that the quarantine-free arrangement was only one-way and they still needed to do two weeks of quarantine back on the mainland.

Hopes are now pinned on a full reopening of the border between Hong Kong and mainland China as early as next month. Final details are being fleshed out, including the requirements needed to offer quarantine-free travel.

Lee said retail and catering workers had endured pay cuts to keep their jobs but “their quality of life and living standard are getting worse”. He felt it was risky for Hong Kong to rely solely on the mainland China market and local market for economic recovery. The government should act before multinational firms turned to other places with more open borders such as Singapore, he said.

“People are becoming less tolerant of anti-Covid-19 measures. The Hong Kong government needs to weigh up the pros and cons of sticking to a restrictive anti-Covid-19 policy,” he said.

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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.

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