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Thursday, January 17, 2008

Social Enterprise 2a

In the 1960s and 70s, Singapore was a poor country and there were many who hawked their food by the streets. It was untidy and posed a threat to public hygiene and environmental pollution. The government recognised that and built "hawker centres" with clean tiled cubicles, water supplies and sanitation to house these food stalls. Rents was nominal, food was cheap and delicious. Gangster extortions from the hawkers were also wiped out by the late 70s.
Then in the 1980s, it became difficult to get a stall in the hawker centres and aspiring hawkers had to rent their stalls from coffee shops, which charges a higher rent based on market forces. Demand for these stall space was good and that created a bid for coffeeshop space. The bids went higher and higher. Sometimes to absurd levels and it was obvious that they were economically not viable. But still the high daring bids went up and up, which lead many to suspect that money from the black economy was involved. Food was afterall a cash business. Sorry we don't accept credit cards or cheques! :)
Around that time, a Singaporean company called Food Junction, started the concept of foodcourt, which is an air-conditioned clean environment which employs cooks and attendants rather than renting them out stall cubicles to independent hawkers. So for the first time, for a higher but moderate price for your plate of food, you can enjoy it in air-con clean comfort. Quite a good deal, but the food is usually lousy compared to those sold in original hawker centres. With economies in scale, food items like chilly paste, fish balls, and sauces are no longer 'home made', but factory produced.
Fast forward to the 2000s, rents for foodcourts have become so high that they have to cut down on the operating costs by hiring cheap labour from China as stall attendants and cooks. Prices have also risen to meet the higher rents, but quality of food has dropped further. Some traditional and lower priced categories of food like goreng pisang, pudu mayam and peanut pan cakes have gradually disappeared, as they are not profitable enough. Stall attendants being from China do not speak English and Malays and Indians have to use sign language to order their food. In other words, the eating out culture and experience in Singapore has changed, with some food dishes gradually going extinct and the necessity to speak Chinese.
Market economy has its limits and perfect market does not exists, because perfect knowledge does not exist, fair access to information is impossible and not everyone has the same amount of capital to start a business. It is quite hard to bid against the big boys when you don't have much money.
Market forces does not take care of public infrastructures and the needy. Also some institutions cannot be based on market forces. For instances, would we want to allow foreigners to stand as candidates in our Parliamentary General Elections? If they are from China, probably they can be cheaper too! We can save some million dollar salaries! :) Or do we want a private army or private police force? Some things just couldn't be privatised.
What we need is a going back to building more government hawker centres, where rents are cheap, food prices are low with delicious food cooked by independent local hawkers. It will also bring back employment to the less educated and lower rungs of the society. This I think, is one of the social enterprises Singapore needs now.

1 comment:

Muhd Imran said...

I never saw it from this perspective before. I think you're right.

It is like a budget food-court just like budget airlines... it can still be a big and viable business without over-killing the people.

How do we get this mooted-out and started is another matter.

Good post. Have a good weekend.