① Singapore’s Certificate of Entitlement
Singapore is the country with the highest cost of living globally. In this country, if you want to buy a car, you must pay over $80,000, separate from the car price.
This is the Certificate of Entitlement (COE). Singapore, being a city-state, limits the number of vehicles within its small national territory to prevent traffic congestion through this COE system.
The Singapore government restricts the supply of this certificate annually to maintain a 0% vehicle growth rate. In other words, a set total amount of cars can be supplied, and registration is impossible beyond that.
Those who wish to purchase a vehicle must participate in a public auction to buy a certificate with a set supply. If the demand from people wanting to acquire this certificate increases while the supply remains the same, the price of the certificate will inevitably rise.
The auction price of this Certificate of Entitlement has been breaking its highest records for several months in a row. The current minimum cost to acquire a certificate for one vehicle is 104,000 Singapore dollars, which is about $77,000.
This price has risen by 126% compared to last year. This is the lowest cost among the different certificate costs for each type of vehicle.
The most expensive certificate is the so-called ‘OPEN’ Certificate of Entitlement, which has no vehicle type restrictions. The cost of this certificate has also hit a record high, currently standing at 152,000 Singapore dollars, which is about $112,000.
After the pandemic, Singapore quickly recovered to pre-COVID-19 levels, and the tourism industry rebounded quickly. As the demand in the transportation industry, including taxis, increased with the growth of overseas visitors, the number of people trying to obtain the certificate increased, thus raising the cost.
② Southeast Asia, Cars vs Public Transport
The Certificate of Entitlement system, introduced in 1990 to reduce exhaust emissions and prevent traffic congestion, is now causing inconvenience to many people.
Due to the skyrocketing cost of the certificate, even households earning the average income in Singapore in 2022, which is 7,376 dollars a month (about $5,500), cannot afford a car. It takes years of saving in Singapore to purchase a vehicle.
Wong Hui Min, a mother of two in Singapore, complained, “It is very inconvenient always to have to take a taxi or use a shared vehicle to send my children to school and swimming lessons.”
On the other hand, some emphasize, “If you can’t afford to buy the certificate, you should use Singapore’s well-equipped public transportation.”
They argue that thanks to the Certificate of Entitlement system, they could avoid traffic congestion problems that occur in other Southeast Asian capitals.
Major cities in Southeast Asia, which have experienced rapid economic growth, are enduring daily traffic nightmares as countless people from rural areas flock to the cities.
The Association of Southeast Asian Nations has been making great efforts in investing in expanding paved roads, highways, and railways. However, it cannot keep up with the rapid urban population growth, economic growth, and increasing number of cars.
Among them, Thailand is infamous for being the worst Asian country for traffic congestion. In the capital city of Bangkok, there are not enough public transportation options like buses and subways, but there are many taxis and motorcycles.
Taxi and motorcycle drivers often do not obey traffic rules, and many are reckless drivers. This leads to frequent traffic accidents and even worse traffic congestion.
According to Inrix, residents in Bangkok waste an average of 64 hours a year stuck in traffic due to severe congestion. The average driving speed of cars in the city center is less than 6.2 miles per hour.
③ City and Nature in a Small Country
Singapore is one of the countries with the highest population density in the world. Despite being smaller than Jeju Island in South Korea, its population exceeds 6 million.
Singapore has seen a doubling of tourists this year. It has to accommodate a high population density and many tourists.
With the surge of tourists, the demand in the transportation industry, including taxis, has skyrocketed, and more people want to buy cars, but Singapore still maintains a 0% vehicle growth rate.
As a result, buying a car in Singapore has become even more difficult. Still, perhaps thanks to the limit on the number of vehicles, Singapore maintains essential aspects of a tourist destination, such as the aesthetics of an orderly city and convenient public transportation.
Despite being a small city-state, Singapore is well urbanized through planned development, but it also preserves nature very well, with half of the country’s territory being green space. If you want to experience both the city and nature, why not consider a trip to Singapore?
By. Seo Sung Min
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