The Big Read: Grumblings in the hawker centers of social enterprises

SINGAPORE: Natives are worried in Singapore's beloved peddlers landscape, with a multitude of problems plaguing what is one of the country's most important community spaces and social institutions.

Allegations of poor management practices, high rents and incidental costs in hawker centers run by social enterprises have made headlines in recent weeks, shortly after the announcement made by Prime Minister Lee Hsien Loong during National Day Rally a place for its peddler culture on the Representative List of the Intangible Cultural Heritage of Humanity of UNESCO.

READ: UNESCO's list can elevate hawkers' culture but saving it is a different challenge, a comment

In announcing his candidacy, Lee highlighted the special place occupied by hawker centers in the heart of Singapore, in addition to the important role they play in reducing the cost of living.

It was less than a decade ago, in 2011, when the authorities announced that they would start building more hawker centers, while the cost of living up and the lack affordable dining options in some subdivisions. The move comes nearly 30 years after the construction of the last colportage center.

A public consultation group on Hawker centers was set up in November 2011 to offer ideas on new hawker centers.

About five months later, he submitted to the government his final report containing a key recommendation – among other proposals – to allow social enterprises to run hawker centers. The proposals were generally accepted by the government soon after.

Defining a social enterprise as "a regular business that maximizes its profits to make a social impact," the panel suggested that the management models for the new hawker centers ensure that the community "maximizes profit", offers opportunities for social and economic development, and offers the best opportunities for business. employment to low-income and less privileged people. individuals, and help those who aspire to be in the food industry.

In addition to trying a new management model, the government has also organized training courses to encourage young people to become peddlers. Last year, the government accepted the recommendations of a Hawker Center 3.0 committee, which had been created to propose ways to improve hawker centers and promote trade.

These include launching a program of incubation booths for budding peddlers and boosting their productivity through centralized dishwashing services and cashless payment options.

Efforts to preserve the culture of hawkers here and keep the trade alive, while ensuring that Singaporeans have access to cheap food, are recognized by many. However, the growing discontent with the peddler management model in social enterprises could threaten to derail these efforts.

So much so that the National Agency for the Environment (NEA) has been commissioned to draw up an inventory of the model, announced Friday (October 19) the Minister of State for the Environment and Water Resources, Amy Khor, to the effect that errant operators would be taken care of. to the job.

Barely three years after the deployment of the social enterprise model in new hawker centers in Singapore, it has not kept its promises. The issues of concern to everyone are: where did everything go wrong? Are there any underlying issues to solve? What is the best way to go?

READ: Our peddlers deserve more, a comment

HOW IT STARTED

In recent years, some members of Parliament have expressed concerns about the social enterprise model applied to hawker centers.

Before the government announced that it had accepted the recommendations of the Hawker Centers public consultation group, Yee Jenn Jong, then a member of Parliament outside the constituency, was concerned that the "forces of the market take over the supply of social goods' does not lead to an increase in prices. consumers.

In her response, Vivian Balakrishnan, then Minister of Environment and Water Resources, cited the example of NTUC Fairprice, the "best performing cooperative" in the context of Singapore.

Noting that Fairprice has "fulfilled its social mission of ensuring that commodities and essential foods are sold at a reasonable price and create competition," Dr. Balakrishnan said:

What I hope to do by changing this policy of hawker centers is, first, to increase the number of places available. This should have an effect on prices, both in terms of rental and those charged by peddlers. That being said, I do not believe that the mere fact of reducing rents necessarily leads to a drop in the prices charged by hawkers.

He assured that the government "would certainly monitor the situation very closely". It would also keep an eye on "the evolution of these new generation hawker centers", to ensure that it does not deviate from the "original purpose".

In 2015, the authorities announced the construction of 10 more hawker centers over the next 12 years to moderate food prices. They will be located in new areas or in relatively underserved areas, such as Bidadari, Sengkang and Bukit Batok.

Later in the year, Kuik Shiao-Yin, a member of Parliament appointed at the time, worries about the concern aroused by the model of social enterprise, and asks how the NEA will ensure that operators of social enterprise reseller centers "do not take advantage of their position to profit unfairly. ".

In response, Dr. Balakrishnan stated that operators are "required to submit audited accounts and detailed management reports". The NEA will "ensure that the interests of peddlers, cleaners, hawkers' assistants and customers are taken into account," he said.

Some, including Mr. Jack Sim, founder of the World Toilet Organization, a global non-profit organization, believe that problems that hurt the sector can be solved early on.

Mr. Sim pointed out that the Hawker Centers public consultation group did not include many experts from hawker centers or food, and that there was not enough of hawkers involved. He said:

In the human-centered design, we must involve all stakeholders, and what has been done was a very top-down approach. This was not done democratically.

In its February 2012 report, the Hawker Centers Public Consultation Group stated that it had held seven formal meetings among its 18 members to deliberate on their recommendations on topics such as design and infrastructure. , dynamism and management models. He also "met with hawkers of different generations and members of the public and visited a number of hawker centers".

The committee was chaired by Elim Chew, founder of 77th Street, and included architects and senior representatives from NTUC Foodfare and Koufu (who operated a food court). There was a representative of the Hawkers' Association.

The panel proposed to ensure that social enterprises manage hawker centers on a not-for-profit basis, to ensure that the management model would be sustainable by providing affordable food. Prior to this, all hawker centers were managed by the NEA.

In the non-profit model, any operating surplus generated by a peddling center must be shared among its stakeholders, such as exhibitors, the manager and the NEA. It must also be used to create "benefits", and it can not go to the manager's shareholders.

Like the group of experts, the Hawker Center 3.0 committee, consisting of 14 members, also mainly included people with no direct experience with hawker centers. Chaired by Dr. Khor, the committee included members such as Rosa Daniel Daniel, CEO of the former National Heritage Council, Leslie Tay, blogger and generalist in the field of food, and Ms. Kee Ai Nah, who was then Director of SPRING Singapore's Industry and Business Group.

Several academics and educators from the National University of Singapore, Republic Polytechnic and Singapore Polytechnic were also involved. Dr. William Wan, Secretary General of the Singapore Kindness Movement, sat on both the committee and the Hawker Centers public consultation group.

To move forward, Mr. Sim suggested a public forum involving all stakeholders to resolve the issues.

"We have to work with the intention of finding better answers for hawkers, and not sticking to rules and normative models," said Mr. Sim, who believes that the management of all hawking centers should be returned to the NEA.

The first social enterprise hawking center, Kampung @ Simpang Bedok, closed in 2013 after a year due to weak business and lack of financial support.

Currently, 13 of the island's 114 peddling centers are run by five social enterprises: Fei Siong Food Management, NTUC Foodfare, Timbre Group, Hawker Management and OTHM.

Hawker Management and OTHM are subsidiaries of Koufu and Kopitiam, respectively.

Of these 13 centers, NTUC Foodfare took over the management of five existing centers – including NEA's Old Airport Road Food Center – in 2016.

SQUARE SQUARES FOR ROUND HOLES

Given that some social enterprises or their parent companies were previously involved in the management of catering courts or other types of restaurants, it is no wonder that some of the practices were imported – and it was not necessary. It has not gone unnoticed that what may have worked in these places, are failing in hawker centers that are not only larger in scope, but also have a greater variety of stalls held by people from all walks of life. backgrounds.

In other words, the standardization and centralization put in place by each operator to allow him to manage more efficiently the food courts or other restaurants do not necessarily work in the centers of peddlers.

"Some new hawker centers operate as food courts. That's why hawkers are upset … rental costs are rising … hawkers can not get their deposits back if they want to leave earlier, "said hawker Douglas Ng, 27.

Mr. Ng directs Fishball Story, which became Singapore's Bib Gourmand Michelin Guide in 2016. He started selling fishmeal and handmade cake dishes at the Golden Mile Food Center, and now has booths at Stamp + in the North, managed by Timbre Group – and the Hungry Bee Cafe in Geylang.

Since their arrival at hawker centers run by social enterprises, many hawkers complain of having been confronted with several problems they did not face in NEA-run hawker centers.

These include the requirement to apply for leave in advance if they choose not to open their booths, not to have the freedom to adjust the prices of food products and to pay for them. penalties "for the termination of their rental.

Other common complaints include the high rents and incidental costs that hawkers face in spite of the low attendance of these centers.

Hawkers from the Jurong West Hawker Center, led by Hawker Management, had asked the NEA to waive the 20-cent fee they must pay for each shelf used by a customer.

On Thursday, October 18, following a meeting with its tenants, Hawker's management announced that customers will soon have to pay a refundable security deposit of 20 cents for each used shelf.

A day earlier, famed food critic KF Seetoh, who had already written on the Makansutra website about the return program of trays to Jurong West, had posted on his Facebook page the copy of a contract with a merchant of the Hawker Center @ Our Tampines Hub.

The contract contains clauses indicating the amount of vegetables and calories from a dish and a fine of S $ 250 for each day of closing an exhibitor if he does not give a weekly notice approved by the manager.

At the Pasir Ris Central Hawker Center, run by NTUC Foodfare, street vendors surveyed said teething problems persisted for about 10 months after it opened in January, leaving more than 10 tenants leaving.

For example, 36-year-old Khaharudin Juraimi, who runs Burgernomics' halal hamburger stand with his trading partner, said some booths, including his own, were leaking hoods. The problem has not been solved yet, although they have repeatedly raised the problem with management, he added.

At the Old Airport Road Food Center, several peddlers who did not want to be named said that while everything remained about the same after NTUC Foodfare took control of the center, the cost of picking up the dishes increased by 40 percent. %, to reach 580 Singapore dollars.

42-year-old Daniel Goh, who runs the Smith Street Taps craft beer bar at the Chinatown Complex Food Center, said some of the aspiring food and beverage entrepreneurs he spoke to were eager to be cut off. Teeth in a hawkers center – until they discover that they would earn more. as a chain cook in a hotel, a job that usually earns around $ 2,000 a month.

A long-time hawker, Kelvin Ang, 52, said he would not want to work in a social enterprise hawking center.

"There are rumors among street vendors that sooner or later we will all be subject to this type of social enterprise management. We are all worried, "said Ang, who has sold braised duck dishes at the Block 724 Ang Mo Kio Food Center for more than three decades.

He pointed out that his peddler's association uses subcontractors to wash the dishes, and that the peddlers negotiate the prices themselves with the subcontractors.

Mr. Ang pays approximately $ 1,000 for table cleaning and dishwashing, in addition to rental fees, at his NEA-run hawker center. However, peddlers at centers run by social enterprises, such as Mr. Khaharudin, can pay twice as much in additional fees, in addition to higher rental fees.

"The NEA believes in the free market … it will not control prices. Everyone follows the same set of rules. But each social enterprise manages its centers differently; it's confusing, "said Ang.

While social enterprises and the NEA had previously indicated that all costs and requirements were known to retailers before signing their leases, CIMB Private Banking economist Song Seng Wun reiterated that some hawkers could not fully understand their contracts before signing them.

Make money against social goals

The recent debate has revolved around the perception that social enterprises make profits by charging high fees to their tenants.

Some also questioned the logic of introducing an additional layer of costs into the operation of hawker centers by integrating social enterprises.

The social enterprise model has "transformed a public good into a private good" and "added an additional management layer to the already price-sensitive market," said Sim.

As a result, hawkers are stuck in the middle, since they have to keep their prices low.

While the social enterprises that run the hawker centers are supposed to be nonprofit, the economists surveyed said they are not legally bound to operate on such a base.

This is different from charities, which are governed by the Charities Act and will lose their registration if they are operated for private purposes.

Mr. Donald Low, former associate dean of the Lee Kuan Yew School of Public Policy, said it "is only a label with respect to the law".

"They are registered as limited companies, according to the tax collector," he said.

NMP Walter Theseira felt that it was not logical to "consider social enterprises as different from for-profit privatized coffee shops, unless the social enterprise can prove the opposite".

"Some may be independent of their for-profit businesses and have strong controls to prevent self-enrichment. Others can not, "added Dr. Theseira, Labor Economist of the Singapore University of Social Sciences.

"The problem is that there can be private benefits and marketing to claim to be a social enterprise, and as such, you really have to look deeper to see what the real case is."

Mr. Song questioned the need to "proclaim that you are a social enterprise". He said:

We do not need to call anything. Consumers are only there for "makan".

Smith Street Taps, Mr. Goh, noted that some of the social enterprises that currently run hawker centers were set up by for-profit corporations.

"Waiting for them to run a" social enterprise "type of business is at least confrontational. What exactly is the social aspect of the social enterprise peddling center, aside from forcing hawkers to offer an inexpensive option to customers? ", Did he declare.

The five social enterprise operators were contacted to comment on the differences between operating a peddling center and managing other types of food outlets, such as restaurants, cafes, food courts, and the teachings. from the operation of a peddling center. Only Timbre group, which manages Timbre + and the Yishun Park Hawker Center, responded to requests.

Its managing director, Edward Chia, repeated that he had frequent dialogues with tenants to obtain information on operational issues and ideas. He also launched several promotions aimed at increasing attendance at lunch time and during off-peak hours.

Mr. Chia noted that the management of a hawker center is different from the management of restaurants and bars Stamp, because the first involves the management of tenants.

"Our team at Yishun Park Hawker and Timbre + will be looking for suitable tenants, working with tenants on operational issues, and providing marketing and communication support," he added.

"STOP THE CAPTURES OF FOOD PRICES, HELPING DIRECTLY THE CUSTOMERS NEEDED"

Industry experts and observers said there was no silver bullet to solve the hawkers' problems, but they felt the government needed to intervene differently to keep food prices affordable.

Song said aid should specifically target low-income groups, instead of cutting the cost of food in hawker centers. This could take the form of food stamps, vouchers or discounts. He added:

This requires taxpayer intervention … assistance to (low-income groups) can also be calibrated to reflect the cost of living on the bottom line. Singapore is small enough for this scheme to work.

Mr. Song also questioned the need for hawker centers of social enterprises to serve regular meals at a maximum price of S $ 2.80. If there was to be a ceiling on prices, he suggested putting in place a mechanism to adjust it regularly while keeping it affordable.

Dr. Theseira agreed that the issue of affordability of food should be addressed through increased financial assistance.

It is "very difficult" for hawkers – and social enterprises – to create meaningful jobs or create business opportunities, while providing cheap food to low-income Singaporeans, he added.

"It must be done at least on a break-even point. But this is simply very difficult to achieve in a context of fierce competition between government-run peddler centers where there are implicit rebates (usually from older peddlers who pay subsidized rents) and privatized food courts that do not. Do not have to worry about social goals, and so can choose where and how they work, "said Dr. Theseira.

The NEA-managed Hawker Centers could achieve both of these goals, he explained, since the government "is not under the same pressure to generate financial returns and is self-sustaining. , just like private companies ".

Low noted that the hawker industry generally had lower productivity growth than other sectors. This means that innovative processes, such as automation and machinery, will not do much to reduce the cost of peddlers' food.

"We should not ask hawkers to cut costs. We need to ensure that incomes rise for everyone at a rate as fast as the costs, so that everyone can afford to pay the rising prices of food products, "he added.

Dr. Theseira said there was no need to keep the price of hawker food within the reach of Singaporeans who could afford it, if this would put undue pressure on low-income peddlers.

"Nobody says we should keep the prices of espressos down, after all. So, why should someone who wants to become a street vendor face this social pressure to keep prices low, while the choice is to own a cafe and sell an expensive espresso? ", Did he declare.

This means that consumers should be willing to pay more to buy hawker food, experts said.

"Wages are going up, so we have to avoid the fact that the costs are salaries for hawkers," Song said.

"A cup of kopi costs $ 1.20, compared to $ 5 for an Americano of a coffee. Yet you have people who have both choices. Why does the street vendor not increase its price of kopi to reflect rising water prices? "

According to Mr Ng, from Fishball Story, Singaporeans should not continue to think that hawkers' food should be kept at traditionally low prices. When prices rise, hawkers can enjoy better margins and be more motivated to pursue their career "if they see good results for their hard work."

We can start by paying a little more. If you want cheap food, I will give you quality food for your budget. If you want good food, expect to pay more.

While the government is putting pressure on hawkers to keep their food prices to a minimum, "it's impossible for a peddler to survive in the long run," he added.