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Is Singapore's prized social stability under threat?

Foreign workers walk around Little India, Singapore the day after the riot on 8 December 2013
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Foreign workers walk around Little India, Singapore the day after the riot on 8 December 2013

A rare incident of rioting in Singapore over the weekend has raised questions about social harmony in the wealthy Southeast Asian nation that has been built on a reputation of stability and prides itself on a long history of racial cohesion.

The underlying cause for the violence late Sunday, which was triggered by a fatal road accident that killed an Indian national, appears to be the festering grievance among low-wage foreigners.

"Poor people, whether foreign or local, are constantly reminded of their conditions in a city with obvious wealth; frustration is inevitable. The riot was obviously a 'blowing off steam' of pent-up frustrations and felt social isolation," Chua Beng Huat, head of the Sociology Department at the National University of Singapore, told CNBC.

Singapore has one of the biggest wealth gaps in the developed world. Its Gini coefficient – which measures the degree of inequality within a country where zero is complete equality and one is maximum inequality – rose to 0.478 last year, the highest among advanced economies, apart from Hong Kong.

(Read more: First riot in 40 years rocks peaceful Singapore)

Chua said while the single incident should not be blown out of proportion, the risk of subsequent outbursts cannot be ruled out.

"When you have tens of thousands of people with relatively same sentiment crowded into a limited space, mass behavior should be expected anytime; the risk is perpetual," he said. Little India, the city's ethnic Indian district where the riots took place, is a popular hangout for South Asian workers during the weekends.

Migrant workers have been an integral part of Singapore's $274 billion economy, enabling a construction and infrastructure boom over the past two decades that has transformed the tiny island nation into a world-class city.

There are around 1.3 million foreign nationals in Singapore whose population is 5.4 million, many of whom are employed in low-paying labor-intensive or services jobs that are shunned by most locals. More than 300,000 work permit holders are employed by the construction industry alone.

According to the non-profit organization Transient Workers Count Too (TWCT), the city's foreign workers have long been victims of mistreatment, from being denied proper medical treatment by their employers to failing to receive their promised salaries.

"It is not possible at this stage to say what part these feelings played in the explosion of random violence," the organization said on its website earlier this week.

"Nonetheless, it would still be good for the authorities to pay more attention to such grievances. Doing so would reduce whatever sense of resentment that may exist, and thereby raise the threshold of the tipping point to better prevent another incident from happening again," it added.

(Read more: Singapore upgrades growth outlook for the full year)

While Sunday's riot was the country's first in more than four decades, migrants workers have become much more vocal about their discontent in the recent years. In 2012, for instance, 170 public-bus drivers recruited from China went on strike illegally to protest against pay and living conditions.

These incidents have agitated Singaporeans who are increasingly frustrated with the influx of foreigners, who they perceive as putting a strain on the infrastructure and resources of their country – which is less than half the size of London.

Earlier this year, around 5,000 Singaporeans assembled to protest peacefully against the government's target to raise the population to 6.9 million mostly through immigrants to offset a chronically low birth rate.

The challenge facing the government is a multi-faceted one – involving the stability of the migrant labor force and ensuring local grievances surrounding the influx of foreigners do not escalate.

(Read more: For foreigners, has securing a job in Singapore just gotten harder?)

"I believe Singapore knows what it needs to do in terms of deepening engagement at the grassroots level, listening to the input of groups of its citizens and visiting workers who had not been enfranchised previously, and designing institutional accommodation for these people," said Ernie Bower, senior adviser for the Center for Strategic & International Studies, a Washington D.C.- based think-tank.

Poster seen on the streets of Singapore on Monday
Poster seen on the streets of Singapore on Monday

"If the government fails to take these steps, it will open the door further for political competition from opposition parties," he said.

However, Bower said the government is unlikely to miss the mandate it is receiving to adapt to new circumstances.

The day after the riot, Prime Minister Lee Hsien Loong said he had ordered a Committee of Inquiry (COI) to review the factors that led to the incident. On Wednesday, Law and Foreign Minister K Shanmugam responded by holding a dialogue with foreign workers to discuss working and living conditions in the city.

—By CNBC's Ansuya Harjani; Follow her on Twitter: @Ansuya_H

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