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Archive for the ‘Economy’ Category

The right way to boost birth rates? And attracting votes?

In Economy, Political governance, Public Administration on 29/10/2014 at 5:39 am

The South Korean annual budget to boost birth rates has reached an equivalent of US$13.85bn this year, says Chosun Ilbo, South Korea’s largest and oldest daily.

Though is almost sevenfold increase since 2006, the number of births has actually dropped by almost 12,000 to 436,500 last year. The birth rate, or the number of births per 1,000 people per year, also fell to 8.6. This is the lowest level since records began in 1970, and also among the world’s lowest indicators, according to World Bank data. http://www.bbc.com/news/blogs-news-from-elsewhere-29598172

According to Chosun Ilbo, the main reason why the government appears to be failing in its efforts to boost the birth rate is because most of the money is allocated to childcare subsidies, rather than making Koreans want to have more children.

Well by going waz happening here, the problem here is the same: the incentives are allocated to childcare subsidies, rather than making S’porean couples want to have a child, lrt alone, more children. They prefer to have pets.

So what are the ways that the govt can persuade S’poreans to want to have children? What about a bigger “subsidy” and fast-tracking for that “second” bite at a “subsidised”HDB flat. The more kids a couple have, the bigger the “subsidy” and the faster they can get a second flat? (And the govt can give incentives to private property developes to offer bigger discounts to couples with more kids.)

And what about a discount on that CoE for a prime mover? The more kids a couple have the bigger the discount? Ten kids are a CoE is effectively free?

Finally, what about abolishing the maid levy if parents have a third kid? And a “free” maid if they have 10 kids?

Finally, cut working hours so that couples have more time for sex. http://atans1.wordpress.com/2014/10/28/improving-productivity-try-this-pm-tharman-possible-reasons-for-peanuts-real-wages-growth/

Sadly, a Hard Truth for the PAP is that populism is out. Only bullying, haranguing the voters allowed. Which is why the Pioneer Generation package, spending on public tpt and other “goodies” is a puzzle. PM is a populist in disguise? http://atans1.wordpress.com/2013/07/16/minister-you-thinking-of-yr-govt/

Or are we going to get screwed with a huge GST increase after the next GE. Remember 2006? A great piece by scholar on how the extra 2 percentage points increase in GST never went into social welfare as promised. http://thereformparty.net/blog/2010/12/24/further-tax-burden-to-enhance-our-social-safety-nets/. The piece was written in 2010 and my admittedly back-of-the-envelope calculations shows that the position is the same today. Perhaps someone should ask Uncle Leong or Roy to update the data.

Whatever it is, remember to ask the PAP when campaigning begins for next GE, “Will you raise GST after the elections, if you win?”

Related post

http://atans1.wordpress.com/2012/03/20/a-populist-measure-can-be-a-sound-measure-ex-imf-chief-economist/

 

 

 

 

 

 

 

Improving Productivity: Try this PM, Tharman?/ Possible Reasons for “peanuts” real wages growth

In Economy on 28/10/2014 at 4:49 am

Productivity

Shorter working hrs, greater productivity. Evidence cited below.

S’pore should try this if PM and Tharman and the govt is really seious when they say that “no stone will be left unturned” in the search to improve productivity. . But then it’s against the Hard Truth that hard work makes people happy. Actually I suspect the Hard Truth was propogated to ensure that S’poreans didn’t have the energy to engage in political activities. Sadly it also ensured that they didn’t have the energy to have unprotected heterosexual sex.

There is a growing body of evidence that shorter work weeks actually lead to more productive employees.

Right now, the US seems to value long work weeks for the sake of long work weeks. We put in more time at the office than other Western nations, but with less to show for it than one would hope.

According to Melissa Dahl, writing in New York Magazine, “The US is one of the most productive nations on the planet, second only to Luxembourg, but Americans work almost 20% more hours than individuals in Luxembourg. We’re working longer days, but that doesn’t necessarily mean we’re achieving more.”

An earlier report found that there was little correlation between hours worked, productivity, and wages. Writing in MarketWatch, Quentin Fortrell calculates that Germany works almost 45% fewer annual hours than Greece, but is 70% more productive, while annual German salaries are higher.

Reducing work hours has also reduced unemployment, he says, noting that “countries with the largest reduction in work hours had the largest increase in employment rates since the Great Recession”.

The shorter work week is an idea that both corporate fat cats and tree-hugging environmentalists can love. Billionaires Carlos Slim and Larry Page have spoken publicly in support of shorter weeks, while CNBC cites a recent survey showing “that more than 69% of millionaires surveyed (those with investible assets of $1 million or more) said they believed the four-day work week is a ‘valid idea’.”

BBC

Btw1, here’s something to ponder about on productivity.

Productivity in financial services and other services  miscalulated?

On a very technical issue could financial services and other services be miscalculated? Remember measuring productivity in services is not easy. That could be happening in the UK. See below.

Btw2, the UK’s could also give some clues as to why the growth here in real wages sucks.

Real wages not improving

UK has come out of a recession when  real wages fell … as productivity tanked. but unemployment wasn’t as bad as feared.

The economy’s recovering, But those in work are now badly in need of some respite.

Possible explanations abound for the curious trend. Britain has more liberal labour markets than most European countries, which may have meant companies found wages easier to cut, keeping employment high. Some sectors, such as financial services, may have mismeasured productivity before the crisis. And low investment probably contributed too.

One mooted explanation for low wages is particularly controversial. UKIP, Britain’s insurgent anti-EU party, claims that immigration from Europe is holding down pay. Evidence on this is mixed: conflicting studies have separately found both a small increase and a small reduction in average wages as a result of migration. But there is better evidence that its effects are unequal; the lowest-paid workers, who face the fiercest competition from migrants, find their wages held down by the arrival of foreign workers. Higher earners are more likely to benefit. Division, it seems, is rife.

http://www.economist.com/news/britain/21627665-workers-continue-feel-pinch-what-recovery

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Elections before 9/8/15?

In Economy, India, Indonesia, Political economy on 21/10/2014 at 6:13 am

Conventional wisdom is that the next GE will be held after the 50th anniversary celebrations of S’pore’s independence which will be a celebration of all things PAP. So the Oppo parties are not gearing up for an early GE (end of this yr or before Aug 9 next yr.)

And this piece of news doesn’t disturb the narrative:With the January 2017 deadline for the next General Election looming closer, the Elections Department (ELD) has been calling up public servants for training to be election officials, as part of the electoral process … , the ELD said in an emailed statement: “ELD prepares and organises the Public Service to conduct elections in Singapore. Amongst other work, ELD selects and trains public officers on an ongoing basis to perform election duties during an election.” (CNA 17 October)

There have been early training sessions before with no elections following. The conducting of training sessions is a lousy leading indicator.

But think about the economic prospects of S’pore  and the training could be a sign of early elections.

No govt wants to hold a general election in a recession or when a a recession is likely. Already the growth rates for this yr and next yr have had to be trimmed because the global economy isn’t doing too well.

And things could get worse: The global economy is in a woeful state [Skip the next few paras if pressed for time or an illiterate in finance and economics]. The euro zone, fully 17% of global GDP, is predicted to expand just 0.8% in 2014 according to the IMF. China and Japan, together 25% of global GDP, are slowing. Emerging markets are floundering: a report on the synchronised slowdown from the Fund puts much of it down to weak trading partners (a sort of trade contagion). As the world slows, America seems a prudent place to park cash. Chinese and Japanese holdings of US Treasury bonds—now $2.5 trillion—have doubled in five years, according to the TIC data.

… the euro area. Inflation is just 0.3% and the area is already awash with unemployed workers … end up with both fiscal and monetary policy being relatively tight.

What would happen next? American exporters would get hit twice—first by weak demand from abroad, then as their goods get pricier for foreigners to buy as the dollar continues to rise. But since America is a relatively closed economy, the impact abroad could be bigger. The big risk is that a runaway dollar topples emerging-market economies just as it did in the 1980s and 1990s. A pessimist would argue that many of the conditions now are exactly as they were then. Many emerging markets borrow by issuing bonds in dollars, rather than their own currency. Appetite for these higher-yielding dollar bonds has been strong in recent years: in January 2014 Indonesia issued its largest dollar bond since 1998; according to its Finance Ministry data, India has dollar debts of around $273 billion (15% of GDP). As the dollar rises, the local-currency cost of these debts goes up.

Floating exchange rates make things a little different when compared to the Asian crisis, but would not help that much. Take a country like Brazil, which has inflation of 6.75% (see the WSJ on this) and yet an economy in recession. If its currency continues to depreciate against the dollar then inflation builds up further. The central bank ends up in a bind: raise rates to cut inflation and stem the depreciation, or keep rates low to get the economy back on track. Both paths would be risky, and could cause a wider stress if the contagion of previous emerging-market crises is any guide.

With any luck none of this will happen. But it all could happen. And if you are in the business of forecasting and stress testing, you should prepare for the worst.

http://www.economist.com/blogs/freeexchange/2014/10/pessimistic-forecast

So what about the fact that oil prices are close to US$80 from US$105 a few weeks ago

[M]ajor Asian economies, though, will look at falling oil prices less as a stimulant and more as a signal that global growth is faltering. For export-dependent Asia, lacklustre worldwide demand could end up being highly disinflationary.

That’s a big worry for the likes of China, Hong Kong and Singapore. These economies have all seen private credit rise rapidly since the 2008 crisis and need tolerably healthy inflation to help bring down the real value of debt. But China’s 1.6 percent inflation rate is now the lowest since February 2010, while the annual rate of increase in Singapore’s consumer prices has slipped below 1 percent. South Korea, which has historically had a problem of high household debt, can’t afford to allow its meagre 1.1 percent inflation rate to slide further.

http://blogs.reuters.com/breakingviews/2014/10/17/cheap-oil-is-no-tonic-for-sluggish-asian-economies/*

So I wouldn’t be surprised if 50th anniversary celebration events come fast and furious early next yr: to remind S’poreans of the role of the PAP in S’pore’s development from the second largest port in Asia to a global city state, with property prices to match those of global cities like NY and London.

But I’d be surprised if the PAP reminded us one LKY said in 1959,”we must go about our task (of building up a nation) with urgency … of integrating our people now and quickly”, because he said this when revealing that only 270,00 out of the 600,000 voters were born here. 

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*Btw two countries where I have investments will benefit: The big exceptions are India and Indonesia. Both governments supply gasoline and diesel to their consumers at fixed, affordable rates. For them, the 25 percent slide in the price of a barrel of Brent crude over the past four months translates into significant budgetary savings, which could be channelled into much-needed infrastructure investment.

 

 

Higher minimum wage, lower unemployment

In Economy, Uncategorized on 19/10/2014 at 4:39 am

Our constructive, nation-building media would never republish or tell this tale of where minimum wages didn’t do what the PAP govt claim it would do: raise unemployment. .

A higher minimum wage in practice – Christopher Flavelle of Bloomberg View argues a $10.10 [£6.27] minimum hourly wage would neither change America for the better nor destroy a million jobs, based on the case study that is Canada.

In 2014 every province in Canada had set its minimum wage at $10 Canadian an hour or higher. British Columbia, which had the biggest increase of any province, saw its unemployment rate fall by almost a full point over the same period, to 6.7 %.

On the other hand, the share of people with low incomes fell just 0.4% in four years, even as the minimum wage increased 16% in real terms during the same period.

“The link with poverty and the minimum wage is almost zero,” Stephen Gordon, an economics professor at the University of Laval in Quebec City, tells Flavelle. “Lots of people who earn the minimum wage are not in poverty, and a lot in poverty don’t earn the minimum wage – the problem is they’re not working, or the number of hours they get.

BBC Online extract

FTs then (1970s) & now

In Economy on 17/10/2014 at 6:18 am

In a response to the PM’s latest remarks on FTs (“no more tightening” and “don’t blame FTs for everything”) at a public lecture organized by the National University of Singapore Society on 3 October, a TRE poster wrote

In the 70s and 80s, Singapore already had FTs (Japanese, Germans etc) into our country. They were few and they were the real talents; working alongside our Singapore workers and also taught us their skills and knowledge.

He has a point. I had a friend who was a PR in the 80s. Despite winning a gold medal from NUS, she didn’t find it that easy to get a job because she needed an employment pass. It wasn’t easy for anyone without working experience, even a gold medalist,  to secure one in the late 70s. It was “S’poreans first and last when it came to fresh graduates”. And it wasn’t that easy to become a citizen either. Heck, it wasn’t even easy to get PR status unless one was a M’sian Chinese professional or an extremely rich Indonesian Chinese. Nowadays, PR is juz toilet paper: even a slutty looking, violent, cheating shop assistant can secure one.

Today, we have all the fake talents from PRC, India and Philippines and even from Malaysia, Myanmar, Vietnam and also Europe and US – all with dubious degrees, knowledge and skills. Worst still, these are the people who are taking away the PMET jobs and also our fresh grads jobs. Lee Hsien Loong – let me repeat this into your ear again ! We didn’t say no FT – please can you define what FT is and bring in only the real FT ok ? Not your open leg policy in allowing any Ah Nieh or Ying and Yang to come into SG please.

I agree with the sentiments expressed, esp the bit about faked qualifications.

(Related post : http://atans1.wordpress.com/2014/10/07/hong-lim-park-the-private-property-of-the-granndfathers-of-roy-hui-hui/)

He ends

SG does not belong to everyone and certainly SG does not belong to you or … ! We will kick your butt out in the next GE !

Lots of S’poreans still want to kick PM’s butt. Issue is how many more (or as is more likely) less from GE and PE 2011 (Sadly, S’porans are easily satisfied, or shld it be conned?). A few weeks ago Alex Au blogged, heard from a friend who heard from another friend (whom I also know – this one’s in academia) that the People’s Action Party (PAP) was confident it had regained lost ground since the 2011 general election. Its confidence stemmed, it was said, from a huge survey that it had been conducting over the past few months and which, by the next general election, will have reached every household in Singapore …

Actually I had heard about the result of this “survey” but had not heard of anyone who had been approached, So I kept quiet. Alex gives more details.  http://yawningbread.wordpress.com/2014/09/28/survey-asked-about-my-confidence-in-the-lee-hsien-loong-government/

The govt has been throwing more of our money at S’poreans what with Pioneer Generation “goodies”, public tpt etc spending. Juz try to remember that our money the PAP govt is spending on S’poreans is “peanuts”. We’ll have another budget surplus this yr, not the estimated tiny “deficit”. I can say more about the peanuts we are getting, but I’ll leave it for another time.

Why S’pore cannot be as creative as Silicon Valley

In Economy on 12/10/2014 at 4:36 am

S’pore isn’t California.

In 1989,Jonathan Ives, now Apple’s designer and Sir Jonathan,  left England and made his first trip to Silicon Valley.

“I was just blown away by the optimism and enthusiasm [in California] that provided such a fantastic environment to try and develop new ideas,” …. “It’s very difficult to develop new ideas in the context of cynicism and sarcasm. It makes for good comedy but it’s a horrible way of trying to develop products.” (FT report)

In S’pore we can’t even make good comedy because we don’t do sarcasm, but the place is terribly cynical, so how to develop new ideas?

 

F1- Only two other countries pay higher fees

In Economy, Tourism on 05/10/2014 at 6:07 pm

Singapore pays US$65m (S$83.3m) a year to bring F1 here. Only Malaysia and Abu Dhabi pay more.(BBC report).

Monaco is the only place that doesn’t pay.

So our “iconic” race is not cheap. Remember this when you read how much money F1 brings here.

The cost for organizing each race is approximately S$150 million dollars, with the government paying about 60% of the costs. And the fee is 55.6% of the cost). The government claims that each race generates about S$150 million in tourism receipts. So sounds like breakeven to me only, without taking into account the inconvenience to commuters and the lost sales at Suntec.

Worse, ticket sales are falling. More than 84,450 tickets were sold for the 2014 Formula 1 Singapore Grand Prix, slightly lower than last year but the third highest attendance since the inaugural race in 2008.Back in 2008, 100,000 tickets were snapped up as Singapore successfully pulled off the world’s first F1 night race on a street circuit.

Real reason govt de-emphasising degrees?

In Economy, Humour, Political economy on 02/10/2014 at 5:04 am

Could be govt wants S’poreans to get married and then breed earlier? Finish poly or vocational training, get a job, earn money and then get handcuffed and breeding is the master plan?

How did I come to think such tots? I had read an article in BT on S’pore’s latest population report, and a piece in the Economist on how the cost of a college education is forcing young Americans into later and later marriages.

BT on 26 September reported that according to the latest Population report released on Sep 25 by the National Population and Talent Division (NPTD — the same people who came up with the population White Paper that was rubbished by scholars). the statistics show a growing number of singles in this country, and when they do marry, it’s at a much later age.

This is the bit from the Economist: the cost of college can delay the day when young people feel they can afford an engagement ring, let alone a family. A third cited their finances as the reason they were not yet hitched, compared with just 20% of those over 35. As one Eminem fan at a recent music festival in Atlanta romantically put it “I’m just trying to sort things one at a time. I’ve got a girlfriend but I’ve also got college debt.”

http://www.economist.com/blogs/democracyinamerica/2014/09/marriage-market

With voters annoyed with the govt’s, “We love FTs, even two-timing Raj and Hui Hui”, there seems to be a mnarked slowdown in the FT intake, so The Republic’s population growth has slid to its lowest in a decade, fertility rates have fallen further, and ageing continues at a rapid pace … negative repercussions on the economy …

Latest government figures released by the National Population and Talent Division (NPTD) on Thursday show that the total population grew at its slowest pace in 10 years, expanding just 1.3 per cent to 5.47 million as of June this year.

The easing in total population growth was driven by slower expansion in the non-resident population, which now stands at 1.6 million – an increase of 2.9 per cent compared to 4 per cent a year ago. This was, in turn, a result of the government’s tight restrictions on foreign labour inflows, which saw foreign employment growth slow to 3 per cent versus 5.9 per cent the previous year.

The spin for FTs like Hui Hui. (Ever heard of QC? Though thinking about it, Hui Hui’s a natural life insurance agent, second-hand car salesperson,more of this soon,, sans her looks and voice.)

By granting 20,000 new citizens and 30,000 new permanent residents (PRs) annually in the past few years, the government has kept immigration numbers stable. This is even as the citizen population continues to age, and as Singaporeans have fewer than enough babies to replace themselves. With increasing life expectancy and low fertility rates, there are more citizens in the older age groups today. The proportion of citizens aged 65 years and above rose to 12.4 per cent in 2014 from 11.7 per cent a year ago, while the median age of Singaporeans increased to 40.4 years from 40 years previously. This means the old-age support ratio – which is the number of citizens in the working age band of 20 to 64 needed to support one older citizen – is shrinking rapidly.

It fell from 11.4 in 1980 to 8.4 in 2000, before sinking further to 5.2 in 2014. At the same time, the resident total fertility rate (TFR) fell to 1.19 in 2013 from 1.29 in 2012, which was a “dragon year” on the Chinese zodiac. While NPTD said that the dip from 2012 to 2013 was gentler compared to previous post-dragon years, the overall TFR of 1.19 is far below the replacement level of 2.1.

Taken on their own, the latest population statistics paint a rather grey picture of Singapore’s future. A shrivelling old-age support ratio would mean greater pressure on the working population [Tot govt claims that the great thing about CPF is that it's not dependent on younger workers unlike ang moh pension systems] and more stress on fiscal policy – worrying trends which population experts have long flagged. (BT 26 September)

http://www.businesstimes.com.sg/archive/friday/premium/top-stories/population-grows-547m-slowest-pace-10-years-20140926

*And we don’t know if post next GE, the floodgates will open again.

 

True blue oldies will save economy, not FTs

In Economy on 30/09/2014 at 5:07 am

Especially not FTs like Hui Hui.

Government figures released by the National Population and Talent Division (NPTD — the same people who came up with the population White Paper that was rubbished by scholars) last Thursday show that the total population grew at its slowest pace in 10 years, expanding just 1.3% to 5.47m  as of June this year and generally painted a picture of doom and gloom.with have negative repercussions on the economy.

But according to the unhelpful, not constructive BT (26 September), * some economists say the situation may not be as dire as generally predicted, since more older citizens are opting to work past retirement age.

Said UOB economist Francis Tan: “The support ratio worsening is just one side of things. Other factors are also at play here: the government is incentivising older workers to stay employed; people are questioning whether their retirement savings are enough so they’re continuing to work; the government’s foreign worker quotas are forcing companies to provide higher wages and that has enticed more elderly people at the margins to join the job market.

“Taken together, these conditions should make us less worried about this scary 5.2 old-age support ratio. I’m not saying the downward trend is not a concern, but I think we can’t look at population numbers purely on their own – we need to look at labour market trends too.”

Indeed, according to figures from the Ministry of Manpower (MOM), the total labour force participation rate of residents aged 65-69 have increased dramatically from a decade ago. While this stood at 19.5 per cent in 2003, it climbed to 27.5 per cent five years later in 2008, before spiking up to 40.2 per cent in 2013.

After all despite or because of the tight labour market, MOM said in January this year that the labour force participation rate rose to a new high in 2013, driven by women and older residents, BT pointed out.

Noted OCBC economist Selena Ling: “If the retirement age changes to 67, that will skew the ratio for sure as more elderly (persons) rejoin the workforce. Then the reality may not be as bad as what the (population) numbers suggest.”

Whatever it is Mr Tan, Ms Ling, and other economists are concerned about the nation’s lacklustre fertility rate and swiftly ageing population.

Said DBS economist Irvin Seah: “This demographic shift is perhaps the biggest challenge facing Singapore… The situation isn’t easy to reverse, and it will take more than conventional economic policy to resolve. Mindsets will have to change.”

On this they are right

http://atans1.wordpress.com/2010/12/28/a-ghost-city-state-or-why-fts-are-needed/

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*http://www.businesstimes.com.sg/archive/friday/premium/top-stories/population-grows-547m-slowest-pace-10-years-20140926

ComCare aiding owners of landed property

In Economy, Political governance, Public Administration on 29/09/2014 at 4:19 am

We are told that this will happen here if we have ang moh welfare type system

It’s not easy being overweight and on benefits, says 25 stone mother-of-two who wants MORE money from the government to help her diet: http://www.dailymail.co.uk/femail/article-2768442/It-s-not-easy-overweight-benefits-says-25-stone-mother-two-wants-MORE-money-government-help-diet.html

So, I was surprised to read in ST last week, that there are five cases of ComCare giving financial aid to elderly residents in Opera Estate. Now the houses in Opera Estate are going for a over $1m each, so really there is no excuse for ComCare to help these people.

Now I understand the emotional attachment of living in the same place for many yrs and preferring not to move, or renting a room out despite oddles of soace (I’m one of those people) but no-one is entitled to welfare when they own a multi-million dollar houses.  Owning such a property is blessing. And yet the heartlanders are subsidising the people living in a landed property? Not right, ever. I mean elderly residents at Tanglin Halt have to move on. [Last sentence added at 5.47am]

That ComCare is helping them with financial aid is a worrying sign for two reasons. One is Opera Estate voted for the WP in the last GE, helping JJ to almost win Joo Chiat SMC. Could it mean the PAP govt is indulging in vote buying.

It’s also a sign that more and more S’poreans are thinking that they are entitled to feed at the trough of public money, even if they are very well-off. But are they wrong to do so, when minsters despite their above average salaries, insist on constantly reminding us that they could be making more outside govt? http://atans1.wordpress.com/2014/09/13/hen-jost-gracef-money-money-money/

(Btw, I juz came across this quote while reading FT, “money is by far the least [important factor]” when choosing where to work. At this level it can’t be painful, right? The job we’re doing is a vocation. All of us like to be paid whatever is deemed competitive in the market, but it’s not the main driver.”” said the CEO of Switzerland’s third largest bank who has had to cut his pay by 12% because shareholders were unhappy. [Added at 6am])

The govt can do a lot more to help the elderly poor, the children of the less well-off to get better education, and in healthcare for those without million-dollar salaries, given that we got the money, but let’s be careful of indulging the lazy and the greedy.

I’ll say no more because I read yesterday that, “A household that earns less than S$1,900 will get basic computing devices such as a tablet, and subsidised fibre broadband internet access for the next four years, from the Digital Inclusion Fund.”

Hmm a gd deal and my hsehold income is below S$1,900. The word is “earns”: dividends, rental income, interest or pension payment doesn’t count.

 

Why TRE can’t raise $/ Only rich S’poreans are optimistic

In Economy on 26/09/2014 at 4:37 am

TRE ranters really have no money to fund TRE

In its report on the  ANZ-Roy Morgan Singapore Consumer Confidence Index*, ANZ said

–[T]he confidence from the poorest in Singapore appears to have stagnated …one possible reason is that most of the wealth of the lower income earners is tied to their houses, and property prices have softened.

[S]ome 44 per cent of respondents – down two percentage points from a month ago – expect Singapore to have “good times” economically over the next 12 months.

“The fact that less than half of respondents expect Singapore to have ‘good times’ economically over the next 12 months, is perhaps the strongest economic indicator of how average Singaporeans are reacting to the myriad challenges of current policies aimed at restructuring and reinvigorating the Singaporean economy.” 

– The supply-side restructuring of the economy may be hurting some of the lowest income households as productivity isreplacing manpower.”  (BT report 25 September)

So I was most probably wrong when I accused TRE  ranters of being talk cock, sing song free-loading cheap-skates, refusing to fund their favourite site and their heloo Roy; they really have no money to help anyone because most of the wealth of the lower income earners is tied to their houses, and property prices have softened. But are too proud to admit it, because if they do, they’ll be asked, “If so smart to criticise people who make money i.e. PAP ministers), how come you so poor?”

No wonder they hate the PAP, and the S’poreans (Kong Hee, Sun Ho) and FTs who lead the gd life. Maybe they should spend less time ranting on TRE, working harder to improve their skills and wages. Or juz have this hobby http://www.bbc.com/news/world-asia-28810578. Oh forgot, they have no money. Their birds will die of malnutrition.

Seriously, this survey does confirm two things thing that the TRE ranters and other anti-PAP activists (and others, though nor PAPpies and their allies in the constructive, nation-building media) have been saying, many S’poreans don’t expect Singapore to have ‘good times’ economically and most of the wealth of the lower income earners is tied to their houses, and property prices have softened.

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More on the Index and ANZ Bank’s commentary:

[The Index] released on Wednesday, rose slightly in September from a month ago to 120.7 points.

The slight bump in confidence over the month – up just 1.7 points – showed more hopeful assessment of the financial situations of those polled.

This contrasts with a sharp 16.9-point dive in the index in August compared to a month ago.

The index reading now sits just below the 2014 year-to-date average of 121.1 points, with the report made public early this month.

Notably, 27 per cent of respondents said that their families are better off financially than a year ago – this is up seven percentage points from a month ago.

More respondents also think financial prospects will improve for their families in a year’s time, with 33 per cent of those polled seeing the glass as half full, up five percentage points from a month ago.

But a closer look at the numbers showed that the gains in the perception of current household income from a year ago are concentrated in the highest income quintiles, ANZ said.

Daniel Wilson, an ANZ economist who co-authored the report, pointed out separately that while income growth here was stronger on a percentage basis for the lower income, compared to the top earners – at about 35 per cent versus about 25 per cent over the past five years – the dollar gains translate to S$556 and S$5,033 respectively.

The disparity is less stark with their views of the economy over the next 12 months, though there remains a small skew towards high-income households.

 

 

 

 

 

“Wages will not rise until employers have to compete for talent”

In Economy on 23/09/2014 at 10:54 am

The above was the headline by a Guardian (a UK newspaper whose views would chime with the SDP, NSP, AWARE, Maruah, Alex Au, TOC and the other usual suspects) journalist on a blog piece on the UK economy: economy growing, property prices flying, FTs flooding in, but real wages stagnant. Sounds familiar?

The statement is very true here here as the following excerpts from BT (16 Sept) quoting the govt (who incidentally still denies that FTs don’t affect the real wages of S’poreans: cognitive dissonance or is it double-speak?)

The tight labour market in Singapore has resulted in more jobs and higher salaries for locals, while the growth in foreign worker employment fell to its slowest quarterly pace since 2009.

So less FTs result in higher wages for local talents, and more jobs: “noise” correct.

Here comes the spin:

But productivity gains saw a reversal in the second quarter of 2014 with negative growth of 1.3 per cent, bringing to an end a run of three straight quarters of positive growth.

Local employment growth remained strong at 41,000 (4.2 per cent year-on-year growth in June), with the services sector accounting for nearly 90 per cent of the jobs created, said the Manpower Ministry (MOM) on Monday.

More spin:

Last year, the real median gross monthly income for full-time citizen workers went up by 4.6 per cent, the ministry said as it released details of Singapore’s labour market situation for the first half of 2014.

The seasonally adjusted citizen unemployment rate was stable at 2.9 per cent in June, while the resident long-term unemployment rate remained among the lowest in the world at 0.6 per cent.

Total employment grew by 27,700 in the second quarter of 2014, moderating from the growth of 33,700 in the same quarter last year, but comparable to the 28,300 in the first quarter of the year. This brought total employment to 3.55 million in June 2014, 3.8 per cent higher than a year ago.

The spin continues:

The latest numbers are indicative of the government’s ongoing push to progressively raise the quality of the foreign workforce [Govt admitting we have Trash like the SGX CEO and the president?] and reduce the reliance on foreign labour.

This, said MOM, is in line with national efforts to achieve quality economic growth driven by sustained productivity improvements … the ministry said that it expects the strong hiring of Singaporean workers to continue for the rest of this year.

This is due to a confluence of foreign workforce constraints [And govt still saying FT influx doesn't affect locals' wages?] , higher wages, and employers adopting flexible work arrangements to attract more women and older workers into the labour force.

MOM … wages are expected to continue moving up, but these increases could only be sustained over the long term by improving productivity.

As for foreign …, MOM said that their total employment growth slowed to 11,200 for the first six months of 2014, which was less than half compared to the same period in 2013 … foreign employment growth in the second quarter of 2014 came in at just 3,800 … lowest quarterly expansion since the third quarter of 2009 during the global financial crisis, when only 700 foreign worker jobs were created.

[700 seems about right, though to Goh Meng Seng and Gilbert Goh, even one is one too many.]

OCBC economist Selena Ling said that foreign employment growth was at a low as firms continue to adjust to manpower policy constraints, although the transition process for selected labour-intensive services and construction sectors was “probably more accentuated”.

“The consolidation process for firms will likely continue in the interim as the productivity performance of these few sectors are still falling short of targets,” she said.

The productivity push, meanwhile, hit a roadblock in Q22014 with negative growth of 1.3 per cent. This ended a period of three straight quarters of positive gains.

[Post next GE, this will be excuse to lewt the FTs in]

“Overall productivity growth is expected to remain uneven,” said MOM in its outlook for the rest of the year.

Michael Smith … employment services provider Randstad, said that, in order to maintain productivity, employers should continue to offer workforce-relevant upskilling and career growth opportunities to help fill the gaps for skills that are in demand.

Ho hum, this makes it clear that the FT influx made this upgrading of skills unnecessary.

On the whole, MOM said that the current manpower-lean environment in Singapore will continue to be a feature of the economy in the coming years.

Come on, after next GE, the floodgates will open. Remember the population White Paper of 6m people?

“As the economy restructures, some consolidation and exit of less-productive businesses are expected. MOM and the Workforce Development Agency stand ready to help displaced local workers re-skill and upgrade so that they are positioned to take on the new jobs created.”

So long as FTs are allowed in by the A380 or 747 cattle-class load, this won’t help.

“How’s Harry doing?”

In Economy, Political governance on 17/09/2014 at 4:26 am

Castro* was asking Xi Jinping, earlier this yr when Xi visited Cuba.

He went on,”S’pore’s an exemplar for our way of doing things, a one-party state that is economically successful. According to leading Cambridge economist, Ha-Joon ChangThe country is usually known for its free trade policy and welcoming attitude towards foreign investments, but it has the most heavily state-owned economy, except for some oil states. State-owned enterprises produce 22% of Singapore’s national output, operating in a whole range of industries – not just the “usual suspects” of airline, telecommunications and electricity, but also semiconductors, engineering and shipping; and its housing and development board supplies 85% of the country’s homes.

‘But I hear that being kinder, more compassionate, tolerant hasn’t worked for the PAP’s popularity. Can only get 60% of the votes. Harry got high 70%s votes by intimidating his opponents, and bullying, haranguing the voters . Still he couldn’t beat my 99.9%, or Mao’s, Deng’s and yr popularity.

‘Any idea why his son is called Pinkie? And can you bring back a box of Havanas for his birthday: S’pore’s juz a bit further South. Yes, I know he doesn’t smoke, but he should start. I smoke a Havana a day and I think I’m fitter than he is.”

Above waz what I tot when I saw the u/m caption, pix and remark.

Party time for the one-party survivors

Cuba's Fidel Castro, right, speaks with China's President Xi Jinping in Havana, Cuba on 22 July 2014Xi Jinping and Fidel Castro met in Havana on 22 July

Caption for this photo anyone? asks the BBC’s Carrie Gracie.

My way of sending one LKY a belated birthday greeting. I’m sure the curses of the TRE ranters and other born-loser anti-PAP activists will invigorate him. Sith lords thrive on being hated.

—————-

*Lest anyone forgets, Castro is LKY’s contemporary. Came into power the same yr as LKY did (1959) and is still the ultimate arbiter in Cuba, ruled by younger brudder. To be fair to LKY, he was a lot less brutal in dealing with dissidents than Castro was.

Precisely why many are concerned about immigration, Khaw

In Economy on 05/09/2014 at 4:33 am

“Against the many racial and religious conflicts elsewhere that we read about almost every day, the state of affairs here in Singapore is truly extraordinary. We must treasure it,” said Minister Khaw at a ceremony to hand out 194 citizenships to new arrivals. A total of about 3,150 new citizens were given their citizenship dog-tags slave collars papers in ceremonies across the island last weekend.

It’s precisely because we want to avoid racial and religious conflicts that we are concerned with the creation of new citizenas, the way we plant “instant” trees. The latter is good, while the former harks back to the bad old* days.

In 1959 (the 50s and early 60s* were according to the PAP and the constructive, nation-building media bad. (Actually they were paid bad according to my parents, only PJ Thum, TOC’s favourite authority on the period, seems to think that juz because S’pore was second biggest port in Asia, things were great then.). In 1959, only 270,00 out of the 600,000 voters were born here. When one LKY revealed the above fact in 1959, LKY also said,”we must go about our task (of building up a nation) with urgency … of integrating our people now and quickly”.

So waz his son doing? I tot it took the third generation to destroy the prosperity, fortune built up by the patriarch. Is Pinky trying to destroy dad’s legacy in the second generation, even if as it seems dad may have repented of his decision to integrate S’poreans?

(Relevant, related post )

So the PAP and other FT lovers like Kirsten Han and William Wan should stop calling those who are concerned about immigration, xenophobes. They should be talking about the unfairness of PRC thugs bullying old-age aunties trying to earn a living: the PRCs it seems came here to do what the old aunties were doing, scavenge for cardboard waste. Tot PM says S’pore imports FTs to do jobs S’poreans can’t, or wont do. So how come PAP govt allows these PR FTs to steal from aunties, the way Indian, Pinoy FTs steal jobs from local PMEs?

But being FT lovers, they won’t. Btw, be thank for small mercies: the FTs still don’t have their very own NMP since William Wan didn’t get to becpme NMP. Taz far, if the hard core anti-PAP voters didn’t get Roy Ngerng, FTs too shouldn’t get their very own MP.

—–

*Racial tensions, racial riots, political riots, massive unemployment.

 

PAP’s bible challenges “market-based solution”

In Economy, Political governance on 21/08/2014 at 4:47 am

I’ve blogged before that the PAP doesn’t need that many smart people as it follows most of the Economist’s prescriptions (except on hanging, drug legalisation, free media and a liberal democracy). It has been an Economist mantra that market pricing is “betterest” because it uncovers the “correct” price. It is also a PAP Hard Truth.

But now the Econimist seems to have second tots.

What if the “correct” pricing level were so high that it prohibited all but the rich from driving in the city? Gulliver paid £9 ($15) to park for a couple of hours next to a horribly overcrowded Dorset beach over the weekend. It was a scorching day, there was only one parking option and it was the first weekend of the school holidays. Unsurprisingly by the time I left attendants were turning away a long queue of cars. There was no public transport, and even if there had been it would have been impractical for Gulliver’s family and its array of apparently-essential beach tat. Who knows what the sweet price-spot on such a day would have been? Enough to put a day out on a public beach out of reach for many, I suspect. 

http://www.economist.com/blogs/gulliver/2014/07/parking-apps

Think CoEs and public housing. Is the “correct” pricing out of reach of most without access to cheap credit? I suspect so.

“A Changing world means changing policies and a changed party,” Tony Blair told a flock of die-hard supporters in London on July 21st reported the Economist.

Trouble is that the PAP’s other bible is “Hard Truths” by one LKY. But given that Tony Blair is now rumoured to be worth more than US$100m (he denies the allegation), maybe the PAP should respect his views on the need to change. A PAP MP eye doctor surely would.

 

What Big Ass teach our govt and SME employers

In Corporate governance, Economy on 20/08/2014 at 4:25 am

The recent dip in labour productivity has the govt denying that restructuring is a failure. This and PM’s NDR speech reminded me that on 7 May, BT reported:  The government will help small and medium enterprises maximise their local and foreign workers’ contributions, amid the ongoing manpower crunch*.

They also reminded me about an article I had read about a US SME.

Big Ass is a US manufacturer of industrial and commercial fans. It makes its fans in the US (a high wage country), pays workers’ well (almost 30% above the national average wage, and nearly 50% above the Kentucky average) and is profitable and thriving. Surely it can teach the govt and our local manufacturers something about productivity in a high-wage environment?

The firm pays almost 30% above the national average wage, and nearly 50% above the Kentucky average. It also returns 30% of profits to its 500 employees in the form of bonuses or share programs. As a result, it can hire the best people, and keep them: in 2013 its retention rate was 88%, compared with a national average of 62%. It also gets a lot out of its workers: productivity is up by 175% since 2009 on one industry measure. Any profits that aren’t returned to workers are ploughed back into the firm. “If we have any money over at the end of the year, we’ve missed an opportunity to invest,” observes Mr Smith.

No rocket science or magic formula. It’s about paying gd wages and reinvesting in the biz, not being mean on wages, so that the SME owner can buy more properties or new super cars.

And its about growing “our own timber” (Ngiam Tong Dow, remember him?, not importing FTs:

Mr Smith’s biggest challenge today, he believes, is ensuring that Big Ass becomes what he calls “a 200-year company”. Part of that is down to people: he believes in hiring out of college, and moving those new hires through a range of different jobs. “We want young people to understand the whole company, because they’re going to be running it 40 years from now,” he says. Another part is hardwiring long-term thinking into the firm’s processes.

It’s also about spending on R&D

Big Ass invests nearly 9% of its revenues in R&D, more than twice the manufacturing-industry average in America. A lot is spent on hit-or-miss blue-sky research.

And it’s always about the long term future (think LKY in the 60s, 70s and 80s):

Privately held firms are not subject to the short-term whims of shareholders, but they face their own hurdles. Mr Smith’s son, Tristan, works for the company, but will his heirs want to cash out, offshore production or change the culture? To ensure that the firm’s values endure, Mr Smith is exploring ways to separate management and ownership, and embed the way the company does business into its formal structure. He has spent a lot of time looking at long-lived firms in Germany, Japan and elsewhere for inspiration. “For me, this is the most complicated and difficult problem to solve.”

http://www.economist.com/blogs/schumpeter/2014/04/making-it-america

If Big Ass was a local SME, it would have brought in FTs by the container-load so that the owners could buy that Ferrari and luxury pent-house.

—-

*This was Prime Minister Lee Hsien Loong’s assurance to firms at the Malay-Muslim Business Conference held on Wednesday.

He said the government cannot ease up on the limits it has imposed on foreign worker inflows to Singapore.

However, Mr Lee added that the number of foreign workers in the country is still growing, though not as fast as before. [Interpretation: FTs will grow by the 747 and A380 cattle class, not by the container-load.]

He noted that small businesses are very worried about manpower and that many of them want more foreign workers. Those unable to find workers have had to turn away business.

Mr Lee’s advice to firms was to offer higher wages and exciting jobs as the best way to attract good people.

He noted that this is only possible if companies raise productivity and climb up the value chain.

Mr Lee said firms can tap the various government schemes available to do that.

He also encouraged companies to venture overseas, with the government’s help.

 

NatDay wish: Govt stop aping other places

In Economy, Political economy, Political governance on 08/08/2014 at 4:37 am

S’pore’s govt is forever trying to copy the successes of other places. Examples

– Israel’ and Silicon Valley’s tech prowess (forgot about Estonia meh?);

– Germany’s SMEs’ structure;

– China’s internet, social media censorship practices (thank god we got Yaacob, a Malay, doing it, not the People’s Voice, TKL who wants S’pore to adopt the Chinese practice of all bloggers and posters registering their identities with the govt before they can comment);

– Scottish biotech prowess (the imported Scots went home);

– Swiss standard of living (apparently we reached it but don’t realise it; costs compared); and

– American social conservatives’ values on family (though not on abortion).

The has been adding to global warming (all that hot air, and methane from BS) and a waste of effort, money.

The govt  should heed the words of a reader of the Economist (required reading of cabinet, civil service but apparently not Jason Chua and the other morons of that pro-PAP FB page, “Fabrications about the PAP”):

“What politicians and policymakers are looking for is a panacea. Imitating Germany will not work. There have been many attempts to imitate Silicon Valley, but no one has succeeded. It is impossible to copy the culture, thinking and collective experience found in a company or a country.”—on “German lessons”, July 12th 2014.

I could add that stopping aping might even help the PAP . I mean we like Israel got NS and high tech weaponry. But why we no got Iseal expertise in civilian high tech meh?. Btw, why NS and the welfare state go hand in hand.

The PAP should walk the talk of what DPM Teo said on 21 July

Singapore has to strengthen its track record of trust, knowledge, connectivity, and livability to attract global companies to set up shop in the country, but must also position itself where it can add most value, said Deputy Prime Minister Teo Chee Hean.

“To achieve sustainable growth, Singapore cannot simply continue to do more of the same, or to put in more resources in a linear fashion,” said Mr Teo, who was speaking at an annual scholarship award ceremony for the Economic Development Board (EDB) on Monday (July 21). (CNA)

The govt should remember that the world class port and the airport and the financial centre were developed without aping any other place. As was SIA, and Keppel Corp’s rig-building businesses. The starting point was the expertise already here, expertise that juz needed nurturing. And Dr Goh aped no-one when he developed Jurong and let the MBCs in.

 

 

 

GIC: Rubbing salt into S’poreans’ CPF woes

In CPF, Economy, GIC on 03/08/2014 at 4:42 am

This is how our constructive, nation-building BT reported how GIC is adding insult to injury:

AMID a gloomier outlook for fund managers globally, GIC has racked up annualised real returns of 4.1 per cent over the past 20 years to end-March this year, up from 4 per cent as at end-March last year. This return – above global inflation – was underpinned by a strong recovery in global financial markets, said the Singapore sovereign wealth fund.

Waz the point of this inflation-beating return when the 2.5% CPF rate is below S’pore’s inflation rate? Remember that until recently, we were told the 2.5% rate was justified given that inflation was oneish?

In late July after the June inflation numbers were released which showed core inflation slowed for a second straight month to 2.1 per cent after May’s 2.2%, but a drop to below 2% will be unlikely this year, OCBC economist Selena Ling told MediaCorp..

CIMB economist Song Seng Wun agreed: “The domestic pressure on core inflation hasn’t disappeared. In fact, the pass-through of wage costs to consumer prices has so far been slower than expected, but may become more visible as the economy further recovers.”Core inflation, which excludes accommodation and private road transport costs, is regardeded as a reflection of the wage cost pressure, and the MAS and the MTI retain their 2 to 3%  forecast given the tight labour market. Govt’s way of saying, “You want less FTs, we give you slower growth of FTs and higher inflation.”?The official forecast for all-items inflation is being kept at 1.5 to 2.5%, as the Government expects overall prices to ease in the second half due to lower imputed rentals and car prices, with Certificate of Entitlement quotas expected to rise more than expected*.

Especially as our CPF monies do find their way into the pool of funds managed by GIC. Not that this s any secret exposed by Roy Ngerng. I blogged about this in 2009. And I think TRE reproduced it then.

And one LKY spoke in 2000 or 20001 at a GIC anniversary do about how the CPF monies were converted into a special govt bond and the proceeds flowed into GIC after being mixed with govt surpluses in the Consolidated Fund.
*Update at 5ooam: Extract from BT of 24 July on inflation
The government has cut its 2014 inflation forecast amid lower car prices and housing costs expected for the second half of the year: it now sees headline inflation coming in at the lower half of its 1.5-2.5 per cent forecast range.

But with domestic cost pressures remaining the primary source of inflation, the government reiterated that core inflation (which strips out accommodation and private road transport costs) will stay elevated at 2-3 per cent in 2014.

The impact of rising consumer prices on households varied across different income groups in the first half of this year. Worst hit were the bottom 20 per cent of households: their larger expenditure shares on food and healthcare costs meant they experienced a higher inflation rate (excluding imputed rentals on owner-occupied accommodation) at 2 per cent, compared to the middle 60 per cent income group and the richest fifth of households (both at 1.7 per cent).

CIMB and DBS economists agreed that much of the increase in food and healthcare costs was the result of ongoing restructuring efforts, where a tight labour market has pushed costs (and therefore prices) up.

Said DBS’s Irvin Seah: “Restructuring is inflationary in nature, and it will affect everything. Even if we are unable to bring healthcare costs lower, we should try to moderate the pace of increase.”

According to a report released by the Department of Statistics (DOS) yesterday, Singapore households experienced a 1.7 per cent inflation rate in the first half of this year compared to the same period in 2013. This was lower than the 1.9 per cent rise seen in the preceding six months.

Excluding imputed rentals on owner-occupied accommodation, the consumer price index (CPI) went up by 1.7 per cent in H1 2014 – slightly higher than the increase of 1.5 per cent in the second half of 2013.

As for the second half of this year, the government expects headline inflation to ease, due to lower car prices and accommodation costs.

ICT: To export, we import

In Economy, Uncategorized on 26/07/2014 at 5:02 am

What the charts show us that we import ICT stuff (5th in the world), add value then export them (4th).

Trade of ICT goods

Want slower GDP growth? Ok if property prices fall more than 20%?

In Economy, Property on 17/07/2014 at 4:56 am

When TRE republished this, Chris K* commented:
In short there is as much risks in an economy growing too fast as in growing too slow. The authorities had to be counter-cyclical i.e. push in the opposite direction to lessen the risks. In Singapore, the govt is cheering on the economy on, adding fuel to the fire. Stratospheric property prices, elevated cost of living, growing disparity in incomes are the result. They are irresponsible and unfit to run the economy*.

Because of its housing policies (keep on raising the prices of affordable public housing ’cause not to do so would be raiding reserves), a property crash (not juz the expected 20% fall)will result in a gloomy 50th yr anniversary next yr and the possibility*** of a freak election result. All the govt’s attempts to spend more of our money on ourselves in the hope of shoring up the vote for the PAP will go to nought.

As it is, the 20% fall is among other things based on GDP growth this yr of around 3.5%. If this turns out to be too optimistic (remember analyss have been busily revising downwards their above 4% growth), maybe property prices could fall 40%? A crash.

Those who want a slowing economy, esp those TRE posters who want a property crash should think of the hard working S’porean home owners (many of who whom are their friends and relatives), mortgaged to their eyeballs for basic shelter, not speculators (whose ranks are alleged to include millionaire ministers who have plenty of spare cash) that will be affected by a crash. Why should anyone be happy or gloat that others will suffer if property prices crash, unless the gloaters are lifer’s born losers.

(Related post: http://atans1.wordpress.com/2014/01/16/why-banks-tested-for-50-plunge-in-property-prices-and-other-wonderful-tales/)

And engineering slowdowns can be tricky. Ask the Swedes. They tried and now face deflation http://www.economist.com/news/finance-and-economics/21606895-interest-rates-are-back-crisis-lows-sub-zero-conditions.

Let me be clear, I speak as a retiree who stands to benefit if the economy crashes: prices come down and I can eat gourmet meals every day. So I’m not talking my book in understanding the dilemma that the govt faces, even if it is responsible for the mess we are in.

But don’t worry. All the PAP govt needs to do is to allow borrowers to borrow more: http://atans1.wordpress.com/2014/04/29/property-prices-valuations-are-irrelevant-its-all-about-credit/

All those TRE born losers will be left leaving frus and banging balls again.

*He knows his financial stuff esp risk mgt. He had better. He works as a risk mgr  in a nearby financial centre that is bigger than ours.

**His preceding comments: The comparison to the UK right at this moment bears watching. 1 year ago John Carney took over at the head of the Bank of England. He said at the time that interest rates will stay very low for a long time to come. Then the economy began to pick up steam and is now at around 2.9%, strong by European standards and close to the top of its long term growth potential. Last month John Carney has signalled to the markets that the central bank will be moving up its time frame to raise interest rates and head off risks. What are those risks? Strong growth raising the inflation rate. House prices shooting up causing instability. At the same time, the new financial stability committee is called to look into measures to mitigate these risks.

***Only possibility ’cause of GRC system. Anyway WP will support PAP if PAP doesn’t get majority. Low has said as much. PritamS wants it.

Property: Tharman trying to crack jokes again

In Economy, Property on 10/07/2014 at 4:34 am

I’ll not comment on Tharman’s CPF speech as Uncle Leong and many others have covered it. Instead, I’ll focus on a sppech he made last week congratulating himself on “cooling” the property market.

On 5th July BT reported that Deputy Prime Minister and Finance Minister Tharman ShanmugaratnamHe told a conference that Singapore had responded early enough to raging property prices with a set of cooling measures.

Err is he living in the same S’pore as I am or is he in S’pore (Roy Ngerng’s version).

Here’s what the FT reported on 30th June

Over the past four years, the Asian city state has implemented more than a dozen measures to cool its housing market and stem a growing tide of protest from locals that rich foreigners are making home ownership unaffordable.

If this sounds like an echo of popular sentiment in London, that is because these are very similar economies. A big financial services industry, paying generous wages, sustains demand for high-end housing. That, in turn, pulls up prices further down the price scale, a dynamic accentuated by the availability of mortgage finance at record low rates. Both cities are also regional hubs for wealthy foreigners, with solid legal systems and relatively open borders attracting property investment from Chinese, Russian and Middle Eastern millionaires.

Back in 2010, when Singapore began to tighten mortgage conditions, the initial moves were similarly token [Talking of recent UK measures]. Stamp duty was imposed on property sellers, and the cap on the size of a buyer’s loan relative to the value of the property being bought was trimmed from 90 per cent to 80 per cent. Every few months since then, there have been further, ever more desperate measures. Stamp duty was raised, to punish quick purchases and resales; the LTV cap was cut to 50 per cent; higher taxes were imposed on foreign buyers; and a tradition of 50-year loans was cut to 30 years. None had much of an effect.So much so that this normally politically conservative island nation has been rebelling. The popularity of the ruling PAP party – in power since the formation of Singapore as an independent state 49 years ago – has plummeted. Disaffection with rising property prices is widely cited. [Emphasis mine]

It was only recently that Singapore’s cooling measures finally had a clear impact on runaway house prices, following introduction of a new “total debt servicing ratio” – a metric that limits a borrower’s aggregate debt repayment commitments to 60 per cent of income. Property purchase volumes have duly fallen by 50 per cent. Prices are down by 6 per cent and are forecast to fall by as much as 20 per cent.

Or is he trying to entertain his audience? As he’s an intelligent, no BS person, I have to conclude that he’s out to entertain.

Isn’t his comments on govt acting quickly on property prices, bit like his jokes on inflation, wages?

http://atans1.wordpress.com/2012/05/25/will-hougang-make-the-pap-moan-the-inflation-blues-not-joke-abt-it/

http://atans1.wordpress.com/2013/11/11/tharman-trying-to-tell-jokes-again/

BTW, according to the BT report, he raised the possibility of a further correction in property prices, “I think further correction would not be unexpected.” but added that a crash in the property market was unlikely. The PAP would hope not given that next yr is an impt yr to remind the sheep of the PAP’s good deeds in the 60s, 70s and early 80s (before PM became a cabinet minister and too bad about the late 1990s and noughties, when he was DPM, dauphin and economic czar).

And On the subject of keeping track of the market, he called for more emphasis on monitoring banks. “I don’t want to quarrel with the Basel recommendations. They are basically in the right direction; they are good for the long term. If anything our banks are over-monitored (which is why the intellectual financial stuff gets done in HK, while the commoditised trading gets done here) , not that this over-monitoring has done the “little people” any gd: ask the mini-bonders.

 

FTs in HR & recruiment jobs, no gd for locals & other job issues

In Economy on 01/07/2014 at 4:36 am

Restrict HR, recruitement jobs to true-blue S’poreans

Because people tend to look favourably on candidates similar to themselves, a significant reduction in discrimination in the labour market may require the hiring of new recruiters in order to increase diversity among those who screen applicants. However, this study suggests that there is trouble ahead if prospective recruiters are to be evaluated by the current ones.

http://www.economist.com/blogs/freeexchange/2014/06/labour-market-discrimination

So if the govt is serious about restricting the growth of FTs here, it should not allow businesses to employ FTs in HR and recruitment posts. Plenty of stories about Pinoys flooding mgrs with only Pinoy applicants. M’sian Chinese and Indian Indians too are allegedly big offenders. As are ang mohs. PRCs got good record here as only $ talk, blood doesn’t.

No wonder S’pore NSman is a rare and endangered species in the corporate suite. AWARE wimmin will be very happy, esp for their FT partners.

MoM’s data proves that liberal FT policies hurt S’poreans

On 14 June, BT reported that

In April, MOM had put the preliminary figure of March’s jobless rate at 2.1 per cent.

But in its Labour Market First Quarter 2014 report released yesterday, MOM noted that its final figure for March was still higher than that of December.

It attributed this to more Singaporeans – particularly the less educated – joining the labour market seeking employment because more jobs with higher wages had opened up, thanks to the tightening of the tap on foreign workers.

And earlier in June, BT reported that MoM data showed that wages went up as a result of less FTs being allowed in

Salaries in the private sector grew 5.3 per cent on the back of a tight labour market and improved economic conditions last year, up from 4.2 per cent in 2012.

Taking into account lower inflation, real total wages rose by 2.9 per cent in 2013, after declining by 0.4 per cent in 2012, according to the latest report on wage practices released by the Ministry of Manpower’s Research and Statistics Department.

As of December 2013, 77 per cent of private establishments with employees earning a monthly basic salary of up to $1,000 gave or intended to give wage increases to these employees in 2013, up from 60 per cent in 2012.

This included the 57 per cent that gave at least $60 built-in wage increase as recommended by the National Wages Council in 2013, up from the 28 per cent that gave at least $50 recommended in the preceding year.

Rank-and-file employees received a basic wage increase of 5.4 per cent, the highest in 16 years and up from 4.3 per cent in 2012. This was the first time since 2002 that the basic wage increase for the rank-and-file exceeded that of the non rank-and-file at 4.7 per cent.

DBS economist Irvin Seah said that the salary growth was in line with his expectations. “In terms of real wage growth, it is quite a significant improvement as inflation was actually higher in 2012. This reflects an improvement in productivity and a tighter labour market,” he said.

Toby Fowlston, managing director of Robert Walters Singapore, said: “There has been an increased focus on hiring local talent, resulting in greater competition for this limited talent pool, especially in certain sectors with high demand. This drives wages up, but not for every industry.”

(Emphasis mine)

And flexi-wages remain a WIP

The MOM report also revealed that there has been a general uptrend in the implementation of flexible wage measures. In December 2013, 86 per cent of private sector employees worked in establishments which had at least one of the flexible wage components recommended by the tripartite partners – employers, workers and government.

Having a narrow maximum-minimum salary ratio was the most common wage recommendation adopted at 63 per cent. This was followed by linking variable bonus to Key Performance Indicators (51 per cent) and having the Monthly Variable Component (34 per cent) in the wage structure.

Bonuses did not go up as much as basic wages in 2013 as the annual variable component in the private sector averaged 2.21 months of basic wage in 2013, up by 0.9 per cent from the 2.19 months in 2012. Consequently, the annual variable component formed a slightly higher share of total wages at 15.6 per cent in 2013, than the 15.4 per cent in 2012.

Cham Hui Fong, assistant secretary-general, National Trades Union Congress, said that the labour movement will continue to push for the Progressive Wage Model to be pervasive in all sectors.

“This will not only raise productivity and upgrade skills, our workers can also look forward to better wages and better career progression. We also call on employers to tap on the various funding schemes and programmes, so as to achieve higher productivity growth,” she added.

Economists like Selena Ling, head, treasury research and strategy at OCBC Bank, added that the wage growth is expected to continue.

“The economic and business cycle is picking up globally, albeit at a choppy pace, and it is not unexpected that more firms are turning the corner. Real wage growth should be sustained this year, especially since inflation is subsiding. It will be very encouraging if the wage share increases over time as well,” she said.

No Country for above 40s

49% of unemployed S’poreans are above 40

http://sbr.com.sg/hr-education/news/mid-life-crisis-bulk-singapore%E2%80%99s-unemployed-are-older-40

 

MoM’s Labor Market survey showed that there were 29,000 unemployed residents older than 40. This is equivalent to 49% of the 59,300 unemployed residents for March 2014.

There are also more older residents who suffer from long-term unemployment. MoM’s data showed that out of 12,900 residents who had been looking for work for more than 25 weeks, almost 8,700 were older than 40.

- See more at: http://sbr.com.sg/hr-education/news/mid-life-crisis-bulk-singapore%E2%80%99s-unemployed-are-older-40#sthash.XQSoHV2X.dpu

 

CIMB’s Cost of Living Survey reflects reality better than Hard & Heart Truths

In Economy, Financial planning on 13/06/2014 at 4:25 am

Going by the CIMB survey and the attendance at Roy’s rant, Hard Truths is closer to reality (slightly only leh) than Heart Truths:

The CIMB’s Cost of Living Survey revealed that 87% of Singaporean households can still save a porti:on of their monthly income. Outside property expenses, people are spending mostly on basic necessities, cars and transport, and retirement savings.

And

We think that the idea that households are struggling is not quite right. That people are quoting the last as one of their biggest expense items does not quite gel with the idea of hardship.

Are households overstretching themselves to pay for their properties and cars? Our survey indicates that about 87% can save a portion of their monthly income (13% have no savings). Most manage to stash away
20-50% of their income.

https://sg.finance.yahoo.com/news/chart-day-graph-shows-no-021300551.html

Well this is certainly not the pix that PAP ministers and the constructive, mainstream media portray: S’poreans are living the gd life under the benevolent rule of the PAP.

And this is certainly not the pix one gets of the standard of living of ordinary S’poreans going by what Ngerng’s gang said last Saturday. Maybe taz why they only attracted a crowd of 2-3,000*.

Most S’poreans including most of the 600,000 (30% of voters) that will always vote against the PAP, simply don’t recognise the S’pore that Roy and gang paint? I certainly don’t recognise it, when I observe the lives of my relatives. Most live in public housing, have salaries around the median,  and have kids in school or uni.

The CIMB survey captures them better than Roy’s rants or the PAP’s propaganda: so long as got job, no serious illness, life is comfortable.

There is a core of elderly S’poreans, who need and deserve, a lot more help from the state. But for most younger S’poreans only a few major renovations to the gospel of Hard Truths are needed, to help them: really affordable HDB flats (15 yr mortgages, not 20 yr mortgages), improved public transport services, universal healthcare (improved Medisave is the first step towards that destination), and a lot less FTs. The last is the most impt, cause FTs suppress wages for S’poreans esp the PMETs.

BTW, these comments appeared on FB below the link to the CIMB story:

Gotta laugh at the holiday part…it’s true. People in my circle of friends who complains about cost of living; these are the people who travels for leisure more than I do*.

– And the same crowd of people will curse Yahoo for exposing their hypocrisy.

Have to agree with them.

Enjoy yr weekend esp if you are an ISD employee. No comedy routines at Hong Lim this weekend. Can look at yr monthly CPF statement and smile, thanking the govt.

*The former was the figure reported by WSJ and the latter by Yahoo.  “Singaporeans, there are 6,000 people here today,”  Roy’s gf, New Citizen Han claimed. Maybe Roy should get her a new pair of glasses, courtesy of his defence fund? And a pair of hearing aids? Remember he denied her reported comments that he wanted to be a martyr and was planning to seek asylum in Denmark. She never denied the report.

 

“E-Friction” index: HK’s 5th, S’pore’s 15th

In Economy, Hong Kong, Internet, Public Administration on 01/06/2014 at 4:48 am

Interesting that this never ever got reported by our constructive, nation-building media or mentioned by Yaacob, the propaganda ministry, MDA and IDA

The solution to improving our score is ensuring speedy and cheap online access should top the list. So come on Yaacob, MDA and IDA: stop trying to fix netizens and get us cheaper online access. Example the 4G charges were added on.

More on the index:

A new study by the Boston Consulting Group, to be presented at the World Economic Forum in Davos this week … “Greasing the Wheels of the Internet Economy”, its purpose is to make it easier to identify points of friction that hold back the digital economy.

At the heart of the report is an “e-friction” index. The authors took no fewer than 55 indicators (from “internet bandwidth per capita” and “average mobile connection speed” to “strength of intellectual property protection” and “press freedom”) and calculated a score for each of the 65 countries covered, which rises the higher the friction (see chart on this page. The full country ranking can be found here).

The usual suspects from northern Europe (Sweden, Finland, Denmark) end up on top, with HK 5th, Oz 14th and S’pore 15th.

… Such rankings often depend on how the indicators are weighed. BCG argues that infrastructure factors, such as the quality and cost of internet access, are the most important sources of friction, and bases half of its index on these. Other types of indicators, such as those that measure barriers that deter companies and consumers from adopting the internet, count much less. But even with a more even weighting, the authors say, the results would not be much different.

A more interesting finding is a clear correlation between a country’s rank in BCG’s index and the size of its internet economy: the lower the friction, the larger the share of online-related activities as a percentage of GDP …

What can countries do to move up the curve? Each country is different, the authors of the study argue. But ensuring speedy and cheap online access should top the list.

http://www.economist.com/blogs/schumpeter/2014/01/digital-trade

Event planning Pinoy style?

In Economy on 31/05/2014 at 5:22 am

The way the Pinoy party was planned and organised, then cancelled reflects badly on the claim that “T” in FTs stand for “Talent”. Skip the next four paras if you know the facts.

The Pilipino Independence Day Council Singapore (PIDCS) is a non-profit umbrella organization representing the Pinoy community in Singapore. It is made up of Pinoy professionals, skilled workers, and cultural societies who planned to celebrate the 116th independence of the Philippines at Ngee Ann City, Orchard Road on 8 June 2014.

The announcement drew a chorus of boos and protests from Singaporeans with Goh Meng Seng and Gilbert Goh shouting louder than others. Turned out no application had been made to hold the function, let alone secure the funds.

PIDCS then lodged its application for a permit, then withdrew it. The police said the withdrawal follows public order and safety concerns about the venue. A police spokesman said, “Police had also advised the organisers to consider alternative locations used previously for the event, such as Hong Lim Park in 2013 and Suntec City in 2012.”

The PIDCS then cancelled the event which meant that for the first time in 20 yrs (Yup that long) saying various other venues – including Labrador Park – were considered for this year’s Philippine Independence Day celebrations. The police would have likely granted a permit for the use of such venues. But a PIDCS statement said these venues did not “pan out for various reasons” including “accessibility to public transportation and capacity constraints”.

If the above is the result of Talents planning an event: Talents? What Talents?

– Announcing the event before getting permission, let alone applying for permission.

– Deciding to ignore the “noise”, and applying for permission.

– Not being aware that holding a function in the middle of Orchard Rd is different from that at  Suntec or Hong Lim.

I understand from police sources that the organisers were surprised that the police wanted to know how the organisers planned to handle the additional influx of up to several thousand visitors to an already crowded stretch of Orchard Rd on a Sunday. (I’ll go into more detail on what happened between the police and the Pinoy Pride people sometime in the future. Rest assured that if the Pinoys had come come up with credible plans, the SPF would have allowed the event, Gilbert Goh’s call of disrupting it notwithstanding.)

– Not having a plan B.

– Not securing the funds ($50,000 for the Orchard Rd party)

S’pore doesn’t need these type of Talents to organise events. We can call on Tan Kin Lian and Goh Meng Seng (TKL’s adviser) to organise events badly. Think of TKL’s badly organised election campaign. Three things stand out. The

– Rally that had to end just when TKL started speaking. The other speakers had talked more than they should.

– Plan, abandoned, to raise the deposit (TKL knew he was going to lose it?) via public donations.

– Appearance at a memorial commemoration in campaign tee-shirts, followed by the excuse that they didn’t know it was a memorial commemoration.

To be fair to GMS, the NSP’s 2011 GE was at least in Marine Parade well organised. Example: the posters were better positioned than the PAP ones.

 

 

 

 

 

 

 

 

 

 

Analysts too agree we need FTs

In Economy on 29/05/2014 at 4:53 am

So TRE readers and other anti-PAP paper activists, are the analysts mentioned in u/m Bloomberg articles (and the many others who hold these views)  PAPpy moles?

My point is that on the issue of FTs (esp in the manufacturing sector), the govt ‘s pro FT stance has the support of conventional wisdom.

One striking fact is that even among the best performing metropolitan areas, overall increases in output per capita have been hard to come by. They have been limited to a handful of very brainy cities, especially West Coast tech centres. In general, growth has been a product of population increase large enough to offset falling output per person.

http://www.economist.com/blogs/freeexchange/2013/05/migration

http://atans1.wordpress.com/2013/05/23/us-experience-on-growing-gdp-via-productivity/

That the conventional wisdom may be flawed is another issue though.

But those of us who don’t want FTs by the container or cattle truck load or even by the 747 or A380 cattle class, must recognise that the govt’s view is that of conventional wisdom.

—-

“This manufacturing recovery that we’re all hoping for seems to be sputtering again,” said Chua Hak Bin, a Singapore- based Bank of America Corp. economist who worked at the country’s central bank for six years. “Foreign-worker restrictions will be tightened further in July. We think Singapore may not be able to fully capitalize on a global demand upswing because of these constraints.”

Singapore in February said it will tighten rules for companies hiring foreign workers for a fourth straight year, with the next round of measures scheduled to take effect July 1. Manufacturers including Western Digital Corp. have moved operations to other Southeast Asian nations, as employers on the island grappled with the restrictions that raised costs and helped push unemployment to a five-year low in the fourth quarter of 2012.

Singapore’s exports declined in nine out of 11 months last year, faring worse than neighbors from South Korea to Malaysia. Manufacturing output shrank in the fourth quarter from the previous three months, and has grown at about 60 percent the pace of the services industry in the past two years as companies struggled to expand, data compiled by Bloomberg show.

“The restructuring has diluted our overall competitiveness,” said Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore. “It’s not just higher labor costs but it’s also the labor crunch, because when you don’t have enough workers, how are you going to meet that order?”

http://www.bloomberg.com/news/2014-01-12/singapore-exports-recovery-seen-limited-as-worker-shortage-bites.html

CPF: Answering TRE poster & supporters/ NMP on inconvenient CPF truths

In CPF, Economy, Political governance on 28/05/2014 at 4:09 am
Toast Bread:

Will LHL answer just one question please?
Did any Singaporean authorize or consent to CPF locking up our CPF retirement money at 55 ?

Rating: +34 (from 34 votes)

 (On TRE)
Person seems to have forgotten that ever since the PAP introduced the Minimum Sum, PAP keeps getting re-elected. Ever heard of implicit consent? Last election the PAP got 60% of the votes. Still some way to go.
Seriously, elected govts round the world run on their record and the promises they make. By re-electing a govt, the majority of voters accept the entire package.
 …..
Never tot much of this NMP who uses a lot of mascara, was a PAP member (expectations were that she would be a PaPpy MP. But she surprised with her frank remarks on inflation (domestic pressures) and CPF rates( lower than inflation will erode our CPF savings):

Nominated MP Tan Su Shan said that it was probable that Singaporeans had to factor in a higher rate of inflation when calculating their retirement adequacy.

This, given the fact that CPF members enjoy a risk-free interest rate of 2.5 per cent per annum on their Ordinary Account savings, but bearing in mind that inflation in Singapore has averaged 4.1 per cent over the last three years since the economic restructuring journey began.

“This is double the historic average inflation rate of about 2 per cent and will erode our CPF savings,” she said, adding that it would be “useful” for the government to provide a medium-term projection of the country’s inflation rate.

Ms Tan … noted that since the Monetary Authority of Singapore had chosen to maintain a strong and stable Singapore dollar, it was likely that most inflation costs could come from domestic pressures.

“Being able to project the growth rate of our cost of living expenses will help us make the right choices, outside of parking our surplus funds in cash deposits,” she said. (Yesterday’s BT)

Ms Tan is the head of private banking at DBS Bank and is considered to be a possible future CEO, by no less than the chairman. She is a S’porean birther, not a new citizen.

S’pore’s trade and debt vis-a-vis other Asean countries, China Japan and India

In Economy on 24/05/2014 at 5:48 am

If S’pore is as bad as anti-PAP cyber warriors say, why is the data showing that things are pretty decent?

We are certainly not the paradise that our constructive, nation-building media say it is, but the media is more accurate than the paper-activists. Let’s not deny reality. Don’t be like the PAP on the need to love FTs. LOL

Example: South Korea has a debt-to-output ratio of 103%, Singapore (105%), Thailand (127%), Malaysia (134%), and Hong Kong (208%).

http://im.ft-static.com/content/images/88906250-b9cc-11e3-957a-00144feabdc0.img

http://im.ft-static.com/content/images/88906250-b9cc-11e3-957a-00144feabdc0.img

 

PM’s idea of saving our lunch

In Economy, Malaysia, Public Administration on 07/05/2014 at 4:54 am

Is to let FTs come in and eat it? And our dinner, supper and breakfast too.

“We can’t tell our competition to go away. They want to eat our lunch, we know that. They want to eat our dinner, we suspect that. We can’t stop them from wanting, but we can make sure we can hold our own, and we can eat our own lunch.” (PM’s May Day speech)

So long as the govt allows PMET FTs in by cattle-class on A380s and 747s (an improvement from the container load, I must admit), taz the effect even if  as PM cont’d*, “We can provide you the resources and the means to stay one step ahead of the competition, and we will have a Singapore system which we can work together to build, to maximise your potential, maximise your contributions.”

From this week’s Economist, “Bill Martin and Robert Rowthorn, economists at Cambridge University, argue that one reason for Britain’s poor post-crisis productivity is that low wages encouraged firms to rely on human labour for low-skilled work, rather than investing in machines and software. Wage rises should start to reverse that trend, boosting investment and workers’ productivity.” Emphasis mine

This stands the Hard Truth that productivity must come before wage rises on its head.

But maybe this Hard Truth will be ditched before the next GE, even if LKY hasn’t “moved on” by then?”

Yesterday, ST reported, Singapore cannot be a First World economy with Third World costs, said Trade and Industry Minister Lim Hng Kiang yesterday at a lunch dialogue with prominent European diplomats and business leaders based here.

But he also assured them that Singapore will stay competitive and business-friendly even as it restructures the economy to achieve quality growth.

Responding to a question from the floor on rising business costs, Mr Lim said: “We have to acknowledge that, over time, Singapore cannot be a First World economy with Third World costs.”

Actually the only thing here about “third world” costs is that our PMETs and other true blue S’porean workers are paid “peanuts”. Other costs like property rentals, petrol, utility bills are among the highest in the world. and the cost of cars are out of this world. Remember the govt tried to debunk a UBS survey of cities which showed that KL had a better ranking because the cost of living there was more in line with wage levels than S’pore? Though to be fair, public tpt fares are reasonable by NY, or London standards, or even that of Brisbane.And healthcare is reasonably priced if one uses the public healthcare system.

So oldies like me who are not 110% behind the PAP had better watch out: wage repression has been gd for us. We are like suckling pigs voting for CNY, sheep for Ramadan or turkeys for Christmas. If LKY calls me “daft”, he is right as usual.

Coming back to PM, and saving our lunch while continuing the “FTs are best” policy, PM should remember what an American officer asked,during the battle of Huế**,“Did we have to destroy the town in order to save it?”.

He should be asking himself if Hard Truths require that FTs eat locals’ lunch and more so that S’pore’s GDP can continue to grow?

——-

*[Update at 1.33pm} I juz read that PM said yesterday that “the number of foreign workers in the country is still growing, though not as fast as before.” (CNA). It was so fast, that if it had cont’d at the rate between 2006- 2011, we’d be having serious overcrowding problems.

** The Battle of Huế during 1968 (also called the Siege of Huế), was one of the bloodiest and longest battles of the Vietnam War (1959–1975). Battalions of the Army of the Republic of Vietnam (ARVN), two U.S. Army battalions, and three understrength U.S. Marine Corps battalions defeated 10 battalions of the People’s Army of Vietnam (PAVN or NVA) and the Viet Cong (Việt Cộng or VC, also known as National Liberation Front or NLF).

http://en.wikipedia.org/wiki/Battle_of_Hu%E1%BA%BF

Who is right? PM? Heart Truths? Consumer survey?

In Economy, Humour, India, Indonesia, Political governance on 05/05/2014 at 4:51 am

Recently PM said the problems S’pore were facing were the results of success*. Here I asked: Success what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a recession.

Meanwhile, many new media warriors (posters on TRE; Heart Truths, near relation to Hard Truths; Han Hui Hui, an FT turned new citizen, who is proof that the Bumis in M’sia are right not to trust the local Cina: Uncle Chua etc) are always full of how hard life is for the average S’porean.

This so-called suffering doesn’t chime with what I observe in shopping malls, restaurants, or even hawkers’ centres or coffee shops, or what my friends, relations or biz connections tell me: S’poreans are  feeling more confident of confident of their prospects, and hence are spending more. Note, I’m not saying that there are no S’poreans suffering, but I take issue that the majority of S’poreans are suffering.

Well a recent Nielsen survey** of 501 S’poreans seems to confirm my view: that things are OK and improving, but not as great as PM is spinning. After all he got a GE to win.

Consumer confidence in Singapore is at its highest level in 10 consecutive quarters, with people remaining upbeat about personal finances and being more willing to spend.

According to the latest consumer confidence index released by Nielsen, Singapore recorded an index score of 99 in the first quarter, up two notches from 97 in the previous quarter … but still shy of the 100 baseline, has yet to reach optimism. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism. [If things are as great as what PM, his ministers and their trumpeters*** in the constructive, nation-building media saying, shouldn't the score be 150 and rising?]

The head of Nielsen Financial Services in Singapore and Malaysia was quoted as saying “The positive outlook on the economy and personal financial circumstances is starting to trickle down to consumers’ spending intentions: we notice an increase in the number of Singaporeans who are willing to spend money on discretionary expenses . . . if these intentions materialise, they could act as a further stimulus to the economy.”

So am I, Nielsen and those S’poreans spending more living in the same S’pore as our PM, or the people complaining via new media? Who is more reflectively of the reality of life in S’pore? PM and Heart Truths and friends are aliens that landed here on UFO Goh Meng Seng, the scourge of Pinoy Pride here?

Jokes about aliens and GMS aside, maybe

– PM and his ministers are out of touch, what with their huge salaries? Yesterday, I wrote “Of course Mah Bow Tan http://www.tremeritus.com/2014/05/01/netizens-agog-at-mah-bow-tans-fortune/and other millionaire ministers (present and retired) are not among these ‘lesser mortals”” in a piece of  EFTs that mimic the strategies of hedge funds.

– It’s these new media warriors who are the suffering underclass and they think that they are representative S’poreans? Or they are fruscos who think that they should have been talent-spotted by the PAP? They are always claiming that the suffering is always the fault of the PAP govt, never an issue of personal responsibility or sheer bad luck, so maybe they have personal grievances against the PAP? BTW, I exclude TRE’s Richard Wan as he knows he has a comfortable living, and knows it.

My serious point is that whatever new media or PAP media or anyone says about any topic, those of us who are rational have to ask ourselves,”Chime with what I observe?”. Don’t get carry away with the views of others. They could have agendas, delusions to propagate.

BTW, more details from BT (1 May) on the Nielsen survey:

– Some 54 per cent of respondents from Singapore consider their finances to be “good” or “excellent”, unchanged from the previous quarter.

– There is an uptick in Singaporeans who intend to invest in stocks and mutual funds, up six percentage points at 32 per cent … continue to be prudent with their money. Some 70 per cent would channel their spare money into savings, up six percentage points compared to the previous quarter and well above the global average of 47 per cent … more Singaporeans intend to increase their discretionary expenditure on a vacation and new clothes. Some 54 per cent intend to spend their spare cash on a holiday, while 37 per cent would spend it on new clothes, a quarterly increase of five and 11 points, respectively.

Interestingly, two of the three countries with the highest consumer confidence levels are in Asean Indonesia (124),  and the Philippines (116). BTW, India (121) is in between.

*Singapore’s economy has fared better than expected over the last decade, but the country’s success also brought about its own set of challenges.  PM Lee made this point in a wide-ranging discussion with regional newspaper editors  recently.

He said the country had paid the price of this fast growth, as infrastructure wasn’t able to keep up with the rapid development.

Mr Lee was asked about Singapore’s success during his time as Prime Minister and if anything exceeded his expectations.

He said yes, the country had done economically better than expected and grown faster — attributing it to favourable conditions.

As investments poured in, the government had put in resources and brought in foreign labour needed to grow. As a result, developments at the Marina Bay area sprung up in within a decade, instead of the expected 20 to 30 years.

He said that in terms of infrastructure, the country had not been able to catch up and had paid a price, and added that the government had been working hard over the past three to four years trying to come back up to speed.

He said that if the government had been able to foresee the outcome, it would have acted sooner.

But that, he said, was with the benefit of “20-20 hindsight”.

“We succeeded more than we expected, and so in terms of the infrastructure, we were not able to catch up — our public transport, building houses,” said Mr Lee. “And we paid a price.”

“We have spent the last three, four years working hard to try and come up back to speed. I wish we had been able to foresee this outcome, and then we would have acted sooner.

“But that’s 20-20 hindsight.”

Mr Lee also emphasised that it’s important for Singaporeans to feel they have a sense of belonging to the country — and that is something that is still a work in progress.

But Mr Lee acknowledged that this growth had come with a cost.

CNA extract

**The survey, conducted from mid February  to  early March this year, polled more than 30,000 online consumers in 60 countries,

***These public grievances [on healthcare costs immigration, ministerial salaries] and expert doubts did appear in the media; they were not completely blacked out. But, they were always toned down and set in a context that ensured that the government’s voice remained dominant. When there was undeniable distance between public opinion and the government’s position, leaders required the press to work towards a consensus by shifting the ground rather than nudging the government.

By dampening doubts and dissent, by allowing government to operate in an echo chamber, the media gave yesterday’s policy makers an easier ride. But, today’s policy makers are paying the price. There is now more for them to undo as they move their frame of reference back to the centre-left. Furthermore, a lack of responsiveness resulted in lower levels of trust, which now make it harder for the government to persuade the public when it needs to.

The flawed media policy is behind the current government’s biggest failure – its inability to sell its Population White Paper, which by its own reckoning was a vitally important strategic blueprint for the future. Because it had been unwilling to subject its immigration policies to even the gentle probing of friendly national media in the past, it lost touch with public sentiment and lost precious political capital. Today, it is unable to carry the ground on immigration issues.

Even when it speaks sense – like when the Prime Minister chided Singaporeans for their irrational, tribal response to the upcoming Philippine Independence Day celebration – it meets a wall of cynicism and hostility.

http://www.mediaasia.info/how-singapores-media-restrictions-have-hurt-even-the-pap/

Author is hubby of  ST’s editor.

PM, police chief, Kirsten Han, Heart Truths are aliens?

In Economy, Financial competency, Humour on 01/05/2014 at 5:07 am

Here via UFO Meng Seng?

This funny take on a recent scientific finding* http://www.tremeritus.com/2014/04/11/pap-makes-use-of-oxytocin-to-manipulate-us/ provoked the usual “PAP will be defeated in the next GE” BS.

Well after the next GE, when the PAP wins (albeit hopefully with only 51% of the popular vote, and a GRC or two falls to the SDP, and the WP retains their seats), I wonder if the same TRE posters who proclaims victory in the next GE will blame the PAP for for putting oxytocin into the water supply? They might as well start blaming VivianB now?

After all these TRE posters who say the PAP will be defeated in the next GE belong on the same planet as the PM**, police commissioner (he excluded NS men from his calculations of police to people ratio http://trulysingapore.wordpress.com/2014/04/08/inaccurate-police-force-to-resident-ratio-figure/)***, Kirsten Han (who thinks that S’poreans can have a dialogue with the govt on its pro-FT policies) and Heart Truths ****.

Their reality of S’pore is different from that of mine, and I suspect of most ordinary S’poreans (esp the 35% whose minds can be changed by rational arguments), Their reality is only slightly different; but juz enough to tell us that they are aliens from an alternate S’pore, in a different time and space, who came here on a UFO piloted by one Goh Meng Seng, assisted by his buddy Tan Kin Lian.

My serious point is that no-one group has a monopoly of saying or thinking irrational, stupid things. We are all stupid. It’s juz that are more stupid than others, and don’t realise their stupidity.

Good long weekend.

————————————————

*Members of a group are more likely to lie after they inhale the “love hormone” oxytocin, a study has found.

This hormone is known to be released during close bonding between groups, and mothers also release it during childbirth and breastfeeding.

The results suggest that individuals in closely bonded groups are more likely to lie when it benefits the group than when it only benefits the individual. http://www.bbc.com/news/science-environment-26771703

**Singapore’s economy has fared better than expected over the last decade, but the country’s success also brought about its own set of challenges.  PM Lee made this point in a wide-ranging discussion with regional newspaper editors  recently.

He said the country had paid the price of this fast growth, as infrastructure wasn’t able to keep up with the rapid development.

Mr Lee was asked about Singapore’s success during his time as Prime Minister and if anything exceeded his expectations.

He said yes, the country had done economically better than expected and grown faster — attributing it to favourable conditions.

As investments poured in, the government had put in resources and brought in foreign labour needed to grow. As a result, developments at the Marina Bay area sprung up in within a decade, instead of the expected 20 to 30 years.

He said that in terms of infrastructure, the country had not been able to catch up and had paid a price, and added that the government had been working hard over the past three to four years trying to come back up to speed.

He said that if the government had been able to foresee the outcome, it would have acted sooner.

But that, he said, was with the benefit of “20-20 hindsight”.

“We succeeded more than we expected, and so in terms of the infrastructure, we were not able to catch up — our public transport, building houses,” said Mr Lee. “And we paid a price.”

“We have spent the last three, four years working hard to try and come up back to speed. I wish we had been able to foresee this outcome, and then we would have acted sooner.

“But that’s 20-20 hindsight.”

Mr Lee also emphasised that it’s important for Singaporeans to feel they have a sense of belonging to the country — and that is something that is still a work in progress.

But Mr Lee acknowledged that this growth had come with a cost.

CNA extract

Success what success? Real wages grew by only 0.4% while GDP grew by 5.9% . while the prices of public housing apartments went up in a recession.

And belonging? What belonging? When FTs can hold events in public spaces, and S’poreans are ghettorised in Hong Lim?

***Wonder what the ratio would be like if  Cisco officers are included (they still wear uniforms that look like police uniforms) are included. I tot of calculating the ratio but there doesn’t seem to be any information available via a google search.

****On govt stealing interest from CPF http://sonofadud.com/2014/04/04/cpf-and-hdb-10-real-dirty-tricks/

And on CPF contributions being a tax and CPF being theft despite this study ranking S’pore’s CPF system as the  7th best out of 20 pension systems analysed http://www.investopedia.com/articles/personal-finance/042914/top-pension-systems-world.asp?utm_source=newstouse&utm_medium=Email&utm_campaign=NTU-4/30/2014

MH370 fallout hurts us too

In Economy, Indonesia, Malaysia, Tourism on 06/04/2014 at 4:49 am

The incompetency of the M’sian defence officials (no explanation yet on why aircraft were not scrambled when aircraft veered off course) and there are allegations that the veering off course was not detected forb hours), and the perceived failures may affect us.

Demand for inbound tours featuring Singapore and Malaysia could see some ripple effect, following the backlash that Malaysia has received in China …

SA Tours’ manager for inbound tours, Dan Tan, said that he has seen a 40 per cent decrease in demand for such combined packages. Mr Tan said that the bulk of the drop comes from Chinese tourists, as demand from tourists in other countries have held steady.

At this time of the year, SA Tours usually receives enquiries from Chinese tourists for large tour groups of 80 to 100 people for the mid-year holiday period. However, for now, the company has received enquiries only from small groups of three to five people.

Mr Tan said that while business has already declined because of a weaker global economy, he believes the MH370 incident is another reason behind the drop in numbers for combined inbound tours. “There’s a lot of debate online between Malaysians and the Chinese, and the Chinese are saying they won’t come to Malaysia again,” said Mr Tan.

To assure tourists, Golden Travel Services’ managing director, Cindy Chng, has told them that travelling to Malaysia is still safe, that the incident “should have no linkage with the place itself” …  no cancellations thus far from Chinese tourists coming in July for combined tours … they have expressed some concerns. “They may not have a good impression of Malaysia and don’t want to travel there,” …

She added that she is open to making changes for tourists if they want to forgo the Malaysia leg of the tour. [Package with Bali leh]

While CTC Travel does not have combined tour packages … said that he expects such sentiments to cause a drop in Chinese tourists coming to Singapore. “We’re pretty close neighbours, and people tend to link us together,” …does not think the impact will be huge … CTC … not been affected much as the company does not have many Chinese customers and focuses more on outbound travel.

Timesworld Travel & Educational Tours and Chan Brothers said that the incident has not impacted combined inbound tours, possibly because they run more corporate and educational tours which could be less affected.

But Timesworld … said that they could face a 10 to 20 per cent drop in demand for the peak season. People are still unsure and are waiting for others to take the first step, she said.

Tour operators say that the number of Chinese travellers on combined tours in the upcoming months will depend on how the situation is handled and resolved …

(BT 5 April)

PAP govt missing the point on how to grow the economy?

In Economy, Political economy on 27/03/2014 at 4:54 am

Growing the economy doesn’t mean more FTs, nor more start-ups, nor more financing of SMEs (owners use money to buy property, flashy cars and donate to WP LOL), but an innovation ecosytem.

This comment by someone analysing the stagnation in the West applies here too

What we need if we are to avoid the much-feared “secular stagnation” is not many small startups—or an obsession with financing “SMEs”–but an innovation ecosystem in which these new firms are made relevant through a dynamic interaction of public and private investments. This requires a public sector able and willing to spend large sums on education, research and those emerging areas that the private sector keeps out of (because of high capital intensity and high technological/market risk); large firms which reinvest their profits not in share-buybacks but in human capital and R&D; a financial system that lends to the real economy and not mainly to itself; tax policy that rewards long run investments over short run capital gains; immigration policy that attracts the best and the brightest from around the world; and rigorous competition policy that challenges lazy incumbents rather than letting them get away with high prices and parasitic  subsidies.

http://www.economist.com/blogs/schumpeter/2014/02/invitation-mariana-mazzucato

Given the importance the PAP places on growth (a growing economy translates into voters: a Hard Truth that went wrong when the PAP forgot that growth must benefit voters), one can only hope it focus on creating an innovative ecosystem, rather than talk about it, as it has done for yrs on end.

Related post: http://atans1.wordpress.com/2014/03/13/productivity-ageing-population-immigration/

Finnish education system aimed at creating unemployment?

In Casinos, Economy, Financial competency, Uncategorized on 26/03/2014 at 4:38 am

S’poreans who laud the Finnish education system may want to think again. Look at the unemployment figures in this chart. Look st the Finnish the S’porean figures. Finnish education better than ours leh? Our system not that bad leh? worse for rapid PAP haters, govt is promising change. LOL

Here’s another inconvenient fact for those who want us to be more Finnish. A S’porean studying there tells me that slot machines are everywhere: in convenience stores, shopping centres etc.

On gambling on per capita basis and because of our casinos, we juz behind the Ozzies. Restrictions for locals? What restrictions? Only restricted if cannot pay and pay. OK, OK, terms and conditions even then apply. Finland is a distant third.

http://www.economist.com/blogs/graphicdetail/2014/02/daily-chart-

Coming back to education, the fact that PISA ranks China (OK Shanghai as tops) in education, doesn’t deter wealthy Chinese parents from wanting a posh, private British education (think s/o JBJ). No they want potatoe speaking, half Chinese, half ang moh sons: they want a better education for their kids.

My serious point, is that education is a very complicated topics. And we shouldn’t trivalise a debate on education with throwing data willy nilly to support an ideological position, even if one LKY (the PAPpy haters tremble and cross their hearts at the mere mention of his name) does it. Remember his remarks about the kids in neighbourhood schools that gave the govt grief?

In fact, data has to be analysed, not used as sticking plaster to support or denounce any given position on any issue. There are no “right” facts, juz facts.

 

WP should resurrect its 1984 manifesto and 1991 speeches?

In Economy, Political economy, Political governance on 21/03/2014 at 4:55 am

(Or “Back to the future for WP in next GE?

In the course of helping the author of Dissident Voices in the research for the sequel, I borrowed the WP 50th Anniversary Commemorative Book from the National Library, Marine Parade branch. I couldn’t find it on the shelves so I asked the librarian if it was “protected” by an invisibility field or was only available to the “right” people. No, it wasn’t hidden away under lock and key. It was openly displayed on the shelf near the PAP’s 50th anniversary book. But it is such an inconspicuous volume that I missed it.

The book told me things that the ST never reported about the 1984 and 1991  general elections. Remember that these events happened before the internet age. If the media didn’t report something, it didn’t exist for practical reasons (Somewhere I blogged on how the 1988 results for Eunos GRC came as a surprise: WP nearly won).

I learnt that the 1984 election manifesto was entitled”Wake Up to Your Freedom , It’s Time”. calling for the people to vote for “the Hammer for a caring society”. The WP called for

– Free and adequate medical care for the needy

– Commission to review education policy

–Free schooling and equal opportunities in education for children from poor families

– Workers’ rights

– Reduced CPF contributions and the right to take your CPF savings at 55

– Adequate care for the aged

– Greater share forSsingaporeans in the economic wealth

– Help for the disabled

– Abolition of tax subsidies and privileges for the rich

– Reasonable compensation for acquired properties

– Abolition of tax on water, light and telephone services

– Review of all fees paid to government and statutory boards

– Guaranteed personal for every citizen

– Freedom from exercise of arbitrary power and protection of citizen’s rights

All this in response to the younger PAP’s ministers call to vote for the PAP for a Swiss std of living.

Compare this to the 2011 manifesto (Key Highlights) which has since been watered down. No more public tpt nationalisation.

I find the 1984 manifesto more stirring and, more importantly, rationally relevant today. True the ideas in the manifesto sounded like pie-in-the-sky in 1984 (when I voted for the WP because I believed that a one-party state was bad for S’pore even though I was happy with most of what LKY, Dr Goh and the other Water Margin “bandits” were doing for us: ya I that ungrateful), but the ideas are no longer rubbish.

According to the PAP we now have a Swiss standard of living (huh? OK, like us the Swiss are unhappy about immigration, so unhappy that in a recent referendum they told the govt to restrict immigration)), and it’s a fact that we got oddles of money in the reserves (though you wouldn’t think so reading Chris Balding and his mindless “hate S’pore” groupies) thanks partly to Dr Goh’s ideas: doesn’t this mean we can now afford the things WP was calling for in 1984?

As regards the danger of overspending, we got the capital, and part of the income from it locked away from the govt in power, whether it be PAP or not. So the govt can only spend what it raises in taxes and the like, what with borrowing requiring the president’s approval.

So the ground is fertile for trying shumething new without worrying that the new policies cannot be reversed.

Another interesting fact I learnt is that according to the book in the 1991 GE, speeches centred mainly on bread-and-better issues:

The PAP would give beautiful promises before elections but there would always be strings attached — service charges would see a hike soon after.

– Under PAP’s reign, it would be difficult to maintain a family and provide decent education for the next generation.

– Their policies have promoted social inequality and a widening of the rich-poor divide.

– Job security for the workers was pathetically limited.

Sounds familiar?  Back to the future?

So, all in all, JBJ and his merry men of bicyle thieves*, ex-Woodbridge patients* , opportunists and economic illiterates were prescient. More prescient than me at least (trained lawyer and wannabe corporate financier). They were prescient earlier than Dr Chee who was still in shorts in 1984. Remember he had been banging away since the 1990s about growing inequality etc as the SDP rightly never fails to remind us. Well JBJ and his merry men had been doing so earlier.

With this track record, why doesn’t WP remind us that it called the future right in 1984 and 1991?

One reason could be that Low is a modest man, not prone in triumphalism; he was Organising Secretary in 1988. Another reason could be that the WP thinks that in the real world the public has a bad impression of the WP in those years even though JBJ is fondly remembered in cyberspace. History began only in 2001, after Low took power from JBJ.

It’s a fact (not a Hard Truth or a Heart Truth) that after the 1997 GE, the WP went AWOL (or is it MIA?).

It went so AWOL or MIA that it could only field two candidates in 2001. It had wanted to field a GRC team too but one James Gomez** it is alleged screwed up, even though publicly Low took responsibility for the balls-up. In 1988, in the first GE under the uber gerrymandering GRC system, it fielded 32 candidates of uneven quality and contested 6 GRCs and 14 SMCs. In 1991 it fielded 13 candidates in 2 GCs and 5 SMCs. in 1996 it fielded 14 candidates in 3 GRCs and one SMC (Houygang). The candidates in 1991 and 1997 were the kind of people voters were comfortable with.

True the leadership had a major distraction that started when JBJ as the editor of the Hammer, even though he didn’t understand written Tamil, published a letter written in Tamil. Let these extracts tell the story.

Legal Action: An Tamil Article Published on THE HAMMER
In November 1995, the Party and the whole of its Central Executive Council found itself the object of two defamation suits filed by five PAP Tamil MPs and eleven members of the Organising Committee of the Tamil Language Week arising from an article published in the Party organ, “The Hammer”. The Plaintiffs’ complaint in both suits was that the article implied that their efforts to promote the Tamil Language had been less than sincere.Members of the Central Executive Council under suit by PAP Tamil MPs and the Organising Committee of the Tamil Language Week were:-
Chairman Dr Tan Bin Seng
Vice-Chairman A. Rahim Rahman
Secretary-General J. B. Jeyaretnam
Assistant Secretary-General Low Thia Khiang
Treasurer Sim Say Chuan
Organising Secretary Ng Ah Chwee
Committee Member Lim Ee Peng
Committee Member James Teo Kian Chye
Committee Member James Tan Joo Leng
Committee Member K. Mariappane
Committee Member Chan Keng Sieng
Eventually, in September 1997, the Party and its Central Executive Council members agreed to pay the five PAP Tamil MPs by 6 instalments, damages for defamation of $200,000/- (inclusive of legal costs). The suit by the eleven members of the Organizing Committee was in the course of hearing at time of writing.
 …

Judgment: A Tamil Article Published in THE HAMMER
By the said Judgment given at the High Court on the 30th November 1998 that Jeyaretnam, A Balakrishnan and the workers’ party were collectively and severally ordered to pay ten of the plaintiffs in the said suit a total sum of $265, 000/- for damages and costs to be taxed.The Worker’s Party’s appeal against the said judgment was dismissed on 21 April 1999. By then the total sum had snowballed to close to half a million dollars, inclusive of legal costs.

(Above extracts from http://archive.is/lSomP#selection-1561.0-1583.184)

(Update at 6.52 on day of publication: More on nuances of the defamation case: http://article14.blogspot.sg/2012/03/who-got-facts-wrong-kenneth-jeyaretnam.html and http://www.google.com.sg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCkQFjAA&url=http%3A%2F%2Fwww.lrwc.org%2Fws%2Fwp-content%2Fuploads%2F2012%2F03%2FDefamationinSingapore.pdf&ei=N3ErU56GM877rAfhr4D4BA&usg=AFQjCNEGC0kB5Gwv5vdRztQr1ooO1060KA&bvm=bv.63316862,d.bmk)

Whatever the reason for not invoking the past in the past since 2001, the WP should seriously rethink the strategy of trying to be near-clones of the MIW. It was the right strategy in the noughties, and it culminated in the victories in 2011 (it campaigned as the voters’ co-driver to the PAP), 2012 and 2013. Huat ah.

But is it the right strategy for the next GE? For the reasons given above, I think not. It’s like the by-election strategy that was adopted by accident in 1991 (JBJ didn’t want it but he couldn’t get enough WP candidates); gd idea for its time but by the end of the decade had outlived its usefulness.

What do you think?

Especially if the ideas expressed here (http://thehearttruths.com/2014/03/19/truth-exposed-how-the-pap-will-crash-the-singapore-economy/take root in the real world), not juz  cyberspace i.e.”cowboy towns” (actually paper-warriors’ alternative reality).

As someone who wants for starters, an opposition that deprives the PAP of a two-thirds parliamentary majority, I don’t want the next GE to be a rerun of the 1997 one.

*OK, OK . Only one of each.  But there were many “strange” MP candidates, pre 1988. But thinking about it only those who perceived reality differently from other S’poreans would have dared take on the PAP in the 70s and 80s.  Remember LKY was no wimp like Goh or Pinkie; he was the leader of Water Margin “bandits”.

**Yup the same Gabra Gomez of 2006. His instructors in BMT would sure have been real nervous during range, and grenade throwing. In 2011, SDP made sure he kept away from the form filling.

When global rankings don’t flatter, PAP’s evolving response

In Economy, Humour, Political economy on 19/03/2014 at 5:03 am

“Troubles come in threes” is an old English saying.

he PAP may have reason to agree. The PAP has had three unflattering rankings. First off was the one early this yr from the people behind the Corruption Index.

Remember Ng Eng Hen getting upset with Transparency International (TI) for giving Singapore a “poor” rating last year for the way it spends money buying weapons. He said that TI’s assumptions for its assessment were flawed. He questioned its move to group Singapore in the same category as Iraq and Afghanistan. TRE rightly pointed out that given if the government finds TI not to be credible as Dr Ng has alleged in Parliament, perhaps the government should stop using TI’s rankings and surveys altogether.

For a start perhaps, CPIB could stop using TI’s rankings on its website. Presently, it prominently displays TI’s CPI on its home page.

Next, CPIB could remove all references to TI on its website [Link]:

[Err don't think this is done]

Also, PM Lee should remember not to quote TI in his speeches anymore [Link]:

(http://www.tremeritus.com/2014/02/19/dr-ng-condemns-tis-defence-spending-rating-for-sg/)

Smart people TeamTRE. TRE readers should note that the public face of TRE is a scholar and elite schoolboy. And they hate elites even though one of elites is on TeamTRE. Kinda irrational?

This was followed by EIU naming S’pore as the most expensive city in the world. Tharman rubbished this: My take on Tharman’s take.

BT, part of the constructive, nation-building SPH came out with a piece rubbishing the basis of the index Index and saying that it was not applicable to locals. Extract from BT is at end of article. Kinda long and boring.

Finally there was S’pore’s appearance at 5th spot in the Crony-Capitalism Index http://www.economist.com/news/international/21599041-countries-where-politically-connected-businessmen-are-most-likely-prosper-planet.

So far, there has been conspicuous silence from the govt and its media running dogs (apologies to the dogs) allies, even though the new media is flogging the story with glee, together with the takeover of Olam: anything to do in the PAP?

Could it be that the PAP has realised that silence is golden when it comes to responding to unflattering rankings. Perhaps it  has realised the self-defeating nature of rubbishing the unflattering ranking. It gives more publicity to the ranking, shows how hurt it feels and its rubbishing leaves PAP supporters wondering if the assumptions or basis of flattering rankings too are rubbish especially if the rankings come from the same organisation like in case of TI’s rankings.

As someone who hates triumphalism of any sort (the fates get tempted), I hope that the PAP’s silence extends to flattering ratings too. Pigs likely to fly first.

SINGAPORE may have climbed five spots to claim the “unenviable title” of the world’s most expensive city, according to a bi-annual ranking compiled by the Economist Intelligence Unit (EIU), but economists downplay the significance of the results.

While acknowledging the undeniable existence of rising price pressures here, economists The Business Times spoke to cautioned against extrapolating that the cost of living for locals has skyrocketed.

This is because two key factors – currency fluctuations and the survey’s expatriate focus – would “automatically limit” such deductions.

In order to achieve comparative indices, EIU’s Worldwide Cost of Living survey converts each country’s prices into US dollars. Therefore, a weaker yen pushed Tokyo – last year’s most expensive city – down to sixth place, and this paved the way for Singapore to claim the dubious honour this time around.

Therefore, Singapore’s ascent to costliest city was due in part to currency fluctuations – EIU noted that over the last decade, Singapore has seen 40 per cent currency appreciation.

Said UOB economist Francis Tan: “There’s so much (buzz) about Singapore taking the top spot, but a lot of this has been fuelled by the fluctuations in different currencies. I wouldn’t read too much into it, because next year we could be number 6 again.”

Mizuho Bank economist Vishnu Varathan added: “If one were to look at cost of living from the point of view of a domestic person, then currency movements arguably don’t matter as much.”

CIMB economist Song Seng Wun was also keen to highlight the survey’s expatriate focus and its purpose as a tool for determining foreigners’ salaries.

In its description of the survey, EIU said: “The survey itself is a purpose-built Internet tool designed to help human resources and finance managers calculate cost-of-living allowances and build compensation packages for expatriates and business travellers.”

Still, emphasising that the basket of goods is “fairly broad to address a lot of essentials”, Jon Copestake, editor of the report, told BT: “The survey is also comparative between locations so it could be argued that if a city is most expensive for expats, then why not for everyone?”

But Mizuho’s Mr Varathan pointed out that “the survey has got inherent biases”: “As they’re looking to compare (like-for-like) items, they probably missed out on some local stuff, and that’s going to work against us. For example, if we take the price of a cappuccino, it will likely set you back about $5. But that’s not the same as getting Ah Poh’s coffee at Golden Shoe.”

Limitations aside, all three economists agreed that the survey results are worth reflecting upon, especially since currency fluctuations only tell part of the story.

Noting that Singapore’s rising price prominence has been “steady rather than spectacular”, EIU said that the city-state was the 18th most expensive city 10 years ago.

It said that Singapore has some structurally expensive items that “skew the overall cost of living upwards”, including cars. This has meant that transport costs in Singapore are almost three times higher than in New York.

Added EIU: “In addition, as a city-state with very few natural resources to speak of, Singapore is reliant on other countries for energy and water supplies, making it the third most expensive destination for utility costs.”

Although the survey’s findings could suggest that Singapore may be losing its cost competitiveness, UOB’s Mr Tan thinks otherwise: “There’s a reason why Singapore is expensive, and there’s a price to pay for everything. If (multinational corporations) want to be in a country where you push a button and things work, where there is near-zero political risk, where the business environment is vibrant – they’ve got to pay a premium for that.”   5March BT

Expats & us kanna pay & pay these bills

In Economy, Footie, Humour on 14/03/2014 at 4:44 am

(Update on 19th March at 9.55am: We most ex in Asia for World Cup http://sg.sports.yahoo.com/news/singapore-costliest-place-watch-world-cup-000511872.html. Thank you SingTel and MDA and Yaacob. PM, tot cabinet ministers chosen and remain on merit? What about the minister responsible for Malay affairs and info, formerly of environment ? Meritocracy? What meritocracy?)

One’s a necessity, the other’s a human rights issue for most, even PAPpies, which that brave but blur barking dog, Maruah, fails to highlight, even though it affects FTs, Maruah’s favoured group. Think I’m mean? Think the alleged “rioters”, drug mules, but not true blue S’porean Dan Tan or the alleged Jihadists.

Seriously, the PAP and its allies in the media must be shell-shocked going by their reactions to the EIU’s survey that ranked S’pore as the most expensive place to be an expat. Tharman’s explanation implies (unless he is trying again to be a comedian) that cars are only for expats: true blue S’poreans and ministers can only use public tpt? And I can’t stop laughing at the misreps in this http://www.tremeritus.com/2014/03/11/cnas-editor-the-high-cost-of-singapore-living/

There is one item that affects both locals and expats that Tharman, and Nicolas Fang and other members of the constructive, nation-building media running dogs don’t tell us Utility bills are also listed as big-ticket items by the EIU, but there is not much anyone can do to save there. Unless, of course, one were to turn off the air-conditioning.

(http://www.economist.com/blogs/banyan/2014/03/world-s-most-expensive-city)

So why don’t they tell us aircon only for FTs? Or when will they tell us this? Giving ang moh lover Bernice Wong another opportunity to diss local buyah males; not that they don’t deserve it. BTW, she might now prefer this woman basher. http://www.tremeritus.com/2014/03/11/ft-accused-of-punching-sg-singer-resigns-from-company/

The human rights issue?  The cost of watching footie: We now know the cost of watching the coming World Cup but remember that EPL  and Champions’ and Europa leagues watching ain’t cheap: M’sia and HK are a lot cheaper. For that we have to thank SingTel’s aggressive bidding, its corporate ambitions (err its run by true blue S’poreans not FTs) and Yaacob’s finest at MDA.

But let’s be fair, the strong S$ that makes it cheap for us to shop in JB and other Asean cities has played its part in making S$ S’pore that expensive: Singapore, which has seen its nominal exchange rate appreciate by 40 percent over the past decade, will obviously have higher U.S. dollar prices. But that only matters to the shrinking group of expatriates who are paid in greenbacks. Most consumers care about costs in the currency in which they earn their living.

http://blogs.reuters.com/breakingviews/2014/03/05/singapore-is-not-the-worlds-most-expensive-city/

Here’s another good point: [These surveys] fail the simple test of people revealing their preferences by their decisions. Imagine a company that used the EIU study to ask its employees in Mumbai to tone down their wage expectations in 2014. They will make a beeline to recruiters’ offices – to search for jobs in Singapore.

Majulah Singapura. Despite what TOC and TRE readers claim, S’pore’s an attractive place: I’m still here for starters. So is Jack for all his grumbling. The PAP must have done shumething good? Right Jack? Think about that when S’pore Inc jacks up GST, utility bills, tpt fares, utility bills etc despite the budget surpluses or profits..

Let’s leave the last word to Banyan:

Much has changed in this part of the world since the original writers of the Lonely Planet series chose Singapore as the place to hole up and write their second volume: South-East Asia on a Shoestring. In sum, to survive on $10 a day (well, a bit more) in Singapore these days: don’t touch the cars, drink beer instead of wine, bake your own bread and eat your meals out at the hawker centres. And then it’s all a bit more reasonable. Which is more than can be said of foregoing the air-con.

————-

*World Cup costs from yesterday’s BT

All 64 of the matches will be free for people who either sign up for – or extend existing – mio TV Gold Pack contracts or standalone Barclays Premier League (BPL) contracts for 24 months.

The Gold Pack is a combination of entertainment and BPL content on the mio TV platform. The standalone BPL content package is available to both mio TV and StarHub subscribers.

Viewers who want a World Cup-only deal will pay a one-time price of $105, excluding GST. This is the most expensive World Cup fee to date – 19 per cent higher than the pre-GST price of $88 and 59 per cent higher than the early-bird price of $66 for the 2010 World Cup.

2014 World Cup pricing for business owners will be announced “shortly”, the operator said.

And http://www.thestar.com.my/Opinion/Columnists/Insight-Down-South.aspx/?c={3054A244-0EAD-4847-A743-A2610B82E86B}

 

Productivity, ageing population & immigration

In Economy on 13/03/2014 at 4:37 am

It’s time for the govt to release productivity data on the various sectors rather than juz harp that productivity levels are not gd enough.. We can then see if the govt is telling us the truth that productivity increases lead to pay rises.

Cleaning and F&B are examples, however, of Singapore’s less productive sectors. These and sectors such as construction, security and retail have been hiring more workers and thus continue to pull down Singapore’s overall labour productivity growth, said Minister in the Prime Minister’s Office Lim Swee Say.

 This is why Singapore’s labour productivity was flat last year, a cautionary sign that despite “healthy signs that the economy is shifting to a new trend … we are not full steam ahead yet”, said Mr Lim. Singapore thus needs a “greater and broader sense of urgency” in its productivity efforts, he said.(5 March wed BT)

I read some where recently that Japan is one of the most productive nations as a result of aging and the refusal to let in the dogs FTs. The Japs use robots, lots of them.

But despite Japan’s success in growing per capita better than other Western countries (something we don’t hear from our Jap bashing ministers and their media allies) giving the lie that more FTs are needed, we need to accept that the PAP is not BSing completely when it comes to the consequences of ageing population and immigration.

Watch this “Face the Facts” BBC video

http://www.bbc.co.uk/news/magazine-25968269: Focus on why the US will still be growing faster than Europe Or Japan.

The number of people across the world over 65 years old will triple by 2050, drastically altering some countries’ demographic make-up, according to a new report by the Pew Research Center.

Perceptions of this shift vary widely across the globe, the report says.

While 87% of Japanese believe the ageing population poses a problem to the country, only 26% of Americans agree.

The survey of 21 countries found that most people believe governments should be responsible for the care of their older populations.

These demographic shifts may adversely affect economies, as more elderly people depend on working-age men and women.

It’s a complex issue. And both the PAP, and GG and friends are not telling the truth.

Here’s another angle: http://blogs.reuters.com/breakingviews/2014/02/10/age-shifts-weaken-global-economys-shock-absorbers/

The ratio of middle-aged to young matter because matters because the global economy’s ability to withstand deflationary shocks is lower when the middle-aged cohort starts dominating the young. That’s because the former saves more for retirement. In the United States, the median householder in the 45-to-54-year age group has 6 times more assets excluding home equity than someone younger than 35. But it is young peoples’ spending that spurs new investment, which in turn soaks up the savings of the middle-aged.

When the ratio is rising, as it is today, a bigger group of the middle-aged are trying to deploy their savings. But because the younger group is smaller in relative terms, its consumption is inadequate to encourage investment. As a result, the savings chase a limited number of investment opportunities, pushing up prices. Even a minor shock can lead to severe market fallout.

This phenomenon has many names: some call it a “savings glut,” others prefer “secular stagnation”. But the global population’s age structure has a message for policymakers: don’t underestimate the risks from turmoil in even minor emerging markets. With its shock absorbers frayed, the world economy will struggle to negotiate deflationary speed bumps. As the ratio of the middle-aged to the young is forecast to carry on rising for the next two decades, markets are in for a rocky ride.

The fact that those of us who disagree that we need a lot more FTS must be prepared to acknowledge is that the PAP has conventional wisdom on its side. We cannot deny this. What we have to do is keep reminding the PAP and other voters that LKY, Dr Goh and gang went against conventional development wisdom by allowing the MNCs to invest here. MNCs were seen as the new “colonialists”. Today, every country (bar a few) want them to invest in their countries.

Related post: http://atans1.wordpress.com/2013/05/23/us-experience-on-growing-gdp-via-productivity/

Cleaning and F&B are examples, however, of Singapore’s less productive sectors. These and sectors such as construction, security and retail have been hiring more workers and thus continue to pull down Singapore’s overall labour productivity growth, said Minister in the Prime Minister’s Office Lim Swee Say.

This is why Singapore’s labour productivity was flat last year, a cautionary sign that despite “healthy signs that the economy is shifting to a new trend … we are not full steam ahead yet”, said Mr Lim. Singapore thus needs a “greater and broader sense of urgency” in its productivity efforts, he said.(5 March wed BT)

Shows us the numbers ex these sectors then

Cleaning and F&B are examples, however, of Singapore’s less productive sectors. These and sectors such as construction, security and retail have been hiring more workers and thus continue to pull down Singapore’s overall labour productivity growth, said Minister in the Prime Minister’s Office Lim Swee Say.

This is why Singapore’s labour productivity was flat last year, a cautionary sign that despite “healthy signs that the economy is shifting to a new trend … we are not full steam ahead yet”, said Mr Lim. Singapore thus needs a “greater and broader sense of urgency” in its productivity efforts, he said.(5 March wed BT)

Shows us the numbers ex these sectors then

Iskandar, answer to rising costs, Reits & other cost tales

In Economy, Malaysia, Property, Reits on 09/03/2014 at 4:16 am

“The government has underestimated the impact of high business costs on our future economy,” said Inderjit Singh (Ang Mo Kio), urging the government to set up a cost competitiveness committee to tackle the root causes of soaring costs before SMEs and MNCs relocate with jobs in tow. He also asked the government to reverse its land divestment policy, which he deems a key reason behind high industrial rents.

Companies are facing a “triple whammy” of rising rents and utility bills, growing wage costs, and a shortage of workers, said Mr Singh, himself a businessman. And this “chronic” cost issue does not affect SMEs alone. “The top management of some large MNCs here … have expressed their serious concerns about the unrelenting increases of the cost of doing business coupled with the unavailability of workers,” he said.

Iskandar’s industrial parks are a “huge threat”, he said. If Singapore’s SMEs are forced to move to Johor, MNCs may follow their SME suppliers and subcontractors. “The exodus may be larger than we imagine … We risk hollowing out our economy in the future, and I would like to sound an alarm that we are close to the tipping point.”…

Though he acknowledged that PIC and PIC+ would help with topline revenues growth, Mr Singh said: “We are just trying to do too many things too fast, and this is hurting many companies.”

Both he and nominated MP R Dhinakaran, who is also managing director of Jay Gee Group, pointed to rising industrial and commercial rents as a key culprit of the high costs of doing business in Singapore.

Citing Association of Small and Medium Enterprises president Kurt Wee’s comment at BT’s Budget Roundtable that rents rise as much as three-fold when leases are renewed, Mr Dhinakaran said: “In this economic climate, rental increases of this magnitude will be fatal for a large number of SMEs.”

Both Mr Singh and Mr Dhinakaran also linked the high rental costs to the government’s land divestment policy. “JTC was a landlord for 18 per cent of industrial property some 10 years ago, but today manages only 3 per cent of the market. This is a huge shift, and the government lost the ability to influence rental prices resulting in developers and investors making the money,” said Mr Singh.

“We have to reverse this policy, even if it means the government having to buy back some of the Reits. In any case, the biggest Reit players are government-linked entities like Mapletree and CapitaLand,” he added.

Denise Phua (Moulmein-Kallang) felt that certain cost increases – the restoration of CPF contribution rates for older workers, higher progressive wages for low-income earners and cost hikes due to tighter low-skilled foreign manpower policies – are justified, with “strong rationale”.

But she also said that business rents need “the touch of the State”, and asked the government to consider “cooling measures, especially for business rents”.

BT 5 March

Given that Ascendas (a GLC) is the biggest player in the industrial land arena: why do you think when the govt says this?

The government will intervene if it sees evidence of collusion or the abuse of market dominance by any landlord – including real estate investment trusts (Reits), said Minister of State for Trade and Industry Teo Ser Luck … in Parliament … calls for help with climbing business costs (and in particular, the affordability of business space) have grown louder both in and outside of Parliament in recent months.

Reits – some of which were formed after JTC and HDB divested space to private owners – have been blamed for shorter lease renewals and sharper spikes in rentals.

“We know that it has come up as an issue, many of you have raised it. We will monitor it,” said Mr Teo.

At the same time, he noted that “Reits are not necessarily the leading players in the rental space market, because they currently only own about 13 per cent and 16 per cent of retail and industrial rental spaces respectively. Like any other landlord, they have to compete in the rental market to attract tenants and cannot charge excessive rents”.

Mr Teo also said that rents for space are likely to moderate in the medium term, as the government has released a “significant amount of land”.

Over the next three years, about 145,000 square metres of new shop space will be completed each year. Over the same period, an average of 500,000 square metres of multiple-user factory space will come on-stream each year.

For the former, that represents more than double the average annual demand for such space in the last three years; for the latter, it is just under double.

(BT 7 March)

Silicon Valley S’pore style?

Entrepreneurship will also receive a boost, since by the end of this year, JTC will open two more blocks to incubate start-ups, as part of a cluster called JTC LaunchPad@one-north.

“It’s our answer to Silicon Valley,” said Mr Teo.

Beer, real wages & next GE

In Economy, Humour on 02/03/2014 at 4:25 am

The news that beer costs $1.30 more at Kopitiam after the increase in excise duty reminds me of something I heard at CNY.

A senior marketing officer at APB told me that while Tiger still dominates the beer market here, sales of Anchor (APB’s value brand) have been up 60% (I think) since the noughties. He said S’poreans were economising. With the rise in duties, APB might be advertising,”Make mine an Anchor” or “It’s Anchor time”?

We’ll know when S’poreans really feel that they have more in their pocket when they switch back to Tiger from Anchor. That’ll be a gd time for PAP to call a GE. They can remind S’poreans that “Only the PAP fills yr belly with Tiger”.

BTW, Kopitam’s explanation that it conducted a survey before settling on a price that was within the survey range had me thinking that it must have got the constructive, nation-building Institute of Public Studies (independent think-tank that is part of the LKY School of Public Administration) or the ST to conduct the survey. My marketing friend tells me that generally coffee shops increased the price by about 50 cents (to cover the duty increase). Typical of ST or IPS to get the facts wrong. They must learn to get the facts right, not the right facts.

S’pore: Asean bridgehead for Jap cos, GM & Oz retailer

In Economy on 01/03/2014 at 4:44 am

Banzai! She’s OK mate.

Japanese companies are returning to Singapore at the levels before the global financial crisis, as look to tap growth opportunities in Southeast Asia reported MediaCorp recently, shortly after this

According to the Japanese Embassy in Singapore, it says,  businesses are gradually returning as the region recovers from the crisis and as the strengthening yen adds to their potential investment ambitions.

Primarily, though, it is the growing economies of South-east Asia which are a major draw that many companies, said Mr ShinichiOnishi, Counsellor at the Japanese Embassy.

“Many Japanese companies like to have their headquarters in Singapore, so they can cover the South-east Asian region. There are many big markets around Singapore, such as Indonesia, and the country is a convenient base said Mr Onishi.

Figures provided by the embassy show that 760 Japanese companies had operations here last year, up from 729 in 2007 and 719 in 2008, when the global financial crisis was starting to cause chaos and many foreign companies were forced to pull back fromthe region.

At the same time, the number of Japanese citizens based here is on the increase: Last year, more than 31,000 Japanese citizens were living in Singapore, up from 25,969 in 2007, according to embassy figures.

Design and architecture firm Nikken Sekkei was one such company. It returned to S’pore earlier this year, after leaving in the early 2000s because of an economic slowdown. It has gradually been expanding in the region following the financial crisis, said its Senior Executive Officer Akihiko Hamada. He said it decided to pick Singapore as it is easy to serve neighbouring countries from here and it was already familiar with S’pore.

“We wanted to set up a regional officeto serve the ASEAN region, because of its prospective marvellous economic growth and its large populationof 600 million people. In the next 10 years, there is also an anticipatedinvestment growth in real estate. Aftersome extensive research, we decidedto establish ourselves in Singapore.”

He added that talent is also readily here. Apparently, we got positive and earnest workforce. And presumably the FT policy helps.

This influx has made its impact felt on the Singapore economy. Figures provided by the Economic Development Board (EDB) show that Japan accounted for S$0.6 billion (7.2 per cent) in Total Business Expenditure and S$0.7 billion (5.5 per cent) in Fixed Asset Investments last year.

BTW1, GM has relocated its Asia Pac (ex China) HQ here late last yr ’cause of its thrust into Asean (think Indonesia, it has manufacturing facilities in Thailand) and India. It was AP HQ until it moved to Shanghai in the early noughties.

BTW2, Oz retail giant Cotton On Group yesterday announced the opening of its Asia headquarters in Singapore, which will boost investment and create 200 jobs here.

The Singapore Economic Development Board (EDB) said that as part of the investment, the group has committed to hiring that number of people by June 2018 to drive its Asia operations.

Since its inception 23 years ago, the Cotton On Group has grown to more than 1,300 stores across nine brands in 16 countries. In 2007, the group established its first store in Asia here.

Today, it has more than 160 stores throughout Singapore, Malaysia, Hong Kong, Thailand, Indonesia and the Philippines, and plans to open several hundred more in the region in the next five years, at a projected investment in excess of $100 million.

PAP must be doing something right?

Gilbert Goh is this true?

In Economy, Public Administration on 27/02/2014 at 6:02 am

Singapore Business Federation chief operating officer Victor Tay said: Measures taken to tighten the inflow of foreign PMETs “are already quite comprehensive and align with the American and European standards” and he doubts the government will go further. (Monday’s BT).

Can GG tell us if Victor Tay is telling the truth? And if he (GG) is satisfied?

If he isn’t satisfied, pls tell us why. If he is, no need to organise demonstrations that no-one attends. Juz tell local PMETs to vote PAP in next GE. They listen.

Err pigs will fly first or GG becomes attractive to S’pore wimmin. LOL.

S&P: Tough year for S’pore and regional banks

In Banks, Economy, Property on 20/02/2014 at 4:14 am

Lower economic growth prospects and tighter credit conditions could create a tougher operating environment for the banking sector here and in the region, said a report by Standard & Poor’s (S&P) late last week.

S&P expects S’pore’s GDP) growth to fall to 3.4 % this year, from 3.7% last year.

The report also notes that corporate and household indebtedness has been on the rise here. The situation could worsen this year, in anticipation of interest rates rising; higher borrowing costs amid rising. See DBS’s CEO’s tots below* and related post http://atans1.wordpress.com/2014/01/16/why-banks-tested-for-50-plunge-in-property-prices-and-other-wonderful-tales/

Related articles: The three local banks posted their reports last week too and for quick snap-shots (not the usual ST or BT fluff)

http://sbr.com.sg/financial-services/news/5-highlights-you-should-know-about-uobs-2013-results

http://sbr.com.sg/financial-services/news/find-out-what-badly-hurt-ocbcs-fy13-results

http://sbr.com.sg/financial-services/news/dbs-braces-itself-looming-30-35-drop-in-mortgage-loan-applications

Charts on banks’ loans etc

http://sbr.com.sg/financial-services/news/10-charts-prove-singapore-banks-mixed-finish-2013

Cheap way of owning UOB shares

http://atans1.wordpress.com/2011/09/05/haw-par-rediscovered-yet-again/

Update at 6.ooam:

South-east Asia’s three biggest lenders, DBS, Oversea-Chinese Banking Corp and United Overseas Bank, have seen their share prices rise this week after posting solid results last Friday. Common trends in the fourth quarter were better margins, trade finance-driven loan growth, seasonally softer treasury earnings and no asset quality weakness, CIMB noted.

UOB has been the star performer this week, gaining 3.5 per cent, while OCBC has risen 2.3 per cent and DBS 0.4 per cent.

UOB, despite being the smallest of the trio, has been particularly impressive with its fee income and regional strategies, CMC Markets Analyst Desmond Chua told TODAY.

“In terms of fee income, it has performed relatively well while the market has been lacklustre, in part due to a higher interest outlook. Its diversification to grow in regional emerging markets has also helped it maintain loan growth despite weaker mortgage demand in Singapore,” he said.

“On the other hand, OCBC’s share price might have been affected by the prospect of its overpriced acquisition of Wing Hang Bank in Hong Kong while DBS hasn’t been able to impress with its fee-based revenue in recent times despite aggressively attacking this space,” he added.

UOB’s net interest margin, which is the highest among local banks at 1.72 per cent full-year, is another advantage for the lender, Voyage Research’s Deputy Research Head Ng Kian Teck added. “UOB has historically been good on this front, and it means the bank can churn the most value out of every dollar loaned — that’s what’s attracting the investors,” he said.

All three banks ended last year on a positive note, with their fourth-quarter net profit rising between 6 and 11 per cent on the back of strong growth in net interest income.

The banks have also continued to solidify their regional presence, drawing more revenue from overseas than before.

….

“Their return on equity is healthier vis-a-vis the other industries, which are facing greater margin pressure due to higher wages. But the banks have been able to control this issue better.”

CMC Markets’ Mr Chua is also bullish, saying: “I’m looking at the banking space being an outperformer this year even though interest rates are bound to rise. Their tactical diversification across this region allows them to tap into Indonesia’s emerging affluent segment, for example.

Update at 5.15pm:Can Singapore safely deflate its property market? http://www.cnbc.com/id/101409247

————————

*DBS Bank chief executive Piyush Gupta expects home prices to fall by 10-15 per cent this year – more than the 10 per cent forecast by property consultants – but says that this decline would not make a material impact on the bank’s loan book. Speaking at DBS’s Q4 results briefing, he said it is likely that the prices of high-end homes will slide 15 per cent, and that for lower-end ones, by 10 per cent.

As for the higher interest rates expected with the shrinking of monetary stimulus policy by the US, he said he was not expecting it to have any effect on DBS. “The Singapore portfolio is really driven on income considerations . . . As I’ve said before, the pressure will likely start coming when unemployment rises – more than when property prices change.” Singapore’s unemployment rate is now at a low 1.8 per cent.

Mr Gupta said: “All our stress tests in the past have shown that we can easily withstand a 20 per cent reduction in Singapore property prices without material impact on our portfolio. We stress-test (for a) 20 (per cent fall in property prices), but don’t expect it to happen; our stress tests are always calibrated to go off the charts. My own sense is that there will be a correction of 10-15 per cent.”

He noted that the market was already stabilising and that the froth was running off, but that if this continued, the government would roll back some of the macro prudential measures. Sales of new mortgages have plunged 30-35 per cent at DBS, and by 40-50 per cent at OCBC Bank as a result of the stricter loan rules.

Mr Gupta likened the Singapore property market to that of New York and London, where prices held up even during the financial crisis between 2008 and 2012. While prices in the rest of the US fell by about a third, prices in New York slipped by only 10 per cent. It was a similar situation in London, another city where the demand is not dependent on the state of the domestic economy.

Mr Gupta said he expects regional money buying properties here to also put a floor under prices. With the slower sales, DBS’s $49.1 billion mortgage book is likely to grow by $2 billion to $2.5 billion this year, down from $3.5 billion last year and $5 billion the year before that, said Mr Gupta.

OCBC Bank chief operating officer Ching Wei Hong said of the new mortgage sales having declined across the board: “That’s expected, given all the cooling measures that have been imposed. We’ve built up a healthy inventory level. The inventory drives the growth of (the loan) book, going into 2014 and 2015. Beyond 2015 H2 and 2016, if conditions remain the same, we’ll see a bit of tapering in that period.”

(BT article last Saturday)

We really poor? Why we don’t have Swiss standard of living?

In Economy, Hong Kong on 19/02/2014 at 4:51 am

The u/m perhaps explains why the PAP despite the triumphalism  of itself  and its wallies of our Swiss standard of living, our massive (but  “secret” reserves), and massive budget surpluses (last yr’s estimated $2.4bn is likely to be $6.5bn according to economists. Gd TRE post on this http://www.tremeritus.com/2014/02/18/sg-surplus-for-this-fy-may-hit-6-5-billion/) refuses to spend our money on ourselves. I’ve always blogged that a Hard Truth born of meanness is, “Don’t spend money on making life more comfortable for S’poreans, better to cheong on markets”. But maybe we juz don’t have the $. It belongs to MNCs.

Incidentally, the article shows why local investment is preferable to foreign investment: the profits stick around. The PAP govt rightly takes credit for attracting MNCs here in the 60s and 70s to create jobs. So it should accept responsibility for not diversifying away from this reliance on MNCs, especially as attracting MNCs is not conventional wisdom. In the 60s and 70s, attracting MNC was seen as neo-colonialism.

In Singapore, personal consumption expenditure has steadily fallen over the years as a percentage of GDP and, at 35 per cent, is now barely half of what it is in Hong Kong. This is an oddity characteristic of a startup economy, not of a wealthy town like Singapore.

But it means that, on the basis of our money-in-your-hands measure, Hong Kong at US$24,000 per capita still outranks Singapore at US$21,000.

The second chart gives you a clue as to why the two economies are so different on this measure. Industrial investment in Singapore, always predominantly foreign, has become even more so in recent years, accounting for an average of about 80 per cent of total investment over the past 10 years. I do not have the equivalent figures for Hong Kong but, at a rough guess, the foreign-local ratio would be the reverse.

This foreign investment in Singapore has in turn produced a huge trade surplus in both goods and services. Over recent years, it has run at about 30 per cent of GDP. And most of this money goes right back out again to pay foreigners for all the confidence they have shown in Singapore by investing in it so heavily.

In short, Singapore’s high GDP numbers are mostly an anomaly created by very generous industrial concessions to foreigners. They do not really reflect domestic wealth.

In another way, however, these GDP measures of Hong Kong and Singapore do not mean much as a yardstick of the comparative efficiency of either system. The fact is both are parasite economies feeding off much larger neighbours, the mainland in Hong Kong’s case and Indonesia and Malaysia in Singapore’s. They are both wealthy because they perform services that their neighbours cannot or, for reasons of policy, will not perform.

http://www.scmp.com/business/economy/article/1420215/singaporeans-not-wealthy-gdp-figures-suggest

Buying, renting or the Korean way?

In Economy, Financial competency, Property on 18/02/2014 at 4:23 am

Recently, the FT carried a commentary (behind pay-wall) on why a leading UK architect was renting, not buying (UK has a home-purchasing culture which one LKY imported and made S’porean for reasons explained below).

Here are two gd responses to the article:

– “People are obliged to borrow to buy property because they need a roof over their heads when they retire and do not want to be at the mercy of a landlord, who will increase the rent annually and reserve the right to serve notice three months after signing the annual shorthold tenancy agreement.” (a reader)

–“As everyone knows, buying property used to be like standing in front of a fruit machine that was jammed on three cherries. Wealth came pouring out. And as everyone also knows, that machine has now stopped dispensing cash. You can’t buy a house that will change your life like my grandmother did, nor buy a flat that makes you rich, like I did when I was only 23. Most people can’t afford to buy anything at all.” (Lucy Kellaway, an FT columnist)”

She also reminds, “It has nothing to do with money, and everything to do with culture, emotion and family.” The very reason why the PAP govt wants S’poreans to own their homes, never mind that most of them are buying 99-yr leases.

At the end of the day as she points out, buying “is a wise move” when property prices go up, “renting is smarter” when prices go down. So long as S’pore is a one-party state with the PAP in charge, property prices may keep on rising*. With WP or SDP in charge, what do you think?

—–

In Korea, there is an unusual rental system, known as jeonse, does not involve monthly rental payments. Instead, tenants provide landlords with a deposit, typically between a quarter and half of the property’s value, to invest for the duration of the lease. Property owners keep the returns and then repay the lump sum at the end of the tenancy … Tenants’ deposits financed landlords’ properties, interest-free, while pushing renters to pool savings: over time, the deposit would become their own home-purchase fund. For decades, monthly rental was synonymous with poverty.

Yet interest rates and property prices have sunk since 2008. To earn a decent return on their investments, landlords have been raising jeonse prices.

(http://www.economist.com/news/finance-and-economics/21596566-landlords-are-having-ditch-century-old-rental-system-lumping-it)

Related article: This S’porean bot http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={157655219-19866-5631219744}

Related posts

http://atans1.wordpress.com/2014/02/10/bring-back-super-mah/

http://atans1.wordpress.com/2014/01/16/why-banks-tested-for-50-plunge-in-property-prices-and-other-wonderful-tales/

http://atans1.wordpress.com/2014/02/11/property-khaw-must-be-doing-shumething-right/

———————————————

*But not in 2014:

DBS Bank chief executive Piyush Gupta expects home prices to fall by 10-15 per cent this year – more than the 10 per cent forecast by property consultants – but says that this decline would not make a material impact on the bank’s loan book. Speaking at DBS’s Q4 results briefing, he said it is likely that the prices of high-end homes will slide 15 per cent, and that for lower-end ones, by 10 per cent.

As for the higher interest rates expected with the shrinking of monetary stimulus policy by the US, he said he was not expecting it to have any effect on DBS. “The Singapore portfolio is really driven on income considerations . . . As I’ve said before, the pressure will likely start coming when unemployment rises – more than when property prices change.” Singapore’s unemployment rate is now at a low 1.8 per cent.

Mr Gupta said: “All our stress tests in the past have shown that we can easily withstand a 20 per cent reduction in Singapore property prices without material impact on our portfolio. We stress-test (for a) 20 (per cent fall in property prices), but don’t expect it to happen; our stress tests are always calibrated to go off the charts. My own sense is that there will be a correction of 10-15 per cent.”

He noted that the market was already stabilising and that the froth was running off, but that if this continued, the government would roll back some of the macro prudential measures. Sales of new mortgages have plunged 30-35 per cent at DBS, and by 40-50 per cent at OCBC Bank as a result of the stricter loan rules.

Mr Gupta likened the Singapore property market to that of New York and London, where prices held up even during the financial crisis between 2008 and 2012. While prices in the rest of the US fell by about a third, prices in New York slipped by only 10 per cent. It was a similar situation in London, another city where the demand is not dependent on the state of the domestic economy.

Mr Gupta said he expects regional money buying properties here to also put a floor under prices. With the slower sales, DBS’s $49.1 billion mortgage book is likely to grow by $2 billion to $2.5 billion this year, down from $3.5 billion last year and $5 billion the year before that, said Mr Gupta.

OCBC Bank chief operating officer Ching Wei Hong said of the new mortgage sales having declined across the board: “That’s expected, given all the cooling measures that have been imposed. We’ve built up a healthy inventory level. The inventory drives the growth of (the loan) book, going into 2014 and 2015. Beyond 2015 H2 and 2016, if conditions remain the same, we’ll see a bit of tapering in that period.”

(BT article last Saturday)

Baer says Nay to S$ in 2014

In Currencies, Economy on 04/02/2014 at 4:27 am

THE one-way bet on the Singapore dollar which had a pretty good run the previous five years is gone, and with foreign investors staying away, expect private property prices to fall 10 per cent in the next 12 months, said Mark Matthews, Bank Julius Baer head of research Asia.

Singapore, the most expensive city in Asia is fast losing its lustre for many expats, noted Mr Matthews.

It is also the seventh-most expensive city to live in the world, while traditional rival Hong Kong is cheaper at 12th place, and Tokyo is a relative bargain at 19th, according to the website Expatistan. (BT on 31st January 2014)

BTW, Baer means bear. So bear mauls horse? TRE, TOC readers will he happy. A weak S$ leads to higher inflation*, leads to higher interest rates, leads to collapsing property market, leads to PAP defeat will be their reasoning.

Related posts

http://atans1.wordpress.com/2013/12/19/tre-readers-are-illiterate-in-economics-and-finance/

http://atans1.wordpress.com/2014/01/16/why-banks-tested-for-50-plunge-in-property-prices-and-other-wonderful-tales/

Happy Neigh Year as the Disney channel cartoon characters will say.

*Update at 9.00am on 4 February 2014:

I juz came across this report again  http://sbr.com.sg/economy/news/singapore-inflation-moderated-24-in-2013yesterday, while looking for something else. It was trupeted by ST as a triump by the govt- moderating inflation

It reminded me of an interesting observation juz before CNY. At the Outram MRT stn there is shop selling rice dishes like chicken rice. In mid November when I exited the station, it was selling the dishes at $2 (a price I know it has held for several yrs). When I next passed the stall on 29th January, the price was $2.20.

Inflation moderating? What moderating? To misquote the sleeping co-driver.

HK, S’pore, Bangkok, KL: What neither MSM nor new media tell us

In Casinos, Economy, Malaysia on 31/01/2014 at 4:20 am

But first Happy Neigh Yr .

S’pore had the second highest number of int’l tourists after HK in 2012. Distant third is Bangkok. KL is 6th. All benefit from Chinese tourists.http://www.economist.com/blogs/gulliver/2014/01/popular-cities

PAP govt must be doing shumething right, TRE , TOC readers? The casinos perhaps, Tan Jee Say?

RHB Capital says S’pore is gd place to expand

In Banks, Economy, Malaysia on 22/01/2014 at 4:40 am

So gd, that RHB Bank S’pore expects to triple profit by 2016.

RHB Bank will aggressively expand its Singapore business by three-fold within the next two years, by focusing on the small and medium enterprise business, wealth management as well as corporate and investment banking.

To meet the increased business needs, RHB Bank Singapore will be doubling its staff strength from the current 500 to 1000, the bank said Thursday.

The aggressive expansion in Singapore is part of the group’s regional strategy, said to U Chen Hock, director of group international business at RHB Banking Grou… the official opening of RHB’s latest branch in Westgate Mall in East Jurong. . (Last week’s BT)

Maybe RHB’s mgt doesn’t read a certain Forbes contributor (no not refering to one LKY), or TRE readers’ comments on S’pore’s prospects or that  more than 90% of the Marina Bay Suites are unoccupied: only 20 of the 221 units at the 66-storey tower are occupied. . But I do know that the RHB research institute has a well respected economist.

IE S’pore & Jos’ point about perfection

In Economy, Humour on 21/01/2014 at 5:24 am

Readers will know that I recently commented (here and here) on Jos Teo’s tots as articulated to ST: comments that have annoyed netizens no end. Juz read the comments posted by TRE readers grumbling that she gets so many things so wrong. “We cannot have the attitude that everything will be perfect from Day One. If we go in with that attitude, it can only mean that we have to build in a lot of redundancy, in particular came in for a lot of flak.

Well getting things wrong also seems to apply to her hubbie’s organisation (According to ST,”Her husband, Mr Teo Eng Cheong, is chief executive officer of IE Singapore …”)

IE S’pore has goofed big time. according to a BT report dated 18 January 2014:

ERRORS in trade data collection meant that International Enterprise (IE) Singapore wrongly reported two months of exports data, with possible implications for fourth-quarter GDP estimates.

October 2013’s non-oil domestic exports (NODX) was said to have grown 2.8 per cent, when in fact it had shrunk 2.7 per cent. Data for September was also overstated – NODX was initially said to have shrunk 1.2 per cent when the actual contraction was a larger 2 per cent – due to the “multiple counting of some trade permits”.

As trade data for both months have been corrected downwards, total trade and NODX for the full year 2013 will now come in lower than expected, IE said in an annex to its trade report for December, released yesterday.

IE will only announce Singapore’s full-year trade data next month, but UOB economist Francis Tan estimates that full-year NODX would have dropped 5.4 per cent, taking September and October’s erroneous figures, but could now fall a sharper 6 per cent. Both are worse than IE’s forecast of a NODX contraction of 4 to 5 per cent for 2013, last revised down in November.

It was an honest mistake. Maybe it was also example of what Jos Teo said, “We cannot have the attitude that everything will be perfect from Day One. If we go in with that attitude, it can only mean that we have to build in a lot of redundancy.

BT wrote: IE said yesterday that the errors were traced back to changes to a trade declaration system known as Access, which is used by four air express companies to declare their consolidated imports and exports. In August last year, changes were made to this system to allow the companies to make amendments to their trade permit records, such as flight details.

However, all amended permits were counted as new ones when transmitted from the Access system to the Singapore Customs’ Trade Statistics System, and then to IE Singapore. In nominal terms, the counting errors meant a difference between an originally tabulated NODX value of $15.599 billion for October, and a corrected value of $14.757 billion.

In response to BT’s queries, IE explained that the over-reporting was not immediately apparent as the values of the individual records still fell within the expected range. “When unusually large numbers were picked up, IE Singapore worked with Singapore Customs immediately to investigate and rectify the issue,” IE said.

For trade data, Singapore Customs conducts selective checks of trade permits against the commercial documents to verify the accuracy of data submitted by traders. “IE Singapore also conducts checks on a monthly basis to track trends based on the value of goods and large ticket items. Export and import categories with significant data swings will be picked up for further verification and analysis in consultation with Singapore Customs,”  …

One economist is annoyed:

DBS economist Irvin Seah thinks internal processes need to be tightened when it comes to collecting official data. “We have seen quite significant revisions, not just in NODX, but also in the advanced GDP estimates. Whether these are estimates or actual figures, there ought to be as little revision as possible. These numbers are important to everyone who wants a good gauge of where the economy is going, not just economists,” he said.

But another was relaxed,“no great damage was done”, said Barclays economist Joey Chew. “After all, the October red herring of a recovery was quickly refuted the very next month when November exports fell sharply, indicating that Singapore exports are clearly not yet out of the woods. The continued slump in electronics in December further confirmed that,” she said.

Whatever it is, S’pore’s reputation remains intact according to BT (But it would say that wouldn’t it?)

As for whether these errors undermine the reliability of Singapore’s statistics, Credit Suisse economist Michael Wan said that he sees them as inherent to the “messy affair” of collecting data. “I don’t think it raises questions about the integrity of Singapore’s statistical collection fundamentally. It’s always an ongoing affair to reduce the number of errors,” he said.

UOB’s Mr Tan said: “The good thing is that they are at least signalling that they are doing the right thing, by coming out and correcting the errors.”

A couple of errors ought not to affect credibility, said Barclays’ Ms Chew. “Especially if the errors are due to technological problems rather than data collection issues, or people gaming the system – for example Chinese exporters reporting fake trade.”

But IE S’pore should not be complacent: Barclay’s Ms Chew does have other issues to raise about Singapore’s data though. “First, the timeliness. We are one of the last to report CPI (consumer price index) in the region, and I don’t understand why. Also, IE Singapore does not release a lot of the export data they collect.”

Jos and hubby should be hoping that the recent bad publicity is part of the karma of the year of the Goat, not the karma for 2014. If the latter, expect more to hear more nad publicity from Jos and IE S’pore?

Intellectual netizen hero critiques doom monger & govt policy

In Economy, Indonesia, Malaysia, Property on 18/01/2014 at 4:56 am

(Or “Are S’pore & other major Asean economies are doomed?)

Even though Singapore is no longer an emerging market nation, I consider its bubble economy to be part of the overall emerging markets bubble that I have been warning about due to its strategic role and location in Southeast Asia, which is also known as ASEAN (Association of Southeast Asian Nations). My recent reports on Malaysia, Thailand, the Philippines, and Indonesia show that the entire region is caught up in a massive bubble, and Singapore is benefiting from this bubble by acting as ASEAN’s financial center.

(http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown)

This piece and its sequel have been well publicised, and the central babk has critiqued the first piece (It would wouldn’t it?)

Readers may recall that Donald Low is a scholar who has liberal viewers despite being the Associate Dean (Executive Education and Research) at the Lee Kuan Yew School of Public Policy. He served fifteen years in the Singapore government and I’ve been told he was one of the fathers of Workfare (a scheme I support though I think it’s too mean). He critiqued the article on Facebook as regards S’pore. I’ve paragraphed hos comments to make it easier on the eye:

Donald Low’s FC

There’s a Forbes article on an impending crash in Singapore circulating widely on FB. I won’t dignify it by posting it but here are my thoughts about it: I read the article a while ago and wasn’t at all convinced with his line of argument. It’s just far too sweeping.

Above all, if you look at the usual triggers of financial crises, they are mostly non-existent in Singapore. We don’t have a large current account deficit – on the contrary, we have a huge current account surplus. We don’t have a large fiscal deficit – we run structural budget surpluses. And we don’t have an highly leveraged/indebted household or corporate sector.

On his point about a housing bubble in Singapore fueled by low interest rates, he is partially correct. But to claim that we are on the verge of financial collapse on account of that is utter nonsense. Our leverage ratios are still healthy and I suspect a large part of the run-up in housing prices in recent years is inadequate supply – a problem which has now been largely corrected. Will we see house prices fall this year? Yes, quite possibly. My guess is 10% but even if house prices were to fall 20%, I don’t think it will impact the health of our banks or even our households. There will be households that have negative equity, but as long as they have the cash flow to service their mortgages, it will not precipitate a financial crash.

But there is one argument from the article that is worth highlighting and which I mostly agree with. And that is booms which are led by real estate development and the financial sector are mostly illusory. They create the impression of economic dynamism without creating any real productive capacity in the economy (think back to Bangkok, KL and Jakarta just before the Asian crisis). They also distort and re-direct resources away from productive activities. Real estate and finance are inherently distributive, not creative, activities – they move money and wealth around, but they don’t produce any productive capacity and technological capabilities for the economy.

So when I argue that the Singapore government should look not just at the quantity of growth, but also the quality of growth, I have in mind not just equity and distributional considerations, but also the composition of growth. Is the growth coming from manufacturing and high value-added services, or is it dominated by real estate and finance? If it’s the latter, we have a structural problem.

Finally, I would also highlight that what this article reveals is the failure of government efforts to attract high net worth individuals to Singapore, to make Singapore a wealth management hub for the rich, and to bring in more billionaires even if they increase inequality. I think the costs to the economy and society of such efforts far outweigh their benefits. What productive capacity do property speculators and HNWIs who park their monies in Singapore help to create? So yes, we get a tiny wealth management industry that employs a few thousand people and manages several billion dollars. We can easily do without these ‘benefits’. Meanwhile, their costs in terms of raising property prices, the competition they create for positional goods, and their ostentatious lifestyles undermine our egalitarian norms and values. They also reduce the trust and mutual regard citizens have for one another, undermining their willingness to contribute to more redistribution. All in, I would say that the efforts to attract rich foreigners to Singapore are incredibly misguided.

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