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Archive for the ‘Economy’ Category

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 Uncategorized, Economy, Casinos, Financial competency 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.

Why banks tested for 50% plunge in property prices and other wonderful tales

In Economy, Property on 16/01/2014 at 4:23 am

Singapore banks are so well-buffered that they will be able to withstand even a 50 per cent plunge in property prices here if this were to occur over the next two years, say stress tests done by the International Monetary Fund (IMF) and the Monetary Authority of Singapore (MAS). (BT late last yr)

I waz wondering when I read the above, why 50%?

Now I know: typical govt over-reaction:

BOTH public and private housing prices in Singapore have finally come down after a raft of government market curbs.

Prices in the once red-hot suburban private home market dropped in the fourth quarter of last year for the first time since 2009, new data yesterday showed. This dragged down overall private home prices.

Housing Board flat resale prices also tumbled in the October to December period, hard on the heels of a third-quarter decline.

This marked the first time public housing prices have slid for two straight quarters since 2005.

Consultants said weak demand for homes could mean that sellers will finally be at the mercy of home buyers this year, adding that a bumper crop of upcoming homes will swing things more heavily in favour of buyers.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={417120496-19741-7479931115}

Well if property prices ever fell 50%, the PAP govt would be overthrown overnight. And the co-driver kicked out with it. mad Doc and his RI doctors will be in charge Actually it would be the end of the world as we know it.

But maybe the govt isn’t over-reacting: http://www.forbes.com/sites/jessecolombo/2014/01/13/why-singapores-economy-is-heading-for-an-iceland-style-meltdown/. Note that the article conveniently forgets that the banks have been stress-tested to survive even a 50% fall in property prices. Lots of other things wrong with the analysis that I’ll cover one of these days. But for now juz remember that one LKY was a regular contributor to Forbes. Taz the quality of their contributors? Oh, the central bank has come up with a rebuttal: read it in yesterday’s constructive, nation-building media.

Next tale: the cowboys were correct that the govt should restrict HDB sales to PRs:

The proportion of Permanent Residents (PRs) buying Housing and Development Board (HDB) resale flats has gone down in the last few months.

This comes after new rules to stabilise the HDB resale market were announced in August.

PRs now have to wait three years after obtaining their Singapore PR status before they are allowed to buy an HDB resale flat.

According to HDB, in the three months after the new rules were announced, PRs made up 12 per cent of all HDB resale transactions, with 528 units sold to them.

This is down eight percentage points from January to August, when PRs made up 20 per cent of all HDB resale transactions.

There were 2,581 resale flats sold during that period.

HDB also noted that the decrease is not unexpected, as there are now fewer PRs eligible to buy a resale flat.

It also pointed out the drop may not be solely due to the three-year waiting period. (CNA 23 december 2013).

Maybe PM should outsource policy decisions to the masses. Even IT operations are being done by the masses via crowdsourcing http://www.bbc.co.uk/news/business-25714443.

Cost benefit analysis: PAP govt underestimating the value of human life?

In Economy, Financial competency, Political economy, Political governance on 12/01/2014 at 6:27 am

I came across this in the latest copy of the Economist in the letters section:

Petty’s cash ledger

SIR – You credited William Petty with inventing economics in the 17th century, but did not do full justice to his cost-benefit calculations (Free exchange, December 21st). The good doctor estimated the value of a person to be somewhere between £60-90 and in “Political Arithmetick” he suggested these values could be used “to compute the loss we have sustained” from the plague and war. In 1667 he argued that given the value of an individual and the cost of transporting people away from the plague in London and caring for them, every pound spent would yield a return of £84 as the probability of survival increased. (He also suggested that an individual in England was worth £90, and in Ireland £70.)

In a lecture on anatomy in 1676 Petty argued that the state should intervene to assure better medicine, which could save 200,000 subjects a year and thus represented a sensible state expenditure. Today’s economic estimates are more refined and the data are more exact, but the arguments presented by Petty still resonate in public policy.

Rashi Fein
Professor emeritus of the economics of medicine
Harvard Medical School

This set me thinking that since the govt is forever touting the importance of costing out the benefits of any spending proposal (something I agree with), maybe it should tell us how much it values a S’porean in monetary terms? Esp since the PM has just said that that more social spending does not mean better results http://www.tremeritus.com/2014/01/11/like-a-war-zone/

As pigs are likely to fly first maybe the SDP RI brains trust (Paul A, Wee Nam, Ang -Drs three- etc) can  “force” the govt to do so by coming up with their own SDP valuation, and what they calculate is the PAP valuation.

As to the co driver doing something? They wearing white?

http://atans1.wordpress.com/2013/12/13/why-a-2015-ge-is-now-more-probable/

Alcohol, Little India and the migrant worker

In Economy on 06/01/2014 at 5:24 am

It’ll soon be a month since the disturbance in Little India which has rattled S’poreans (that they over-reacted). Even the PM was rattled, so much so  that he still talked a lot of cock about it at Christmas http://singaporedesk.blogspot.sg/2013/12/taking-easy-way-out.html.

Here are some relevant facts that I’ve discovered that are not reported in our constructive nation-building media or in the usually anti govt alternative media that I hope will help S’poreans towards a right understanding of the riot and surrounding issues:

– Alcohol is available in the dormitories’ supermarkets. I had tot they were banned from selling alcohol. The most popular brands are two imported brands from India (one is Kingfisher, the other I can’t recall), followed by our very own ABC. Needless to say, the beers are not yr  normal strength beers: they have alcohol content sof 10-12% versus the usual 4%.

– To avoid problems, the beer is only sold in cans, not bottles. For those who’ve not been involved in drunken brawls: broken beer bottles are useful in a fight. Just grab the handle of an empty bottle (no point wasting gd beer), and smash it against a wall and you are ready to maim or kill. But if the police catch you with it even if no-one is injured by it, it’s the cane after “due process”.

– Despite these sales, there are no reports in the alternative media about brawls, scenes of drunkenness near the supermarkets. Maybe, the workers are responsible drinkers? Or TOC, TRE reporters don’t do dorm visits (unlike Lianain Films)? As for ST and other MSM publications reporting such fights, they wouldn’t report such frights even if they happened outside their doorsteps would they? They will call Yaacob and ask,”Is there a fight? What are the right facts for us to report?”?

– The Little India shopkeepers (and their landlords) made great money off these workers. I’ve heard that a small shop selling veggies could gross S$90,000 in sales on a gd weekend day. When you hear media reports of the bizmen in the area moaning, bear this in mind. BTW, I understand that the dorm supermarkets’ prices of Indian, Bangladeshi favourites and staples are competitive. It’s juz that the workers love shopping in Little India: it’s their home away from home.

– Prior to the riot, Little India on weekends wasn’t a nice place to hold seminars on “the struggle for workers’ rights” (Maruah tried to hold its do on a Monday) or for romantic dates. A beer marketing executive,who regularly tours outlets, says that fights and drunkenness were a common occurrences in the area. Guess minister Lui didn’t speak up about too many alcohol outlets because of the previous observation about the profits being made. Let me very clear, if Boat Quay or Clarke Quay were as crowded as little India on weekends, they too would be unpleasant places. No ang moh tua kee pls. Besides our manual worker guests don’t beat up taxi-drivers for sport: only drunken ang mohs do it, then flee or plead they are depressed.

– Since the riot, I’ve seen more workers going to and returning from the the Marine Parade sea front on weekends and public hols. I expect the area to remain peaceful and crime free.

They come hear to earn a living, a hard one: not to get drunk, brawl , steal or molest. They are like us

                                                                                               Hath
 59   not a Jew eyes? hath not a Jew hands, organs,
 60   dimensions, senses, affections, passions? fed with
 61   the same food, hurt with the same weapons, subject
 62   to the same diseases, healed by the same means,
 63   warmed and cooled by the same winter and summer, as
 64   a Christian is? If you prick us, do we not bleed?
 65   if you tickle us, do we not laugh? if you poison
 66   us, do we not die?

(Shylock in The Merchant of Venice)

Pls spare migrant workers pennies from the $2.5bn++ they “gift” S’pore

In Economy, Political governance, Public Administration on 27/12/2013 at 4:30 am

(This is a follow-up to this on how Santa 2.0, the govt and Scrooge are related.)

TOC’s Terry Xu commented on Facebook a few days ago: The total foreign worker levies collected were S$2.5 billion for the Financial Year 2011 and S$1.9 billion for the Financial Year 2010. Similar to other sources of Government revenue, the foreign worker levies are not ringfenced for any specific purposes. All Government revenue collected would go into the Consolidated Fund used to fund Government expenditures in general.”

And it goes up even more in the year 2012, 2013 given that there are more workers and that the levies have increased since then … (Thanks Terry for this info. I’d been meaning to check up the quantum and use of the levies, but never got round to googling)

This means the govt can do more, a lot more, to ensure that these workers have better living and work environments, and are not exploited (This is how bad things can be: http://www.lianainfilms.com/2013/12/the-singapore-way/), without increasing the tax burden on S’poreans and others living here, or on the workers’ employers, and biz in general.

Surely some of this money can be used to set-up a medical insurance fund and a general welfare fund for these workers? Surplus for our SWFs to use to place bets on juz a bit smaller. True, we pay them wages but those wages are off-set by the Hard Truth that if they were not available, we’d be paying serious money to get workers or robots to do what they are currently doing for “peanuts”.

But I would like to remind the activists that there are worse places that migrant workers are willing to go to.

A November report produced by Amnesty International, the British-based rights group, found the Qatari construction industry to be “rife with abuse”, including forced labour and virtual slavery. Workers complained that their salaries were half what they were promised, or that they had not been paid at all for months. Others said their wages had been docked for taking five-minute breaks during 18-hour shifts in the searing summer heat. Sponsors routinely confiscate their employees’ passports, preventing them from changing jobs or leaving the country. In the most extreme cases, workers have paid with their lives: this summer 44 Nepalese migrants died in two months from heart failure or work-related accidents. The International Trade Union Confederation warns that as many as 4,000 labourers could perish during the next nine years of construction.

(http://www.economist.com/blogs/gametheory/2013/12/football-and-labour-rights-qatar)

I’m not using the fact that are are worse places than S’pore to defend the S’pore Way: juz to try to put things in perspective. We are not “Swiss” enough, but we are not cruel slave masters, far from it. Interestingly, about 10 yrs I met an Iraqi who was working in ST. We got talking and somehow touched on employer/ employee relations: and he reminded me that the people of the Gulf had only stopped owning slaves legally in the early 20th century, and that there was a slave, master mentality there even in 2003.

Workfair and Maruah should campaign for the use of some of the $2.5bn to be used to provide medical insurance and other benefits, not against the deportation without, what they claim, is due process. I’ll blog on the deportation issue next week.

Ho Ho Ho: Santa = S’pore govt = Scrooge?

In Economy, Humour, Political economy, Political governance on 26/12/2013 at 5:54 am

Santa’s critics note that higher profits and productivity have not resulted in higher pay for the elves. They were seeing their real incomes squeezed even before the Fairy Tale of Wall Street had an unhappy ending in 2008, and then took pay cuts rather than lose their jobs. With welfare being cut, most plumped for a job over the dole even if it meant a cut in living standards.

Santa accepts that the workforce has made sacrifices. But he insists these are vital to keep the company going at a time of cut-throat global competition. The elves have to understand, he adds, that the alternative to zero-hour contracts and pay cuts would be that the jobs would be outsourced from Lapland to a lower-cost grotto in the far east.

http://www.theguardian.com/business/economics-blog/2013/dec/22/santa-elves-living-standards-surveillance

Doesn’t Santa sound like PM or his dad or VivianB or “cheaper, faster” Zorro  etc? I’m so confident that readers will agree that I wouldn’t give examples. This isn’t ST.

As to Scrooge, this is how Dickens described Scrooge before Scrooge repented and became a Dr Chee type of person (actually better than Mad Dog  as Scrooge had his personal wealth to spend on the poor, Dr Chee is depending on our reserves and higher taxes)

“Oh! but he was a tight-fisted hand at the grindstone, Scrooge! a squeezing, wrenching, grasping, scraping, clutching, covetous old sinner! Hard and sharp as flint, from which no steel had ever struck out generous fire; secret, and self-contained, and solitary as an oyster. The cold within him froze his old features, nipped his pointed nose, shriveled his cheek, stiffened his gait; made his eyes red, his thin lips blue; and spoke out shrewdly in his grating voice. A frosty rime was on his head, and on his eyebrows, and his wiry chin. He carried his own low temperature always about with him; he iced his office in the dog-days and didn’t thaw it one degree at Christmas.”

“Even the blindmen’s dogs appeared to know him; and when they saw him coming on, would tug their owners into doorways and up courts; and then would wag their tails as though they said, ‘No eye at all is better than an evil eye, dark master!”

Mean of Dickens? Scrooge when asked for donations for the poor, “There are many things which I might have derived good, by which I have not profited” and  “Are there no prisons?”. Sounds very much like our very own VivianB when he was welfare minister?

Merry Christmas.

BT inflation headline talks sucks, really sucks

In Economy, Financial competency, Holidays and Festivals, Media on 24/12/2013 at 6:28 am

I recently blogged that the PAP should approach mrbrown to help PAP MPs in particular Baey and Tharman. Looks like BT needs his help in getting the facts “right”.Let me explain.

I waz planning to take a break from nasty, vicious blogging as it’s the time of peace and gooddwill towards men.

Happily for my inner Grinch , I read this

Core inflation inches higher, forecasts up
Economists point to higher inflation for next year with pressure from wages, business costs, COEs
… Inflation rose to 2.6 per cent year-on-year in November, from 2 per cent the previous month, with private-sector economists forecasting higher inflation for next year. In a statement yesterday, the Monetary Authority of Singapore (MAS) and the Ministry of Trade and Industry (MTI) said core inflation – which strips out accommodation and private road transport costs – also picked up pace to 2.1 per cent in November, compared with 1.8 per cent in October.Based on the above, core inflation was up 16.7%. Taz’s “inching” in a month?

Trying to spin gold out of bull dust? Or is shumeone seriously drunk or mathematically challenged? BTW, inflation was up 30% in a month.

Santa, I want for Christmas “Headlines from a Mathematically Literate World”

Our World: Unemployment Rate Jumps from 7.6% to 7.8%
Mathematically Literate World: Unemployment Rate Probably a Little Under 8%; Maybe Rising, or Not, Can’t Really Tell

Our WorldFirm’s Meteoric Rise Explained by Daring Strategy, Bold Leadership
Mathematically Literate WorldFirm’s Meteoric Rise Explained by Good Luck, Selection Bias

Our WorldGas Prices Hit Record High (Unadjusted for Inflation)
Mathematically Literate WorldGas Prices Hit Record High (In a Vacuous, Meaningless Sense)

Read more

http://mathwithbaddrawings.com/2013/12/02/headlines-from-a-mathematically-literate-world/

And if interested on why core inflation was up 16.7% (can’t help think of “ponding”)

A higher headline inflation figure in November – marking the first time since March that inflation has risen beyond the 2 per cent level – was generally expected as it had been flagged by MAS and MTI previously.

The biggest driver was higher accommodation costs, which rose 3.3 per cent year on year from 1.9 per cent in October, when service and conservancy charges rebates to HDB households had kept housing-related costs down.

 

TRE readers are illiterate in economics and finance

In Economy, Financial competency, Property on 19/12/2013 at 4:51 am

Or at least many are. Let me explain.

TRE posted this piece of mine on Reits.

It provoked a long rant* from someone called Armchair Anarchist. His or her basic grumble against the govt was that interest rates should have been raised a few back to curb various ills including rising property prices. It received huge positive ratings. And there are no dissenting views, not one.

Last yr around this time, I met an old friend at a function. He was an ISD detainee (short while and it seems ’cause dad was Barisan partisan)) and a strike leader. He later got a MA in Econs and was in admin service (taz meritocracy at work in S’pore, TRE readers, at least 30 yrs ago) before becoming a wheeler-dealer.He was, and is a proud S’porean. No S’pore hater he.

We were discussing what Tharman would do in 2013 to control inflation and property prices given that he couldn’t use interest rates, and the policy of strengthening the currency slowly was not working to control inflation or property prices.

We knew that raising interest rates would only make things worse. Given that everyone (except TRE, TOC and TRS readers) think that S’pore is a safe haven, raising interest rates will result in more foreign money pouring in to take advantage of the better yield here. The currency will be pushed up and exports and services will become uncompetitive. Prices of  most properties (and other assets) will rise. FTs will be willing to accept lower wages, ’cause S$ worth a lot more in their home currencies.

The result: a recession, unemployment among locals, deflation and rising asset prices (except possibly for HDB flats and low end condos: S’porean PMEs default ’cause they lose jobs to FTs). He and I and others with access to credit would make a killing buy low-end condos and renting them out to FT PMEs.

Is this what TRE readers want for Christmas and Chinese New Year?

Are they that deft?

—-

*Armchair Anarchist:

S-REITs payouts lean towards the high side of the global REIT market (e.g. average dividend yield of around 6+% compared to less than 5% in Japan and Germany, 6% UK). If dividends are cut by 20-25%, the yield is still relatively attractive given the dearth of high yielding instruments in Singapore.

But I do find MAS’s warning rather strange. If they are indeed worried about such things as REITs and the health of the Singapore financial sector in face of a potential rise in interest rates, the MAS ought to have engineered such a rise in rates at least 2 years ago and taken the froth out of REITS, the property market and reduced the risk in Singaprean banks’s balance sheets. Why issue warning now that the Fed may begin to taper when the MAS ought to have acted long ago? The easy financing for real estate speculation and the rise in inflation are not new. These had been with us for a few years now and are clear warning signs that interest rates are too low and liquidity too plentiful in Singapore. Look at bank deposit rates and CPF ordinary account rates: we suffered from negative real interest rates when adjusted for the underlying inflation rate (CPI is too crude, PCE deflator is a better indicator). When real rates are negative, the ordinary savers suffered as the value of their savings are inflated away. But it is great for speculators and big companies because it provides a very cheap source of debt financing.

Seems to me, the MAS is probably basking in the reflected glory of superior GDP growth while sleeping on the job in terms of forecasting the real threat to the economy. Another bunch of over-paid, incompetent elites?

Rating: +25 (from 25 votes)

Armchair Anarchist:

I like expand a little bit more on MAS caution regarding rise in interest rates.

My view is MAS left it rather late in the day to caution and to act if necessary. Certain sectors will be hit, not least real estate which had several adrenalin shots that propel values ever higher. But, for our savings and long term investments, it is no bad thing if interest rates are going up. It is my conviction that not just exercising political repression, the govt also exercise financial repression. I said before our AAA-rating is absolutely great for GLCs and big companies but a total disaster for ordinary citizens who have to save and invest for retirement and the rainy day. The Govt incessant extraction of revenues from all sorts of economic activity (tax, COE, surcharges etc)result in persistent budget surplus because in their anti-welfare extremism, the govt do not spend much on social, health and infrastructure programmes. Therefore, our bond yields are artificially low because the govt do not really need to borrow. The govt actually pretend that our CPF rates are pegged to market but in effect the govt control the levers of the bond markets giving themselves a low financing rate. The effect is that we received bugger-all out of bank deposits, CPF and bonds. Singapore company dividends are lousy because whatever crap they pay is still higher than CPF and bond yields.

So let interest rates go up. At least it reverse the equation slightly in favour of the man in the street rather than have the Govt, the GLCs and the big companies indulged themselves in winner-takes-all.

Rating: +20 (from 20 votes)

Why a 2015 GE is now more probable

In Economy, Political governance on 13/12/2013 at 6:03 am

(Note there is an update since first publication at the end to reflect the PAP’s calls for ideas on how to celebrate a coming 50th anniversary.)

I’ve been beating the DRUMS that 2014 is the last window that the govt can raise prices because the GE has to be held sometime in 2016 and raising prices in 2015 is too close for comfort. I’ve also been drumming that an election in 2015 is possible.

Well going by one report and one speech. last week,  an election in mid 2015 is  more than probable

The report: Singapore’s economic growth will stay strong in the next two years relative to the other countries in Asean, despite the cooling of China’s economic engine, the Centre for Economics and Business Research (Cebr) has predicted.

The independent consultancy said in its latest quarterly report that healthy increases in consumption and strong exports will boost Singapore’s gross domestic product (GDP) by 3.8 per cent this year.

Next year, strong momentum and greater demand will push up its economic growth to 4.1 per cent.

In the year after, 2015, Singapore’s growth will ease, but remain robust at 3.9 per cent, said the Cebr report entitled “Economic Insight, Southeast Asia”.

(http://www.businesstimes.com.sg/premium/top-stories/spore-economy-stay-pink-next-2-years-20131205)

The speech: Minister for Social and Family Development and Second Minister for Defence Chan Chun Sing  said the PAP has to deliver a better life for Singaporeans during its term of government, and also convince the people that it is the best party to deliver beyond this term. He was addressing addressed 1,000 PAP members at the party’s annual gathering on Sunday morning.

He, who is also the PAP Organising Secretary, said the party will act to “deliver, enable and communicate”*.

(Aside, netizens are missing the point by focusing Chan’s call for party members to “continuously and strenuously defend the common space for people to speak up”.

“If we do not stand up for what we believe, other people will occupy that space and cast us into irrelevance. We must not concede the space – physical or cyber . . . We will have to do battle everywhere as necessary.” 

And netizens are not making hay that the FT rioters really listened to him, unlike Sheep, Singkies S’poreans)

So, returning to the issue of a GE in 2015, the ground is likely to be sweet in mid, late 2015. In addition to a decent economy (other Asean countries too will do well), S’poreans would have forgotten about the early 2014 price rises in public tpt etc, lulled by the goodies in the 2015 Budget, improving public tpt, steady HDB prices, and propaganda that the govt is no longer pro-FTs and that it cares for S’poreans.

On the last point, there will a lot of smoke about the need for FT manual workers for the infrastructure projects. Already an ex-ST editor (who is it is alleged had designs on the top job in ST) was quoted (singing for X’mas goodies?**) as saying,  “It will be tough for the (government) to fulfill its promises on infrastructure development without foreign manpower,” observed Singaporean blogger Bertha Henson. “And it would not make sense for citizens to advocate such a tightening of the tap that it compromises our own future.”. One of these days I’ll blog on why her first statement is an exaggeration, that is straight out of the PAP’s spin book.

Then after the GE, and PAP has its more than two-thirds majority, and its toilet-trained WP***, the balance, let rip the GST increase, price rises and resume the flood of FTs?

What can the paper warriors do to counter the paper generals? In late 2014, and in 2015, it is impt for S’pore Notes, TOC, TRE (if it hasn’t closed down in disgust at the failure of its ungrateful readers to fund its continued existence: they expect Andrew, Richard etc not only to work for free, but to fund the servers needed), the other tua kee bloggers, and the ikan bilis to keep reminding voters to ask the PAP if after the GE, the govt will increase GST, or other taxes, or the cost of services, or allow in more FTs (to achieve a population of 8m, more than the White Paper projection of 6.9m). Of course, the PAP leaders and ministers will will say not say, “YES”, lest they lose a few more GRCs.

The PAP will then be held accountable for their pre-election promises, if the promises are broken, somewhere down the line, hopefully. But then, the PAPpies may play the same cyclical, cynical game again, knowing that S’poreans got short memories: even sheep got better memories.

Update on 27th January at 4.05am: I’ve been asked why I didn’t mention the 50th anniversary celebrations as an election feel good factor. The reason is that this is a two-edged sword. If handled in the traditional PAP manner (Soviet, Chinese, North Korean parades) style, it would remind older S’poreans (like self) of the difference in the quality of the PAP leadership. I think the PAP realises this. Witness the spate of ministers asking S’poreans for ideas on how to celebrate 50 yrs of independence? Since when has the PAP listened to the people?

—-

*“The world has changed, and so must we,” declared Prime Minister Lee Hsien Loong in Mandarin yesterday at the biennial People’s Action Party (PAP) convention.

To that end, the ruling party has adopted a new resolution statement – its first in 25 years – which reinterprets the PAP’s goals so as to stay relevant “in this new phase and with the new generation”.

“This is a strategic shift,” said Mr Lee. “Although the content looks similar, its meaning is different. This is a new frame of thinking for the PAP, to make the party’s long-term goals more relevant to the needs of society today.”

As the culmination of five engagement sessions with party members (spread over the course of three months), the main thrust of the new eight-point resolution involves upholding an “open and compassionate meritocracy” in a “fair and just society” with “opportunities for all Singaporeans”.

“We rely on free markets to grow the pie but will moderate its excesses . . . We support a progressive system of benefits and taxes to enable all to enjoy quality education, good housing, and affordable healthcare,” (Extract from BT)

**She juz kanna saboed by MDA as readers will know.

***

Men in White wearing blue

Men in Blue wearing white. Yup Auntie’s a man. Wonder if Kim Song noticed? (OK, OK, I sorry for being mean to an old RI boy).

Not yet reported by MSM: Google builds HDB-type data centre here

In Economy on 12/12/2013 at 6:40 am

And it’sw a global first

Google has opened its first ever data centres in Asia as it wants to grow further in the region: one is in S’pore, the other in Taiwan. The one in Taiwan is bigger.

Singapore’s small size inspired us to try something a little different. Instead of spreading the data center out, we built it up, creating our first urban, multi-story data center. Our neighbors include a local primary school and several HDBs (for non-Singaporeans, HDBs are publicly run housing, which around 85% of Singaporean’s call home).

Our first multi-story data center

http://googleasiapacific.blogspot.co.uk/2013/12/our-first-data-centers-in-asia-are-up.html

Bang yr balls in frustration all you S’pore self-haters, esp the cheapos who read TRE but who are unwilling to fund it.

 

An outdated economic Hard Truth

In Economy on 05/12/2013 at 5:19 am

Uncle Leong wrote recently, “How many more years and how many times must we hear the same old pledge and rhetoric that with productivity, the pay of low-wage workers will go up?”

The PAP has at least since 1965 stressed that productivity and wage rises must go hand in hand (BTW, taz not the case when they came into power in 1959. If you read the book I reviewed here, there was a huge increase in strikes when the PAP came into power, and workers and their employers tot the PAP was pro-labour.In 1959, 26,000 man-hours* were lost as a result of strikes, in 1960 125,000 man -hours were lost. a 481% increase.

How times have changed. Actually as late as 1971, as this book shows, activists tot of NTUC and the PAP govt as pro-labour: a minister, no less, assisted in a strike that brought ST to its knees.)

Sorry for the digression. Back to the Hard Truth that wage rises and productivity go hand in hand. It’s Economics 101:IMAGINE the proceeds of economic output as a pie, crudely divided between the wages earned by workers and the returns accrued to the owners of capital, whether as profits, rents or interest income. Until the early 1980s the relative sizes of those slices were so stable that their constancy became an economic rule of thumb. Much of modern macroeconomics simply assumes the shares remain the same. That stability provides the link between productivity and prosperity. If workers always get the same slice of the economic pie, then an improvement in their average productivity—which boosts growth—should translate into higher average earnings. [Emphasis mine]

(http://www.economist.com/news/leaders/21588860-labours-share-national-income-has-fallen-right-remedy-help-workers-not-punish)

Well it may be Economics 101 but it ain’t the reality, the article goes on: More recently, however, economics textbooks have been almost the only places where labour’s share of national income remains constant. Over the past 30 years, the workers’ take from the pie has shrunk across the globe (see article). In America, their wages used to make up almost 70% of GDP; now the figure is 64%, according to the OECD. Some of the biggest declines have been egalitarian societies such as Norway (where labour’s share has fallen from 64% in 1980 to 55% now) and Sweden (down from 74% in 1980 to 65% now). A drop has also occurred in many emerging markets, particularly in Asia. [Emphasis mine]

So the PAP’s Hard Truth that productivity goes with wages is not going to solve the problem of stagnant wages. The Economist gives two suggestions:  Govts should focus on improving the prospects of the low-paid and low-skilled. And they should aim to spread capital’s gains more widely.

The govt here has always talked the talk of improving the prospects of the low-paid and low-skilled. As to whether it has walked the talk, ask yrself are TRE readers right to fret that S’pore is threatened by inequality and rampant, uncaring capitalism and the govt? They are insecure and fearful. They feel poor. They feel so poor that TRE has problems raising money to fund itself: http://www.tremeritus.com/2013/12/04/tre-to-cancel-one-of-its-servers-to-remain-within-budget/.

On the latter, privatise Temasek?

*Bang yr balls, AWARE When are the gals going to bitch that MoM should not use the the word Manpower in its name?

Cost of chicken rice, FTs and the BBC

In Economy on 04/12/2013 at 6:08 am

This blog is critical of our ministers’ attempt in the past to talk down inflation (Tharman and Hng Kiang. Lee Jnr) To be fair, they’ve been quite on that front recently, cause of the numbers that keep coming out.

Here’s a practical example, courtesy of the BBC: for our chicken rice, the prices of its key ingredients – chicken, rice and the vegetable oil to cook the food – have all about doubled since 2005.

Chicken — 84%

Rice — 90%

Vegetable oil — 100%

(http://www.bbc.co.uk/news/business-25147402)

So don’t think ill of the seller for increasing his prices since 2005. In addition, he got to pay the rent.

In the above link, which talks of global food inflation, the reporter interviewed a PRC FT (in a hawkers’ centre) on the rising cost of food in S’pore and in Mandarin. Clip is towards end of article. GG and TRE readers will not be happy that a PRC FT is interviewed instead of a local. and P Ravi will be upset that Mandarin is used, not English. Seriously even I think that the BBC is wrong to give the impression that S’pore is part of greater China, or FT heaven (5 people interviewed for another series, three are FTs, one true blue S’porean and one first gen. P Ravi will be fuming that the two locals are ethnic Chinese.He should complain to the BBC that 7% of the population are ethnic Indians and that they play a huge role in the governance of the country: two out of four of PM’s most trusted ministers are Indians. AWARE will be not be their usual bitchy selves as both are women. Yes, I’m fed-up with AWARE’s triumphalist, patronising and ang moh attitudes-are-best attitude.)

BTW, in general as countries develop people spend proportionally less on food.

2014: Last chance for govt to increase prices?

In Economy, Indonesia, Political governance on 30/11/2013 at 5:51 am

(Asean round-up)

Ministers no longer joke about COE prices not affecting core inflation, (related post) ’cause increase in food prices is affecting core inflation.

In addition to Thai meat, maybe Burmese rice (see below) will help curb food inflation prior to next GE. Remember that public tpt fares are going up soon despite lack of much improvement. This is ’cause SMRT needs $ (scholar, ex-SAF chief says biz model broken, but nothing that higher fares can’t fix) and 2014 is last possible time that fares can rise. GE must be held in 2016, and increasing fares in 2015 may be too risky for PAP. As an election may be held in 2015, January to June 2014 is the last window of opportunity for us to kanna pay and pay.

Burma plans to more than double rice shipments as the country that used to be the largest exporter embraces trade and opens its economy, challenging Thailand, Vietnam and Cambodia for sales amid a global glut.

Shipments may increase to 2.5 million tonnes in 2014-2015 from an estimated 1.8 million tonnes in the year that started on April 1, according to Toe Aung Myint, director-general of the Department of Trade Promotion at the Ministry of Commerce. Exports are targeted to increase to 4.8 million tonnes in 2019-2020, he said when Hong Kong.

Indonesian coal and property firms could find obtaining loans increasingly difficult next year as banks tighten their lending due to higher interest rates, slowing economic growth and a weakening rupiah, industry officials said. The rupiah has fallen nearly 20 per cent so far this year, hitting 12,000 per US dollar yesterday for the first time in almost five years.

The central bank this month issued guidance to banks to slow loan growth to 15-17 per cent next year, from 18-20 per cent this year, in an effort to protect the financial system from potential turbulence amid heightened global uncertainties. In response, Bank Mandiri, Bank Central Asia (BCA), Bank Tabungan Negara, and other top financial institutions are becoming more particular about companies they lend to.

“We haven’t turned cautious for any sector, but we see challenges in infrastructure, construction, coal, cement, and real estate because of several policies. We are expecting a slowdown,” said Eugene Gailbraith, a BCA director, at an investment conference. He said that the country’s biggest bank by market value plans to “take a breather” and will lend less than its expected 45 trillion rupiah (S$4.79 billion) target this year.

Loan growth at Bank Mandiri is seen slowing to 17-18 per cent in 2014 from 19-20 per cent this year, while Bank Jabar Banten eases to 22 per cent from 33 per cent, company officials said. “We will be more cautious on sectors that are sensitive to interest rates,” said Pahala Mansury, Bank Mandiri chief financial officer. Indonesia’s increased hesitation to lend to coal companies comes as no surprise with banks around the world curbing their exposure to the industry due to a sharp fall in demand and prices. For the property sector, Bank Indonesia has made the industry less attractive to banks by implementing several policy measures to curb the purchases of second homes. Financial institutions are expected to favour consumer driven industries, such as retail and food companies, as domestic consumption continues to remain strong. – Reuters. (BT report)

Indonesia’s most aggressive rate tightening in eight years has barely dented a current account deficit, prompting calls for more increases and other measures before the Federal Reserve cuts stimulus.

Bank Indonesia has raised borrowing costs by 1.75 percentage points to 7.5% since early June, the quickest since 2005.

Following data which recently showed the country recorded its second-highest current account shortfall on record in the three months through September, JPMorgan Chase & Co and Standard Chartered now see a further 50 basis points of increases in the first half of next year.

Foreign funds pulled US$3.8bn from Indonesian stocks and local currency bonds in June after the Fed said it could cut stimulus, and a lack of progress on improving the current account before the US does eventually taper leaves the country vulnerable to another sudden outflow.

In addition to ongoing political unrest in Thailand:

Thai factory output shrank more than expected in October, adding to a string of weak data that prompted the central bank to unexpectedly cut interest rates to support the economy as mounting political tension dents confidence.

The Industry Ministry now expects output to fall 2.8 per cent this year, rather than growth of 0.5-1.0 per cent projected earlier, but predicts a rise of 2 per cent next year.

October was the seventh straight month in which output has declined, falling 4.02 per cent from a year earlier. The median forecast of a Reuters poll was for a decline of 3.3 per cent.

In September, output dropped 2.9 per cent. (BT report)

– Thailand’s central bank unexpectedly lowered the cost of credit Wednesday as escalating protests to topple the government add to pressure on the economy.

The central bank lowered its policy interest rate by a quarter percentage point to 2.25 %, hoping to stimulate lending and investment, saying  in a statement that the “ongoing political situation” could compound existing weaknesses in Southeast Asia’s second-largest economy. Business confidence is fragile and government plans for $69.5 billion of spending on high speed rail and other transport infrastructure have been delayed by legal challenges.

Thailand’s third quarter economic growth was weaker than expected and a recovery in exports has not gained traction, the bank said. Earlier this month, Thailand’s economic planning agency cut its growth forecast for this year to 3% from 3.8-4.3% predicted in August.

Govt faciliates spying and tax avoidance, but bans Ashley Madison: Uniquely PAP

In Economy, India, Indonesia, Malaysia, Political governance, Telecoms on 27/11/2013 at 5:05 am

In the space of a few days, the govt is facing or is likely to face uncomfortable questions from other govts about its activities: activities that the usual suspects, could reasonably argue, show the two-timing nature of the PAP govt that they (they the usual suspects) detest and wish it all the ill-will in the world.

Malaysia said it will summon Singapore’s high commissioner today to respond to allegations of spying which risk damaging improved political and business ties between the Southeast Asian neighbors.

Indonesia and Malaysia have been key targets for Australian and U.S. intelligence cooperation since the 1970s, facilitated in part by Singapore, the Sydney Morning Herald reported yesterday, citing documents leaked by former U.S. intelligence contractor Edward Snowden. Malaysia’s foreign ministry said it was “extremely concerned” and had already acted against earlier claims of espionage by the U.S. and Australia.

The reports could also spur friction between Singapore and Indonesia, Tan said. “The Indonesians would probably be concerned whether the information is also being shared with Singapore intelligence, besides the Australians*.”

(http://www.bloomberg.com/news/2013-11-26/malaysia-summons-singapore-commissioner-as-spying-claims-widen.html)

As SingTel was singled out for mention by the Oz newspaper**, and as it has extensive mobile operations in Indonesia and Thailand, and a major stake in a major Indian telco, it could face problems in these countries.

Then there is the issue of how European and US cos are using S’pore to avoid taxes, at a time when there is growing resentment among politicians and voters that these cos are not paying their fair share of taxes. The Indian, Japanese, Taiwanese and Korean govts will also not be too happy too with S’pore’s corporate tax-regime if they read the Economist.

“Taxing times for Singapore as corporate strategy faces scrutiny” was a Reuters headline on 24 November 2013 (BT and Today carried the report too). It gave details of how Apple used S’pore as a tax-saving centre and went on, “Companies justify booking significant amounts of revenue and profits in Singapore by the fact they often run key business functions such as finance and operations, hold intellectual property rights there or base regional executives in the city.”

The chart below (via the Economist) shows a hypothetical scenario where a company moves its headquarters from Singapore (a very low-tax economy) to another country. http://www.economist.com/blogs/schumpeter/2013/11/corporate-tax-rates

S’pore very cheap place (tax wise) esp compared to Japan. Minister Zorro must be happy: juz as happy as looking as his monthly CPF statement.

The Reuters article went on: Singapore has so far largely stayed out of the debate raging in Europe and the United States about the ways multinationals try to lower their tax bills.

But revenue-hungry governments are looking to impose tougher rules on so-called transfer pricing that could make it harder for firms to trade goods, services or assets between their Singapore and overseas entities.

As a result, accountants warn that the city-state will need to review the level of transparency in its tax incentive schemes and get stronger justifications from companies on their transfer pricing arrangements to fend off challenges from other jurisdictions.

“Singapore’s challenge is to ensure that it stands ready to adequately address any kind of unilateral tax action taken by other countries,” said Abhijit Ghosh, a partner at PricewaterhouseCoopers in Singapore.

“In this brave new world of fiscal competition for the tax dollar, dispute resolution will be on the increase and Singapore will need to focus more resources on enforcing and defending its principles of value creation in international forums.”

The city-state’s government says it is against artificially contrived arrangements constructed “solely for the purpose of flouting or exploiting loopholes in tax rules”, according to a spokeswoman from the Ministry of Finance.

However Singapore is also arguing that it should not be singled out because it has low tax rates.

“We must guard against new forms of protectionism masquerading as tax harmonisation,” the spokeswoman said. “We should avoid converging on high taxes globally as this would only hurt growth and jobs.”

Looks like the owl that visited PM was a harbinger of bad news for PM.

Seriously, the “usual suspects” could reasonably argue, if they tot about it, that the “chickens are coming to roost”.and that while moralising on adultery, the PAP govt helps the ang mohs spy on our neighbours, while helping ang moh and other Asian cos avoid tax. And PritamS wants the WP to be in coalition with the PAP?

*Remember that Indonesia suspended military co-operation with Australia, after allegations emerged of Australian spies bugging the phones of the president and his inner circle.

**Access to this major international telecommunications channel***, facilitated by Singapore’s government-owned operator SingTel, has been a key element in an expansion of Australian-Singaporean intelligence and defence ties over the past 15 years.Read more: http://www.smh.com.au/technology/technology-news/new-snowden-leaks-reveal-us-australias-asian-allies-20131124-2y3mh.html#ixzz2lkSC0P8c

***SEA-ME-WE-3 cable as well as the SEA-ME-WE-4 cable that runs from Singapore to the south of France.

Ageing population Hard Truth is cock and bull?

In Economy, Political economy, Political governance, Public Administration on 20/11/2013 at 4:25 am

The govt and the constructive, nation-building media keep shouting at us that a rapidly aging population (and the stas do show this aging as a fact, no bull here) will lead to disaster if FTs like two-timing new citizen Raj or Tammy’s killer or the FTs that beat up S’poreans and then fled S’pore*, or a looney, violent bank director are not allowed in by the container load. They point to Japan as what can happen if FTs are not allowed in: economic stagnation. The truth is more complex. As I reported here HSBC, a bank, in 2012 published research that Japan is doing pretty well when compared to other developed countries, including immigrant friendly countries like the US and the UK (though the UK is now repenting its liberal immigration policy)

Whatever the impact of an ageing population on S’pore’s prosperity, here’s a piece of evidence casting doubt on the assumptions (stated or unstated) behind the need to have a population of 6.9m by 2030. It comes from academics from the University of Edinburgh.

The idea that dependent older people represent a great demographic challenge of our age has been turned on its head …The research questions an assumption behind arguments for health, social care and immigration policies … The paper demands society rethink some of its assumptions about elderly dependency – drawing a distinction between the ‘young old’ and the ‘old old’

Here’s more from the BBC’s Home (i.e. domestic affairs) editor (Note that the paper in question is based on British statistics but the argument seems applicable elsewhere as he points out)

“The extent, speed and effect of population ageing have all been exaggerated and we should not assume that it will strain health and social care systems,” Professor John MacInnes and senior research fellow Jeroen Spijker write in the article ‘Population Ageing: The timebomb that isn’t?’

Healthier and fitter

The mistake people have been making, the paper suggests, is to assume that all pensioners are dependent and all working-age adults are workers.

They point out that, while it is true there are now more people over 65 in the UK than children under 15, rising life expectancy means older people are effectively “younger”, healthier and fitter than previous generations.

Instead of simply looking at how old someone is, the research focuses on how long they might be expected to live.

“Many behaviours and attitudes (including those related to health) are more strongly linked to remaining life expectancy than to age,” it says.

In 1841, life expectancy at birth was 40 years for males and 42 years for females.

By 1900 it was 52 and 57 and today it is 79 and 83. So the point at which we enter ‘old age’ has also been changing.

Equally, using age to define the adult working populations makes little sense, the authors suggest, because “there are more dependents of working age (9.5 million) than there are older people who do not work”.

So they calculated an alternative measure, what they call “the real elderly dependency ratio”, based on the sum of men and women with a remaining life expectancy of up to 15 years divided by the number of people in employment, irrespective of age.

Important implications

Using this measure, the paper calculates that old-age dependency in the UK fell by one third over the past four decades – and is likely to stabilise close to its current level.

The measure suggests similar falls in many other countries.

“Our calculations show that – over the past four decades – the population far from ageing, has in fact been getting younger, with increasing numbers of people in work for every older person or child,” the authors say.

“The different story of population ageing told by our real elderly dependency ratio has several important implications for health policy and clinical practice.”

In policy terms, this analysis to one of the central challenges of an ageing population might be something of a game changer. Rather than seeing longevity itself as an expensive problem, focus could shift towards managing morbidity and remaining life expectancy.

http://www.bbc.co.uk/news/uk-24921171

The continued refusal of the govt to accept that the issue of ageing population is a complex one and the unwillingness to question its Hard Truth on the issue continued in the face of evidence that the Hard Truth is doing real harm looks all too similar to the intellectual fetters that led central bankers to persist in tighten monetary policy in the early 1930s when faced with a global Depression.

It also shows that they are unlike LKY and Dr Goh Keng Swee who were willing to challenge the conventional wisdom that allowing MNCs in amounted to neo-colonialism. And demographics is not the only issue where the PAP govt is wedded to Hard Truths. Take welfare, where there is evidence that gd welfare systems do not reduce the will to work: they do not make people lazy e.g. http://www.bbc.co.uk/news/uk-scotland-24974745: another University of Edinburgh study.

Maybe, time to send scholars there to learn to walk on the wild side, and think unHard Truths? After all  University of Edinburgh is a great university. It juz doesn’t produce the ruling elite of the UK or the US. Our scholars to to unis where the UK and US ruling elite are educated.

BTW, here’s an article on using robots to as carers for the elderly: http://www.bbc.co.uk/news/technology-24949081

*PR was given to one after he beat up the S’poreans.

S’pore at tech cutting edge

In Economy, Humour on 12/11/2013 at 6:08 am

If you recently read Kirsten Han’s stuff (juz google her leh) in ang moh publications, you would get the impression that S’pore thrives because locals are repressed and FTs exploited, with xenophobia thrown into that mix. Recently too, TOC and TRE carried quite a number of recent BBC articles, clips that didn’t put S’pore in a gd light.

But going by other stuff the BBC has been broadcasting recently (and not highlighted by TRE or TOC), S’pore is doing real cutting edge techie stuff to make life better for S’poreans and the the rest of the world:

Researchers at Singapore’s Nanyang Technological University (NTU) have been working on ways to improve rush hour traffic flows in Singapore.

They are trying a system of tracking vehicle movements through GPS and combining the data with fluid dynamics to predict congestion ahead.

http://www.bbc.co.uk/news/technology-24673439

The ‘supertrees’ of Singapore are the central attraction of the Gardens by the Bay, an energy-efficient district of the bustling city state.

During the day, the man-made structures, which mimic real trees, gather energy through solar panels. At night, they come to life and form a spectacular lightshow.

http://www.bbc.co.uk/news/uk-scotland-24678421

Singapore’s Gardens by the Bay were created six years ago from reclaimed land and are now part of trial for the country’s “super wi-fi” white space programme.

White space is the name for a wireless network made available when old frequencies for analogue television signals are repurposed to carry data.

It is hoped free public wi-fi will be rolled out across the island within the next two years.

http://www.bbc.co.uk/news/technology-24822458

Near Field Communications (NFC) technology allows small amounts data to be exchanged when enabled devices are tapped or held closely together or one device is touched against an NFC tag.

Although the technology can be found in many smartphones, credit cards and passports it has yet to become mainstream.

But Singapore’s size and willingness to embrace new technology might make it the perfect place to roll out a nationwide NFC network.

http://www.bbc.co.uk/news/technology-24756033

And here are two plugs for the PAP govt, courtesy of the BBC:

To stay competitive, a country needs to constantly innovate.

Where the US has Silicon Valley, Singapore has Biopolis – a major biomedical research and development hub.

From almost nothing more than a decade ago, the sector has grown to account for a quarter of the country’s manufacturing output.

http://www.bbc.co.uk/news/business-24799516

Singapore’s economy has often been the envy of many of its neighbours.

Many people have marvelled at how this small island, smaller than New York City, has come to be worth more than $270bn (£167bn).

One key to that success has been the vibrant shipping port.

http://www.bbc.co.uk/news/business-24605503

As far as the issue of state repression, the closest the BBC has come to reporting repression here are these:

Singapore’s Marine Life Park is in the Guinness Book of Records for being the world’s largest aquarium, but it has already come under the scrutiny of environmentalist and critics.

They say that dolphins should not have been caught from the wild to be exhibited in its newly-opened enclosure.

http://www.bbc.co.uk/news/world-asia-24738828

– Dan Tan’s case

In the next few weeks all the evidence that has been gathered against the syndicate will be presented behind closed doors to the Ministry of Home Affairs and then an advisory council, before a final decision is made by the president.

If all agree that the suspects should remain under “preventive detention”, then Dan Tan and his associates could be held for years without ever having the evidence tested in a court of law.

Under huge pressure to act, the Singaporeans say they’ve now “cut the head off the snake”.

In doing so, the world’s biggest match-fixing syndicate may have been disabled but if the process remains behind closed doors it hardly feels like justice being served.

http://www.bbc.co.uk/news/world-asia-24238681 (BTW, Ms Han and her friends ignore Dan Tan’s case. He got more money than them? They jealous?)

This blog while often critical of the PAP govt, is very happy to live here as quitter in residence.So that tells you that on balance, this blogger is one of the ungrateful S’poreans (at least as the PAPpies are concerned). He’s juz glad that he’s not a young, working S’porean working here. But if he was a young S’porean, he would be working overseas. When he qualified, it was difficult to work overseas because of immigration rules. Eventually he did do stints abroad, but today he could have found a job overseas easily after he qualified.

Tharman trying to tell jokes again?

In Economy on 11/11/2013 at 5:16 am

Singapore’s Deputy Prime Minister Tharman Shanmugaratnam said there is the need to ensure that the Republic continues to remain a country of low unemployment and good income growth for the average citizen and family, and in particular low income citizens. He was delivering the keynote address at the Ordinary Delegates Conference of the NTUC according to  CNA a few weeks ago.

On talking of good income growth for the average citizen and family, and in particular low income citizens, he obviously hadn’t got round to reading Department of Stats reports, and he certainly not Uncle Leong. Uncle Leong reported

Historical wage growth 1.3%?

Using data from the Department of Statistics, the historical annualised inflation from 1980 to 2012 was about 2.0 per cent.

So, since the historical average of overall wages was 3.3 per cent annually, does it mean that real wage growth over the last 32 years was only about 1.3 per cent per annum?

1% wage growth this year?

Since “The MAS expects consumer prices to rise by 2.5 to 3 per cent this year”, even if the increase in wages is 4 per cent as is being predicted now, the real increase in wages for the year may only be about as little as 1 per cent.

Gd wage growth? What gd wage growth?

On low income citizens being looked after, Uncle Leong pointed out or, rather, reported

… the median basic pay of office cleaners was only $800 according to media reports just a few days ago. On top of these low-wage cleaners, there are about 114,000 full-time workers earning less than $1,000 a month and about 460,000 full-time and part-time workers earning below $1,500 according to the latest available statistics. (Note: The Singapore labour statistics classifies those who work more than 35 hours a week as full-time workers – probably the “longest” part-time workers’ definitionin the world)

And this

… since the per household member growth was much lower at 13 per cent, does it mean that household income grew relatively more because there were more working members per household?

Does it mean that particularly for lower-income households, more members may have to work to make ends meet?

Uncle Leong also reminded us that the govt sophistry of rising wages includes the govt mandated increase in CPF rates

Inclusive of employer CPF contribution?

Moreover, since the statistics are including employer CPF contribution, what is the growth without employer CPF contribution.

It used to be that the statistics in the past were based on without employer CPF contribution.

Different from other countries?

Do any of the other 7 countries cited in the table for comparison include the employer’s pension contribution in calculating real income growth? I believe the answer is no.

After reading all these points raised by Uncle Leong , I doubt anyone would say that Tharman is correct to assert that  S’pore remains a country of … good income growth for the average citizen and family, and in particular low income citizens. It hasn’t been since the mid-1990s, when a foreign capitalist grumbled that in S’pore, “the fruits of [his] labour” (his words) went to his employees, including me, when I had the brazenness to tell him he was being greedy, when I argued with him on the on the methodology of my incentive scheme. Capitalists were screwed by the govt. How times have changed.

And if one wants to be fair to Tharman, one could point out that the purpose of wage increase is to keep pace with inflation, not exceed it by a wide margin. And that anyway, not fair to use average over such a long period as it distorts the underlying data.

But then, even the govt concedes that real wage increases have in the recent past been stagnant or PMETS, and especially for the low paid, so Tharman was tempting the fates (and Uncle Leong)  by making the assertion about good income growth for the average citizen and family, and in particular low income citizens.

Last year I blogged that Tharman was trying to do comedy. Looks like as though he’s trying again. He should learn from RI boy, Hng Kian: stop telling jokes when not cut out to do comedy. But then Tharman’s from ACS. And the Indian community, and liberals see him as the next PM: http://atans1.wordpress.com/2012/08/24/why-tharman-will-be-the-next-pm/.

So he has to try to get as gd as PM with his “mee siam with hum” joke.

Double confirm: FTs displace S’poreans

In Economy, Political governance on 01/11/2013 at 4:51 am

Following this, more evidence that we were misled that FTs created gd jobs for locals? In fact, they displace locals, it seems.

Or, at the very least, as one Siow tua kee activist and commentator (and no usual- suspect ranter) put it on Facebook, “So… is this an implicit admission that the flow of foreign workers DID depress salaries? Like everyone outside gahmen has been saying? Uh-huh.”

And this time the evidence comes from the central bank. Emphasis is mine.

Weakness in PMET job market for locals seen to be dissipating

Tertiary-educated Singapore residents – who have experienced a soft patch in hiring over the past year – can look forward to better job opportunities, thanks to recent government curbs on foreign labour inflows.

“Recent manpower policies to tighten the inflow of S Pass and Employment Pass holders will boost the hiring of tertiary-educated residents, particularly at the entry level,” the Monetary Authority of Singapore (MAS) said in its Macroeconomic Review released yesterday.

The new Fair Consideration Framework, aimed at ensuring that Singaporean professionals are fairly considered for jobs, will also go some way in boosting these job-seekers’ prospects, it said.

Despite continuing demand for manpower in Singapore, local professionals, managers, executives, and technicians (PMETs) have recently faced a constrained job market. (BT 30 October 2013)

Meanwhile Today reported:

Resident wages up as efforts to stem foreign labour kick in

Wages for resident employees grew at a much faster pace in the first half of this year, as businesses paid more to hire locals in a tight labour market caused in part by efforts to stem the flow of foreign workers.

The contribution of resident workers to employment growth has also improved, with locals making up more than half of the total in the first six months, the Monetary Authority of Singapore (MAS) said yesterday in its bi-annual macroeconomic review.

“Overall, resident wage growth accelerated to 4.5 per cent on-year in the first half of 2013, up from 2.3 per cent in the whole year of 2012,” the central bank said. “This was largely consistent with the resident unemployment rate, which remained low at around 3 per cent in the first half of 2013.”

In all, 62,600 employees were added to the workforce in the first six months, compared with 58,900 in the same period last year. Resident workers made up 55 per cent of the overall job gains in the first half, up from 45 per cent last year and 31 per cent in 2011.

“The contribution of foreign workers to total employment growth slowed in (the first half), as foreign labour policies became more binding,” the MAS said, adding that the number of work permit holders rose by 18,500 in the first half of the year, compared with 43,500 for the whole of 2012.

Economists TODAY spoke to say the rapid rise in wages is not surprising given the tight labour market, but that the increase is not entirely good news.

MAS data shows that wages for local employees in industries such as community, social and personal services, real estate services and professional services grew the fastest in the first half of the year. However, resident wages for construction, manufacturing and food services grew less than in the second half of last year.

The MAS expects the core inflation rate, which strips out the cost of accommodation and private road transport, to increase from between 1.5 and 2 per cent this year to between 2 and 3 per cent next year. http://www.todayonline.com/business/resident-wages-efforts-stem-foreign-labour-kick

Need I say more? The “right” facts on FTs were raised by the netizens of “cowboy towns” many moons ago but were dismissed as “noise”.

And finally, we should remind PM that the operative word is “Talents” not “Trash”: http://www.tremeritus.com/2013/10/30/pm-global-talents-needed-to-make-sg-a-vibrant-economic-hub/#comment-1086501. And I’ll add to TRE example of PRC PR masseurs: remember the shop assistant that beat up SMRT officer who tried to stop her son from trying to get a free train ride, and the PRC hawkers? They are PRs.

S’poreans* don’t have an issue with Foreign Talents like the CEOs of DBS and OCBC. But we have a problem with Foreign Trash. Juz look at SGX, where the CEO and his number two are FTs. Look at the damage these two FTs did recently: SGX lifted trading restrictions on three stocks, then after they cheonged announced that the price movements (prior to the trading restrictions) were going to be investigated. Prices collapsed. It should have made both announcements at the same time.

I doubt this would have happened under the previous CEO (whom I know personally). BTW, not talked to him about the above SGX issue.

Related post, title notwithstanding: http://atans1.wordpress.com/2013/08/15/low-productivity-lky-and-the-drums-agree-on-its-cause/

*GG and friends excepted. BTW, going by GG’s outburst against S’porean women (He thinks they prefer FTS: personal experience? He is either divorced or separated.), his version of paradise S’pore is hellish: only male true-blue S’poreans allowed. No women. Guess we males who are not gays or bisexuals will need robots to satisfy our carnal desires, or maybe he wants us to be wankers?

On this tot, have a gd weekend.

Proof that FTs displace S’poreans?

In Economy, Humour, Political economy, Political governance, Public Administration on 28/10/2013 at 4:52 am

And ST reported the proof.

Can someone from govt, or its running dogs* in the think-tanks or the constructive, nation-building media explain this ST headline (and accompanying story) on 24th October?

ITE graduates in demand as SMEs face manpower crunch

 Job-matching scheme places ITE and poly students in local firms

ST went on

Small and medium-sized enterprises (SMEs) are stepping up efforts to recruit Institute of Technical Education (ITE) graduates in a bid to combat the manpower squeeze.

The aim is to place some 300 with local companies every year over the next five years, said Minister of State for Trade and Industry Teo Ser Luck yesterday.

The job-matching, which is part of Spring Singapore’s SME Talent Programme, has sent 32 polytechnic and ITE students to 15 firms since it was launched in June.

Seven trade associations and chambers have also reached out to more than 1,600 students to apply for jobs such as retail associates, clerks and technicians. Employers are eager for more.

(Backgrounder: http://www.tremeritus.com/2013/10/24/demand-for-ite-grads-picks-up-when-foreign-quota-reduced/)

It’s reasonable to conclude from the ST story that this demand for ITE and poly grads is the result of the govt’s very slight retreat from its “We love FTs, first, last and always” policies**. So whatever happened to the Hard Truth that the the more FTs, the more and better jibs for locals? Seems more like BS doesn’t it? But then the line between a Hard Truth and BS can be pretty thin.

(Gd related article: http://www.theonlinecitizen.com/2013/10/where-are-the-good-jobs-prime-minister)

for the record, Yeoh Lam Keong, former chief economist at GIC, has called for the immigration policy to be reversed. “What we need to do is to be much more stringent on admitting such unskilled labour. We’ve really got no excuse to be so relaxed about this kind of immigration.” (BTW, he has also called for the government to return to its roots to meet and serve the needs of ordinary citizens over public housing, education, healthcare, welfare and other services.)

If readers want to read, good, evidence-based critiques of govt policies, not the usual rhetorical rubbish that appears from most of the usual suspects most of the time, Uncle Leong excepted, follow “Lam Keong Yeoh” on Facebook.

Related posts:

http://atans1.wordpress.com/2012/09/17/rewriting-lkys-views-on-fts-and-if-so-why/

http://atans1.wordpress.com/2013/08/17/sccci-sme-survey-proves-lkys-point/

http://atans1.wordpress.com/2013/01/25/when-55-of-voters-were-fts/

http://atans1.wordpress.com/2013/03/12/alternative-to-fts/

http://atans1.wordpress.com/2013/03/17/alternative-to-fts-ii/

——
*No disrespect to Tammy and other dogs.
**OK, OK, I exaggerate. But if the govt and its allies can exaggerate, why can’t I?

FT policy: Dialogue? What dialogue?

In Economy, Political governance on 23/10/2013 at 5:09 am

“The “victimised Singaporean” framing does nothing to push these issues forward for intelligent debate. It does not encourage Singaporeans to think about how things can be improved while acknowledging what we have. It does not led to useful discussion over policy …

‘I have no doubt that the people who spout this line [I assume she means hatred of foreigners] love their home. I have no doubt that they have real worries and anxiety. I have no doubt that many of their concerns are valid. But if they really love Singapore and want the best for it, the best course of action would be to quit the melodramatic posturing and engage in real dialogue.” – Kirsten Han (http://sg.news.yahoo.com/blogs/singaporescene/great-singaporean-grievance-103242143.html0

Were things that simple.

The unsaid assumption is that there are channels for discussion and dialogue, and that discussion and dialogue can lead to something meaningful being done to solve the grievances. All these “fruscos” need to do is to use these channels. Well, any dialogue or discussion has to involve the govt who initiated the liberal immigration policy.

For someone who perceptively writes, “Concerns over freedom of expression and other civil liberties need to be given attention”, I’m surprised that she doesn’t realise that there are no channels for discussion and dialogue on this issue, as on many other issues. NatCon is not dialogue and it didn’t exactly go into the FT policy.

And anyway the FT policy is not open for dialogue. By releasing the white paper when it did (juz before NatCon started, even an accademic involved lamented that fact), the govt sent a strong message that the issue is not negotiable. FTs are the Special Ones and taz a Hard Truth.See here and here.

By promising to focus on public concerns that housing, healthcare and public transport will remain affordable, and on education, the govt is doing its best to ensure that its pro-FT stance does not further alienate S’poreans, and hopefully (from its perspective) wins back voters by bribing voters with their (our) own money.

To put it another way, all the public spending on housing, healthcare, public transport and education has as one as its aims mitigating the effects on S’porean PMETs of the “FTs all the way” position of the govt.

Even the trumpeted nearly 45% increase (to $102.4m, but as the retired chief economist of GIC points out this is 0.03 of a percent of GDP- a paltry amount in view of the fact that around 10 to 12% of households ( some 350 to 400,000 people) are way below the income per capita criterion of $550 per month and WIS payouts are way too stingy! Even if you take just the unemployed and aged poor (excluding working poor) of around 140 000 people) that’s barely $60 a month each!) in one year in welfare spending on the poor surely has something to do with mitigating the effects of the FT policy. After all, the welfare minister who sneered at the elderly poor is still in the cabinet, albeit in a post where he doesn’t have to deal with the poor, homeless or elderly.

Yes, yes, I know the govt and the constructive nation-building media are spinning that the govt is cutting back the supply of FTs especially to SMEs. The SMEs are screaming (http://www.cnbc.com/id/101123289), presumably because while the owners have to pay pay more for their bungalows, penthouses and CoEs, profits are reduced ’cause their access to cheap FT PMETs is being supposedly closed.

But until the numbers say so, I remain sceptical, very sceptical that a pro-FT leopard can change its spots. Go to http://www.bbc.co.uk/news/world-asia-24428569. Of the five people working in S’pore featured, the poorest paid (an elderish cleaner)  is a true blue S’porean: BBC spins she can afford a maid. The other local is a first generation S’porean. Both are ethnic Chinese. The other three are FTs.

Reading the article, and knowing the facts on the ground, one can easily understand the grievances of the people Kirsten Han referred to above, especially if they are poor and elderly, and ethnic Indians or Malays.

BBC says cleaners can afford maids

In Economy, Humour on 22/10/2013 at 1:57 pm

Even our nation-building, cfonstructive media’s journalists or editors don’t talk such rubbish.

“But the forced saving scheme and social housing mean that even cleaners live in reasonable housing and employ their own foreign live-in maid,” writes a BBC economics journalist, admittedly relatively newish and whose blog postings have been criticised. (http://www.bbc.co.uk/news/business-24606989).

She based this comment on Office cleaner Liew Siew Giok [who] works all day on her feet but goes home to a meal cooked by her Burmese maid. She lives with her extended family, who pay for the domestic help and her flat.

Her secret? She lives with her extended family, who pay for the domestic help and her flat. (http://www.bbc.co.uk/news/world-asia-24339815)

So S’poreans, this BBC reporter is saying life is gd. Stop bitching. Come next Ge, vote PAP!

Not bull: FT policy is bad for productivity and innovation

In Economy on 22/10/2013 at 5:40 am

The govt complains that productivity is poor and is worried, introducing measures to “improve” it. At the same time, we all know that the working population here has increased due to the flood of FTs. At the same time, S’pore’s attempt to be a global centre of innovation, is stuck on the runway. Contrast this with Estonia.

Some S’poreans have pointed to the influx of FTs as a probable reason (not the only one) for the low productivity. The local media and the govt ignore these views. The implication being that cutting back on FTs will help productivity.

Well these views have some validity as research in the West proves. (Note emphasis added is mine.)

Is it possible, really, that low productivity growth was a consequence of rapid labour-force growth? Once upon a time Paul Romer speculated that it might be:

One interpretation…is that there is a negative exernality associated with labor. this could arise if there is a form of innovation that economizes on labor, if investment in this kind of innovation is sensitive to movements in wages, an dif this innovation has positive external effects because of spillovers of knowledge. in this case, an increase in the rate of growth of the labor force, with the implied decrease in the rate of grwoth of wages, could case a decrease in innovation, and hence a decrease in knowledge spillovers from innovation. The net effect that an increase in labor supply has on output would then be the combination of the positive direct effect of more workers and the negative indirect effect of less innovation.

The suggestion that this kind of effective could be present is not new. This kind of interaction between wages and innovation has been invoked repeatedly in the comparative analysis of productivity growth in the United States and Britain during the nineteenth and early twentieth centuries.

More recently, Daron Acemoglu has done extensive work noting that innovation responds to factor scarcity or abundance. If there’s rapid growth in labour supply then one should expect lots of innovation in technologies that complement labour and very little in labour-saving innovation. Whether that should net out to a slowdown in overall productivity growth is unclear, but the story isn’t something to write off out of hand.

(http://www.economist.com/blogs/freeexchange/2013/09/generations)

If you’ve read this far, you will have noticed that innovation suffers when there there are too many bodies available. So govt saboing its policy of trying to make S’pore a centre of innovation?

Why economic forecasters underperform fortune tellers

In Economy, Financial competency on 20/10/2013 at 5:23 am

(Taz all the more reason to stick to stocks that make can make sustainable (we hope) good payouts. Check Temasek’s Fab 5 out: they have consistently made gd payments but the prices reflects this i.e. better yields available elsewhere but at greater risk.)

[A]n advance estimate showing the city-state’s economy shrank 1.0 percent on quarter in the July-September period, better than expectations for a 3.6 percent contraction, but a significant deceleration from 16.9 percent growth in the previous three months.http://www.cnbc.com/id/101109030

Opps wrong again. And govt isn’t that gd either at forecasting. A few months ago: The Republic’s economy is expected to do better this year than previously expected, with the growth forecast raised to between 2.5 and 3.5 per cent, Prime Minister Lee Hsien Loong said yesterday.

The previous official forecast was between 1 and 3 per cent. [Today]

In both cases, in percentage terms, the changes are significant: a fortune teller would lose his credibility with such forecasts. All finance ministers, their advisers, economists, central bankers and analysts always get their forecasts wrong: nothing uniquely S’porean.

In addition to the general reasons I gave here, here are two more reasons for them being sotong in the post 2008 environment.:-

– The experts are lost because the conventional model of how the financial system interacts with the real economy has evolved too little since the huge and largely unexpected financial crisis. Now as then, there is too much debt in the world for either monetary or fiscal policy to have the effect that the textbooks say.

The stimulative efforts of governments and central banks help the highly leveraged financial system stay afloat, but only a small portion of the funds actually reach the real economy. In such an unconventional financial world, the conventional wisdom is likely to stay wrong. Expect more of the unexpected.

http://blogs.reuters.com/breakingviews/2013/08/05/markets-central-bankers-face-strange-new-world/

– Economics is an inexact science, with exceptions to almost every pattern of behaviour that economists take for granted. For example, economists predict that higher prices for a good will reduce demand for it. But students of economics will no doubt remember an early encounter with “Giffen goods”, which violate the usual pattern. When tortillas become more expensive, a poor Mexican worker may eat more of them, because she now has to cut back on more expensive food like meat.

Such “violations” occur elsewhere as well. Customers often value a good more when its price goes up. One reason may be its signalling value. An expensive handcrafted mechanical watch may tell time no more accurately than a cheap quartz model; but, because few people can afford one, buying it signals that the owner is rich. Similarly, investors flock to stocks that have appreciated, because they have “momentum”.

The point is that economic behavior is complex and can vary among individuals, over time, between goods, and across cultures. Physicists do not need to know the behavior of every molecule to predict how a gas will behave under pressure. Economists cannot be so sanguine. Under some conditions, individual behavioral aberrations cancel one another out, making crowds more predictable than individuals. But, under other conditions, individuals influence one another in such a way that the crowd becomes a herd, led by a few.

Unfortunately, many of these methods [to get clear-cut evidence of causality. If high national debt is associated with slow economic growth, is it because excessive debt impedes growth, or because slow growth causes countries to accumulate more debt? cannot be applied to the most important questions facing economic policymakers.] So the evidence does not really tell us whether a heavily indebted country should pay down its debt or borrow and invest more.Moreover, what seem like obvious, commonsense policy solutions all too often have unintended consequences, because a policy’s targets are not passive objects, as in physics, but active agents who react in unpredictable ways. For example, price controls, rather than lowering prices, often cause scarcity and the emergence of a black market in which controlled commodities cost significantly more.

http://www.theguardian.com/business/2013/aug/08/raghuram-rajan-economic-paranoia-uncertainty

 

Blame Apple, Google for declining exports, growth

In Economy, Indonesia, Malaysia on 19/10/2013 at 6:26 am

The following pieces of bad news came as no surprise even though I’m no economist

– Singapore’s non-oil domestic exports (NODX) fell year-on-year for an eighth straight month in September.

Overall, exports declined by 1.2 per cent on-year in September.

Still, economists say the contraction was smaller than what the market was expecting.

Better-than-expected export performance in September was driven by non-electronic exports like ships and petrochemicals.

This helped to offset lower electronics exports such as PC parts and disk media products.

Electronic export has been declining year-on-year for 14 consecutive months due to weak external demand.

Vishnu Varathan, a senior economist at Mizuho Bank, explained: “The higher value-add items such as the part for the integrated circuits — they did better; whereas PC parts, the lower-end items, disk drives — these did much worse. So this underlies the fact that Singapore’s competitiveness must be at the higher end of the range given our cost base, and that’s where we’re losing out. So in terms of restructuring, it’s going to be a difficult period for electronics despite coming from a low base.”

The top three contributors to the export contraction were the European Union, South Korea and Japan.

On a month-on-month basis, exports rose 5.7 per cent in September, versus the previous month’s 6.6 per cent decline.

http://www.channelnewsasia.com/news/business/singapore/singapore-s-nodx-down-1-2/850428.html

– [A]n advance estimate showing the city-state’s economy shrank 1.0 percent on quarter in the July-September period, better than expectations for a 3.6 percent contraction, but a significant deceleration from 16.9 percent growth in the previous three months.http://www.cnbc.com/id/101109030

This is because on 10 October I read a BBC report:

Global PC shipments drop to a five-year low

Global shipments of personal computers (PCs) have hit a five-year low, according to new figures from the research firm Gartner.

Shipments totalled 80.3m units in the three months to September, down 8.6% from a year ago.

PC sales have now fallen for six quarters in a row, hurt by the growing popularity of tablets and smartphones.

Gartner said falling prices of tablets had further hurt sales of PCs in emerging markets.

“Consumers’ shift from PCs to tablets for daily content consumption continued to decrease the installed base of PCs both in mature as well as in emerging markets,” Mikako Kitagawa, principal analyst at Gartner, said in a statement.

“A greater availability of inexpensive Android tablets attracted first-time consumers in emerging markets, and as supplementary devices in mature markets.”

Decline

Research firm IDC, also released figures on Thursday, which showed global shipments of PCs fell by 7.6% to 81.6m units over the period.

As I explained before (example), S’pore and M’sia belong to the Microsoft ecosystem, not those of Android or Apple.

Not gd news for Msia either.

In other Asean-round-up news,

In M’sia, Umno V-Ps favoured to hold on to posts. They are up against three challengers, including Mahathir’s youngest son, Mukhriz

And maybe we can learn something from Indonesia‘s

– youth growing interest in politics and civil society matters (http://www.bbc.co.uk/news/world-asia-24549654); and

– how to grow old gracefully by going against tradition (http://www.bbc.co.uk/news/business-24530350).

Waz the “right” kind of gotong royong?

In Economy, Infrastructure, Internet, Political governance, Public Administration on 18/10/2013 at 5:00 am

Update on 22 23 October 2013: Minister explains use of Criminal Law Temporary Provision Act (http://au.sports.yahoo.com/football/news/article/-/19491410/football-match-fixing-witnesses-fear-reprisals/) on footie fixers.

I recently came across “gotong royong” the American way, or community spirit the capitalist way: in American- speak, the “sharing economy”.

Technology is revolutionising the way Americans catch a cab with a ride now just a click away through mobile phone apps like like Uber, Lyft, Sidecar, Instantcab and Flywheel.

Many of these services are part of the so-called “sharing economy” in which car owners offer to drive strangers in exchange for a “donation”.

http://www.bbc.co.uk/news/magazine-24393348

But is this the “right” gotong royong that the PAPpies say they want here?

Bet you the Hard Truths that premise the PAP’s governing methods will prevent S’pore from ever going down this route, even though this seems one of several viable solutions (several are needed)  to our public tpt and private car problems  Remember, NTUC is via the Labour Foundation, the controlling shareholder of ComfortDelgro, the owner of the biggest taxi fleet here, and Temasek’s SMRT has a big taxi fleet too. The former runs most of the buses, while the latter runs most of the trains too. And it might impact the revenue from CoEs.

Seriously, the problem here is that “gotong royong” is contrary to the PAP’s Hard Truth that it is fount of everything. Gotong royong is not compatible with a top-down approach, where there is always a “right” way of doing things.

In “gotong royong”, as in the “sharing economy”, things happen because the rabble plebs mob community, society, consumer is the driving force, not a benign meritocratic elite. The people realise that there is a problem, issue, and are free (within some, not many, constraints) to work out a solution*. They don’t bitch while waiting for the governing elite to solve the problem, feeling entitled that because said elite is well-paid, they must solve the problem, resolve the issue.

I consider the following to be gotong royong in action, but doubt the PAP ministers urging us to “gotong royong” would agree:

– TOC’s and TRE’s continued existence;

– the various fund raisings for various legal cases where the govt is the defendant;

– the public funding of the deposits of Alex Tan and friends, and the independent team at Tanjong Pagar GRC;

– Nicole Seah raising money for her team’s election expenses;

– the free food and drinks at Gilbert Goh’s Hong Lim Green functions;

– Function 8;

– CHC members who willingly pay the legal fees of church members being prosecuted for false accounting etc;

– pastor Khong’s gang funding a legal suit;

– those who lend sound eqpt and technical help at various Hong Lim Green parties

– the kay pohs trying to help FTs avoid being hung for drug trafficking**;

– those gathering to help the family of Dinesh Raman get justice and closure**;

– Maruah**;

– the volunteers who help FT manual workers;

– the LGBT community; and

the dedicated band of enthusiasts who have been trying to draw attention to the cemetery’s [Bukit Brown's] value. They have succeeded in having it included on the biennial watchlist of the World Monument Fund (WMF), of heritage sites around the world that are in danger.

All these examples and more show that the gotong royong spirit is alive and well. They juz don’t fit the PAP’s narrative, especially the bit that the PA’s and PAP’s grass-root activists are the only selfless, dedicated volunteers. And that in cyberspace, their activists are no match for the the injuns, outlaws and other inhabitants of cowboy towns.

*In the US, there is no hegemonic elite to enforce the top down approach, and stifle innovation or stifle dissent or force recantations from members of the elite turned heretical.

**How come no help Dan Tan? Because he drive 7 series, got properties and China babe? And he not violent, middle class or FT?

Analysts worried about higher inflation, predict stronger S$

In Currencies, Economy on 16/10/2013 at 4:21 am

Remember ministers jokes on inflation last yr? They told us that we should look on the bright side i.e. inflation excluding COEs as though biz vehicles don’t need COEs. http://atans1.wordpress.com/2012/08/13/inflation-why-the-misleading-picture-minister-media/

Wonder why they don’t crack such jokes this yr? Inflation (excluding COEs) not too looking gd for us and govt

From BT 15th October 2013

Coupled with a tight labour market, the central bank said that core inflation – which excludes costs of accommodation and private road transport – is expected to be 1.5-2 per cent in 2013, and rise to 2-3 per cent in 2014. With upside core inflation risks looming, economists from Nomura, Citi, DBS and UOB say that a tightening of monetary policy in April could be on the cards – particularly if prices rise beyond the government’s comfort zone.

Said Nomura analysts in a report: “Overall, the statement should raise market expectations of the MAS shifting towards an even tighter (foreign exchange) policy stance at the April 2014 meeting.”

Added Citi economist Kit Wei Zheng: “Though not our forecast, with the possibility that core inflation may breach the MAS’s implicit 2-2.5 per cent tolerance threshold in 2014, slope steepening in April 2014 cannot be ruled out, especially if growth uncertainties subside.”

Calling such a scenario “definitely possible”, UOB economist Francis Tan said: “It would have to be fuelled by something completely unanticipated, like if oil prices suddenly spike up due to renewed political tensions in the Middle East. Then the MAS will probably move in to tighten the Singapore dollar NEER.”

http://www.businesstimes.com.sg/premium/top-stories/unabated-inflation-could-tip-mas-tightening-economists-20131015

Ah well S$ will appreciate eve3n more against regional currencies. Gd for S’poreans travelling, not gd for tourists from the region, and for our companies.

Why more FT Indians here than local Indians?

In Economy, India on 15/10/2013 at 4:52 am

(I hope readers don’t mind my flow onto LionsXII at the end)

One of the bloggers, I was concerned about here that might get a stroke or a heart attack, last week blogged that there are more FT Indians, than local Indians here. He didn’t give his source but used the statistic as the basis of prophesying doom and gloom for our minorities and society. It would have been nice if he had given his reasons, rather than assuming that we all know why.

Assuming he is correct about the FT Indian population being bigger than the local Indian population, there is possibly a gd, sound economic reason for it:- Our local Indians are not the “right” kind of Indians S’pore needs?

He may not be aware that S’pore’s an offshore hub of India, along with Dubai and Mauritius.

The largest hub for Indian trade is probably Singapore. It is the centre for investment banking, which thrives offshore, owing to the tight regulation of India’s banks and debt markets. Reflecting this, the global exposure to India of Citigroup and Standard Chartered, the two foreign banks busiest in India, is 1.9 times the size of their regulated Indian bank subsidiaries.

Fund managers running money in India are often based in Singapore. India’s best financial newspaper, Mint, now has a Singapore edition. At least half of all rupee trading is offshore, says Ajay Shah of the National Institute of Public Finance and Policy in Delhi. Investors and firms do not like India’s fiddly rules and worry that the country may tighten capital controls if its currency falls too far, says one trader in Singapore. He denies, though, that the rupee’s fall is mainly the work of speculators abroad. “The onshore guys have as much of a role,” he says.

Indian e-commerce firms often get their data crunched in Singapore, using web-hosting and cloud-computing firms, such as Google and Amazon. Amitabh Misra, of Snapdeal, says bandwidth costs less, technology is better and you avoid India’s headaches—such as finding somewhere to work, coping with state-run telecoms firms and having to wait to import hardware.

Singapore is also a centre for legal services. International deals involving India often contain clauses which state that disputes be arbitrated outside India, with its clogged courts. Singapore, along with London and Paris, has become the preferred jurisdiction. “The level of comfort Indian companies get from Singapore is unmatched,” says Vivekananda N of the Singapore International Arbitration Centre.

When India’s economy thrived, in 2003-08, so did its offshore hubs. Singapore’s service exports to India tripled. Yet these centres may sometimes be a reverse barometer. If things improve in India, activity should shift to the mainland, and vice versa. By gradually improving its ports, for example, India has convinced more shipping lines to make direct stops.

The government wants to attract activity back to create jobs and boost foreign earnings. Pride plays a role, too—it is unbecoming for a potential superpower to have outsourced vital economic functions. India has far less control over Dubai and Singapore than China does over Hong Kong. Plenty of policy statements in recent years argue that India should become a global hub for aviation, legal arbitration, diamond trading and international finance.

http://www.economist.com/news/international/21583285-growth-slows-and-reforms-falter-economic-activity-shifting-out-india-made-outside?spc=scode&spv=xm&ah=9d7f7ab945510a56fa6d37c30b6f1709

So are TRE posters who regularly complain about Indian FTs are DRUMS saboing S’pore? Though two-timing new citizen Raj who has publicly boasted that his son will avoid NS, and get PR (here and here) is not exactly a poster boy for Indian FTs or the govt’s “We love FTs” policy: more for GG and friends who hate FTs.

Finally, those of us (self-included) who love to regularly grumble about or mock ESM “Peanuts” should remember that he initiated the “Look to India” to differentiate himself from one LKY who wanted S’pore to be plugged into China’s sphere. So three cheers for him, for initiating the move that resulted in S’pore becoming a major offshore hub of India? Or should it be only two cheers for then allowing the likes of new citizen Raj in?

BTW, Mindef should be trying to close the loop-holes that allow those bums like new citizen Raj to boast that their sons can avoid NS, and then get PR, rather than make it difficult for our young Lions http://www.goal.com/en-sg/news/3880/singapore/2013/10/13/4321556/zainudin-hints-at-restrictions-for-sundram-departure: In his two-year tenure with the LionsXII, one of Sundram’s biggest bugbear had been the unavailability of players. A slim squad that was frequently decimated by injury lay-offs was further shorn of players due to National Service (NS) call-ups.

Players in NS who had used up their annual leaves to play for the LionsXII were often unable to find release from their active duties. Shakir Hamzah was most infamously found guilty of going AWOL from duties in June, after linking up with the LionsXII for an away game, and was handed a four-day sentence in the detention barracks.

BTW2, Our media has been 200% behind Fandhi’s attempt to be the new LionsXII  coach (Of course, he would deny he is campaigning to be coach: he would wouldn’t he?); but would temperamental Fandhi have put up with Sundram’s frustrations. I doubt he would. Likely, he would have walked out. Don’t anyhow support Fandhi. He willingly collaborates with our MSM, wanted to sue SDP and failed as coach of a free-spending Johor team (think Sity, think Johor). He was a good, and honest footballer but he isn’t exactly god’s gift to LionsXII. He’s god’s gift to our constructive, nation-building media who use him to sell papers and try to make us forget that the media here in part of the Dark Side.

Financial centres’ curses

In Economy, Internet, Political economy, Political governance on 13/10/2013 at 5:10 am

For all the highfaluting talk of govt and talk-cock artists especially in the local media, we don’t do things like this even though Burma is in Asean (our backyard):

[I]n Burma – or Myanmar – social media sites and the whole internet have been inaccessible for years.

For one Canadian-Vietnamese woman that has provided a unique business opportunity to found the Burma’s first-ever social networking site.

However, Rita Nguyen had never been to the country before this year as BBC South East Asia correspondent Jonathan Head heard.

http://www.bbc.co.uk/news/business-24393043

Why?

(Related post: http://atans1.wordpress.com/2013/08/25/a-very-high-tech-inventive-low-population-country/)

Are we are more comfortable as serfs slaves PMETs in a financial centre?

A recent article, interestingly, makes a compelling argument that places that depend on the financial industry (like S’pore) are like resource-rich countries, and like them suffer from the triple problems of a high exchange rate that causes problems for manufacturers, revenue volatility and poor governance.

Is finance like crude oil? Countries rich in minerals are often poverty-stricken, corrupt and violent. A relatively small rent-seeking elite captures vast wealth while the dominant sector crowds out the rest of the economy. The parallels with countries ‘blessed’ with powerful financial sectors are becoming too obvious to ignore.

http://taxjustice.blogspot.sg/2013/09/is-finance-like-crude-oil-resource.html

Another US innovation to breed entrepreneurs

… has designed I-Corps as a way of converting the most promising science and engineering projects in American universities into start-ups. The I-Corps teams … comprise just a principal investigator (usually a tenured professor), a younger entrepreneurial lead (undergraduate, graduate or post-doctoral student) and an experienced entrepreneur or venture capitalist as a mentor. Each of the 100 or so teams has received a [US}$50,000 to cover a crash course on how to avoid the pitfalls common to all new ventures … New ventures, they are taught, are all about finding customers, what distribution channels to adopt, how to price the product, who to partner with, and more. From day one, the mantra is “get out of the lab” … The I-Corps programme is based on the premise that all new ventures are little more than a series of untested hypotheses—in other words, optimistic guesses about market size, customer needs, product pricing and sales channels. With so many unknowns, the programme teaches participants to treat their start-up as if it were a typical research project, amenable to the same iterative process of hypothesis testing and experimentation.

http://www.economist.com/node/21559734

PM’s statement that’s so very wrong

In Economy, Political economy, Political governance on 02/10/2013 at 6:45 am

PM’s comments, “there are countries like China, Vietnam and India which are hungry and anxious to steal the lunch from us”, is pure inflammatory rubbish worthy of Gilbert Goh. They are not trying to steal from us. They are trying to improve themselves, by working harder (and perhaps smarter) than us. PM should leave anti-foreigner comments to Gilbert Goh and friends. Even TRE, TOC not into this kind of rubbish. The PM shouldn’t. But maybe he wants to talk on 5 October at GG’s “regime change” day.

Three other things wrong about his comment:

– Why is he comparing S’pore to these countries esp Vietnam? Tot, PM and his govt say we first world country like Switzerland, or global city like NY or London? I mean even manufacturers from China are moving to Vietnam because labour is cheaper there? What next compare us with Bangladesh or Burma?

– Productivity is more impt than working hard

And it seems that more productive—and, consequently, better-paid—workers put in less time in at the office. The graph below shows the relationship between productivity (GDP per hour worked) and annual working hours:

The Greeks are some of the most hardworking in the OECD, putting in over 2,000 hours a year on average. Germans, on the other hand, are comparative slackers, working about 1,400 hours each year. But German productivity is about 70% higher.

http://www.economist.com/blogs/freeexchange/2013/09/working-hours

It’s all about working smart, like the decadent Japs that LKY mocks but who outperform the ang mohs. http://atans1.wordpress.com/2012/10/05/honest-conversation-on-fts-lets-have-it-not-juz-pretend-that-weve-having-it-iswaran/

– “Insatiability, and the 15-hour week — Lessons in life and work”

http://www.economist.com/blogs/prospero/2013/09/insatiability-and-15-hour-week

The most stinging rebuke to PM’s line of reasoning comes close to the end of this longish, but intellectually entertaining piece.

BTW, if PM is genuine about wanting us to trust the govt, in addition to not imitating Gilbert Goh and friends, he should

– ensure that this kind of inflammatory rubbish doesn’t appear in our constructive, nation-building media

I am Singaporean, therefore I am entitled
While there is nothing wrong with policies that are based on a ‘Singaporean first’ principle, it can be taken too far. Abuse of this principle could lead to racism, xenophobia and aggressive nationalism. By Wu Zijian
It’s stuff like this that makes me thing GG has a point (which he doesn’t) about FTs being the problem. The problem is the PAP govt’s “FT Tua Kee” attitude.
– not juz talk the talk on limiting FTs coming in. Using, govt stats, Uncle Leong shows the flood is still rising, not receding. http://www.tremeritus.com/2013/09/27/new-citizenships-increased-by-31-in-2012/

Why rising inequality shows that things are working

In Economy, Humour, Political economy, Political governance on 24/09/2013 at 4:52 am

No, not the PAP or one of its running dogs talking; but the Economist (Err OK it is part PAPpy friendly ecosystem http://atans1.wordpress.com/2013/09/02/sporeans-avoiding-low-paid-jobs-are-not-lazy-or-daft-juz-rational/, on economic and financial matters, though not when it comes to things like human rights, hanging, democracy, drugs, gays and media freedom.)

The regeneration of Manchester regeneration hasn’t benefited the whole population of the city equally. This is certainly true. The authors of the Manchester Independent Economic Review, published in 2009, found that in the first decade of the new millennium, while in absolute terms, every part of the city improved, inequality in the city had actually sharply increased. The richest bits of the city got richer at a much faster pace than the poorest bits.

I’m not sure that is a bad thing however. Even if we accept that growing inequality across the country is a bad thing, in this case, it strikes me as evidence of success. After all, as this Work Foundation report found, the most equal parts of Britain are towns such as Burnley and Sunderland. Those places are not more equal because the money is spread out more fairly. They’re more equal simply because everyone is poor. Manchester’s growing inequality, like London’s, is proof that it has managed to create well-paying jobs for at least a minority of its population.

http://www.economist.com/blogs/blighty/2013/09/manchester

Surprised our constructive, nation-building media, and the Breakfast Network and Independent are not telling us that rising inequality shows things are working. Maybe the media are waiting for media guidance.

But unlike Manchester, S’pore doesn’t have Manchester’s culture life that students find attractive: Cultural life feeds off economic success. After all, Burnley and Sunderland are not known for their great independent record shops and nightclubs. And it doesn’t have too EPL teams. BTW, for MU fans, the explanation for the defeat is simple: Allah and the Pope had the better of Yahweh on Sunday.

On the clubbing scene attracting students, I knew a German gal who chose to study in Manchester because of the nightclubs. She hated the weather though when she got there. BTW, while she was a party animal, she did very well in the IB exams, a perfect score.

Related posts:

http://atans1.wordpress.com/2013/09/23/the-pap-govt-has-lost-output-legitimacy-discuss/

http://atans1.wordpress.com/2013/09/06/ingratitude-uniquely-sporean-blame-the-internet-not-really/

The PAP govt has lost “output legitimacy”: Discuss

In Economy, Political economy, Political governance on 23/09/2013 at 5:18 am

The ST has for several weeks been writing about the loss of trust between the people and the govt, and laying the blame on the people (“daft”) who are distracted by the new media’s DRUMS beating the RAVII theme ( OK I exaggerate but juz a little). (BTW, here in a different context, I’ve looked at the role the new media plays: amplification, not distortion of the dissenting, inconvenient voices to the PAP’s narrative which the local media propagandises, while suppressing the former.)

Actually, the loss of trust is due to the PAP govt’s loss of “output legitimacy” since the 1990s.

“Output legitimacy” is the idea that elected leaders make decisions that are unpopular in the short term but will be approved by voters once their success has been demonstrated.  A govt aiming for “output legitimacy” (most govts don’t, but the PAP is an exception) is a bold, self-confident govt because the govt and the politicians need to be proved right by events.  Sadly for S’poreans and the PAP, the record doesn’t look that great for one LHL. He had been DPM, and in charge of economic and financial issues, and the civil service, since the 1990s, until he became PM in 2004.

Yet events have showed that S’poreans are discontented, not happy with the achievements of his govt. The PAP only polled 60% (lowest ever) in the 2011 GE, and three cabinet ministers lost their seats, with the WP winning for the first time ever a GRC. In the subsequent PE, the PAP’s “preferred” candidate and a challenger (ex PAP man too) polled 35% each. The preferred candidate won by a very short nose.

This yr, the PM promised to meet our concerns (housing, healthcare and public transport will remain affordable, and on education) is like that: “Crashed the cars, trains and buses we were on – and then wants us to thank him for pulling us out of the wreckage using our own money, by voting for the PAP”.

– http://atans1.wordpress.com/2013/08/16/analysing-pms-coming-rally-speech/

– http://atans1.wordpress.com/2013/08/23/govt-needed-natcon-survey-to-find-these-things-out/

After all S’poreans concerns that housing, healthcare and public transport will remain affordable, and on education are the result of govt policies

His dad introduced the concept “output legitimacy” to S’pore (although not the term: too highfaluting perhaps?), partly because it suited LKY’s personality (intellectual thuggery, the belief that “leaders lead” and shouldn’t be governed by opinion polls, and micromanaging**), and partly because while S’pore was a leading Asian city in the 50s and 60s (as LKY and PAP haters like to remind us ad nauseum), that wasn’t saying much for most S’poreans: err bit like now, one could reasonably argue. Examples:

– When the PAP came into power in 1959, unemployment was over 10%; and

– in 1960, 126,000 man-hours were lost in strikes as compared to 26,000 in 1959.

Source: book reviewed here

There were then things that had to be done that would upset many people most of the time for a while. But if the policies worked, then the results would be visible. Well, at the very least, the voters were prepared to give LKY and the PAP, over 70% of the popular vote and all the parly seats for over a decade.

The world’s now a bit more complex since then, and S’poreans’ expectations have rightly risen, so whether it is ever possible that the PAP govt can ever recover “output legitimacy” is open to question even if it has the ‘right” people leading it. But at least it’s willing to spend more of our money on making life a more comfortable for ourselves. Maybe that should be its articulated goal, to frame our expectations of its “output legitimacy”.

Maybe the constructive, nation-building media, and new media outlets that believe in constructive criticism, like the Breakfast Network and the Independent*** can help the PAP govt? Better than flogging the dead horses of trust, daft people and that the internet beats DRUMS to the RAVII theme.

*Recriminations, Accusations, Vilifications, Insinuations & Insults

**Remind me of the bible verses: “Are not five sparrows sold for two farthings, and not one of them is forgotten before God?” or “Are not two sparrows sold for a farthing? and one of them shall not fall on the ground without your Father.”

***Independent sucks because it got its branding wrong. Name is so traditional media. In fact there is an established UK newspaper by that name.

Names with a whiff of the establishment seem old hat. Chris West, founder of Verbal Identity, specialists in linguistic branding, says that “they appear to be hankering after a debased culture of corporate magnificence”. Consumers think of them as pompous, self-serving, impersonal. The advantage of calling your business Wonga and GiffGaff lies in the rejection of superfluous formality. We perceive them as younger, more in-touch, less “corporate”. As Mr West concludes, “they sound like words we might hear at the pub”.

Then there is the quality of its writing. But that shows up the pedigree of two of its founders.

As for BN, it’s a work-in-progress, and it’s a gd training place for budding journalists: got ex-TOCer who has learnt to write proper, readable English. So I wish it well, even if I’ve heard allegations about its funding. And it has a great name. Spent a lot of cash getting its name right?

NS and the welfare state: two sides of the same coin in the first world,

In Economy, Political economy, Political governance on 19/09/2013 at 4:55 am

including Switzerland and Israel

S’poreans are rightly asking why they should do NS to defend two-timers like new citizen Raj who openly boasted on how his son will avoid NS, while still getting his PR status. (Related post on two-timer Raj)

In return, the govt has been moaning that S’poreans no longer believe in the value of NS. It tries to make NS more “valuable” for us via gimmicks rather than hard cash (“Money talks, BS walks”) and addressing the the issue of defending someone like new citizen Raj and his family.

Apart from addressing the issue of defending people like new citizen Raj and his son, methinks the ministers and ESM should reach for a 6th September article in FT (behind a pay-wall). It is an opinion written by Mark Mazower, professor of history at Columbia University and author of ‘Governing the World”. It is entitled, “The west needs a replacement for the warrior spirit”.

Cutting to the chase, I quote the following:

The late Charles Tilly demonstrated in a series of brilliant sociological studies the extent to which warfare and welfare have historically been tightly connected. Rulers who wanted citizens to fight learnt the hard way that they had to give them something more concrete and appealing to fight for than the privilege of dying in their name. That is why the advent of mass conscript armies, unified around allegiance to the nation, coincided with the dramatic 20th-century transformation in the nature of the state and the swift post-1945 expansion of social rights in the shape of public housing, healthcare and schooling.

During the two world wars, military service resulted in the percentage of the population in uniform in the UK and the US approaching an extraordinary 10 per cent. This kind of warfare accustomed entire societies to new egalitarian norms and demonstrated the indispensability of the state itself as mediator in industrial relations, and as economic strategist and planner. The lessons were learnt and applied after the war as well, underpinning much of the west’s managed capitalism in the years of the post-1945 economic boom.

Get it PAP govt? NS and the welfare state go together. Israel and Switzerland, countries still with NS, have gd welfare systems, BTW.

Maybe, since the PAP doesn’t want a welfare state, scrape NS? Has the additional benefit to the PAP of getting rid of the issue of us defending new citizen Raj and his family. We might be willing to be more amenable to more two-timing new citizens, like Raj.

Get it PAP govt?

Related post: http://atans1.wordpress.com/2013/09/17/where-ns-leads-to-successful-high-tech-start-ups/


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