Posts Tagged ‘S’pore Inc’

Why we don’t buy the “explanations” of S’pore Inc

In S'pore Inc on 27/11/2010 at 5:23 am

The ex-head of the civil service and now chairman of the Public Service Commission showed he “got it” when he said at a recent speech in the US to S’pore  scholars: If we strive to be world-class, we will be judged by world-class standards. If we say that we have one of the best governments in the world, the public will expect it to solve virtually any problem Singapore faces.

Taz correct.

But he showed he didn’t “get it” when he went on: Some of our citizens are now beginning to expect the government to do the impossible. Many citizens are now less prepared to give the government room to make mistakes and are less forgiving and more demanding. They tend to regard explanations as excuses. Take the recent floods. To some Singaporeans, saying that floods are natural disasters and Singapore cannot be flood-free, sounds like a cop out. Every time something goes wrong in Singapore, citizens ask: “If our public servants and Ministers are so smart and paid so well, why can’t they prevent the problem from occurring, or solve it for good after it occurs?”

He is assuming that the “explanations” given explained what had happened. He should relook this assumption.

Juz look at some of the recent “explanations” that have been given for goof-ups or incidents that caused public inconvenience. Are we wrong in thinking sume people were trying to avoid responsibility?

When MPs asked why the flat of Mas Selamat’s brother was not watched, they were told by the Home Affairs minister that that Mas Selamat could go undetected in the flat “was not a security lapse’ and that hundreds were probed . Err how abt answering the question, “Why wasn’t the flat watched?”

As to the floods, I could not understand the minister’s and senior officials’ explanations. I only “got it” when, on an inside page of ST, it was reported that more rain had fallen in a few hours than it had for days on end i.e. it was very, very heavy rainfall in a very short space of time. Point taken. But this explanation by a junior official was buried deep inside ST, and I’m sure many would have missed reading it. The front page “explanations” failed to give this fact, or where they did, this fact was lost in the smoke of hot air.

The problem is that the “explanations” given often ignore the question, assume that S’poreans are morons or that we are educated, and refuse to admit that mistakes were made. Perhaps PSC should run courses to train scholars to be less arrogant; to admit to making mistakes; and to write in simple, believable prose? One gets the impression that ministers and civil servants attend courses where they are taught not to ever admit making a mistake; and to avoid answering questions. Read the rest of this entry »

S’pore Inc: gd policies not enough leh?

In Corporate governance on 14/11/2010 at 5:23 am

In 1994, Bill Clinton had a problem. The Democrats had lost control of Congress. So he made a speech. In the speech there were two sound bites that can be used in the coming GE, one by the Opposition and one by the PAP.

I hope that one of the major opposition parties, RP, SDP or WP,  will use a variant of this: “You can have good policy without good politics, but you can’t give people good government without both”.

This Bill Clinton sound bite encapsulates what the opposition parties and various do-gooders have been trying to tell us over the years, but lacked the eloquence or wit to put it so pithily. The result? The PAP  got to frame the issue: “Gd policies is the only thing that matters”.

The message from the Opposition should be: “S’pore needs good politics. Good policies are not enough. Good governance needs good policies and good politics. Without us there can never be good politics.” So simple, leh.

Note that being a good politician is not easy. Ronald Reagan did not connect with working class Americans just like that.

From 1954 to 1962, he worked for GE as host of a weekly television programme, General Electric Theate. He had to travel to 139 GE plants meeting more than 250,000 employees.

In his memoirs, he wrote “Looking back now, I realize it wasn’t a bad apprenticeship for someone who’d someday enter public life…the GE tours became almost a graduate course in political science.”

Next week, this time, a longish quote from Bill Clinton that the PAP should ponder. BTW It’s not “It’s the economy Stupid”. I promise you a great laugh. So click on.

BTW,  in a previous incarnation, I was one of the strategists that roamed China in olden times looking for a warlord willing to listen and pay. So PAP and anyone else who can pay: I’m for hire. Thing Chuko Liang or Fan Li or Sun Pin.

S’pore Inc’s coming general meeting

In Corporate governance, S'pore Inc on 08/11/2010 at 5:25 am

S’pore Inc’s board of directors regularly rant at the US practice of allowing the media to play a major role in the governance of the US, the world’s hegemon. But funnily this board makes sure S’pore Inc follows American practice when it comes to the power of the board and management of corporations vis-a-vis its citizens i.e. shareholders.

Unlike the British practice in the law governing companies (which S’pore follows in company law), the US practice makes it difficult to remove directors and challenge or overturn management decisions. Shareholders often have only an advisory role in the company they own. If they are not happy with the board or management, they can quit the company (sell the shares) if company is listed.

Doesn’t this sound like the corporate governance of S’pore Inc? Not happy, be a quitter. You can’t change the board or management.

The only realistic outcome of the coming general election is for the board and management to feel the anger or dis-satisfaction of the shareholders, if these feelings are real and not just astroturfing by anonymous Internet posters.

Either the Reform Party or the SDP (I give up on WP and the Chiams, and NSP is too small, and asking RP and SDP to cooperate may be unrealistic) should try to work on an index to show how badly S’poreans have done since 19991 (when present SM became PM) and 2004 (when LHL became PM). Remember Ronald Reagan became president by asking if Americans were better-off than when his opponent became president. No hope of change here, but such an index can help people decide if they are angry or dis-satisfied. And whether they want to send a message.

(They may not want to if they have landed property or HDB flats bought years ago

Seriously, we need some hard numbers because as the Polish philosopher Leszek Kolakowski said: there was never a shortage of arguments to support any doctrine one wanted to believe in for whatever reasons. He called this insight the law of the infinite cornucopia.

S’pore Inc: first and fourth world corporate governance

In Corporate governance, S'pore Inc on 05/11/2010 at 5:26 am

Interestingly S’pore Inc practices “betterest” and “baddest” corporate governance at the same time.

When it comes to CEO succession, we follow best corporate practice (and that of North Korea, China, and the Roman Catholic Church).

There is gd succession planning for the post of PM (CEO), and cabinet posts. People are talent spotted and groomed and tested. Some have remained as junior ministers, while now and then a cabinet minister is sent packing. Though sadly such best practice is not infallible: it led to the hubby of Peanuts Choo becoming PM, resulting in the “lost 14 years”, when S’pore lost its way. But to the fair to the system, at that time an Indian was thought by someone as not acceptable to the Chinese majority, while another candidate didn’t want the job. So what to do?

But we have a rotten practice when it comes to ex-CEOs. In any well run listco, does the ex-CEO retain his place on the board of directors? The answer is no, not unless he also happens to be the controlling shareholder.

The presence of the ex-CEO will be taken as a sign of no-confidence in the new CEO. Or that the new CEO is weak. Or both. Or that it is all wayang kulit. The ex-CEO is the puppet master. and the new CEO is his puppet.

In the cabinet (S’pore Inc’s board), we have two-ex PMs and now one ex-DPM. Err what does this say abt the PM? Or what the ex-PMs think about him?

If S’pore Inc were listed in London or NY, what would the shareholders have done?

Funnily this worst practice is not practised at S’pore Inc’s lower levels: e.g. in the admin service and SAF. When senior officers make way for new fresh blood, the former don’t hang around in posts where they can monitor their successors.They are given new posts: like a general becoming a investment director at Temasek.

This kind of “guardian or trustee”meh?

In Corporate governance, S'pore Inc on 04/11/2010 at 5:24 am

If any

– unhappiness with or criticism of any policy is met with “kind to be cruel”, “it contributes to economic growth stupid”, “don’t be ungrateful”, anger or hostility;

–  govmin goof-up is met with spin* and then by “move on” if the spin is not believed; and

– stayer who raises questions abt national identity is met with hostility,

is this govmin, a government to look after our lives like a guardian or a trustee?.

Is S’pore a place whose political system [ ] is fair, honest, accountable, and stable … which can produce an honest and effective government; and which can deliver the kind of buzz which Singaporeans want for their country?

Only the PSC chairman gets it: If we strive to be world-class, we will be judged by world-class standards. If we say that we have one of the best governments in the world, the public will expect it to solve virtually any problem Singapore faces. Some of our citizens are now beginning to expect the government to do the impossible. Many citizens are now less prepared to give the government room to make mistakes and are less forgiving and more demanding. They tend to regard explanations as excuses.

If the ruling party doesn’t get it (and talk of a military coup if there is a freak election result), and we can’t change the system, isn’t it time for us to be rational abt the value of being S’porean, and “move on”?

I’ve “moved on” mentally. The antics of the PAP (esp that of SM), and two leading Opposition parties, the WP and Chiams, annoy and sadden me . The WP thinks passivity is the answer, while the Chiams are saying, “We run the SPP and SDA”.

Feel free to call me a quitter-in-residence. Hotel room and service gd here, even if I can find better value overseas.

If the daughter of SM and “peanuts” Choo can “move on”, why can’t or don’t you?

*Maybe the spin meisters have not kept up with the literature on risk. Such things may be inherent in the complexity of the world and no one person or group can be blamed. Warning: piece is 6 pages in three columns per page. But it’s a great, disturbing read. And talking of spin, which moron allowed the release of these without the methodology (sample size etc) details? I mean these stats seem to be a tad too convenient.

How we fund our SWFs

In GIC, S'pore Inc, Temasek on 02/11/2010 at 5:42 am

This piece is an attempt* to answer,”If Singaporeans are not “hard-driving and hard-striving”, where did GIC and Temasek get so much money to lose?”: a posting on a Temasek Review article in late 2009.

The answer parroted mindlessly by the government is that government budget surpluses mean that GIC and Temasek get money to invest with.

A more detailed explanation has to start with how the surpluses arise.

As about 43% of the working population  don’t pay income tax, and VAT and other taxes are relatively low: one way the surpluses are generated is by a government being thrifty (government’s view) or mean (view of many netizens).

Economists in the private sector, and the Reform Party (the sec-gen was once an economist and he has a first-class degree from Cambridge) have argued that rather than accumulate large surpluses that are then invested abroad, the government should spend more building up Singapore’s human capital. By spending more on things like education, healthcare and consumer protection, the returns generated will be better than the returns on overseas investments.

This is an argument that has excellent academic credentials. China is often asked by eminent economists ,”Why do you export so much when you, in return, use the surplus lend to the Americans so that they can buy more from you?” The economists advise that China should invest more locally.

The government’s view is that Singapore needs the reserves as an emergency fund should things go badly wrong. The late Dr Goh Keng Swee talked of spending the reserves in a recession (as has happened recently). Dr Goh and others could also have quoted the example of Kuwait. When Kuwait was invaded by Iraq, the reserves were used to help pay for the war. And afterwards for the reconstruction of the country. They could also have cited Iceland and Dubai as countries that got into trouble because they ran out of $, when they could not borrow any more.

The second reason why surpluses occur is that our CPF monies are invested in special government bonds. The $ from the bonds flow into the government’s Consolidated Fund together with revenues from taxes etc. All government expenses are paid out from this fund. If there is a surplus (as there usually  because the government is thrifty or mean depending on who is doing the talking) part of that surplus can go to GIC and Temasek. The government argues that because all the monies in the fund  is fungible (cannot be separated), one is wrong to argue that CPF monies are invested abroad.

Technically and legally the government is correct, but so what is the retort? The financial effect (though not the legal consequences) is the same as if our CPF monies are directly invested abroad.

And these special bonds are the reason why S’pore is up there on a  list that the local media does not ever publicise. S’pore has the 8th highest public debt to GDP ration (113.10%) in the world. Greece is 7th with 113.40. Other countries on the list above us are Zimbabwe  (champion), Japan (second), Lebanon and Italy. Iceland is 9th (106.7) while Ireland is at 36 (57.7).

(Aside, could this high debt to GDP ratio be the reason why the govmin wants to force-feed GDP growth through immigration? I may explore this issue in future and I hope RP will explore the issue as something the electorate should be educated upon.)

Singapore is unique among the countries with the largest sovereign wealth funds. The other SWFs are effectively funded from oil revenues. In the case of Singapore, it could be reasonably argued, by government critics, that the funding results from the “hard-driving and hard-striving” Singaporeans who are forced to save and lend the money to the government; and from less than optimal government spending.

So the quote at the beginning of this piece has elements of the truth. And worse: one could reasonably argue that the government makes something for itself from “hard-driving and hard-striving” S’poreans.  One noted local economist has said that the government is effectively pocketing the difference between the returns it gets from investing abroad and the returns it pays on our CPF accounts: a carry trade arbitrage. Borrow low and invest for higher returns.

*What with an election coming, I tot I should revise (and repost) a piece I did in December last year. The revision has been pretty extensive.


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