Inflation: Why the misleading picture, minister & media?

In Economy, Media, Political governance on 13/08/2012 at 5:12 am

(Or “Think short-term, not long-term says minister Lee or “MTI minister does not know econs?” or “Govt’s spin machine is stuck in the stone age”)

The Retail Price Watch Group (RPWG) last week emphasised that the slower pace of food inflation impacted positively on household expenditure as food expenses take up a considerable portion of each household’s monthly budget. This slower pace of food inflation is good for S’poreans is the message that the constructive, nation-building media is spreading, not challenging. Example of how inflation is reported . At the end of this piece are two links on the numbers on inflation, and what they mean.

Earlier this year, when inflation was hitting new highs, in addition to the sick jokes by Tharman and Hng Kiang on “no worries” if “you don’t rent private housing, or want or need to buy a car”*, S’poreans were told to look forward, not back. Inflation would “moderate”. It hasn’t has it? The rate of growth has slowed a tinny winny bit, taz it.

Now the message seems to be look back, not forward. If you wonder why, read this, “Another food crisis looms”: grain and meat prices are rising fast (not rice though but note “Rising wheat prices and a failure of America’s soya harvest might scare nervy Asian countries into a rice-export ban just as during the food crisis of 2007-08.”).

And there is this: Global food prices sharply rebounded in July due to wild swings in weather conditions, a UN food and agricultural body has said.

The rise has fanned fresh fears of a repeat of the 2007-2008 food crisis which hurt the world’s poorest. BBC report

But when asked about the current drought in the United States Midwest which is affecting corn and soybean crops, Mr Lee Yi Shyan, Senior Minister of State for Trade and Industry and National Development and chairman of RPWG said it is not likely to have an impact here in the near term.

This is because Singapore imports a negligible amount corn, and only seven per cent of its soy beans from the US.

But a sustained price hike for the grains, which are used for animal feed, he said, may raise commodity prices in the long term.

So said minister is downplaying the effect of drought in the US on food prices. And our media is not questioning him. And they all are wrong to downplay the rise in retail prices.

There are floods in Brazil, the other large exporter of soya. So it isn’t juz the US. 

There is no getting around the fact that two of the staples of the world food industry are about to become scarce commodities.

That means they will also become more expensive. Soya beans and corn make oil, animal feed, and ethanol (to be added to petrol), and are used in snacks, fast food, even soft drinks. America’s drought is going hit us all.

FT gave a concrete example: Based on the numbers of a big US producer of chickens, Sandersons, a US$2 increase in corn, like the one that just took place, adds about US7 cents to the cost per pound of chicken meat. And as the margins are tiny, so prices of chicken have to rise unless there is a serious recession.]

Then there is the issue of time frame. The USDA expects further rises in prices, and it is predicting that global corn trade will be sharply lower this month “in response to tighter US supplies and higher prices” reports the BBC. So minister, if “this month” is “long term”, what is “short-term”? Ten minutes? 

But this downplaying of inflation and the misuse of the term “long term” is not all.

But a sustained price hike for the grains, which are used for animal feed, he said, may raise commodity prices in the long term.

So after always being tot to think long-term, and with the government always praising itself that it takes the long-term, strategic view, and taz why we should always vote for the PAP, we are now told to think short-term? 

Whatever happened to thinking and planning long-term? Retired juz like one LKY?

And why is the media not pointing out and commenting the change in govmin thinking? Are they waiting for approval?

Could minister and media been trying hard to avoid spoiling the national mood ahead of 9th August?

Or waz it all, “An honest mistake?” Or is this Lee trying to ape Tharman and Hng Kiang as a standup comic?

Or, as is most likely, could the government PR and corporate communications machine still be in the pre-internet age when real-time information was expensive and limited to traders in financial institutions? Then media releases, and ministerial statements and Q&As could be crafted days or weeks ahead of time, with each officer in the pyramid making changes until the final draft reached the minister. Now when communicating to any audience, ministers and their minions must be aware that real-time info is available at a touch of the screen.

(Links on inflation

Inflation has accelerated, fueled by rising housing and private transportation costs … The monetary authority last month estimated consumer-price gains will average 4 percent to 4.5 percent this year, compared with the 3.5 percent to 4.5 percent range it forecast previously.

DBS says S’pore facing stagflation with one of highest inflation rates in region.


*OK, OK I exaggerate but only a little.

  1. Whether economy or inflation,it is a show directed by ?presented daily on the MSM.

  2. […] Thoughts of a Cynical Investor: Inflation: Why the misleading picture, minister & media? – AhTanLor: Has HDB lost its way? – Loh and Behold: My Life in Ten Posts: Of Sore […]

  3. […] But a sustained price hike for the grains, which are used for animal feed, he said, may raise commodity prices in the long term. (More) […]

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: