atans1

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

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  1. […] – Five Stars and a Moon: Searching for my mother tongue – Bertha Harian: The news in numbers – Thoughts of a Cynical Investor: When global rankings don’t flatter, PAP’s evolving response […]

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