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Archive for the ‘Economy’ Category

TRE poster asks “Why save when struggling?”/ Corporate raiders and change

In Corporate governance, Economy, Financial competency on 21/04/2018 at 10:57 am

When TRE used PAP is losing the war to keep S’poreans in ignorance there was this comment

SUNNY:

in fact every generation can barely only support it self.
actually we are now the future generation ,what benefits are we enjoying??
may be the leaders should have their 90% salary/bonus cut for future 20 years generation,so we can witness before we die.
why save when it is raining heavily today.we won’t be around tomorrow.
who knows if the world will end tomorrow.

Here’s another thing to think about

What is the point of having a very good balance-sheet if the S’pore economy is underperforming its full potential?

In the 50s, 60s and 70s, US CEOs boasted of their companies strong balance sheets while spentdingcorporate funds on private jets, hunting lodges for themselves, co directors and senior executives, and their cronies. Shareholders got “peanuts” but wewre grateful. Then came the corporate raiders with the doctrine of “shareholder value”. CEOs  etc are still well renumerated but they have to keep the shareholders happy.

Recognise what should happen here next?

Too bad we got the likes of the Wankers’ Party, Mad Dog, Uncle Leong, Phillip Ang, Goh Meng Seng, s/o JBJ, TKL, Martyn See, Seelan Palay,Kirsten Han, M Ravi and TJS. They are the faces that the swing voters (those who voted for Dr Tan Cheng Bock) usually associate with change.

We need more people like Dr Paul, Terry Xu, Sonny Liew, Chris K, Tay Kheng Soon, Yeoh Lam Keong, Cherian George, Donald Low, Alex Au, Mohamed Imran Mohamed Taib, Tan Tarn How and Remy Choo.

 

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Trump’s u turn on TPP shows Churchill’s wisdom

In Economy on 15/04/2018 at 11:14 am

You can always count on Americans to do the right thing – after they’ve tried everything else.

Winston Churchill

Well a modern day variant would be

You can always count on Trump to do the right thing – after he’s tweeted about everything else.

From NYT Dealbook

Has Trump changed his mind about the TPP?
He once denounced the trade pact as “a rape of our country.” But his decision yesterday to reconsider joining — which surprised his own advisers — could hearten U.S. businesses and Republican lawmakers who supported it as one of the best ways to box in China.
Senator John Thune, Republican of South Dakota, told Politico, “If you want to send a message to China, the best way to do that is to start doing business with their competitors.”
Free-trade backers may point to this reversal, as well as attempts to revise Nafta, as a change of heart by a protectionist president. Then again:
And Japan’s chief cabinet secretary cautioned this morning that it’d be hard to rewrite a “well-balanced pact” that already met the needs of 11 signatories.
The president’s decisions on economic matters are now the purview of Larry Kudlow, who’s casting himself as a “happy warrior” even as he described the TPP decision as coming “out of the dark, navy blue.”
Meanwhile, China is not-so-subtly threatening to scale back its purchases of U.S. debt, though that would be a risky maneuver.

PAP FT policy trying to avoid this mistake?

In Economy on 08/04/2018 at 10:52 am

In The Decline and Fall of the Roman Empire, Edward Gibbon wrote: “The narrow policy of preserving, without any foreign mixture, the pure blood of the ancient citizens, had checked the fortune, and hastened the ruin, of Athens and Sparta. The aspiring genius of Rome sacrificed vanity to ambition, and deemed it more prudent, as well as honourable, to adopt virtue and merit for her own wheresoever they were found, among slaves or strangers, enemies or barbarians.”

Well we now have an FT jnr minister Dr. Janil Puthucheary who comes from M’sia and FTs by the cattle truck load.

Why en-blocers could be in for a nasty surprise

In Economy, Property on 06/04/2018 at 10:54 am

As could all other property speculators and developers and their banks financing them.

They shouldn’t be counting their chickens before they hatch.

https://www.economist.com/sites/default/files/imagecache/800-width/images/print-edition/20180331_FNC159.png

If the phoney war between China and the US becomes a real trade war, we’ll be caught in the middle. We are part of China’s great export machine that Trump wants to destroy: see how much as % of GDP do our exports add value to China’s exports to the US.

 

What’s behind the market slump?

In Economy on 05/04/2018 at 4:45 am

NYT Dealbook (Tuesday morning) explains

S.&P. 500 futures are up this morning, suggesting yesterday’s market rout may not continue. And European and Asian marketsdidn’t fall as sharply as did the U.S.’s. But what’s behind the markets dropping 4 percent so far this year? A couple of ideas:
• Washington (and Beijing), again: China’s tougher-than-expected retaliatory tariffs gave investors more reason to fear a trade war.American pork and fruit producers are among those sweating. “The Trump administration’s unorthodox and unpredictable decision-making is likely to keep markets on edge,” Mike Ryan of UBS Wealth Management told the FT.
• Tech, again: The FAANG stocks are still weighing down the S.&P. 500 and the Nasdaq, as the likes of Facebook and Google face the prospect of greater regulation and President Trump repeats his attacks on Amazon. (Tesla was down, too, but that’s more understandable.)
• Technical issues: Traders could be trimming bull market bets.
Peter Eavis’s take: Before investors began fretting about tech and trade, the underpinnings of the stock market’s ascent were perhaps not as robust as they looked. Analysts expect S.&P. 500 companies’ earnings to grow 25 percent this year. But rising interest rates worldwide could affect revenue growth. And if wages and other costs come in higher than expected, profit margins could get squeezed.
The bottom line: Uncertainty has descended upon the markets, and it will be hard to shake off.

Coming back to S’pore, I wouldn’t count on the next en-bloc sale being completed given the uncertainity of a global trade war. More soon on why if the fight between China and the US becomes more than wayang will hurt us.

Cybernuts’ Guide to Trump pak China

In China, Economy on 26/03/2018 at 4:48 am

Summary: Be happy because global trade will suffer and thus S’pore very dependent on global trade (Why S’pore’s growth is so gd this year) will suffer.

Chief cybernut, Oxygen, already sending out invitations to his “PAP will collapse soon” party

Alternative view from EDB: Really? “Singapore Says Asian Growth Helps Offset U.S. Trade Threat”(From early last year)

From NYT’s Dealbook

Will the U.S.-China trade fight be a flicker or an inferno?
They’re here. President Trump imposed $60 billion worth of tariffs and penalties on Chinese goods. China is threatening tariffs on $3 billion worth of U.S. goods like nuts, wine and pork. Now S.&P. 500 futures and markets in Asia and Europe are down this morning, following yesterday’s steep sell-off (which was driven in large part by Boeing).
The context: Mr. Trump has made subtext — China is the U.S.’s main economic rival and must be treated as a strategic competitor — text. Few in the U.S. are happy with Beijing’s trade and intellectual property policies. But the world is now watching to see whether the fight turns out to be a spat, or a prolonged and damaging conflict.
Peter Eavis’s take: A trade fight that eventually relaxes some of China’s disadvantageous conditions could bolster the long-term prospects of U.S. firms. And if the U.S. is able to recruit other countries to its cause, China may relent. Still, much could go wrong.
On the other tariffs: The E.U. is still waiting for confirmation of exemptions from the imported metals tariffs. They may get quotas instead. Meet Century Aluminum, the tiny manufacturer that pressed for those penalties.
Critics’ corner
Stephen Gandel of Gadfly writes, “Trump’s tariffs and especially his protectionist rhetoric threaten to cut more and more of the world off.”
Paul Krugman writes, “America has much less trade leverage over China than Trump imagines, and a trade war with ‘China’ will anger a wider group of countries, some of them close allies.”
The WSJ editorial board writes, “A rising and aggressive China poses considerable risks to world order, but persuading its leaders to conform to trading norms requires more than scattershot tariffs.”

 

PAP’s simple growth equation no longer works

In Economy on 20/03/2018 at 10:14 am

There is no maximum size for a city’s population, even the booming megacities of Asia. It is all a matter of clever planning – and looking ahead 100 years. So claims Dr Liu Thai Ker, Chairman of Morrow Architects.
Read more at https://www.channelnewsasia.com/news/video-on-demand/conversation-with/dr-liu-thai-ker-9855058

Dr Liu’s interview earlier this yr has been remaking the rounds on FB. He seems to be the PAP administration spin meister on why we need FTs by the cattle-truck load and a population of 10m.

He and the PAP administration parrot unthinkingly the conventional economic wisdom that growth is just demographics plus productivity. If  birth rates are lower than in the past, and no FTs come in,  and productivity is flat, growth must be slower. And property prices will collapse.

It’s a simple equation.


Growing the economy via productivity is very, very hard: US experience on growing GDP via productivity

————————————————————————————–

The retired chief economist of GIC disagrees and he just reposted his critique of this view.

Just to repost my comments on Dr Liu Thai Ker’s views on planning for a 10mn population for Singapore as they probably bear repeating :

“The problem here is that with all due respect, while Dr Liu is an extremely competent and highly regarded town planner, he is effectively recommending very poor, outdated economic policy indeed.

He is still stuck in the defunct “go for growth” strategy which the government has long realized was a mistake since 2010.

Between 1990 -2010, twenty years of this “go for growth” strategy has left us with a bloated, inefficient, labour intensive and low productivity economy that has depressed wages for the working class, created massive working poverty, and boosted the population to an uncomfortable 5.6 mn that could easily swell to double that if labor force growth is not scrupulously controlled well below 1% pa long term.

Germany for example, grew its labour force and population at less than 0.5% pa over the last few decades and remains the most competitive and dynamic high value-added export economy in the world!

Doing the same for the next few decades will leave Singapore with a population well below 7 million, not anywhere near 10 million and with higher productivity and real wages, less wealth and income inequality and a much much smaller and more assimilable new foreign population.

What we need is high quality, not poor quality, high quantity growth. The latter is the way towards an unbearably crowded, extremely stratified and socially divided Dubai-type, not a Swiss-style standard of living that a productivity-led, relatively population-light strategy like Germany or Switzerland’s can alternatively provide.

Citizen well being, not growth numbers, greater profits, more billionaires or tall fancy buildings should be the true test and ultimate goal of long term population policy and urban planning.Let’s not forget that we are not just a city state but, much more importantly, a nation state as well.”

GST: Even economists tot GST could go up

In Economy, Political governance, Public Administration on 11/03/2018 at 10:44 am

I quoted a senior lawyer

If the G thinks the earlier remarks were clear and categorical, so that citizens could have no doubts, how does it explain why so many reputable economists were willing to entertain thoughts of an increase this decade?

PAP voter cheers on Auntie, says Fu talking cock 

A pal of mine posted on the FB post where this quote originally appeared

The economists even factored in an increase in their analysis of GDP growth. Btw, I’m one who tot that GST would not go up this yr because it would contradict what Tharman said in 2015 and because it would make no sense effectively “locking up” the increase for 2018- 2020 because there’ll be a new govt by 2021.

The retired GIC Chief Economist waded in

…my respected economist friends were similarly unsure if GST would be raised this time after attending pre budget MOF briefings, even with Minister Heng.

Here’s what the constructive, nation-building rag of MediaCorp had to say about the economists changing their forecasts after the Budget speech

The Budget’s one-off cash handouts and delay in the goods and services tax (GST) hike, which will kick in sometime between 2021 and 2025, prompted Credit Suisse to raise its 2018 economic growth forecast for Singapore from 3 per cent to 3.3 per cent.

Taken together, these would boost growth domestic product (GDP) as well as private consumption, the bank said in a research note, as it raised its private consumption growth forecast to 3.6 per cent, up from 2.9 per cent.

Credit Suisse economist Michael Wan said the bank had previously factored in a 2-percentage point GST hike for its macro forecasts. “We, together with most other economists, were forecasting GST rates to rise this year,” wrote

Mr Wan, who described Monday’s announcement on the delayed GST increase as among the “surprises” of Budget 2018.

Other economists who had expected a GST hike to be implemented either this year or next agreed that the delay would bring a “minor boost” to consumption spending. Nevertheless, they left their GDP forecasts unchanged.

Commenting on the Credit Suisse report, Mr Bernard Aw, principal economist at IHS Markit, said consumers are expected to bring forward “large purchases” ahead of the GST hike.

UOB economist Francis Tan said he is keeping to his earlier forecast of 2.8 per cent GDP growth this year, which was based on a 1 percentage point GST hike this year. Nevertheless, he acknowledged that the delay of the GST hike “provides some upside”. He added: “Whenever there is a higher tax, people reduce their purchases.”

Maybank Kim Eng economist Chua Hak Bin is also maintaining his 2018 GDP forecast at 2.8 per cent, as he had expected the GST hike to be implemented next year. Private consumption is expected to improve from last year but it is unlikely to exceed 3 per cent this year, he said. “The jobs market looks to be improving and that will support consumer spending,” he added.

Both Mr Tan and Mr Chua, however, did not think that the impact of the hongbao handouts would be significant enough to lift GDP growth. Some Singaporeans may choose to save the money instead of spending it, Mr Tan noted. “In that aspect, these are not material handouts,” he said.

The reason I quoted so extensively is to show that “after attending pre budget MOF briefings, even with Minister Heng” the economists felt it necessary to factor in a GST rise in their forecasts.

 

Welfarism the PAP way/ The last word on GST

In Economy, Financial competency on 08/03/2018 at 9:54 am

Here corporates get welfare, not the people: and its foreign corporates that get the best goodies. PAP is not against welfarism so long as the beneficiaries are corporates, especially if they are foreign-owned. Ang moh tua kee kind of fascist movement?

Don’t believe me?

Well a friend, a respected economist, wrote

In Singapore’s case, there are other reasons to avoid the GST: In the context of an economy where there is an extraordinarily high profit share of GDP, is it appropriate that households bear a higher proportion of taxation than corporates? Our very rough estimate is that the direct taxes plus indirect taxes plus various levies paid by the household sector amount to about 11% of GDP, whereas the equivalent for the corporate sector is around 6%.

And

Given that foreign shareholders earn roughly half of the profits accruing to the corporate sector, the burden on Singapore households seems already to be unevenly high. This being the case, it does not seem appropriate to increase the burden on the household sector even more by increasing the GST rate.

Writer is Manu Bhaskaran. He was Tharman’s cell mate when they were convicted of breaching the Official Secrets Act. OK, OK, they were only fined. Btw, that incident showed that S’pore is a place of laws. Manu talked to his old boss in Mindef (Manu’s a scholar), BG Yeo, but BG Yeo couldn’t help. But maybe BG Yeo was ball-less or powerless, or both?

Sorry back to the article. Do read https://www.theedgesingapore.com/singapore-funding-its-rising-social-spending-right-way. Lots of other good stuff that show the fallacies of Hard Truths on Reserves, GST and govt spending.

Examples

And this brings us to the nub of the issue: What is the optimal savings rate for a country like Singapore? Savings is not an end in itself; it is the welfare of the citizens that is the end. Simply accumulating savings continuously is not the right thing to do — the right approach is to look holistically at all the determinants of welfare and then decide an optimal savings rate.

And

The thrust of the discussion above essentially leans to a view that Singapore is probably already saving enough and may even have exceeded the optimal savings rate. In that context, the better approach to funding rising social spending is to use more of the income from investments and to not raise taxes, be it the GST or some other tax.”

 

PAP is losing the war to keep S’poreans in ignorance

In Economy, Financial competency, Media on 02/03/2018 at 11:01 am

Be of good cheer, those of us who want the PAP lose its hegemony (Cybernuts excluded because like TRE’s Oxygen, they think a crushing defeat of the PAP is just another GE away: they’ve been thinking that since before Cyberspace came into existence), the PAP is losing the war on keeping S’poreans financially illiterate with comments like:

GST hike ‘the responsible way’ to fund areas of collective need: Heng Swee Keat

(Today)

Preserving reserves signals to markets strength of Singapore dollar: Chan Chun Sing

(ST)

Let me explain.

When two natural PAP supporters make the comments I report below, it’s clear that the retired chief economist of GIC (Known as LKY on FB), Donald Low, Chris K and others (including little old me) have not wasted our time raving and ranting that

— S’pore has too much reserves and that they can and must be used to make life better for S’poreans.

— And that tax rises show that the PAP administration are reckless prudent, or at least are mindlessly prudent.

FB post by a retired SAF officer, now active in mental welfare causes. He was one of the first Black Knights.

Maybe what the Government needs to do is to show to the citizens various scenarios (given some assumptions) about how to cater for the future financially. Period 2021-2025…, Scenario1…use of GST hike and 50% of Investment returns to manage the budget; Scenario 2…use of all reserves to do the same. Then show Sporeans what is left at end 2025, and how the projected financial state will affect Spore’s future financial health.

And this FB post by a lawyer who has said he voted for the PAP

The G says that Singapore’s reserves must be kept secret as a defence against speculative attack.

Whether true or false, there is an obvious price to pay in that if there is no public information about Singapore’s reserves, intelligent debate about Singapore’s fiscal policy becomes well nigh impossible.

The debate in Parliament currently appears to be rather sterile in the absence of meaningful facts and figures.

I am not in favour of the G’s current approach to the (non)transparency of Singapore’s reserves, which to me is not justified and makes no sense, on balance. We are better off having the knowledge to chart our national destiny.

People like Dr Tay Kheng Soon should take heart that the 70%ers can change their mind. He has often mused that educating S’poreans to realise that the PAP articulated alternative is not the only “right” way is a thankless, long and tedious task.

Whatever, remember that half of the 70% voted for Dr Tan Cheng Bock as president. He only lost because of Tan Kin Lian and Goh Meng Seng decision to fix S’poreans. As a TRE reader put it

Sabo King help Tony Tan by persuading Tan Kin Lian to steal 4.91% votes which is enough to prevent Tony Tan from winning.
Sabo King sabo TKL and made him lost his deposit.

 

 

Trump changing mind on TPP?

In Economy on 02/03/2018 at 4:26 am

Treasury Secretary Steven Mnuchin has floated the idea of rejoining the Trans-Pacific Partnership, more than a year after President Trump walked away. (NYT)

NYT Dealbook

If Trump can change his position on assault rifles, he can move his position on TPP.

PM will be pleased with the newsreport.

PAP govt: Win some, lose some

In Economy on 24/02/2018 at 10:08 am

Rio Tinto, a global mining co, is planning another restructuring that will see support staff moved to one of three global hubs or here.

But Google said it was stopping booking most of its New Zealand advertising revenues in Singapore, a low-tax jurisdiction. This follows a similar change implemented by the company in Australia

Property: Americans and S’poreans alike

In Economy, Property on 23/02/2018 at 4:56 am

In SIBOR up 25%, but property mkt is hot?, I pointed at riasing interest rates do not deter S’poreans from being bullish about property.

Seems the same is true in the US too. And maybe S’porean buyers are thinking like the American buyers.

Mickey Levy of Berenberg, who also offers this detail from the Michigan [Consumer Confidence] survey, widely followed by economists etc. More than half of Americans feel that their own household is better off than it was a year ago – the first time that has been true in too long:t appears that many people are taking rising interest rates as a reason to go out and buy a house now, before rates go up further. Mickey’s conclusion:

In the last year, we have emphasized that when confidence measures are among the highest of all of their historic readings—both on the consumer and business surveys—we find that they are reliable predictors of future consumer spending and business investment.  Accordingly, we take note of this strong University of Michigan Consumer Sentiment Index that was conducted during the abrupt stock market sell off.  If other surveys that mirror confidence also hold up, that would confirm our expectations that the economy is continuing to build momentum.

FT

Emphasis mine.

Heng needs AI to help him in making Budget forecasts

In Economy, Political governance, Public Administration on 20/02/2018 at 9:41 am

Because if my favourite fortune-teller had made the Budget surplus prediction of S$1.91bn that Heng made in 2017, she would lose all credibility. The 2017 surplus is S$9.6bn: 5 times or 503% bigger than projected last year. This is a miss of S$7.7bn, or, as Chris K points out, nearly 1.8% of GDP.

As usual the “blame” for the whooping error is put on stamp duty. And the next PM said this is a one-off. If I recall, this has happened more than a few times already. Still a one-off?

But Heng and the rest of MoF, and the entire PAP administration are not held accountable for getting the 2017 projected surplus horribly wrong.

Yesterday morning, in Budget: Consistently flawed/ Use more from Reserves meh?, I pointed out that the previous year’s Budget surplus is always bigger than predicted because

Consistently expenditures will be found to have been overestimated, and revenues underestimated

And that this tot was triggered by FT’s description of a Japanese mgt practice

[T]he pattern is too consistent for comfort, often strays into the deliberately deceptive, and is carried out as part of a habit of systemic conservatism

Let me be clear. I am not accusing anyone in MoF or the govt of being  “deliberately deceptive”. Here in S’pore, the pattern of underestimating revenue and overestimating expenditure “is too consistent for comfort and is carried out as part of a habit of systemic conservatism”).

Chris K spotted two more whopping misses in 2017 that are likely to be repeated based on the forecasts for 2018

Land sales revenue is estimated to be 12,2b for 2018 but for 2017, land sales revenues are revised from 8.2b to 12.9b. A revenue miss of 4.7b.

Investment income pertaining to interest and dividends only is estimated at 11.5b for 2018. But for 2017, it was revised from 10.5b to 17.5b, a whopping miss of 7b. Why I say whopping? Interest and dividends from an investment portfolio are fairly predictable, what is not predictable is the change in market value of investments. But the latter is not included so why such a large miss?

In total, both land sales revenues and investment income are 23.7b estimated for 2018 and revised upwards to 30.4b for 2017.

Facebook

Coming back to Heng and AI, maybe MoF should use IBM’s Watson cognitive computing innovation to help it improve its forecasting techniques.

After all in 2014,

DBS Bank and IBM today announced an agreement in which DBS will deploy IBM’s Watson cognitive computing innovation to deliver a next generation customer experience. This collaboration is part of an ongoing journey by DBS to shape the future of banking.

 

What about benefits comparison table too?

In Economy, Media on 20/02/2018 at 7:31 am

When I saw this bit of propoganda for the GST increase, I couldn’t help but think:

They should also put the benefits alongside the comparison of the GST rates.

Whatever, I note that HK does not impose GST.

Budget: Consistently flawed/ Use more from Reserves meh?

In Economy, Political economy, Political governance on 19/02/2018 at 10:02 am

[Update at 5.25pm: Trumpets please

My prediction that GST increase would be announced but delayed is correct: Heng announced GST increase of 2% from 7% to 9% to “fund recurring government expenses”. Increase will take place between 2021 and 2025 in a progressive manner. Handouts of GST vouchers will be made permanent once the increase is put in place.]

“Thus has it always been, thus shall it ever be”.

The FT talking about how Japanese mgt do earnings guidance

[T]he pattern is too consistent for comfort, often strays into the deliberately deceptive, and is carried out as part of a habit of systemic conservatism*

reminds me of our Budget’s forecast of expenditures and revenues in the coming year. Consistently expenditures will be found to have been overestimated, and revenues underestimated when the next Budget comes around the following year.

The result?

Economists expect bumper surplus for 2017

Part of headline from today’s ST. ST went on to gush

United Overseas Bank economist Francis Tan expects an overall surplus of $3.1 billion for FY2017, compared with the official initial estimate of $1.91 billion. UOB’s econometric model projects that the Government may see $2 billion more in revenue than expected, due mainly to higher corporate income tax receipts and stamp duties.

Mr Tan expects corporate income tax revenue to hit $14.8 billion, higher than the official estimate of $13.6 billion. If so, corporate income tax would regain its place as the largest contributor to revenue, ahead of the projected $14.11 billion net investment returns (NIR) contribution.

“Thus has it always been, thus shall it ever be” as the saying goes.

So remember that expenditures will be overestimated, and revenues understimated when we are told in the Budget statement that GST has to be raised because expenditure is rising for welfare and other goodies.

================

So why is there is surplus still?

Between FY2007 and FY2016, Singapore’s revenue has grown from S$43 billion to S$83 billion, based on revised FY2016 estimates. Over the same period, however, government expenditure has more than doubled from S$33 billion to S$71 billion.

Constructive, nation-building Today

http://www.todayonline.com/singapore/pressures-main-revenue-sources-prompt-govt-look-ways-grow-pie

And Err what about using more from income from reserves** and designating land sales as revenue, not chips for Ho Ching and GIC?)

======================================

Whatever, my bet is that there’ll be an announcement of a GST increase of 2 % but that the increase will be deferred so that Tharman’s promise will be kept

To be fair to PM Lee, both the MOF and he have clarified that consistent with DPM Tharmans 2015 remarks, we do not have to raise taxes before the end of the decade.

So there’s really no need to get our fiscal knickers into a twist about GST or income tax increases till after the next GE folks..

Countering PAP’s BS that taxes must go up

——————————–

*”Earnings guidance in markets everywhere is often a victim of the management instinct to lowball first so as to triumph later with an overshoot. In Japan, though, the pattern is too consistent for comfort, often strays into the deliberately deceptive, and is carried out as part of a habit of systemic conservatism. CEOs are not financially incentivised to reach for the stars, so opt for comfortable survival meeting targets they know are achievable.”

FT

**Long quote from https://www.theedgesingapore.com/how-will-singapore-fund-its-rising-budget-0

The reserve option

One other way of funding soaring spending on healthcare and social spending is to tap reserves built up over past decades. “If the government feels that, based on current revenue projections, it is not able to fund increased social spending and is looking for new sources of revenue, then its first consideration should be whether reserves should be tapped,” says Donald Low, associate dean at the Lee Kuan Yew School of Public Policy.

In a chapter in a book he co-authored, Hard Choices, published in 2014, Low argues that it is the baby boom generation — the group of people now entering or in retirement and at whom increased healthcare and social spending is targeted — that contributed the most to the accumulation of national reserves. “A significant part of our reserves is the result of fiscal surpluses generated in the 1980s and 1990s — the period when the baby boom generation was most economically productive,” he wrote. “Now that the generation that contributed the most to our reserves is entering retirement, it is only fair from an intergenerational perspective that the state reverses part of that transfer.

“To impose the fiscal burden of looking after the needs of the baby boomers onto subsequent generations in the form of higher taxes while continuing to accumulate reserves is not only unequitable but also inefficient… because continuing with a strategy of growing our reserves regardless of context implies a negative discount rate — that is, we favour the interests of a future generation more than those of the current generation… which has immediate needs.”

Singapore has, in fact, been tapping more of the investment returns of its reserves in recent years. In FY2016, Temasek Holdings was included under the so-called Net Investment Returns framework, which allows the government to spend up to 50% of its expected long-term returns. That year, NIR Contribution amounted to $14.37 billion and helped turn a $5.59 billion basic deficit to an overall surplus of $5.18 billion. The NIRC was the single largest contributor to the government coffers in both FY2016 and FY2017.

The NIR framework was implemented in 2009 to include expected long-term real returns on the government’s net assets managed by GIC and the Monetary Authority of Singapore. It was a major change from the previous Net Investment Income framework, under which the government could only spend investment income comprising dividends and interest.

Yet, should Singapore not be careful about using its reserves to fund the Budget? Should we not hold on to it for that proverbial rainy day? “But isn’t it the case that future generations are likely to be richer, for one, and, with [total fertility rate] at 1.2, the future generation is going to be a smaller generation [too]?” Low retorts. “So, we’re saving for a future generation that’s likely to be richer and almost certainly a smaller cohort than the baby boom generation. That seems like a regressive transfer of resources.”

He adds, “I think we have a social obligation to reduce inequality. In Singapore’s context, given that the baby boom generation helped to accumulate a large part of our reserves, one way of reducing inequality would be to tap the reserves to fund their needs. Another would be to introduce or increase existing wealth taxes.”

Still, other analysts do not expect the government to make more changes to the NIR framework, at least for now. “I think it’s good policy to use the good times to save up for the future,” says Wan.

How a UK town is coping with less FTs

In Economy on 15/02/2018 at 11:05 am

Harrogate is nice spa town in the North of England.

Its good schools, pretty Victorian terraced houses and proximity to the Yorkshire Dales mean that it frequently tops lists of the best places to live.

In the noughties, FTs flocked there because businesses needed employees to cater to an increase in tourism and other service-related industries. But

Every year since 2012 more foreigners have left Harrogate than have arrived, according to official figures.

As a result wages at the lower end have gone up 9%

Unemployment has fallen to 3.6%, below the national and regional levels, allowing some workers to drive harder bargains. Though real median wages in Harrogate have not changed much since 2014, at the lower end they have risen by 9%.

https://www.economist.com/news/britain/21736178-harrogates-downward-migration-trend-few-years-ahead-britains-how-it-faring

Employers and property owners  are also working smart

Attaching furniture such as bedside tables and toilets to the wall, rather than resting it on the floor, makes cleaning underneath quicker, and might make it possible to employ one cleaner fewer.

Employers are also changing processes and using more machines.

Has lessons for us as the constructive, nation-building media spins the need for FTS by the cattle truck load: How to get S’poreans to welcome mass immigration

 

PAP got a point on welfare programmes

In Economy on 14/02/2018 at 10:26 am

[M]y first wish is that Medishield Life be expanded to cover evidence-based healthcare interventions. I raised this at the IPS dialogue with DPM Teo Chee Hean last month and his response was to cite the classic neoliberal argument* that if you provide free medical care, a “buffet table syndrome” will result. This means that individuals will get all kinds of diseases and treatments just so that they can enjoy the free medical benefits. This is not his fault, it is a widely held belief among health economists from various right wing think tanks primarily in the United States who have advanced this argument.

Dr Paul Tambyah

http://yoursdp.org/news/paul_tambyah_39_s_speech_budget_2018/2018-02-12-6222

(Do read the speech from the only adult in the SDP portiburo. If only Mad Dog would step down and Dr Paul replaces him, the voters perception of SDP would change, enabling the SDP to be the Opposition not the Wankers’ (Or it it “Worthless”?) Party But Mad Dogs don’t do resigning, only biting. Sad.)

The PAP would also make the point that all welfare programmes grow and grow, as expectations rise. This in turn overwhelms other worthy state expenditures. Are they wrong?

Here’s what’s happening in the US

the crucial driver of US indebtedness is not military or discretionary domestic spending. It is the spending on “mandatory” entitlements, primarily social security payments for pensioners and healthcare programmes for the elderly and the poor. Along with interest on the nation’s debt, these make up more than two-thirds of federal spending, a proportion that is expected to grow. In the absence of a debate about how to reduce spending on big entitlements, or how to generate more revenue to support them, political fights like the one just resolved are theatre. They have the potential to do damage if they go wrong, but no chance whatsoever of changing the long-term outlook. The trajectory of the US debt burden is disquieting. The country is headed, by all accounts, for deficits of at least $1tn a year, which amounts to 5 per cent or more of gross domestic product. The total stock of US debt, now standing at 80 per cent of GDP, will pass 100 per cent before a decade is out if current policies are sustained.

FT

Dan Coats, the director of national intelligence, has just urged Congress to tackle the ballooning national debt, saying it posed a “dire threat” to economic and national security.

Btw, I’m sure Dr Tambyah would consider the FT and the the US intelligence community to be major part of the neoliberal establishment.


*Why you think he started sending potential ministers to the Kennedy School of Government at Harvard? Harvard is a another major part of the neoliberal establishment.

Heng, can be PM meh?

In Economy, Political governance on 13/02/2018 at 10:25 am

Two major biz trade groups are publicly very unhappy with Heng’s Industry Transformation Maps. Looks like bizmen and corporate executives don’t think much of the Industry Transformation Maps (ITMs), drawn up by Finance Minister Heng Swee Keat’s  Committee on the Future Economy (CFE)

The ITMs, which make up one of the key strategies outlined in the Committee on the Future Economy (CFE) report, have come under the spotlight recently amid questions from business and industry leaders about its relevance.

https://www.channelnewsasia.com/news/singapore/looking-ahead-to-budget-2018-what-it-could-mean-for-businesses-9943406

And he’s suppose to be a contender to PM? I mean did anyone say that Ah Loong’s economic strategies drawn up when he was a minister or DPM (Economic restructuring: This time, it’s really different) were anything less than greater than great? He was the Messiah, Moses and Jesus Christ Superstar all rolled into one, even though Ong Teng Cheong was more popular with the masses.

The Association of Banks is one of the unhappy business groups:

At a pre-Budget roundtable organised by the Institute of Singapore Chartered Accountants (ISCA) last month, DBS CEO Piyush Gupta, who speaking in his capacity as chairman of the Association of Banks in Singapore, questioned if the ITMs can keep up with the rapid changes in each industry.

“The blueprint and roadmap that you put in place will be outdated by six months so what we have to create is not a transformation roadmap but transformation capabilities,” he said. “We need to take our ITMs to the next level, which is to create the industry’s capacity to experiment and rapidly change.”

Then there’s the Singapore Business Federation

Also speaking at the roundtable, Singapore Business Federation (SBF) CEO Ho Meng Kit noted a disconnect between the ITMs, which are led by Government agencies, and the “realities of the industries”.

He added that he was concerned about the ITMs being developed for the bigger firms and risk leaving out “the long tail of SMEs in the same industry that are not as productive”.

(And btw this is damning for the Ministry of Trade & Industry

According to the SBF’s latest survey, half of the roughly 1,000 businesses surveyed said they still do not know enough about the ITMs to assess their impact*.)

I repeat again:

[H]e’s suppose to be a contender to PM? I mean did anyone say that Ah Loong’s economic strategies drawn up when he was DPM (Economic restructuring: This time, it’s really different) were anything less than great?

For the record, I predicted many moons ago that Heng would be PM: The next PM has been unveiled.

===================

*Minister for Trade and Industry (Industry) S Iswaran said on Feb 5 that “it is not possible for the Government to reach out directly” to all enterprises. In a written response to a parliamentary question, Mr Iswaran stressed that unions, trade associations and chambers (TACs) “must help to propagate the message”, while business owners “must also take the initiative to find out more about the ITMs”. He’s got a point that ‘business owners “must also take the initiative to find out more about the ITMs”’.

 

 

 

 

 

Why GDP is magic

In Economy on 08/02/2018 at 11:30 am

 

Recently, I wrote

The 2017 GDP growth of 3.5% was dismissed by anti-PAP types (nutty and sane) saying it’s mainly due to electronics which doesn’t employ many S’poreans because it’s a capital intensive industry. And it gave them the opportunity to diss the focus on GDP growth.

Impt of electronics to S’pore and rest of Asean

Here;s why they have a point on GDP

Magic numbers A lot falls through the cracks when tallying up gross domestic product. The big dumb number ignores the quality of growth. It confuses new technological efficiencies (which sometimes result in job losses) as a slowdown in growth. The more society grows, the less real growth is captured in the digits. (World Economic Forum)

FT’s Due Diligewnce

The link to the WEF piece is titled “5 ways GDP gets it totally wrong as a measure of our success” and is a reprint of an FT article.

Once upon a time thigs were different

Here’s something that came across my FB wall. MTI data shows that growth averaged 10 % p.a. in the 70s, with manufacturing sector’s share of GDP grew from 14 % in 1965 to 24 % by 1978.

Production work was boring but she stayed on because of her close friends in the line. Maryati worked at Rollei in the 1970s and then at Seagate in the 1990s (in the interim she took care of her children).

She became a ‘lead girl’ at Rollei in charge of about 15 operators, and was in fact selected for training in Germany but because she was pregnant she was unable to go.

Maryati’s husband Hassan was a security guard at Rollei from the beginning in 1971 till the company shut down in 1982. They met at Rollei. To my surprise, Hassan had many interesting stories to tell of his time at Rollei.

As Maryati explained, the operators knew production, but security guards knew people.

Hassan became a delivery driver and then a taxi driver when Rollei closed. Maryati was retrenched when Seagate downsized and moved from Ang Mo Kio to Senoko.
It was really good to speak to Malay workers who played a part in Singapore’s industrialisation.

Maryati at her work: for the photos I am thankful Rollei made cameras and she had to test whether they worked!

Theatres of History & Memory: Industrial Heritage of 20th Century Singapore

When strong GDP growth benefited the ordinary worker

How to get S’poreans to welcome mass immigration

In Economy, Political governance, Property on 05/02/2018 at 10:25 am

The calls are getting louder, with more and more voices making the case for Singapore to relook its position on the foreign manpower issue, in the face of a severe demographics slowdown*.

http://www.todayonline.com/singapore/big-read-foreigner-issue-are-we-ready-rethink

The above and a similar ST article a few days earlier is evidence that the constructive, nation-building media is again preparing the way for the flood gates to be opened and for FTs to be allowed in by the cattle truck load (not like now by only the A380 or 747 cattle class load).

The stories reminded me also that

“Opposition to immigration is largely cultural and psychological. Policy options will therefore have to address this.”

Eric Kaufmann, professor of politics at Birkbeck University of London, http://blogs.lse.ac.uk/politicsandpolicy/why-culture-is-more-important-than-skills-understanding-british-public-opinion-on-immigration/)

Eric Kaufmann was talking about the UK, but what he says also applies here.

So somehow, I think talking in general terms that the economy needs FTs wouldn’t work. Think the Population White Paper (Population White Paper: PAP’s suicide note?) which didn’t convince S’poreans that we need FTs by the cattle-truck load.


A personal view

As I’ve blogged before, FTs by the cattle-truck load is good for me personally because of the wage repression effect, stronger GDP growth, rising property prices etc. But still I’m not even in favour of FTs by the A380 load. I want FTs by the A350 or 787 business class and first class load.

__________________________________________________________

So if the PAP wants to use culture and psychology to get S’poreans to welcome cattle truck-loads of FTs, the constructive, nation-building media should tell S’poreans what will happen to the value of their “affordable” HDB flats that they are paying for via 25-year mortgages, if said FTs are not allowed to come in by cattle truck-loads to beat up taxi uncles and professional women. After all, falling HDB, and private property, prices are a consequence of weak economic growth, which will result from restrictions on immigration: at least according according to the “experts” quoted in the said articles*.

As Moneytheism (particularly the Propery cult) is our religion, the message will sink in very fast that S’pore needs FTs by the cattle-truck load to prevent HDB prices, and private property prices, from collapsing.


*The article goes on

Last December, economists said it may be time to re-look the Government’s stringent immigration policies following a UOB report on Singapore’s “demographic time bomb” which will start ticking next year, when the share of the population who are 65 and over will match that of those under 15 for the first time.

In January, Monetary Authority of Singapore chief Ravi Menon devoted much of his speech at a high-profile conference on the topic, making an impassioned plea for Singapore to “reframe our question on foreign workers”, given the limited scope in raising birth rates and labour force participation rate (LFPR). This was followed by a commentary penned by National University of Singapore (NUS) academics urging the Republic’s universities to admit more international students, in light of falling numbers.

Dr Chua, the Maybank economist, questioned how the targets could be met based on the current workforce size without additional foreign manpower, even after taking into account those who are displaced from positions becoming redundant.

“Manpower policies will need to be fine-tuned…Singapore’s transformation roadmap cannot be fulfilled without some flexibility in its manpower policies,” he said.

Dr Chua reiterated that relaxing foreign manpower restrictions during economic upcycles will allow Singapore to capitalise on growing investments and demand. “If restrictions are too tight, business will choose not to invest in the first place,” he said. “That in turn hurts job creation and opportunities for Singaporeans.”

He added that foreigners also “pay their fair share of taxes and contribute to the overall fiscal position, reducing the tax burden on citizens”.

 

 

Weak productivity: PAP’s Frankensteinian monster

In Economy on 01/02/2018 at 7:16 am

When I read the u/m from Rana Foroohar, a FT columnist that I love to hate (usually so pretentious and full of BS and who refuses to accept that Trump the bum is doing some good), I couldn’t help but think of the S’pore economy which the PAP administration claims it created:

— looking at the “supply side”: all those FTs;

— “capital intensity of the most innovative sectors – like pharma and high tech – is quite low”: pharma and high tech are high on the PAP administration’s wish list of investments that we must have;

— “the most digitally advanced industries – again, software, biotech, etc – aren’t the biggest employers.”: throw in the oil refining and petrochemical industries and that describes to a “T” the industries that are paid and paid to come here; and finally

— “The industries that are labour rich – retail, healthcare, education, public sector – are both tech and productivity poor.”: think of our huge finance sector (13.1% of GDP in 2016). The “retail, healthcare, education, public sector” are all part of any modern economy, so the PAP administration’s can’t be faulted for encouraging their growth.

Here’s what the FT columnist wrote:

According to James Manyika, the head of the McKinsey Global Institute, weak productivity – a real mystery in a time of such dramatic technological change – is down to a cocktail of issues that we aren’t looking at in the right way. First, demand is weak in most parts of the developed world, yet economists studying productivity typically look more at the supply side. Second, the capital intensity of the most innovative sectors – like pharma and high tech – is quite low relative to the past (they just don’t need big factories or expensive equipment). Third, in the past, big productivity gains were seen when the biggest employers made large tech jumps. Yet today, the most digitally advanced industries – again, software, biotech, etc – aren’t the biggest employers. The industries that are labour rich – retail, healthcare, education, public sector – are both tech and productivity poor.

FT

The kind of economy we have

— lots of FTS;

— with capital-intensive hi tech, oil refining and petrochemical industries that don’t need much labour; and

— finance which is labour rich, productivity poor,

was created by the governing party, the PAP, which has ruled since 1959 this de facto one-party state.

And which said party is louding KPKBing has a productivity problem

Which begs the question, “Do PM and his team deserve their millions?”: At 8.38 pm January 8, PM’s pay would pass Ah Beng’s yearly salary.

After all, they created an economy that is inclined towards low productivity.

What do you think?

 

4000% increase if estate duty replaces GST increase

In Economy on 31/01/2018 at 12:47 pm

There’s a lot to talk in cyberspace of reintroducing estate duty in place of a GST rise.

But none of the people proposing the reintroduction of estate duty seems to have gone thru the numbers.

We had estate duty and it brought in

an estimated S$75 million a year — the average annual amount collected before it was scrapped.

Compare that $75m to the rumoured GST rise expected to bring in $3 billion to $3.6 billion a year.

Experts have said they expect the GST to be raised by 2 percentage points to 9 per cent — translating to additional tax revenue of between S$3 billion to S$3.6 billion a year.

http://www.todayonline.com/singapore/where-spores-additional-tax-revenue-could-come-experts

So do the people who propose the return of estate duty really expect estate duty to be raised from its previous level so that it can replace the GST increase? From $75m to $3bn means a humongous increase: 4000%.

Did they do their sums? Did they analyse where $3bn a year in estate duty can come from? Is it targeted only at the super rich or is it across the board? And, if the latter, will S’poreans want such a high estate duty tax? And if targeted at the super rich, have the proposers taken into account the lumpiness of the tax. When there was such a tax, one year there was a big jump because Khoo Teck Puat died.

Or as usual, are the proposers: juz talking cock and singing song? They only want to show S’poreans that cybernuts don’t do their homework before opening their asses to fart?

There could be a case to revive estate duty as a means of redistributing income, but that is a different story from reviving it and increasing it by 4000% from the previous level to avoid an increase in the GST rate.

 

 

See who’s telling govt to control healthcare costs/ What be should be KPKBing about

In Economy, Public Administration on 25/01/2018 at 11:08 am

This guy from DBS has the right idea: govt should control costs of households esp in healthcare

Controlling costs for households, especially healthcare costs, would also help moderate government spending on subsidies and rebates.

DBS senior economist Irvin Seah says: “No matter how much we increase healthcare subsidies, it will never be enough if costs are not kept in check.”

The cost of healthcare has been rising inexorably. Between 2011 and 2016, Singapore’s average annual healthcare inflation rate was 2.4 per cent, compared to an average of 1.6 per cent among developed countries.

“There is an urgent need to review the current cost structure of the healthcare system,” Mr Seah adds.

ST: Do taxes in Singapore really need to go up?

Thw point about keeping costs down was also made last week in a letter published in ST. Getting the PAP administration to keep down costs is what S’poreans should be KPKBing about.

But the letter writer is wrong about there being no free lunch available. Think of the reserves, especially the returns. It’s billions of lunches being hoarded.

Chris K posted on FB

 Heartening. Despite the govie jawboning about increase in taxes and trying its damnest not to talk about the other way to meet higher expenditures, tapping more earnings from the reserves, 40% preferred tapping the reserves versus 34% favouring tax increases.

He was referring to the IPS study highlighted in http://www.todayonline.com/singapore/most-singaporeans-believe-family-and-government-should-take-care-elderly-poll

To sum up: S’poreans should demand that the PAP administration strive to keep costs down while spending more of the income from the reserves on S’poreans. Jam today: Welfare: Jam to-morrow and jam yesterday – but never jam today.

And we should also KPKB that the PAP’s definition of budget deficit is not one used by IMF and Western countries. For starters, it excludes land sales only half of the returns from the reserves is included, so the last sentence in this piece is a lot of rubbish.

Credit Suisse economist Michael Wan predicted that annual government spending will rise by a further 1.7 per cent to 2.8 per cent of gross domestic product (GDP) by 2025, driven by infrastructure projects, higher social expenditure, and measures to transform the economy. If the Government does not raise its revenue, it could run into a deficit of between 0.3 per cent and 1.4 per cent of GDP by that year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

“Do taxes in Singapore really need to go up?”/ ST trying to change its spots?

In Economy, Public Administration on 24/01/2018 at 7:15 am

“Do taxes in Singapore really need to go up?”is the title of an article in the constructive, nation-building ST.

But it looks as though it’s trying hard to no longer be constructive and nation-building.

In the article, it quotes Maybank Kim Eng economist Chua Hak Bin as saying

“It is quite remarkable that Singapore, with one of the highest saving rates in the world (at 48 per cent of gross domestic product) and fiscal reserves, still needs to increase taxes.

“The risk is that higher taxes may weigh on growth, which could lead to lower tax revenue collection as a result. Singapore’s low-tax regime has been historically a reason for its success, its attractiveness as a business hub and a vibrant city that draws talent.”

Taz no exactly what the PAP expects to hear from it’s No 1 loudhailer.

But taz not all, it further quotes him as saying that the govt should target subsidies more effectively.

For instance, the Pioneer Generation healthcare package should have been more targeted towards those who needed help most (by housing type or income), rather than a blanket scheme for everyone aged above 65, suggests Maybank Kim Eng’s Dr Chua.

http://www.straitstimes.com/business/economy/do-taxes-in-singapore-really-need-to-go-up

Now taz criticising the PAP adminstration’s signature policy, and it’s across the board schemes

Whatever, my mum for one is not impressed by this suggestion. She’s one of those who he thinks that she doesn’t deserve her “freebies”.

Btw Mr Chua is a M’sian. His dad is a fat cat who owns a finance co.

Connecting SMRT failures, 4th gen ministers & change of PM

In Economy, Political governance on 22/01/2018 at 8:16 am

This headline

All EWL stations to see early closures, late openings on weekends and select weekdays in March

(CNA)

reminded me of the failure of the PAP administration to ensure that the trains run on time*. I mean even that incompetent World War II dictator, Mussolini, ensured that Italian trains ran on time.

This failure is more significant than just the loss of output legitimacy (PAP has lost “output legitimacy”) because the PAP is talking about a change of leaders and the importance of trust.

People would also give their trust when they see the Government has been “responsible, anticipates and are responsive in meeting their needs” and there is an overall improvement in their lives, Mr Chan said.

The minister added: “Some policies take longer to bring forth results and the population may feel impatient.

“Each generation of leaders would therefore need to be consultative yet nimble in meeting these needs while managing finite resources responsibly. These are important so that we do not face a trust deficit, and run the risk of citizens disconnecting with or being disenfranchised by the government.”

Read more at https://www.channelnewsasia.com/news/singapore/chan-chun-sing-lays-out-key-leadership-qualities-needed-for-9852508

The problem for Kee Chui and other potential PMs is that the trust (partly based on output legitimacy”) S’poreans have for the PAP leaders is based on Harry, Dr Goh and gang did. The PAP has been living on (literally withdrawing yearlymillions of dollars) the trust in the bank trust account that these guys put in.

But the fourth generation ministers have not put much trust in the trust bank (OK, OK, same for GCT and Ah Loong and their gangs but that’s another story).

In fact, they could have cost losses to the bank account

— a possible future PM,  Ong Ye Kung, can be blamed for three problems: low productivity, labour unhappiness and SMRT breakdowns.

— Heng, the probable next PM, is linked to the minibond and DBS HN5 note losses (He was MD of the central bank at the time: Helping retail investors: the HK way and the S’pore way).

And worse, there’s not that much left in the bank account after the SMRT cock-ups and PE 2017 fiasco.

True, the 4th gen ministers have avoided getting involved in the SMRT mess. But that shows that they were not trusted to get involved in such an important matter affecting the lives of ordinary S’poreans.

Trust? What trust, Kee Chui?

What’s more, in a one-party state, the party in charge can’t be seen to incompetent, and the SMRT fiascos clearly show that there’s something wrong with the way the PAP does things. So that’s yet another problem for the 4th gen team.

But then could the failings of the 4th generation leaders be the excuse for the 3rd gen leaders in the cabinet to skip a generation and bring in a young, IT savvy guy as the PM in waiting? Names please on a post card?

————————————–

*SMRT said on Friday (Jan 19) that its board has confidence in the company’s management team and the ongoing efforts to enhance management, operational and maintenance capabilities.

CNA

The report went on

A Straits Times report on Thursday said that Mr Nathan has resigned and is serving out his notice. It also said that “observers are expecting chief executive Desmond Kuek to step down as well”. It did not specify which observers it was referring to or why they expect this to happen.

SMRT has been under pressure from the public and the government in recent months after a series of high-profile incidents, including the train collision at Joo Koon station in November which left more than 30 people injured, and the flooding of a section of a tunnel in October which caused prolonged delays.

 

Impt of electronics to S’pore and rest of Asean

In Economy on 16/01/2018 at 2:13 pm

The 2017 GDP growth of 3.5% was dismissed by anti-PAP types (nutty and sane) saying it’s mainly due to electronics which doesn’t employ many S’poreans because it’s a capital intensive industry. And it gave them the opportunity to diss the focus on GDP growth.

True but it’s mainstay of the our economic growth, despite us (and this region generally) missing out on the growth in Smartphone electronics: Missed smartphone boom, planners thinking about 2025. We are part of the PC ecosystem. The Android and Apple ecosystems are in North Asia (China, Taiwan, Korea and Japan).

MTI minister Iswaran said that the country’s electronics manufacturing sector is expected to create a total of 2,100 new jobs for professionals, managers, executives and technicians (PMETs) by 2020. Moreover, the sector also accounted for 4.4% of GDP last year, generating a total of S$90 billion in manufacturing output.

Electronics is also a mainstay of the other countries in the region.

According to the ASEAN Secretariat, Thailand’s electronic assembly bases consisted of over 2,300 companies and employed 400,000 workers. Thus, the country is recognised as a global leader in production of integrated circuits, semiconductors, and hard drives. Thailand is also the world’s fourth largest producer of refrigerators and second largest for air-conditioning units.

The Philippines is also a top producer of hard drives and semiconductors. The country is presently supplying the world with 2.5m hard drives per month and also represents 10% of the world’s semiconductor manufacturing services.

Malaysia’s electronics and electrical sector has more than 1,695 companies with a total investment of US$35.5bn.

Vietnam’s electronics industry is the third largest in ASEAN and the country is the 12th largest exporter in the world. Intel has a major plant there.

Indonesia, is also an electronic manufacturing hub with more than 250 companies. Myanmar is also set to compete in labour-intensive industries, taking advantage of its low employee costs.

Why S’pore’s fintech ambitions won’t go far

In Economy on 16/01/2018 at 5:33 am

Too much wishful thinking combined with motherhood BS from the authorities.

The head of Singapore’s central bank said on Monday he hoped the technologies underpinning cryptocurrencies such as blockchain would not be undermined by an eventual crash in the digital money.
Read more at https://www.channelnewsasia.com/news/singapore/singapore-central-bank-head-hopes-cryptocurrency-tech-will-survive–crash–9861880

And

Menon added that he would not rule out the possibility of the MAS issuing a cryptocurrency directly to the public but that he was not sure it was a good idea.

This reminded me that in mid November last yr, he told the Financial Times that S’pore only wants good initial coin offerings: MAS was “very keen’’ to facilitate fundraising through “good” initial coin offerings.

HE said it  wanted to use its “regulatory sandbox” approach — created to experiment with financial innovations in a controlled environment with regulatory reliefs for a limited period of time — as a testing ground for good ICOs.

Problem is that the way he defines a good ICO means that there’s no incentive for anyone to want to raise money because the there’s no money to be made by investors or the fund raiser.

Seriously, this is what he said on what is a “goods” ICO.

He identified two kinds of good ICOs that could prosper under an MAS regulatory environment created last year that was designed to support financial innovation. Mr Menon said one type was a transaction that did not promise a return linked to the financial performance of the issuing company, and was not designed as a speculative bet on the cryptocurrency being used.

“What makes a security a security is basically a promise; a promise to share in the economic interest of your enterprise,” he said. “If you can find a model of crowd funding that doesn’t involve that, then you are not regulated at all.”

Wow work for free isit? While ministers ands senior bureaucrats make millions in salaries?Manna ada logic?

AS I said before, in S’pore, fintech is about making the local banks more efficent and entrenched, not diarupting the banks. Bit like the 10% of S’porean voters who vote Oppo to make sure the PAP listens to them.

 

PM doesn’t tell us what a great country looks like

In Economy, Political economy, Political governance on 14/01/2018 at 1:28 pm

Neither does ST nor any other constructive, nation-building publication or channel tell us what makes a country stable, safe, fair, providing its citizens with a good quality of life.

But first. Did you know thatWorld Economic Forum ranks S’pore 55th out of 144 countries in the Global Gender Gap report? No wonder the wimmin with hairy armpits at AWARE are always anti-PAP.

Sorry, coming back to the title

If you’re looking for what makes a country great, it seems, don’t look at its GDP or unemployment rate. Look at its commitment to its citizens – and how long it’s stuck to that commitment for.

http://www.bbc.com/future/story/20180111-how-can-you-measure-what-makes-a-country-great

The BBC article says

So what can make for these strong underpinnings – the kind that help make a country stable, safe, fair and provide its citizens with a good quality of life?

The main factors seem to be two. Whether it’s social progress or overall quality of governance that a country is after, the important things seem to be the level of commitment to those institutions… and the amount of time it’s had them.

“We measure outcomes, not inputs: you can’t change your social progress just by changing the law or spending a bit of money. So a long-term commitment to social progress seems to be one factor” of success, Green says.

Similarly, Botero points out, countries that have developed robust government institutions over a long period of time – like the US or UK – have been in less danger of losing those protections.

Want to grow SMEs? Identify well managed SMEs

In Accounting, Corporate governance, Economy on 09/01/2018 at 9:55 am

In 2018, another bad yr for SMEs, I took a cheap shot at Inderjit Singh and Jack Sim because they, Tay Kheng Soon and the other usual suspects last yr came up with yet another a wish list for SMEs (See below). Nothing really new in the list.

I think rather than banging their heads against the wall, asking “More money PAP” they should rethink their entire approach about wanting more tax payers money to be thrown at SMEs.

Since, Turban and Toilet Men keep saying the govt should start thinking out of the box, maybe they should set a good example and stop banging their turban and head, respectively, against the banks’ and govt doors, and think of creative ways that they, with the help of the govt can help SMEs.

Here’s three constructive, nation-building suggestions.

One is persuading the govt to allow HDB flats to be used as collateral for loans.

In HDB flat: Dead Capital, I wrote

And the PAP administration KPKBs about the need to create an entrepreneurial, risk taking society? Entrepreneurs need funding and banks and other financial institutions need collateral when making risky loans. And property is the best collateral. No collateral no funding.

They should also try to granulate the SME universe i.e classify the SMEs into different categories by turnover, staff seize or other criteria they think relevant and then focus on what categories need what help. And where to prioritise

Let me explain. SMEs cover a wide spectrum.

Small Medium Enterprises (SME) in Singapore are defined as companies with at least 30% local shareholding, group annual sales turnover of less than $100 million or group employment size of not more than 200 workers (Skills Connect, 2013). Out of 180,000 SME’s in Singapore, 70% of them have a turnover of less than a million and commonly referred to as micro-SME’s (Scully, 2014).

http://sdh.edu.sg/wp-content/uploads/2016/11/Embracing-Structured-Internship-1.pdf

For a start this means subcategorising the 30%, then the 70%, so that a nuanced, granular view of the SME universe is possible. This will help policy makers etc analyse the group better, and hopefully lead to better policies to help SMEs.

Related to this segmentation is the need to create some kind of quality assurance mark to help credit providers and equity investors differentiate the sheep from the goats. 

As I’ve said before, I’ve given up investing in listed SMEs because. in the main, the management of listed SMEs are determined to reward the controlling shareholders (management) rather than create shareholder value for investors. Family members (daughters-in-law for example) are paid do nothing, while sons are overpaid to do simple jobs.

And as these SMEs go thru a vetting process before they are listed. What more about the vast majority of SMEs?

And that’s before the suspicion especially for non listed SMEs that the accounts are “fake” and that external financing for the business will find their way into the owners’ pockets. Hence all those personal guarantees that the banks ask for.

Even SME champion Inderjit Singn has privately conceded that there are badly run SMEs, though one of his pals told Chris K, when asked by Chris K, how many SMEs are really professionally and competently run,”We are not here to moralise issues”. 

But as Chris K  points out when commenting on commenting on a story about $40 million of bogus SkillsFuture claims

giving grants or providing soft financing to firms that are not professionally and competently run is a moral hazard.

While there are various platforms for SMEs to raise funds from suckers investors, there’s a need for good ways that financiers and investors can use to identify “good” SMEs. True there’s a SME credit agency (https://www.dpgroup.com.sg/smecreditrating/), but it ain’t enough.

So Turban and Toilet Men should be thinking of creating and administrating a methodology that can identify well run SMEs. An SME can then approach the organisation administering the methodology and for a fee get certified as a well run SME. If it fails to get certified, it and the certifier keep quiet, ensuring that the matter remains private and confidential.

Investors and financiers can then feel more comfortable when “certified” SMEs approach them for funds.

————————————-

SME wish list

  • Creating a single government agency focused on helping SMEs and start-ups with growth, financing and internationalisation;
  • Improving access to debt and equity financing by setting up institutions like an SME bank and a private equity exchange;
  • Setting up a cost competitiveness committee to address rising business and living costs;
  • Helping SMEs manage the cost of industrial rent and land by increasing the share of industrial space owned by JTC;
  • Making it easier for companies and research institutes to commercialise intellectual property, for instance by introducing short-term licensing; and
  • Introducing a minimum wage scheme tied to compulsory regular upgrading of skills.

 

 

2018, another bad yr for SMEs

In Currencies, Economy on 08/01/2018 at 3:57 pm

Seems our SME owners are buying properties and new Beemers and Mercedes because

Singapore’s small-and-medium enterprises (SMEs) are expecting stronger sales and profits for January to June next year, as they anticipate better business conditions amid an improved economy, said a survey.

When if I were them, I might want to think twice because according to OCBC’s economist, the expected change in MAS policy on the S$ from neutral to hawkish “is putting additional pressure on SMEs which are already struggling to deal with the economic restructuring and tight manpower situation. If you get a stronger Sing dollar and higher interest rates, it will be an additional challenge,” she said.
Read more at https://www.channelnewsasia.com/news/business/after-an-outperforming-year-how-will-singapore-s-economy-fare-in-9813946

But never fear Turban Man and his side-kick, Toilet Man, are fighting to ensure that SME owners get even more tax-payers’ money. More on them some other day.

 

What is producivity? Why low productivity?

In Economy on 07/01/2018 at 4:31 am

The PAP administration KPKBing that low productivity means wages cannot rise (Btw, skip to the end if u want to read something that disses the PAP administration). And low productivity is a global probem, not unique to S’pore.

But what is productivity?

Until 10 years ago, productivity was the motor that drove economic growth. Its definition is nothing more complicated than the amount we produce per worker (or per hour).

If you’re a coffee shop worker, it’s the amount of coffees, tea and food each worker sells. On a pie-making production line, it’s how many pies you turn out. If you’re a lorry driver, it’s how much you deliver.

Now think of that lorry driver stuck in a traffic jam. With too little investment in new roads and too many cars and lorries using them, his trips are slower. However hard he works, he can’t keep delivering more than before. His productivity stalls.

One reason is weak business investment. A company trying to meet an expanding order book can try one of two methods: hire a few more people, or make its existing workforce more productive by investing in new, more efficient technology. As long as its cheaper and less risky to hire cheap labour, the business may hold off investment.

But weaker private investment – and private investment has in any case been growing recently – can’t account for the whole effect.

Another attempted explanation is weak training and poor infrastructure, another is weak spending on research and development – all of which play a role but none of which can explain in full the breakdown of what is normally the engine of economic growth.

http://www.bbc.com/news/business-42012388

Reasons for low productivity

One of the great economic puzzles of recent years has been the slowdown in productivity growth across Western nations. There are many potential explanations for this: the continued survival of zombie companies in a low-rate era; mismeasurement of the gains from technology; new tech being less significant than older innovations (the Robert Gordon thesis); a preference among businesses to use extra labour when wages are low. And so on.

FT

Re “a preference among businesses to use extra labour when wages are low”, taz what is happening here. Despite the recent restrictions, FTs still coming in. Only by the A380 cargo load, not the cattle truck load, as before. Remember that official productivity figures account for the cash value of output produced, divided by the number of workers.

Mental health and productivity

In Economy on 06/01/2018 at 5:09 am

Further to this on happiness in S’pore and the UK What makes S’poreans happy?, S’pore like the UK has a productivity problem. But unlike S’pore the UK the UK seems to be taking a wider approach in trying to solve the problem.

Is there a link between mental health and the nation’s productivity? When Prince Harry was editing BBC Radio 4’s Today programme, he asked us to look into this question.

Well the BBC reporters tasked to find out found that

“By looking after employee’s mental wellbeing, staff morale and loyalty, innovation, productivity and profits will rise,” says Emma Mamo, the Head of Workplace Wellbeing at the charity Mind.

It isn’t just a case of caring for staff. In September, the Health and Safety Executive launched a campaign to remind employers they have a legal duty to protect workers from stress at work by doing a risk assessment and acting on it.

And

A study by Deloitte has also concluded that companies which spend money on improving mental health benefit from that investment.

Research published in October 2017 found “The return on investment of workplace mental health interventions is overwhelmingly positive.”

“We found that a 1% increase in happiness gives us a 0.5% increase in productivity,” says Dr MacKerron.

http://www.bbc.com/news/business-42512723

SIBOR up 25%, but property mkt is hot?

In Economy, Property on 01/01/2018 at 5:03 pm

SIBOR up 25%

The three-month Singapore Interbank Offered Rate (Sibor) – the benchmark rate for most residential property loans here – has risen from 0.969 per cent on Jan 3, to 1.212 per cent as of the middle of this month. It is expected to go up further, in line with the Fed interest rate hikes next year.

But property market is hot and getting hotter. See what the property experts salemen say below.

So is cybernut-in-chief and oither haters of the 70% right that the market will tank Good economy = Unhappy hols, cybernuts?

Well so long as the global economy continues to enjoy a broad-based and strong period of growth, Oxygen and pals both at TRE and Chris K’s FB wall* will be banging their balls in frustration. And all indications are that in 2018 the party will continue for a bit longer. After all growth last year was 3.5% and will be easily 3% this yr.

Just be cautious that

The global economy may not grow as fast as predicted because China may experience slower growth than expected. If that happens stock markets will be in trouble as they seem to be priced to perfection.

But whatever, S’pore’s GDP growth will not collapse to 2%, let alone go into a recession. We may not have a great yr, but it ain’t going to a really bad yr.

On China, apart from being S’pore’s largest export market, accounting for 14.8% of total non-oil domestic exports (NODX), China has also been the fastest growing market over the past months. Almost 70 per cent of the NODX growth since July 2016 was driven by China alone. “Any slowdown in this key market will have a ripple effect on the Singapore economy,”  says DBS’s economist.

Whatever, beware property experts salemen talking their own book. Nomura economist Brian Tan urged for caution: “My main concern is that the market may be getting ahead of itself in terms of expecting this pick-up in (the) property market to be sustained.”

After several years in the doldrums, the recovery of the Singapore property market will be in full swing in 2018, experts say.

The jury is still out on whether concerns over a potential supply glut are warranted, but experts point out that how the market shapes up next year will depend very much on demand from buyers. This, in turn, hinges on the one major lever which the Government could yet call upon: The cooling measures, several of which — including the Total Debt Servicing Ratio (TDSR) — have remained in place since 2013.

The predicted market rebound will take place against a background of improved economic showing and jobs market for Singapore. The Republic’s economy had expanded 5.2 per cent year-on-year in the third quarter, the fastest pace in more than three years, prompting the government to raise its full-year economic growth forecast for this year to between 3 and 3.5 per cent, up from 2 to 3 per cent.

“(Property) prices are picking up because of… the higher economic growth, low unemployment and stronger buyer confidence,” said ERA Realty’s key executive officer Eugene Lim.

http://www.todayonline.com/business/looking-ahead-2018-property-market-poised-roar-back-life


*Even Chris K is reduced to saying that in the old days, growth would be 6% not 3.5%. Funny that he keeps saying at other times that things have changed: so the 3.5% is the old 6%. Anyway cybernuts from TRE might want to move to his FB wall: going by the comments there many have already. Unlike TeamTRE he doesn’t publicise my pieces so taz a reason move if any.

But be warned, he tries to keep things civil. So Oxygen please keep away.

Good economy = Unhappy hols, cybernuts

In Economy on 20/12/2017 at 5:09 am

In the run up and during the festive season in 2015 and 2016, the cybernuts were having a great time sneering and jeering at the 70%  as they smoked weed, drank cheap arak and ate the scraps thrown from millionaire ministers’ tables.

They were so happy because conomic growth was only 1.5% and 2% in these yrs,

They were so happy that fellow S’poreans were suffering, forgetting that the anti-PAP voters also suffered. They were forecasting the end of PAP rule.

Well this yr is different.

When TRE republished Why S’pore’s growth is so gd this year venom and bile and curses came my way (Don’t they know that their hatred, makes me strong?) even though I pointed out that the economy is strong because of an uptick in global trade, and not because of the PAP’s actions.

Chief cybernut, Oxygen (who is so nutty that he donated $10,000 to TRE in 2015) is now saying the world economy will tank next yr and that S’poreans will suffer, quoting analysts.

Well, he’ll be banging his balls because

‘Stars are aligned’ for Singapore stocks to go higher in 2018: Analysts

The likes of banking heavyweights, developers and property trusts will continue to lead the charge next year for Singapore’s stock market, which could see gains of as much as 11 per cent, according to market analysts.

Read more at https://www.channelnewsasia.com/news/business/stars-are-aligned-for-singapore-stocks-to-go-higher-in-2018-9501814

Whatever global equity markets are on a roll.

So as I drink and eat all the way thru to Chinese New Year, my enjoyment will be tripled as I think of how unhappy Oxygen and the other cybernuts are that the revolution against the PAP has again had to be postponed. Reality bites again.

The global economy may not grow as fast as predicted because China may experience slower growth than expected. If that happens stock markets will be in trouble as they seem to be priced to perfection.

But whatever, S’pore’s GDP growth will not collapse to 2%, let alone go into a recession. We may not have a great yr, but it ain’t going to a really bad yr.

So Merry Christmas and Yum Seng.

May the Prosperity Gods be with u.

 

Don’t only blame PAP for low productivity

In Economy, Internet on 16/12/2017 at 6:10 am

Official productivity figures account for the cash value of output produced, divided by the number of workers. So the cybernuts and anti-PAP thinkers (Yes there are some) say that given the PAP’s love of FTs, shipping them in by the cattle truck load, the FT flood results in low productivity.

Maybe that’s part of the reason.

But maybe free lunches account for a large part of the problem of low productivity?

[N]owadays a lot of the valued output people like is offered free to users, delivered cheaply by a low-cost technology.

People use Google services, buy a great deal on Amazon and download entertainment. These free or low-cost services help depress reported productivity.

FT Columnist

 

Why S’pore’s growth is so gd this year

In Economy, Property, S'pore Inc, Shipping, Temasek on 12/12/2017 at 10:17 am

And next yr’s should be better.

Nothing to do with the PAP administration.

All down to the recovery in global trade.

Since 2010 global trade has, by and large, shown only lacklustre growth. Once expected to grow regularly at 1.5-2 times global gross domestic product, trade has been growing at, or even below, the rate of broader economic output in recent years, prompting some to proclaim the end of an era of “hyperglobalisation”.

This year is expected to be the best in recent history for global trade. The WTO in September upgraded its forecast for world trade growth, predicting it would expand by 3.6 per cent in 2017. That is largely the result of a better global economy. For the first time since the crisis all of the world’s major economies are in relatively rude health.

FT

Don’t overleverage in property

But the recovery in global trade remains far from a boom and there are still plenty of signs of fragility.

FT again

And yes the scholar and SAF general now running SPH screwed up big time when in ran NOL. selling it when the cycle was turning.

Real reason why S’pore wants to be a Smart Nation

In Economy, Infrastructure, Internet, Political governance on 04/12/2017 at 3:35 pm

Prime Minister Lee Hsien Loong says efforts to simplify and integrate electronic payment systems are underway, including making such a method available at hawker centres, in a bid to transform the country into a Smart Nation.
Read more at http://www.channelnewsasia.com/news/singapore/national-day-rally-singapore-to-go-bigger-on-e-payments-with-9140068

Makes survelliance of the sheep people a lot easier. Black-listing of trouble makers will also be easier.

Companies in China, including Alibaba, Tencent and Baidu, are required to help China’s government hunt criminal suspects and silence political dissent, and their technology is being used to create cities wired for surveillance. (WSJ)

NYT Dealbook

I wrote this Coming here, China’s new tool for social control? sometime ago

Beijing wants to give every citizen a credit rating for everything.  Citizens’ ratings are to be linked with their identity-card numbers. The rating will be based on behaviour such as spending habits, turnstile violations, filial piety and “assembling to disrupt social order”. These scores can be used to blacklist citizens from loans, jobs and air travel.

Why S’pore industrialised in the 60s

In Economy, Political economy on 29/11/2017 at 4:43 am

Local historian Loh Kah Seng posts articles on Facebook about the industrialisation of S’pore. Here’s one piece that I tot would interest because it shows the link then betweewn GDP growth and how it benefited the ordinary S’porean:

The main reason why Singapore pursued rapid industrialisation after the Second World War was not that the existing economy, based on the entrepot trade, was doing badly.

It was rather the high population growth rate, as increasingly people settled down in Singapore instead of returning to their home countries.

In the 1930s, more Chinese women entered Singapore and formed families. Just before war broke out, the Deputy Controller of Chinese Labour reported ‘swarms of Chinese children in their teens, mostly local born, and still more who have not yet reached their teens’.

This trend increased near the end of the Japanese Occupation, when multiple children were born, who became known as the postwar ‘baby boomers’.

In 1961, Singapore had a population of 1.6 million. The growth rate between 1947 and 1957 was 4.5% per annum – the highest in the world – while the size of a nuclear family in was 5.4 persons in 1957 and 5.6 in 1970.

Goh Keng Swee’s study of low-income households in 1956 found that a fifth of the households lived in poverty, with a monthly income under the minimum of $102.

High population growth created impending problems of employment and dependency. Under the entrepot economy, many of the growing children and teens would likely be unemployed or underemployed. Furthermore the entrepot trade was unlikely to grow. A youthful two thirds of the population would have to rely on the work of a third.

Labour-intensive industries, on the other hand, would absorb many more people. The aim of the State of Singapore Development Plan for 1961-1964 was to increase the number of jobs for young people entering the workforce each year.

Countering PAP’s BS that taxes must go up

In Economy, Financial competency, Internet on 26/11/2017 at 4:37 pm

The now retired chief economist of GIC published u/m on his Facebook wall but tOC has circulated it to a wider audience*.

Summary: There’s plenty of money.

And if anyone should know, it should be Yeoh Lam Keong.

The Bigger Fork in Our Long-Term Fiscal Policy Road

To be fair to PM Lee, both the MOF and he have clarified that consistent with DPM Tharmans 2015 remarks, we do not have to raise taxes before the end of the decade.

So there’s really no need to get our fiscal knickers into a twist about GST or income tax increases till after the next GE folks..

IMHO what’s really at stake are larger, more important policy issues and related fiscal choices over the longer term.

What PM was talking about and trying to tell the public was that in the longer term after 2020, tax increases might be needed given inevitable rises in social spending and infrastructure needs in the more distant future.

Actually I really hope that in the end he’s right but from an entirely different angle.

My reason : our current fiscal headroom is so large that were we to truly need higher tax revenues, this would mean that much needed increases in social spending would finally finally have been funded first. Given our current paltry current social policy spending levels, ( much lower than OECD averages as a share of GDP for healthcare, education and social protection) this would be an excellent policy development!

Consider first that we have a 5-7% GDP structural budget surplus ( calculated by global fiscal policemen the IMF no less) – that’s $20-30 bn extra a year. (I don’t want to get into technicalities of how that is a valid number here – please read my previous posts ).

Second, the formula for using net investment returns contribution or NIRC only uses only half of expected long term real returns leaving official reserves to grow by about 2% in real or about 4% in nominal terms for future generations. This could potentially contribute at least another $14bn to the budget or 3.5% of GDP currently.

This 50% spending rule for NIRC itself is a questionable division of investment income from official reserves and a shows a strangely skewed social time preference. Shouldn’t a more reasonable time preference be to use more of the investment income ( not even the real principal mind you ) for the pressing problems of the present generation in this current decade?

Surely the needs of current citizens who have built modern Singapore through very tough times and have serious remaining problems with absolute poverty, inadequate retirement finances, no universal long term or primary chronic health care, underspending in primary and secondary education relative to OECD norms, inadequately planned and funded industrial policy and a badly underperforming public transport system needs this spending now and over this coming decade. Much more so than the uncertain problems of significantly richer coming generations in the much longer term future.

I suspect though, that in the end, we might just be left Singapore daydreaming.

Rather than first spend this hard earned, exceptional fiscal largesse on pressing social and infrastructure needs of the day, then raise taxes only if necessary afterwards, I suspect that our policy makers would instead tend rather towards raising taxes first, partly to keep this implicit huge fiscal savings largely intact ( by the way the IMF thinks that this is an excessively unhealthy level of national savings ) for the rainy day in the even more distant future!

So here is what I think is the really important fork in our long term fiscal and social policy road:

Either we will finally spend enough on social and infrastructural spending – another 8-10% of GDP over the next decade – or we will continue in the kia su practice of spending considerably less, yet still raise taxes in the name of fiscal prudence to maintain one of the most extravagant public savings rates in the world.

All this while continuing to expand social policy at decidedly suboptimal levels that does not really meet our social policy needs sufficiently in all the above key areas.

To do the former means stepping out of current incrementalist, anti – welfare and state intervention mindsets and boldly reshaping, refitting and reinvesting in social policy in healthcare, education, social security, public housing and transport and industrial policy to make these key areas truly future ready for our citizens. This is what we did so successfully and innovatively in our first 30 years of independence.

Please keep in mind that at this much higher level of spending we will merely be at the lower bound of OECD public spending as a share of GDP and roughly on par with developed East Asian economies. We would also be close to true budget balance ie not structurally in fiscal deficit or running up debt. Yes, that’s how extremely conservative our current long term fiscal position is.

The latter, however ( largely status quo), means kicking the can down the road through incremental rather than transformative changes that are likely to end up being constantly behind the relentless curve of economic instability arising from globalization, technological change and worsening demographics. And perversely maintaining the highest and fastest growing fiscal resources in the world.

No prizes for which I think is the more likely scenario on current trends. Which fork we finally take and when, however, depends on both the boldness of political leadership and citizen political awareness to push for a new social and fiscal policy regime that will truly cater to our well being in a more reasonable and balanced but still sustainable way.

*I’m surprised Terry’s Online Channel didn’t republish it for a wider audience, so I’m doing it and hoping that TRE will pick it up for a wider audience: not everyone going to TRE is a cybernut. The rule of thumb on the internet and social media is

1 % of users initiate discussions or content, 9% transmit content or participate occasionally and 90% are consumers or “lurkers”.

I’m hoping to reach the lurkers who visit TRE.

(Btw, didn’t ask permission.)

PAP has lost “output legitimacy”

In Economy, Political economy, Political governance, Public Administration on 28/10/2017 at 9:54 am

We all know the failures of SMRT and MRT. So no need to elaborate.

But the problems at SMRT and MRT and the failure of the PAP administration to hold anyone to account except “the maintenance team” (Though to be fair the team failed to empty the holding tanks beneath tracks so they can absorb rainwater without jamming the service.) shows that the PAP administration has really lost “output legitimacy”.

I wrote this four years ago between GE 2011 and 2015. The results of the two elections showed not that the PAP regained “output legitimacy”; but showed that the PAP spent more of our money on ourselves in between Are you better off now than you were in 2011?(Death of LKY also helped):

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”.

— https://atans1.wordpress.com/2013/08/16/analysing-pms-coming-rally-speech/

— https://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 highfalutin 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 nauseam), 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?

The PAP govt has lost “output legitimacy”: Discuss

Btw, Breakfast Network morphed into TMG which has just announced that it’s closing. No money. The Independent has morphed into The Idiots.

Related post: Parable of the contented dog/ No need to be grateful to the PAP

Ministers will claim credit for good economic growth

In Economy on 12/10/2017 at 1:50 pm

This year, economists are talking of 2.5% GDP growth (from last year’s 2%).

As sure as day follows night, PAP ministers will be claiming credit for this good growth: PAP’s “right” policies make this good growth possible.

Well just remember that there’s good global growth which is good for S’pore

In its latest World Economic Outlook, the IMF has revised its forecast for the global economy and is now expecting slightly stronger growth.

It now predicts growth of 3.6% this year and 3.7% in 2018.

BBC


[Since]

election day last year, the S&P 500 has delivered a total return of more than 20 per cent …stocks outside the US have gained even more in the America-first era, at 22.8 per cent.

FT

————————————————

And also remember what UOB and HSBC are saying: domestic consumption and investment remain weak.

UOB

lack of a convincing recovery in the broader economy, with strength coming “only from pockets of Singapore’s economy”, according to UOB economist Francis Tan.

Beyond key growth segments in the manufacturing sector such as semiconductors and precision engineering clusters, Mr Tan noted that growth in other clusters including the offshore and marine, continued to be limp.

Domestic consumption and investment also remained weak. In particular, the latter’s 7.3 per cent year-on-year decline over the second quarter “nearly rivals the weakness last seen during the Global Financial Crisis” – a fall of 7.7 per cent in the fourth quarter of 2008.

“Real GDP growth is only showing the first signs of green shoots. It is better to err on the side of caution and for monetary and fiscal policies to remain accommodative,” Mr Tan added.

Read more at http://www.channelnewsasia.com/news/business/worst-has-passed-for-singapore-economy-but-mas-in-no-rush-to-9296294

HSBC’s chief ASEAN economist Joseph Incalcaterra had a similar view: “The cyclical recovery appears convincing… however, when we dig a bit deeper, it becomes clear the economy is far from firing on all cylinders.”: that any recovery in the labour market will likely be “very gradual”. Translation: Don’t expect wage rises or more jobs for local PMETs.

And longer term there’s What should really frighten S’poreans

But in the very short term, things could be even be better than expected:

In a note released on Wednesday (Oct 10), DBS economists said there could be a “pleasant surprise” of 4.8 per cent year-on-year growth, up from 2.9 per cent in the previous quarter, with “another stellar performance” from the manufacturing sector on the cards.

On a quarter-on-quarter, seasonally adjusted annualised basis, the economy could expand 7.3 per cent during the July to September period, accelerating from 2.2 per cent in the second quarter.

While the pick-up in GDP shows that recovery is broadening out, DBS noted that third-quarter figures could be the strongest set of growth data this year.

“Growth could ease a tad in the coming quarters as the economy shifts from a recovery to a normalisation phase. Moreover, it is only logical to expect growth to moderate against the backdrop of a normalisation in global monetary policies,” wrote DBS economists, who added that GDP growth is expected to come in at 2.8 per cent this year before softening to 2.5 per cent in 2018.

Read more at http://www.channelnewsasia.com/news/business/worst-has-passed-for-singapore-economy-but-mas-in-no-rush-to-9296294

 

Property: Freehold rules OK

In Economy, Property on 09/10/2017 at 11:11 am

In Property dev, S’pore style,I reported that CityDev build Amber Park 34 yrs ago and sold each unit at about S$360,000. Now they are buying back at more than S$4.3m per unit, spending S$906.7m in total. Owners are expected to receive between S$4.3 million and S$8.3 million in gross sale proceeds.

If u are wondering why CityDev is prepared to pay so much, it’s because the land it sold and bot back is freehold. No need to top up to renew lease because there’s no lease to renew. Btw, a retired social activist (honourably discharged) must be feeling good. Ten years ago he bot ia newly developed freehold condominium apartment in the Joo Chiat area . He was saying that the market priced the project at a slight premium to a similar 99-yr leasehold project.

Bet u CityDev will now sell the flats on a 99-year lease, keeping the freehold for itself, juz like the govt aka HDB flats.

As to the selling price, a fat cat reader says, “With an average 1000sf unit, that’s $2.6+M”. I’d round that up to S$3m a flat.

Given that CityDev is now so bullish about the property market, what will the cybernuts say now?

When I wrote this Property: TRE nuts will be getting more frus, chief TRE cybernut, Oxygen, went madder with rage, saying I was peddling untruths about a recovering property market.


Oxygen is so nutty that he

— donated $10,000 to TRE before GE 2015;

— despite living in Oz and KPKBing about wanting his CPF money, he still keeps (or cannot give up?) his S’pore citizenship and so still cannot withdraw his CPF money; and

— dances on graves of dead children, sneering at their grieving parents TRE grave dancer doesn’t deny grave dancing.


Now that City Dev has shown its faith in the S’pore property market, Oxygen must be banging his balls even harder. And so will his fellow TRE cybernuts like Philip Ang and Ng Cock Lim. Their predictions of a collapse in S’pore property prices remain dreams like their predictions of big losses in 2015 for the PAP.

Worse news for them: this year’s GDP growth is looking good at a forecast of 2.5%. Last yr’s was 2%.

Coming back to property, when u see the greedy residents of Laguna Park and Pine Grove put their flats up for en bloc sales, its peak market time again: Even greedier en-blocers.

That was written in 2011, when they were looking at each enbloc sale grossing S$1.4bn.

They should now remember this: JLL’s Tan advises owners of private residential projects on leasehold sites to be aware that, as the lease gets shorter, the differential premium that developers have to pay gets higher. “This will eat into their sale price,” he says. Old private flats’ value can also fall off a cliff

Why PM wants a cashless payments system/ Ownself sabo ownself

In Banks, Economy, Political governance on 27/09/2017 at 6:42 am

Why does PM wants a cashless payments system?

Because no-one can hide from Big Brother when the banks are at the centre of the system.

When TRE republished my piece on a TRE appeal on behalf of its longest serving team member, there was this response

oxygen: MY INFORMATION SOURCES ARE RELIABLE – just bring whatever cash you want to donate, fill in a deposit slip of amount and account number of payee and hand it to the bank teller at the counter.

No banker is interested in who is the donor or deposit maker. A can pay C on behalf of B who is short of cash or unable to have funds to settle his/her debt to A. Or X can pay Z $XXX giving the latter a financial loan.

It is none of anybody’s business except as between the transacting parties. No bank ask you why you pay a check to supplier A – Z for what financial obligations. They are not interested to know your business transactions. People gives to charity – nothing wrong with that.

So those who can afford and want to give to charity, just walk into a bank and do it before 30 September.</blockquote

and someone tried it and it worked

Trying it out: This morning I deposited S$50 to the given POSB account over their counter. I handed cash and remain anonymous. I did not give any of my personal details. I got the receipt. But the recipient name is slightly different. I hope it is all in order. I was trying out donation on anonymity basis.

http://www.tremeritus.com/2017/09/20/follow-up-to-tr-emeritus%E2%80%99-in-house-techie-requires-assistance/

So go on – if you are able and incline to contribute to humanitarian cause. It is nobody business if you want to do charity or help someone (can be Ah Kow, Ah Ngeow or Ah Beng or Ah Lian) who haven’t got the time to Q in a banking hall to do charity.

Singapore POSB Account

Payee: Ten Leu-Jiun

A/C No: 193-69702-0

(The last day of payment to this account is 30 September 2017.)

Ownself sabo ownself

Incidentally, no picture, no sound from the PM or his minions on the e payments system proposed by Razer’s CEO https://sg.news.yahoo.com/razer-ceo-submits-two-pronged-e-payment-system-proposal-pm-lee-112133198.html.

PM was talking cock when he was moaning that S’pore was so far behind China in e-payments because it’s his and his administration’s fault.

They are not fighting vested interests i.e. the banks: think transction and merchant fees charged. And the PAP administration’s red line is that banks must be at the heart of the system. This among other things ensures that the authorities have access to information.

But let’s be thankful to the PAP for sticking to the Hard Truth of die die must protect our banks: Cash is king. And anyway I own Haw Par which is a cheap way of buying into UOB.

But don’t try depositing a $1000 bill into any bank account. A few yrs ago, someone gave me a $1000 bill. I gave it to my mum and she decided to put it into my POSB account. Bank wanted me to come down to deposit it. She said I was overseas and so bank reluctantly took the money.

 

Why Tharman wants to “evolve” a good education system

In Economy, Public Administration on 22/09/2017 at 4:34 am

“The Singularity is coming” is the short answer.

To face a tumultuous future with challenges, Singapore’s education system will need to keep evolving as it has done over the last 50 years, said Deputy Prime Minister Tharman Shanmugaratnam at the first Majulah Lecture organised by the Nanyang Technological University (NTU) on Wednesday (Sep 20).
http://www.channelnewsasia.com/news/singapore/if-it-ain-t-broke-don-t-fix-it-will-not-cut-it-for-singapore-s-9235202

He wants the system to

— “to make the most of technology or those who are displaced and disempowered by technologies?”

— to maintain “a sense of togetherness in society.

–to become “an innovative society – with individuals and people with a mind of their own – while retaining a deep sense of community.”

Well in NY (a day earlier), Masayoshi Son made a speech (reported by NYT’s Dealbook) that explains why Tharman (and the PAP administration) thinks the education system needs to change

The Singularity is coming, Masayoshi Son says.

The founder of SoftBank, the Japanese conglomerate, had the business world chattering on Monday night with his speech at the Appeal of Conscience FoundationFoundation. (DealBook is the first to report on it.)

His main thrusts:
• The Singularity, when artificial intelligence finally outstrips that of humans, will replace huge swaths of jobs.
• The number of sentient robots on Earth will rival the number of humans.
From his speech:
“Here we have white collar and blue collar. I said a new collar will start: that is metal collar. That metal collar will not only replace most of the blue collar jobs, but many of the white collar jobs. So when they become so smart and the muscles to move, what is the definition of what mankind’s job should be? What should we do if they replace many of our jobs? What is the value of our lives? We have to think once more, deeply.”

More from Mr. Son on artificial intelligence:
“I predict 30 years from now, the number of smart robots, the smart robot population on this earth will be 10 billion. By that time, human population will be around 10 billion. So here on this earth we will have 10 billion population of mankind and 10 billion population of smart robots. This is the first time on this earth that we live together with 10 billion robots.”
“Every industry that mankind created will be redefined. The medical industry, automobile industry, the information industry of course. Every industry that mankind ever defined and created, even agriculture, will be redefined. Because the tools that we created were inferior to mankind’s brain in the past. Now the tools become smarter than mankind ourselves. The definition of whatever the industry, will be redefined.”

“I’m invested in S’pore”

In Economy, Political governance on 19/09/2017 at 5:21 pm

Hence I talk so much about the way the PAP is mismanaging the place. I wrote this in 2013:

Shumeone (Bad grammar indicates that it is a member of YPAP Internet Brigade? Juz joking LOL) wrote,”why (sic) is this blog becoming like the local sites to air political grievances ?”

Because like PAPy Puthu, “I’m invested in S’pore”. So long as I remain a quitter in residence, and have investments here (property, shares, S$ cash), I must protect these investments. Increasingly the issues affecting my investment centre around the goofs of the PAP govt. These goofs have resulted in over 5% inflation, overcrowding, failing (by S’pore’s very high standards) infrastructure (telco and train cock-ups, congested roads, and the very high cost of public housing), productivity, stratification of society, among others.

“I’m invested in S’pore” & S’pore in 50s/ 60s

I’m not like chief TRE cybernut Oxygen who moved on out of S’pore years ago, but cannot get S’pore out of his mind. He still KPKBing about his CPF when all he needs to take it out is to become an Oz citizen. But maybe Oz will not him become a citizen because he’s a nut?

Tan CJ loves FTs

In Economy on 14/09/2017 at 5:22 pm

Tan Chuan Jin was the acting minister at the Ministry of Manpower between 2012 and 2014. Between 2014 and 2015 he was the MoM minister. In 2011, he was the junior minister at MoM. Tharman was the minister but had other portfolios.

The MoM report for the second quarter 2017 showed

The number of Employment Pass holders – professionals and executives who earn at least S$3,600 – declined for the first time in four years, while the number of S Pass holders – mid-skilled technical staff who earn at least S$2,200 a month – remained flat.
Read more at http://www.channelnewsasia.com/news/singapore/resident-unemployment-rate-down-fewer-retrenchments-in-q2-9215154

The employment pass numbers were going up for four years prior to 2Q 17. This despite the slowing economy in 2015 (1.9% from 3.6% in 2014) and 2% last year. Growth in 2013 was 5%.

So despite the slowing economy since 2014, Tan let FTs in to steal the jobs of professionals and executives.

 

Job mkt for NTU maths grads

In Economy, Hong Kong, Political economy, S'pore Inc on 07/09/2017 at 6:28 am

But first contrasting HK and S’pore in one sentence:

Tycoons are as synonymous with the story of modern Hong Kong as founding prime minister Lee Kuan Yew is with Singapore.

FT

But thinking about it, both share a common preoblem resulting from this contrast.

The article then goes on to analyse why young Hongkies are unhappy with the legacy of these tycoons. They dominate the HK economy, stifying the aspirations and creativity of the young. Even a tycoon’s heir can feel so frustrated that he has to enter the family business, in order to get on.

Sounds like the legacy that Harry left us. Because of Hard Truths, TLCs and other GLCs dominate our economy, stifling the aspirations and creativity of the young.

And the job market ain’t that good even for elite local grads.

Recently I spoke to a friend whose daughter, an NTU maths scholar, is just about to join a big local bank’s data mining development team on a one year internship (very decent pay). So far so good.

But the catch is that out of the previous cohort of NTU maths grads who finished their internships, only 3 out of 10 manage to get permanent jobs, some continuing on a yr to yr contract. They are told it’s the economy.

Meanwhile LKY’s son rows with his siblings and fixed the presidency so that a presidency reserved only for Malays, has none of the three declared candidates having an i/c saying “Malay”. As I wrote here:

The PAP’s candidate and a candidate who speaks Malay badly both have i/cs saying “Indian” while the third person has one saying “Pakistani”. Even for me who knows about the thin culture line between Malays and some Indian Muslims* am shocked that there isn’t someone with an i/c saying “Malay” willing to stand. Don’t want to be regarded as selling out to the PAP isit? Or unlike “Indians” and “Pakistanis” feeling piseh to stand in a presidency reserved only for “Malays”.

What should really frighten S’poreans

In Economy, Property on 03/09/2017 at 4:46 am

Think twice before u cheong property. Growth in global trade, a very dependent driver for our economy in the past, can no longer be reliably relied on to produce its regular fixes to the S’pore economy and the PAP’s popularity.

S’pore is highly dependent on global trade and global trade growth has slowed in recent years.

International trade has been growing below historic trends for the past five years. The 1.9 per cent growth recorded in 2016, according to the team at the [World Bank], was the slowest since the 2009 collapse in commerce that followed the global financial crisis.

FT in February this year

Martin Wolf of the FT earlier this year on the global trade slowdown

Between 1960 and 2015, world trade increased at an average rate of 6.6 per cent, in real terms, while output grew at an average rate of 3.5 per cent. Between 2008 and 2015, however, average annual growth of world trade was 3.4 per cent in real terms, while world output grew at 2.4 per cent. Not only has the growth of trade slowed, but the gap between trade growth and that of output also fell sharply.

And although growth in trade has picked up this yr, the slowdown could be secular, not cyclical

The man running the world’s biggest sovereign wealth fund says there’s every indication that global trade is suffering from something more serious than a temporary slowdown.

Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, as the fund is known, says the heyday of cross-border trade is probably behind us.

Because

During a recent conference on globalization, the fund’s chief strategist, Bjorn Erik Orskaug, suggested the world might be at an “inflection point” in trade, with shallower value chains and less cross-border production. And then there’s the protectionist agenda some governments are pursuing.

https://www.bloomberg.com/news/articles/2017-08-31/norway-s-980-billion-fund-reveals-bleak-view-on-global-trade

Taz why PM was trying so hard for TPP despite rowing in private with his siblings: TPP sucked but only cybernuts celebrate its demise

 

When strong GDP growth benefited the ordinary worker

In Economy on 31/08/2017 at 4:53 am

Here’s something that came across my FB wall. MTI data shows that growth averaged 10 % p.a. in the 70s, with manufacturing sector’s share of GDP grew from 14 % in 1965 to 24 % by 1978.

Production work was boring but she stayed on because of her close friends in the line. Maryati worked at Rollei in the 1970s and then at Seagate in the 1990s (in the interim she took care of her children).

She became a ‘lead girl’ at Rollei in charge of about 15 operators, and was in fact selected for training in Germany but because she was pregnant she was unable to go.

Maryati’s husband Hassan was a security guard at Rollei from the beginning in 1971 till the company shut down in 1982. They met at Rollei. To my surprise, Hassan had many interesting stories to tell of his time at Rollei.

As Maryati explained, the operators knew production, but security guards knew people.

Hassan became a delivery driver and then a taxi driver when Rollei closed. Maryati was retrenched when Seagate downsized and moved from Ang Mo Kio to Senoko.
It was really good to speak to Malay workers who played a part in Singapore’s industrialisation.

Maryati at her work: for the photos I am thankful Rollei made cameras and she had to test whether they worked!

Theatres of History & Memory: Industrial Heritage of 20th Century Singapore

Image may contain: 1 person, sitting, standing and indoor
Image may contain: 2 people, indoor
Not a tudung in sight. But our presumptive president was wearing one in NUS in the mid 70s.

PM, this is real economic growth

In Economy on 16/08/2017 at 11:06 am

On a year on year measure, GDP rose 3.8 per cent – above a 3.3 per cent forecast – and a moderation from the 4.3 per cent year on year registered at the start of the year. The first quarter expansion was Hong Kong’s best since 2011.

FT

Now our constructive, nation-building media reports that for S’pore

the year-on-year growth number of 2.9 per cent for the second quarter could be the economy’s strongest showing this year, given MTI’s expectation for 2017 growth to come in at 2.5 per cent. This means that the economy will likely see an average growth of about 2.3 per cent of the second half of the year after having expanded 2.7 per cent over the first two quarters.

Read more at http://www.channelnewsasia.com/news/business/better-gdp-growth-for-singapore-in-2017-but-watch-out-for-9114588

Btw, HK revised its full-year GDP forecast from a range of 2-3 per cent to 3-4 per cent in 2017. So 2.3% iGDP growth is “peanuts”.

While PM was bawling and brawling with his siblings in a muddy playpen and ensuring that we have a Malay president whose i/c says “Indian”, HK’s economy, despite all its internal political problems (shumething we don’t have since we are a defacto one party state under Lee) is powering ahead.

When talking on “Indian” is “Malay” I wrote something that helps explain, partially, why we are growing at only the average first world standard, not more, unlike HK:

Whatever, how can S’pore be creative, let alone progress if the ruling party in a defacto one-party state refuses to change its mind on policies that no longer work or never worked in the first place?

Take the economy where the PAP

— continues to see welfare** as a bad thing except when it needs to buy votes, and

— believes that FTs are needed to keep the economy growing.

No wonder we have had restructuring plans galore (Once every decade it seems),

Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back

John Maynard Keynes

Tomorrow, I’ll tell of an Asian city (not HK) that has no high-paid ministers or bureucrats mindlessly churning out restructuring master plans but which is a place that even Silicon Valley respects albeit grudgingly.

OBOR: Ang mohs laughing all the way to the bank

In China, Economy on 06/08/2017 at 5:52 pm

Western multinationals, spotting a bonanza, are selling billions of dollars of equipment, technology and services to Chinese firms building along it.

America’s General Electric (GE) made sales of $2.3bn in equipment orders from OBOR projects in 2016, almost three times the total for the previous year. John Rice, the firm’s vice-chair, expects the firm to enjoy double-digit growth in revenues along OBOR in coming years. Other firms, such as Caterpillar, Honeywell, and ABB, global engineering giants, DHL, a logistics company, Linde and BASF, two industrial gas and chemicals manufacturers, and Maersk Group, a shipping firm, rattle off lists of OBOR projects. Deutsche Bank has structured eight trade deals around it and has an agreement with the China Development Bank, one of China’s policy lenders, to fund several OBOR schemes.

https://www.economist.com/news/business/21725810-general-electric-got-23bn-orders-infrastructure-project-last-year-western-firms

Too bad for Keppel and SembCorp groups (they have the skills for many OBOR projects) that Xi snubbed S’pore by not inviting Pinkie to his grand party, inviting only Lawrence Wong.

The Hard Question about putting S’poreans First

In Economy on 15/07/2017 at 1:59 pm

This is something TOC, TRE and other anti-PAP new media outlets will never dare say.

Are we happy to pay more for goods and services if we try to only employ S’poreans? Because taz the Hard Truth consequence of paying S’poreans to do work that FTs do. Luckily for bleeding heart “progressives” who benefit from the lower prices that come from FT labour, this Hard Choice is made by the PAP administration who love FTs. The ang moh tua kees can feel good about calling for “S’poreans First” happily knowing that they won’t be given the choice of having it.

Here’s something from America from NYT. The employer’s tots are the tots of S’pore employers.

If you can’t get workers at $17 an hour, why don’t you offer higher pay?

In response to …, I got an email that said if we were to offer $35 an hour with health care benefits, we would definitely get people to apply; it said people who were highly qualified applicants with years of experience would probably line up at our door.

My response is: We would love to be able to offer $35 an hour as starting pay, but are you in turn willing to pay premium prices for your next roof replacement? A lot of customers we get through online lead services likeThumbtack are people looking for the best deal. They want to collect proposals from four to five businesses and most of the time choose the cheapest one.

We want to compensate our employees fairly for the work they do and the risk they take, but we wouldn’t be able to stay in business if we doubled the hourly rate. It’s not just their hourly wage that becomes a factor. Insurance in the roofing industry is extremely expensive. Not only are we required to carry expensive general liability insurance, we also have to have workers’ compensation insurance for employees on the roof. That comes to 40 percent of their wage. And on top of that, there’s payroll tax.

Still expect world topping salaries isit?

In Economy on 14/06/2017 at 2:01 pm

Today, I was thinking about Chris K’s recent comment that our unemployment rate was creeping up despite better economic growth. This (And his siblings eant about him) reminded me about PM’s May Day speech on the economy.

The constructive, mainstream media (often quoting employers) is forever bashing our young for a sense of entitlement.

Reading the u/m, it’s not difficult to see where this sense of entitlement comes from (Think Queen Fu or the Hen or Queen Jos). Can our ministers continue to say that they deserve their million dollar salaries when our employment can only creep up? Note that Japan’s unemployment rate is 2.8%, only slightly more than ours.

As Singapore wrestles with slower economic growth and disruptive technological changes, challenges have emerged in the local labour market.

In his annual May Day speech, Prime Minister Lee Hsien Loong noted that unemployment increased last year and even with better growth in 2017, the Government expects a “steady trickle of redundancies” as the economy continues to restructure.

He added that other developed countries are seeing much higher unemployment of between 5 to 10 per cent, and as Singapore grapples with similar pressures as these mature economies, the local unemployment rate – which stood at 2.3 per cent as of March 2017 – “will gradually go up”.

Pressures that such economies face include an ageing workforce, technological changes and a global economy that has yet to completely shake off the ills of the 2008 global financial crisis, economists told Channel NewsAsia.

Read more at http://www.channelnewsasia.com/news/singapore/singapore-s-unemployment-rate-how-much-higher-could-it-rise-8818602

 

Question poorer 70% should ask

In Economy on 12/06/2017 at 10:17 am

But are not asking.

“What does it mean to have low unemployment* when inequality stays the same?” asked a German florist, quoted by the FT. (See Chris K’s improvement below)

Well her question should be asked by the less well-off PAP voters who face stagnating wages in spite of higher (unjustified) water prices and higher (also unjustified BTO prices), and coming higher public transport prices, again unjustified.

Maybe Oxygen and other TRELand cybernuts should not tar all PAP voters as daft? Maybe they should confine their remarks to those like them: poor, lazy and born losers. People like PAPpy dog RayWing Ng who celebrates Employers’ CPF because he admits he cannot get a 16% pay increase if it wasn’t compulsory for all S’poreans. Taz how much of a loser he is.

Update at 10.45 am: Chris K improved on  the quote for S’poreans:

Rephrase in Singapore terms – what’s so good about low unemployment when inequality is so high?

I should have tot of that rephrasing. But to be fair to the MIW, inequality has dropped a little.


*German unemployment is a lot higher than S’pore’s. People like Chris K are pointing out that our employment rate is rising despite improving economic growth. Technically we are at full employment.

PM that stupid meh?

In Economy, Political governance on 28/05/2017 at 1:27 pm

In cyberspace, from the early noughties onwards, S’poreans were telling him and his millionaire ministers that we needed better quality FTs, not Trash by the cattle truck load. Err we were “unhappy” people according to him.

Only yesterday did he agree with us saying

“We have to manage the inflow carefully, and make sure that the people who come can integrate into our society, make sure they have the abilities and skills to contribute to our economy, and make sure their hearts are in the right place and they will become good Singaporeans. We are a country, not simply a city or an economy.”
Read more at http://www.channelnewsasia.com/news/singapore/singapore-has-to-manage-population-growth-carefully-pm-lee-8888750

What took him so long?

Worse, despite his double first in Maths, he got problem in counting, a bit like Uncle Leong:

About 30,000 babies are born as citizens every year and, to top up, about 20,000 foreigners become new citizens annually.

With about 50,000 new citizens every year, Singapore can “almost sustain a stable population”, he added.

Err what about the PRs and those on employment passes? Why they not included in the 50,000 bodies needed to “sustain a stable population”. After all, PRs are part of the resident population.

 

 

 

LKY rates S’pore E

In Economy on 12/05/2017 at 5:22 am

No not our beloved Harry

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

but Yeoh Lam Keong retired chief economist of GIC whose initials FB mangles into LKY

Actually i think the govt got an A+ till end of 1980s

After that the immigration inflow was clearly excessive

It dampened wages for the working class and created working poverty for the bottom 10%

A more calibrated immigration intake would have resulted in higher productivity and real wages and a truly first world economy

Also the population increased to 5.5mln and threatens to be well above 8 not well below 6.9 by 2050

My verdict on the 1990s and 2000s?

Grade E

(Err didn’t ask permission)

What had happened is that in the 90s S’pore became an expensive place to do biz. My then M’sian boss complained that here, landlords and employees got the better of capitalists like him. One of Yeoh’s pals, Manu Bhaskaran, wrote in BT after the regional 1998 financial crisis, that the advantages of being based here for MNCs was no longer that attractive given the costs of being based here. S’pore no longer offered value for money.

The PAP administration’s solution: repress wages by allowing FTs in by the cattle-truck load rather than restructure the economy. There wasn’t a restructuring the economy report in the 90s.

Not that these reports are worth the time and effort of cutting and pasting the previous reports

Another decade, another restructuring report?

In the 80s, one Lee Hsien Loong as trade and industry minister headed a committee to recommend changes in the economy. In the early noughties when DPM he headed another committee on the same issue.

 In 201o, one Tharman and his committee produced the 2010 Economic Strategies Committee (ESC). And now there’s the CFE. It’s a bit early, but then there wasn’t a report in the 90s: so maybe making up for lost time?

No need to steal others’ lunch, PM

In Economy, India on 03/05/2017 at 2:53 pm

After all eating other people’s lunch is unhygienic.

Juz follow Trump.

He cut back the flood of the number of Indians that Indian IT cos, abusing the US visa system, were using to prefer cheap countrymen to real American, depriving real Americans of decent jobs.

Result: Infosys, the Indian IT services company that is one of the biggest losers from changes in how the US issues work visas , plans to hire 10,000 Americans in the next two years, according to the CEO.

Here’s a really long post I lifted from FB explaining how the MIW allowed Indian Indians to screw S’poreans (It was posted in 2014) over visas for Indian FTs. It seems it was a negligent, honest mistake, not on purpose. What do u think?

For all the allegations of bias that have been made against sites like TheOnlineCitizen, there are benefits in reading these alternative sources in addition to mainstream ones. For example, you get to read things that would have otherwise “flown under the radar”. Let’s have an example.

Take this FB post here by TheOnlineCitizen:https://www.facebook.com/theonlinecitizen/posts/10152771544366383

It bring’s one’s attention to the Comprehensive Economic Cooperation Agreement (CECA) signed in August 2005 between Singapore and India, and in particular, the bit on allowing free movement of professionals.

Now, have a look at the relevant bit (Chapter 9) of the CECA here. Don’t panic, it’s just 4 pages. “Above the Peanut Gallery” posts require a little more reading than your average bad photoshop, but I’m not expecting you to read whole legal judgements (yet).
http://www.fta.gov.sg/…/india-singapore%20comprehensive%20e…
in particular

(Article 9.2, Para 2f): The definition of intra-corporate transferee, with a nifty list of 127 professionals in Annex 9A
http://www.fta.gov.sg/…/annex%209a%20-%20list%20of%20profes…

(Article 9.3, Para 3): “Neither Party shall require labour market testing, economic needs testing or other procedures of similar effects as a condition for temporary entry”. Speaks for itself.

(Article 9.5, Para 1): “…each Party *shall* grant temporary entry to an intra-corporate transferee of the other Party…” Note the word *shall*. Not *may*.

(Article 9.6, Para 1): Yep, they can bring in spouses and dependants. Again, note the *shall*. Not *may*.

Now, look at the Fair Consideration Framework right here.
http://www.mom.gov.sg/…/P…/fair-consideration-framework.aspx
Notice the bit on jobs not needing to be advertised under the Jobs Bank for Singaporeans – Note intracorporate-transferees are exempt.

What this seems to mean is… An intra-corporate transferee from India is perfectly placed under CECA to “fly under the radar” to take a job here that is:
a) Not your stereotypical “we need foreign labour” construction worker (see that list of 127 professions)
b) does *not* need to be advertised in the Jobs Bank (see Fair Consideration Framework exception for intra-corporate transferees)
c) does not require “labour market testing, economic needs testing or other procedures of similar effects as a condition for temporary entry” (see CECA Article 9.3, Para 3)
d) AND can bring over his spouse and dependents to work as managers, executives or specialists (see CECA Chapter 9, Article 9.6).

I’ll pause here to let that sink in for you. For extra fun and games, do feel free to look at the 127 jobs, and see which one is most similar to yours.

===

Now, to their credit, the Singaporean (yes, the currently PAP) govt is doing their best by stalling full implementation of the CECA. I sense that they also know an “Oh crap, why did we sign that” moment when they see one. What I’m wary of, is that the stalling may not last past the elections in 2016, when political consequences of un-stalling the CECA are no longer an immediate concern.

The piper must be paid someday. India has been repeatedly raising this issue. The mistake was made already, back in Aug 2005, by policy writers and approvers who are now most probably beyond the reach of accountability. And to our chagrin, even voting in an Opposition government can’t stop this – not without going back on our word.

We can’t stop the train, but at least we know when and how it would hit us, and we know who set the train on that track.

Now, do you see the value in reading alternative media?

Smart Nation: It’s all about Big Brudder watching us

In Economy, Infrastructure, Internet, Political governance, Public Administration on 24/04/2017 at 2:45 pm

True the BBC in  http://www.bbc.com/news/technology-39641262 can come across as constructive and nation-building as ST but three cheers to the BBC for pointing that the way the PAP administration does things is a major problem for the Smart Nation initiative:

Harminder Singh, a senior lecturer in business information systems at the Auckland University of Technology in New Zealand, says the main issue with Smart Nation is that there may be too much government control over it right now for real innovation to take place.

“Singapore’s way of doing things is that the government leads, then others follow,” he told me. “This might be a problem – it is too centralised and so it may take too long for plans to trickle down.

“And ideas from the ground may be neither visible to those on top nor acceptable to them, especially if they are related to the delivery of services that are traditionally handled by the government.”

But he’s very cock in saying

it is not clear why Singapore’s leaders are so keen to move full steam ahead with this plan.

Ah ya no need to explain. It’s all about making sure Big Brother can keep on watching S’poreans. But he’s right to say that we don’t know “how the Smart Nation project will improve salaries and jobs”

“Smart Nation is about building national technology infrastructure so that the government can offer new services, or do what they do now differently. The government may need to explain more clearly how the Smart Nation project will improve salaries and jobs in Singapore to get the project moving faster.”

 

We got so many robots meh?

In Economy on 20/04/2017 at 7:17 am

Second after Souh Korea per 10,000 manufacturing workers.  Btw, the International Federation of Robotics defines industrial robots as machines that are automatically controlled and re-programmable; single-purpose equipment does not count.

What this seems to indicate is that the manufacturing of pharma and electronic products, the leading exports, here is highly automated.

So where do the FTs fit in other than in the manual labour sector (which S’poreans shun)?

Why u think why so many PMETs are unhappy?

Why wages don’t grow in line with property prices:

Real wage growth in many rich economies has been disappointing for much of the past two decades. Low wages are enabling some reallocation of workers. An overwhelming share of the growth in employment in rich economies over the past few decades has been in services, nearly half in low-paying fields like retailing and hospitality. Employment in such areas has been able to grow, in part, because of an abundance of cheap labour.

http://www.economist.com/news/business-and-finance/21719761-probably-not-humans-have-lot-learn-equine-experience-will-robots

It’s the People, stupid

In Economy, Tourism on 18/04/2017 at 1:50 pm

There’s been a lot of BS and angst about the death of Orchard Road as an “in place”.

A lady Viv Won got it right when ashe posted this comment on Facebook

Orchard used to be the IT place for urban displays of modernity and pop culture until the suburban centers and other hubs sprang up. I think it’s the G overrating form over function, Orchard has lost its function: MBS took over high end retail; people can meet their Everyday social, biological and service needs at regional centres; good hotels are spreading out of the Orchard sphere so short term tourists aren’t trapped there; there’s much local flavour and life elsewhere, in different pockets of the city like Ann Siang Hill, Boat Quay or MBFC, Robertson Quay, etc. Orchard Rd malls are like upmarket clones of things you can find everywhere else (except Far East Shopping Centre). People can’t exert their identity in a place that imposes its own overarching identity upon everything else.

It’s the People that make a place hip, not the decor or the planned festivities or whatnot. If they had to learn something from what was Mohd Sultan Rd in the late 90s, it should be that a place gets its culture from the people who gather there, for whatever reason (refurbished go-downs make great clubs). So there’s really not much reason to go to Orchard when there are so many more interesting and authentic places to hang out with people you consider to be cool🙂 then there’s always Hong Kong.

Same too like other creative industries like finance and technology.

The PAP just doesn’t get it. Remember its attempt to make S’pore a leading stem cell research centre?

Why Budget surpluses are bad: No not Chris K but a US president

In Economy, Public Administration on 12/04/2017 at 9:28 am

Albeit one from the 19th century. He thought it unfair for the US to tax the people while keeping the surplus.

“it is indefensible extortion and a culpable betrayal of American fairness and justice” for the government to run a budget surplus, and “multiplies a brood of evil consequences.”

The Treasury was “a hoarding place for money needlessly withdrawn from trade and the people’s use thus crippling our national energies, suspending our country’s development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder.”

Cleveland, the first Democrat to become president since before the Civil War, was incensed that the federal government was taking in more than it spent.

It bears pausing on that notion. A Democrat in the executive mansion (it wasn’t called the White House until Teddy Roosevelt came along) considered it unfair that Uncle Sam was taxing its people and squirreling away the excess.

In fact, Cleveland felt even more strongly than that. He told the assembled representatives from the then 38 states of the Union that “it is indefensible extortion and a culpable betrayal of American fairness and justice” for the government to run a budget surplus, and “multiplies a brood of evil consequences.”

The Treasury has become “a hoarding place for money needlessly withdrawn from trade and the people’s use,” Cleveland thundered, “thus crippling our national energies, suspending our country’s development, preventing investment in productive enterprise, threatening financial disturbance, and inviting schemes of public plunder.”

http://www.reuters.com/article/us-usa-trade-breakingviews-idUSKBN17D1SU

Slow train from UK to China: See who’s running it

In Economy, Logistics, Shipping on 12/04/2017 at 4:52 am

I’m surprised the cybernuts are not saying that this shows S’pore is doomed, doomed. They most probably don’t read anything other than “The Idiots — S’pore” and TRE and ST. Even Terry’s Online Channel is too cheem even if it advocates “pak police” (OL OK “Diss police”)

The first rail freight service from the UK to China has departed on its 17-day, 7,500-mile journey.

British goods including soft drinks, vitamins and baby products are in the 30 containers carried by the train, which will be a regular service.

The DP World locomotive left its terminal in Stanford-le-Hope, Essex, for Zhejiang province, eastern China.

http://www.bbc.com/news/uk-39549077

Seriously waz interesting is that the train is run by a port co that is a global rival of PSA: DP World or Dubai World.

So what if we are tops in start-up talent?

In Economy on 31/03/2017 at 5:45 am

What has this to do with the price of eggs?


In case any TRE cybernut reading this wonders about the term, it means

When we get told “What’s that got to do with [anything, the price of eggs in China, the sun and the moon and the stars, etc]?” the speaker is saying (or telling us) thatwhatever we said beforehand was irrelevant or has no bearing to the discussion.

———————–

Great response to the constructive, nation-building media’s attempt to play up finding that S’pore is tops in world for start-up talent.

 

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Interesting Jack Ma signs this with M’sia, not S’pore

In Economy, Malaysia on 25/03/2017 at 7:00 am

A common comment on social media and blogshere when not dissing the PAP is that our SMEs serve locals. Even the PAP administration grumbles that SMEs not going abroad.

So it’s interesting to read that Alibaba’s Jack Ma took a step on his plan for an electronic trade platform to ease the cross border exports and imports of goods for SMEs by announcing in M’sia that M’sia is the first country outside China to sign up to Alibaba’s electronic world trade platform.

What has this to do with the price of eggs?

In Economy on 17/03/2017 at 7:13 am

NUS tops Asia university ranking for second year running

CNA

Given

Jobless graduates hightset since 2004

TNP

And

Irony of irony: “NUS rated tops in world rankings” scream the headlines. But NUS graduates are glorified in the MSM as carving a career driving Uber and Crab car! Well done. Meanwhile employers, including GLCs, are merrily recruiting Pinoys, PRC and Indians from dodgy 3rd rate Universities. Why? Because it’s so EASY!

FB comment

And FT PMETs keep coming in (Only rate of growth is slowing: from cattle truck loads to A380 load) . And plenty of unemployed, underemployed S’poreans looking for jobs.

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Repented that u helped PAP get 70% of the popular vote?

 

Water price hike included meh?

In Economy on 15/03/2017 at 5:10 pm

INFLATION FORECAST AT 1% FOR 2017

Inflation for the year is expected to come in at 1 per cent, unchanged from the analysts’ forecast in the previous survey. For the first quarter of this year, inflation is expected to be 0.8 per cent.

Core inflation – which excludes accommodation and car prices – is expected to be 1.5 per cent for the whole year, slightly above the 1.3 per cent predicted in the previous survey. It is also predicted to come in at 1.3 per cent for the first quarter.

For 2018, headline inflation is expected to be 1.3 per cent while MAS core inflation is forecast at 1.7 per cent.

CNA

So economists don’t think that that the hike will cause inflation, something the cybernuts are screaming their heads out over.

Maybe the economists are relying on the assurance of a junior minister that

the cost of goods, such as coffee and tea, “should not and ought not go up” when participants addressed the trickle-down effect that the water price increase.

TOC

But then we had the assurance of a cabinet minister that water was priced correctly in 2015, juz before the elections.

 

Watergate: MIW caught with pants down

In Economy, Environment on 02/03/2017 at 4:46 am

PAPpies and their running dogs in the constructive, nation-building media and academia and on social media say that the price of water hasn’t been changed for years, so we shouldn’t be getting worked up about the 30% hike (peanuts, really).

But 18 months ago, VivianB said (see below) there was no need to change the price because PUB has improvements in membrane tech and productivity and that the water tariff and WCT reflect the scarcity of water.

So what has changed in 18 months?

Either in 2015 (before GE) the PAP administration didn’t do their homework leading a minster to mislead S’poreans and parly, or in 2017 the cabinet didn’t read what the then minister said in 2015 when making the decision to raise prices.

But then maybe before GE 2015, PAP wanted to get rid of its “Pay and Pay” tag?

Kudos to whoever originally dug this up. I think it is Chen Jiaxi Bernard, a WP man. Well done.

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What the Old Guaed got right/ What the Young Guard ignores

In Economy on 27/02/2017 at 11:20 am

Yesterday, I posted that there wasn’t much difference politically between the PAP Old Guard and the African leaders that governed after independence*.

But these leaders lost power because didn’t help their people achieve material prosperity. It was this prosperity** that gave the PAP legitimacy in the eyes of up to 80% of the voters from 1965 — 1990

Since then the PAP and the economy have been on auto-pilot.

The PAP avoided a crash in 2011, and regained altitude by throwing more of our money our way. What the PAP derided as “welfarism” will be redefined as the “need to attend to the well-being of citizens” (words of a PAPpy running dog in today’s SunT)

But the economy for all the talk of restructuring is still on auto pilot. When S’poreans realise what 2-3% economic growth really means (hope to blog on this soon), unhappiness will grow especially among those who boutht into the idea of die-die must buy pigeon hole in the sky..


*A reader pointed out

The difference is that the old guards viewed themselves as chairman & board of directors of a corporation, and were internally motivated to see the long-term growth of same, staking their own prosperity with that of the country/corporation. That said, a corporation isn’t a democracy.

Africa & Burma strongmen basically were more interested in short-term extraction of maximum wealth & benefits in the shortest time possible, while using guns & muscle to maintain the looting for as long as possible.

Places like India fall somewhere in-between.

**If Lim Chin Siong and friends had won, based on their own words, we’d have gone the way of the Africans and Burmese. Whether they’d made a u-turn is something that can be debated until the cows come home. All I’ll say is that they did not have a Dr Goh Keng Swee on their team.

 

TOC, TMG can rebut this?/ But then PAP is always wrong

In Economy, Environment on 25/02/2017 at 9:34 am

 

TOC, TMG (with a once (and future?) wannable Sith Lord)  and other anti-PAPpists have been complaining about the impending water price hikes.

 

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Singapore MattersLike Page

Your bowl of mee pok is going to cost 30% more because water price is going up by 30%? Your cup of coffee will cost 30% more?

That’s FEAR MONGERING! Quit it!

Put that 30% increase in perspective. If your cup of coffee costs 30% more because water price has gone up, that’s called exploiting the water price increase to raise prices.

Taz wht we had the assurance of a junior minister that

the cost of goods, such as coffee and tea, “should not and ought not go up” when participants addressed the trickle-down effect that the water price increase.

TOC

Then what happens when prices don’t rise?

TOC, TMG and the cybernuts will then complain that sellers of coffee and tea drinks and food sellers are suffering.

Don’t know whether to laugh or to cry.

The PAP is so very lucky in its enemies.

Fault of PAP that economy can’t transform

In Economy on 22/02/2017 at 5:10 pm

David Skilling a director at Landfall Strategy Group, a Singapore-based economic research and advisory firm wrote in an article in ST

My assessment is that the more important constraints on Singapore’s transition to a productivity-driven growth model are those associated with the structure of Singapore’s economy. Indeed, I would suggest that it is exactly because the existing growth model has been so successful that the transition process to a productivity-led growth model is so challenging.

One way of thinking about this is a Singapore version of “Dutch Disease”, in which one part of the economy becomes so successful that it weakens the competitive position of other sectors. This is because the successful sector places upward economy-wide pressure on wages, costs and the exchange rate. In Singapore, as with some other FDI (foreign direct investment)-intensive economies, the MNC (multinational corporation)-heavy sectors are highly productive, and have correspondingly higher wage and cost structures. This attracts resources from elsewhere in the economy, and raises the cost structure for other Singapore firms relative to their levels of productivity.

This is felt keenly by Singapore firms in internationally oriented sectors that have lower average levels of productivity than the large MNCs. The high cost structures faced by these firms make scaling up entrepreneurial and innovative activity into international markets more challenging. This has contributed to the observed difficulties with growing new global champions from Singapore.

http://www.straitstimes.com/opinion/on-singapores-economic-pivot?utm_campaign=Echobox&utm_medium=Social&utm_source=Facebook&xtor=CS1-10#link_time=1487662022&utm_source=facebook&utm_medium=social-media&utm_campaign=addtoany

S’poreans kids only taught one relevant skill, not three

In Economy on 17/02/2017 at 5:47 am

The skills young S’poreans must pick up to get high paying jobs are EQ, maths and coding skills. Taz what the data from the US tells us:

 

But although coding is now being emphasised in the curriculum, EQ is still not. So out of the three skills only maths is emphasised.

But then maybe MoE, like a tua kee from The Middle Ground, no not the Sith Lord wannabe that saw the light after she retired, thinks the US data are “US BS”.

Sad.

Two elephants in the room the CFE report misses

In Economy on 15/02/2017 at 4:32 am

Donald Low points out that people are history

has been a failure of governments to compensate the losers of globalisation and technological disruptions sufficiently. Not only has income inequality increased in most developed countries, but this has been accompanied by wage stagnation for average earners. Technology advances may have created new and better jobs, but they have also caused the disappearance of many jobs that required “middling” skills and earned middle wages—a phenomenon known as job polarisation.

https://www.facebook.com/notes/donald-low/cfe-report-could-have-included-long-term-macroeconomic-issues/1427286870638616

And that there’s nothing in the report about safety nets (rumour has it that recommendations on “stronger safety nets” were taken out because of the PAP’s dislike of “welfarism”):

the state would be called upon to engage in more aggressive fiscal redistribution and to provide stronger safety nets. In fact, such measures are not just a necessary response to higher inequality. They are also an important lubricant of economic restructuring and a complement for measures to promote competitiveness; they make pro-growth policies far more acceptable to workers.

The American experience shows that the middle class is being wiped out by the march of progress, something that will happen here whether or not S’poreans vote for the PAP.

ANOTHER VIEW
Self-driving truck technology for travel on interstate highways, based on artificial intelligence, is already technically feasible. Today, about five million drivers are employed in the industry. A 20 percent reduction in this work force over the next 15 years would equate to a million lost jobs.

How Efficiency Is Wiping Out the Middle Class

Trade and immigration became the boogeymen in the presidential election, but what’s really displacing workers is the advance of technology.

NYT Dealbook

 

CFE report: Another good critick by another Indian

In Economy on 13/02/2017 at 7:25 am

I’m sure you have read Inderjit Singh’s critick of  the Report of the Committee on the Future Economy (CFE), or at least heard of it. If you have not, read it: v.v. good.

But I’m sure you missed the u/m Facebook critick by Devadas Krishnadas. He’s an ex-bureaucrat who now runs his own consultancy: “Future-Moves Group (FMG) is a client-centric, outcome-driven management consultancy founded in 2012.”

He regularly KPKBs in the constructive, nation-building media and the new media, especially on Facebook.

It’s a good piece but has one very serious flaw, a flaw I hope to discuss later this week. See if you can spot what the flaw is.


The importance of having Indian blood

Btw, other than from Chris K (Look out for Terry’s Online Service to reproduce his FB tots), I’ve not seen a good critick by a non-Indian anywhere. Maybe taz why Indians are the master race in S’pore? And why the presumptive Malay president has Indian blood despite being Malay? Having Indian blood is a genetically good thing fir other races? But these questions are material for several posts.)

————————————————————

Facebook post by Devadas Krishnadas.

AN ECONOMY BY COMMITTEE

The much vaunted ‘Committee for the Future Economy’ released its report today. The most impressive thing about the report is the sheer number of contributors. It is cumulative result of the thinking of 30 main members, 218 sub-committee members, some 700 resource persons or who were involved in focus groups and over 225 civil servants. A total exceeding 1200 persons.

The report itself is composed of 109 pages which works out to about 11 contributors to a page of the report. It advocates 7 strategies comprising of 22 related recommendations. This breaks down to more than 170 contributors per strategy and more than 55 contributors per recommendation. There are also 80 supporting recommendations from the sub-committees which works out to about 15 contributors per supporting recommendation.

Doubtless, the committee chairmen would prefer the large pool of contributors to be characterised as an effort to be consultative, inclusive and comprehensive.

Acknowledging the year long effort and the distinguished and lengthy list of contributors, one could be forgiven for expecting more substance in the report.

A report of consequence should be one that does not merely talk in terms of motherhood statements, of which there are too many to list all, just a few examples – “Press on with trade and investment cooperation”, “Support enterprises to scale up”, “Partner each other to enable innovation and growth”.

It should also not be a report about how many more planning activities need to be undertaken. A major recommendation of the report to develop and issue “Industry Transformation Maps” or ITMs for 23 industries. So even more effort into meetings, focus groups, detailed planning and proposals will be forthcoming internally within government.

A report of consequence should be about thinking in terms of what we should stop doing, how we should be rethinking the roles of government, industry and the civil society in the context of constrained economic growth and acknowledging the limits of ‘crystal ball gazing’ which will be winning sectors.

While the intention to think ahead to the future is always laudable. This report reveals more a fixation with the past. This is in the sense that it continues to reflect a belief system that command planning the economy is still the critical success factor and that generating a plan and achieving a result are synonymous. That mode of thinking has not worked for some time but it does serve an essential self-interest – that of justifying an outsized and expensive Rolls-Royce of a public sector to develop, implement and administrate all these gilt plans.

It is high time that it be publicly acknowledged that the Government does not create jobs or value-added. Only the private economy does. We should be thinking in terms of what the government and only the government can and should do, which are areas of co-creation between the government and the private economy and where the private economy should be left to do its thing.

What is needed is fundamental rethinking of the nature of our economy, the embedded structural considerations – both institutional and mind set – which limit or hinder the full exploitation of our economic potential. This should include looking at how and how much the government should be intervening in the economy and revisiting politically charged issues such as population augmentation.

There is one further, basic but yet critical oversight. This is that the report neglected to identify a 24th industry for a much needed ITM – this is the public sector, currently the single largest employer in the country and whose size and wage structure has shaping effects on the labour market.

One obvious recommendation should be for few thousand of the best qualified civil servants to cross over to the very human capital starved private sector, particularly in the small and medium enterprises, to create products, ideas, companies and the jobs of the future.

This may be the most immediate and practical contribution of any report on the future economy. A pity that this does not feature among the long list of recommendations. But then, it is easier to write about a future than to be responsible for making it.

Inderjit Singh’s critick of the CRE Report

In Economy on 13/02/2017 at 4:06 am

Btw, he’s being modest in calling his Facebook post “My Comments on the CFE report”: it’s a very good analysis of the Report of the Committee on the Future Economy (CFE).

Piece reads:

My Comments on the CFE report.

A. Executive summary

On a general note, while the report covers a few important areas, I do see quite a number of initiatives that have been suggested before, from the time we started T21, to the ERC and the ESC. The key is going to be in implementing some of these as in the past we did not achieve the desired results. The key is going to be the details on how the government plans to implement.

I do feel that there are no major new radical ideas that can greatly contribute to the transformation of the economy which we greatly need. In the past, we saw new ideas like – making the finance sector as a core sector of the economy, developing the Life Science industry, implementing the knowledge economy. I was hoping for some fresh and significant ideas that can show us the light a little better. But we should perhaps wait for implementation before brushing off the recommendations made because if they are done well we could achieve the outcome we failed to achieve in the past.
It seems that the government remains in a state of denial about the worrying state of the economy. There seems to be a mismatch between what many companies, SMEs, business owners and PMETs are seeing on the ground versus what the government is telling us – that things are not bad, that many jobs will be easily created. I do believe that Singapore’s economy needs to be structurally corrected and government policies need to be changed significantly in certain areas for us to grow a long term sustainable economy.

For example, although there is some admission that we need to develop more locally grown companies, we need this to be backed by changes in the way the government supports the various sectors of the economy. I was hoping to see greater clarity in this shift of strategy in the CFE. If we don’t make a clear change on how we want the economy to grow in the future, we will never create the local global companies that are very much needed to fuel the economic growth of the future. We cannot keep relying on an old formula that we put in place in the 1960s.

I do feel that the CFE has blamed the current state of affairs solely on the global slowdown which is not a complete picture of our economic woes. We should have also gone deeper into what is wrong locally and addressed those issues as we do need a restructuring in some areas like cost competitiveness, government agencies’ support and the financing landscape that has become very tough for companies.
Below, I am making some more detailed comments for some of the strategies and just minor comment in some areas where I don’t have a good feel of things.

B. Introduction

1. The report has given a broad-brush view of the government’s thinking on the strategies they plan to adopt in the coming years. My initial reaction is that many of the ideas spelt out were expansion of many initiatives that the government had already been working on for many years. For example, since 1999, we first started looking catalysing the VC industry through the T21 programme which has limited success and we are seeing the same recommendation again. I hope in implementation, the government will study the issues with past programme so that we don’t make the same mistakes.

While the CFE pointed to the changing global landscape, I would have thought a little introspection was also needed to study what has changed in Singapore. A few things have changed drastically;

a. Cost structure in Singapore has changed, making us uncompetitive. Land cost, rentals, REITs are all issues;

b. Financing environment has shifted, making credit more difficult to come by;

c. MNCs are shifting out faster than before because we have become less competitive and also because other cities can offer better terms and a lower cost structure with easy access to manpower. Along with the flight of MNCs, our SMEs will have to either leave Singapore to follow the MNCs or shut down.

d. Manufacturing is very important and we should keep it at least 20% of the economy, but we don’t have enough homegrown companies with deep manufacturing capabilities. Economic strategies of the past focused on prioritizing new areas of technologies or capabilities instead of deepening the skills and strengths we already developed in the past. For example, we have lost the disk drive industry, while the semiconductor industry has a few big MNCs players but we have lost most of the local big players because we lost technological competitiveness and did not invest enough in R&D. So, every 15 to 20 years a new focus on a new industry cluster instead of retaining the core capabilities we already developed over the years.

I therefore feel the CFE missed the opportunity to study what weaknesses Singapore has developed and how to overcome these. The CFE could have recommended some near-term plans to resolve some key current issues hindering our ability to restructure the economy. Because without resolving the issues the longer-term goals may be more difficult to achieve.

My bigger worry is that we will see huge structural problems that will take a long time to resolve if we don’t change the economic growth model of the country – rebalancing the contribution of FDI and MNCs vs local companies.

C. Specific comment on some of the sections;

1. Deepen and diversify our international connections
This is important and is something Singapore has focused on since the beginning, 50 years ago. It remains important as we are a small market. I would like to see how local companies, especially SMEs can benefit from these. I feel many of the FTAs benefitted larger companies and not many small companies benefitted. So, I hope in implementation we will focus on helping more start-up and SMEs benefit from this connectivity.

The government needs to also be more aggressive to tap further away emerging markets. The last major frontier is Africa. Most developed economies are already playing a key role in Africa while Singapore has not even seriously started with serious support structures for companies that already ventured there. Most of the companies who are in Africa have done it on their own with negligible direct support from the government.
autonomy and flexibility to manage their GIAs. We should allow different models to develop and not imposed a central government driven model.

2. Acquire and utilise deep skills
This will be very important especially if we want to anchor the IT and manufacturing sectors in Singapore. The compensation system needs to favour people with deep skills as much as those with general management. For this to succeed, society and government need to change their mindset.

I think the issue with PMETs who lose their jobs and go for reskilling is that they go through a training programme without knowing if they will get a job at the end of the training. To encourage more people to upgrade themselves, the government should start the reverse way – match PMETs to jobs and then they go through a OJT or part-time training programme. Salary support can come from government to incentivize companies to hire such people and train them. The Professional Conversion Program where the government pays up to $4,000 monthly salary to the company when they hire and re-train the employee is in place. The agencies managing this need to identify why the take up is not as much as desired to be effective in absorbing the displaced PMETs

There is also a need for closer management of the work pass system to make it more difficult for companies to hire foreign professionals who are not among the best in their fields. Unless they are best, companies should be compelled to hire Singaporeans and be give a 1 to 2 year training programme to build up their skills, with salaries supported by the government.

3. Strengthen enterprise capabilities to in novate and scale up

I find the recommendations here repeating what the T21 recommended in 1999 and what the ERC recommended in 2002. Yes, there is a need of more innovation and creation of new enterprises. How we do it is very important. I do believe the ERC did achieve the key objective of encouraging more entrepreneurship among Singaporeans and we already have an ecosystem that supports start-ups well. What is missing is their ability to grow beyond their start-up phase for a few reasons;
a. Market Access
b. Growth Capital
c. Management skills

It would have been useful if the CFE addressed these issues.
The recommendation of smaller companies partnering bigger companies has been made many times over the last 20 years and we have no seen great success. Unless there are new ideas I see this as motherhood in nature.

The ESC and also ACE in the past recommended an Exim bank to be set up to support overseas projects. The government accepted the ESCs recommendation but this never materialized. The CFE has recommended a few schemes in the areas of financing support. I hope this time we will see better outcome.

I disagree with these recommendations :
a. “Significantly grow the community of IP and commercialisation experts”
b. “bringing in dedicated commercially-oriented entities that are focused on the commercialisation of IP

We need less control and more flexibility in our commercialization efforts. To many lawyers and experts will slow down the process. I have seen this happening in many cases where the researchers and the entrepreneurs get too tried dealing with too much of bureaucracy and failing to spin-off a company or the commercialize the IP.

It is a pity that after spending so much in research, I believe in the region of over $40b in the last 20 years, Singapore has not scored well in innovation and creation of enterprises despite the large amount of money spent.

The few things I liked in the report are;

a. “The standardized IP protocol” – I believe many start-us and spin-offs don’t get formed because of rigidity of some of the RIs in wanting to control more or wanting to earn more form the IP they developed. The end result has been that the IP remains on the shelf and does not get an opportunity to be commercialized. I would suggest IP be made relatively very cheap and RIs practice flexibility to encourage more researchers, SMEs and entrepreneurs to want to innovate and commercialize new products and hopefully create a few big winners. Even if the IP was given out for $0, the value added to the economy can be significant – so the RIs should not see themselves as entities that have to earn more income from the IP (because the R&D grants should be seen as government’s investment for the general economy and not for the RIs own benefit).

b. “Provide high-growth enterprises with more dedicated and customised support” – the best way for this to happen is to bring all government agencies dedicated to SME and start-up support under 1 umbrella. The CFE suggests “ lead Government agencies could be assigned to coordinate all Government assistance rendered to enterprises”. This has been recommended before but has not worked well. We should bite the bullet and create a one stop all encompassing SME and start up agency – like a “Local EDB” with the same resources, power and funding like EDB. It sis about time we have one Local EDB that follows the company from birth till the company become a global SMEs (and supported by agencies who may be experts in certain horizontal agencies – IT, Internationalization, Finance, etc.). These verticals should be invisible to the SMEs if the LEDB coordinates everything.

c. “For unlisted companies, the Government should facilitate the creation of a private market platform”- This is important for money to circulate faster for investors. Today, may investors wait a very long time before they can exit from a company – by an IPO or a trade sale. IN countries like Taiwan, private equity exchanges are really private, with minimal government regulation. If investors can cash out earlier through such private equity exchanges, it will encourage them to invest more money in start-up and growth companies.

Having said that, this is not a new recommendation, ACE made this recommendation about 15 years ago, and it took a long time for the government to respond and when they did, we created such a private equity platform, called the “OTC”. This platform last just a few years before being shut down because of very unfriendly government regulations, particularly from MAS. I suggest the government study why the OTC failed before implementing another similar platform. Otherwise this recommendation will not translate to an effective outcome. I acknowledge however that part of the problem then was also because we were too ahead of time and there were no good start-ups here to invest in yet. Hence, the VCs invested outside. The eco-system is more mature now and we do have a good crop of start-ups. The key question is how to continue to anchor their key value adding activities in Singapore as they scale given our small market.

4. Build strong digital capabilities

Excellent initiatives suggested by the CFE and the future economy need to get the digital capabilities right for us to compete well in the global economy. SMEs and start-ups must be able to easily access these so that they don’t have to invest too much in the same capabilities.

5. Develop a vibrant and connected city of opportunity

I would say these recommendations are not new and the strategies have been in place for the last 30 years or so. But these are areas that gave Singapore our strengths that attracts investments and we need to continue to build on these.

6. Develop and implement Industry Transformation Maps (ITMs)

I believe the ITM strategy needs to change drastically as the proposal is no different from what has been done in the past with multi agencies working with companies. We do need a one stop local Enterprise agency to deal with companies from start-up to the time they become global Singapore companies. I don’t see for example EDB being able to play a useful role in supporting local companies in the clusters they are responsible for.

From the government’s perspective, the ITMs are a very useful way to plan the future industry clusters but the current approach of appointing lead agencies to champion certain sectors is flawed and outdated. The future industries will not come from clearly defined sectors but from a mix of sectors. For example, future retail will have to encompass retail, IT, logistics and Finance (payment systems). In the current Map, Spring is in charge of retail, MCI in-charge of IT, EDB in charge of logistics and MAS in-charge of finance. So, by giving each government agency one sector to manage, we will see things falling into cracks.

It would have been better to reorganize the government agencies to verticals – size and stage of a company – i.e. start-up/SMEs, MNCs, GLCs, Local MNCs and Horizontals – by technology or core competencies. This will require a major reorganization of government agencies. I would have expected the CFE to be more radical in the recommendations for this area as the old models will not work well in the future as we will see companies emerging from nowhere and becoming big and big companies leaving Singapore or completely disappearing.

Furthermore, I have seen in the past that EDB had been ineffective in handling SMEs as their key focus is to attract foreign MNCs. So when a SME in a logistic sector needs support for EDB, they have not been getting the support they need. A former EDB chairman once commented to me when I challenged him and this was his response : “What did you expect me to do, I had a sledgehammer to handle the elephants (MNCs) and the ants (SMEs), so I decided to handle the elephants and ignored the ants”. Of course, it is easier to show results for your KPIs by spending a lot of money to attract MNCs than to work with many SMEs for the same or lesser results. So, if EDB continues to champion clusters for MNCs and SMEs, I am quite sure the SMEs will once again be left behind. Currently, it is a case of too many hands (WSG, SSG, SPRING, IE Singapore, IMDA, JTC), making it rather unproductive with each agency chasing their own KPIs. Sharing of info is also a challenge. There is no universal CRM for businesses with its profile and growth info. But the situation is also different. There are only about 8,000 MNCs but 180,000 SMEs. Maybe another solution is to have a Small Business Agency and a Growth Enterprise Agency. In implementation, I hope the restructuring of government agencies supporting the economic development of Singapore will be seriously relook at.

7. Partner each other to enable innovation and growth

This is also not a new area of focus. We had these strategies before and these are still relevant today. The biggest change that is need is the public sector to be willing to experiment with innovation by partnering start-ups and SMEs. We had some past success – eg Hyflux but we could do with many more, so I hope to see a change in the attitude of the civil service and government agencies to make this happen.

Singapore companies have a bad track record of working together to win business opportunities overseas. Somehow the large companies are not keen to partner smaller companies and SMEs don’t seem to trust the larger companies and we have not been able to create the spirit of cooperation unlike what we can see with Japanese, Korean and Taiwanese companies. I hope there are great ideas to change this mindset among Singapore companies.

D. Conclusion

The CFE has worked hard to study the Singapore economic landscape and suggested their strategy for the future economy. While the paper is not as inspiring as hoped, there are many details that need to be looked at and the key is successful implementation. We have seen some successes of the ERC and the ESC but we have also failed in a number of areas, productivity being a key failure. To a large extent, the issues we the past strategies were not the ideas but how they were implemented. The government needs to understand why there was failure in implementation because if they don’t understand what went wrong, we risk another round of implementation missteps which may not yield the desired outcomes. It is important that the government agencies responsible for implementation have a much better feel of the ground so that they can get things right this time. The CFE report is out, this is the best we have. We all need to work hard to recreate a vibrant economy of the future for the future of Singaporeans. Hopefully more good ideas will emerge at the implementation stage. We also need to know what we are working towards. So implementation is key, but unlike the ESC we don’t have KPIs here or major timelines. Greater clarity is needed on this.

Really? “Singapore Says Asian Growth Helps Offset U.S. Trade Threat”

In Economy on 07/02/2017 at 4:31 am

(Or “EDB does alternative facts”)

“A lot of our manufacturing here is to address the needs and opportunities in Asia.”

“Singapore Says Asian Growth Helps Offset U.S. Trade Threat” 

Erm. A lot of the opportunities and needs in Asia come about as a result from the ultimately exporting to the US of A.

Here’s a chart from the Bloomberg article

Juz google “Export data” and

— China’s main export partners are the United States (18% of total exports), Hong Kong (15%), the European Union (16%, of which Germany, the UK and the Netherlands account for 3% each), ASEAN countries (12%, of which Vietnam accounts for 3%), Japan (6%) and South Korea (4%)

— Malaysia’s main export partners are: Singapore (14%), China (13%), European Union (10%), Japan (9.5%), the United States (9.4%) and Thailand (6%).

Need I say more?

But there’s more: the chart below (courtesy of Chris K) shows that we are among those countries that will suffer the most from the imposition of a US border tax. But we’ll be happy that M’sia will be more badly affected. As will Thailand and Vietnam.

Image may contain: text

Again the effects on big exporters to the US like China and M’sia will also affect their trade with us.

So what cock is the chairman of the EDB talking? And what weed is he smoking?

Finally remember when reading the u/m from EDB remember what I said recently about FDI numbers: FDI does not always result in new physical investments, with new jobs to match it. Often FDI is the transfer intangible assets for the purpose of lowering corporate tax.

Investment commitment levels in Singapore are expected to be similar to those seen in 2016 amid uncertainties in the global economic environment, the Economic Development Board (EDB) said on Thursday (Feb 2).

At its 2016 Year-in-Review press conference, EDB said it will seek to consolidate Singapore’s position as a high value manufacturing base by capturing opportunities in advanced manufacturing. It will do this by anchoring lead adopters of advanced manufacturing in Singapore, while building up an ecosystem of suppliers and enablers to develop technologies and solutions, the agency added.

And

http://www.channelnewsasia.com/news/business/singapore/2017-investments-likely-to-remain-similar-to-last-year-s-edb/3486220.html

Btw, maybe FDI levels are projected to remain static because MNCs are expected to cut back their use of tax havens following public outrage in the West after revelations of the tricks (not all legal) they use to mininise tax?

Luxembourg is already expecting this and if it happens there, it’ll happen here. Remember Oz miners are on the rack after it was revealed that they use S’pore to minise taxes on their exports of minerals from Oz?

True in US: True here too?

In Economy on 30/01/2017 at 4:36 am

“If businesses saw more value in investing in US workers, they could have done so” was part of the headline of an article on the US on why manufacturing jobs were history in the US.

Given our low worker productivity record especially in the SME sector, it’s clear that SME owners see no value in investing in S’porean workers. Why should they, given that they have access to FTs willing to work for less than S’poreans?

So the 70% of voters that voted for the PAP are either state bureaucrats, or work in sectors not affected by FTs? Can’t be. Must be some truth that some PAP voters are as daft as anti_PAP cybernuts.

Fake news about Chinese port investments here isit?

In China, Economy, Infrastructure, Logistics, Shipping on 19/01/2017 at 5:25 am

Recently the anti-PAP cybernuts have been gleefully predicting the economic demise of S’pore what with a recent spate of reports on Chinese initiatives

— China and M’sia to build a major port in Malacca;
—  China was looking to build the Kra Canal; and
— the first freight train to make the journey to the UK.

They are saying part China wants to take business away from our port ha, ha ha.

One Eugene Tavano has been particularly vocal on TRE especially on the freight train service, not realising are already regular train services* to Germany (and Spain I think), which have not affected S’pore’s port. But then cybernuts are like that: blur factually. Think Tan Jee Say (who compares our economy unfavourably with that of PeenoyLand instead of with HK, Taiwan or  South Korea), and Philip Ang and Roy Ngerng (on our reserves etc).

Eugene Tavano (What a Peenoy sounding name: FT here?) is also been very vocal on the M’sian port.

So maybe they know that the u/m is “fake” news? But when another cybernut posted links on Facebook about the M’sian port and Kra canal projects, gleefully predicting gloom for S’pore. I posted the u/m link on Chinese investment here and asked if was fake news? No response.

Most likely then the nuts don’t seem to realise that there’s a 2016 Chinese agreeement to invest in three new megaberths here which will ensure S’pore maintains its global ranking.

Hong Kong-based COSCO Pacific and PSA Singapore have signed a new investment agreement in Shanghai, China today to co-invest in three new mega berths at the Phases 3 and 4 expansion of the Pasir Panjang Terminal which was opened last year.

The investment will be implemented through a joint venture Cosco-PSA Terminal (CPT) and allow for the arrival of mega container ships at the new container berths in anticipation of trade growth and growth in size of boxships plying the international waters.

The new mega berths are slated to begin operations from 2017. According to PSA, they will be fully integrated with PSA’s infrastructure and supported by the automated and intelligent port technologies.

The co-investment agreement is strategically important to both partners and will help them up their competitive game. It is also a clear demonstration of China COSCO Shipping’s confidence in Singapore as a well-connected transhipment hub. I believe the project will also contribute positively to China’s Maritime Silk Road initiative and “One Belt, One Road” vision,” said Singapore’s Senior Minister of State for Finance and Transport, Josephine Teo.

COSCO Pacific is a subsidiary of China COSCO Shipping, which was formed following the merger of China‬’s two largest shipping companies, COSCO Group and China Shipping Group. The merger created the 4th largest container shipping line in the world.

Cosco Pacific and PSA formed Cosco-PSA Terminal Pte Ltd (CPT) in 2003 to manage and operate two berths at Pasir Panjang Terminal.

http://worldmaritimenews.com/archives/187056/cosco-pacific-psa-to-invest-in-mega-berths-in-singapore/

*Update at 2.00pm: The UK’s biggest supermarket, Tesco, doesn’t have any goods on this particular train but does use rail to carry toys, electrical goods, homeware and clothing from China to European rail hubs such as Bratislava in Slovakia and Krasnaje in Belarus.

BBC report

 

TPP sucked but only cybernuts celebrate its demise

In Economy on 16/01/2017 at 4:43 am

Why it sucked

Economists, int’l media and our local media say

The TPP, which brings together 12 Asia-Pacific countries accounting for roughly 40 per cent of global GDP as signatories, is often hailed as a seminal trade framework that will enable exporters to benefit from the removal of duties on more types of goods than previous trade agreements provided for.

BT

Well this letter made it to the Economist’s “best letters from our readers in 2016. Our letters editor picks submissions that sum up the year”. It tells us what conventional wisdom omits

Why they’re right
A lot of what you said in your leader on trade and globalisation made sense, but those who oppose trade deals are not “wrong” (“Why they’re wrong”, October 1st). Free-trade deals have changed remarkably since the repeal of the Corn Laws in the 1840s. Accords such as the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership and the Comprehensive Economic and Trade Agreement are more about protecting the interests of large multinational corporations than they are about reducing costs for consumers and promoting competition.

These deals expand intellectual property rights, increase patent protections and enable foreign companies to sue governments for alleged losses of potential profits in supranational courts through “investor-state dispute settlements”. This is what the protesters are most opposed to: noxious provisions that boost the economic power of large corporations at the expense of democratic governments, smaller businesses and individual citizens.

TOBY SANGER
Economist
Canadian Union of Public Employees
Ottawa

And there was this too:

Globalisation is inevitable, but the current configuration favouring neoliberal politics and economics is not. It is entirely possible to integrate domestic economies in ways that do not favour capital over labour or inequality over equality. More social democracy would address that.

The case for free trade has rested on a confusion between two notions of efficiency: Kaldor-Hicks and Pareto. Free-trade agreements are Kaldor-Hicks efficient because they produce overall net gains to welfare, but they are not Pareto efficient in that they do not make some better off without making some worse off. Economists and politicians have been too quick to point to the former type of efficiency but ignore or downplay the latter, thus producing a backlash.

Something is Kaldor-Hicks efficient not only if it actually maximises net wealth but also when losers are compensated for their losses. Somewhere along the line economists and politicians forgot this part of the equation.

PROFESSOR DAVID SCHULTZ
Editor
Journal of Public Affairs Education
St Paul, Minnesota

But why it matters to us

But for its faults, the anti-PAP cybernuts like the TRE ranters, Tan Jee Say, Goh Meng Seng, Philip Ang if they really care about their fellow S’poreans (which incidentally I don’t think they do. They are S’pore haters.) are wrong to cheer the defeat of an initiative where PM invested so much time, and effort.

As BT says

The setback for the TPP comes at a crucial time for Singapore, which is in the middle of drawing up a blueprint for its future economy – one in which internationalisation figures prominently, in order for its economy to grow externally.

And growing Singapore’s external pie has become increasingly crucial, given that its economy can expect a “new normal” of only 2-3 per cent annual growth, said Deputy Prime Minister Tharman Shanmugaratnam in September.

Although it is expected to boost Singapore’s gross domestic product (GDP) by only 2 per cent by 2025, the increased trade activity is expected to strengthen the city state’s role as a regional entrepot hub.

Forget the BS about “a blueprint for its future economy” (such a plan comes around once every decade) but we benefit from globalisation especially in trade and finance, both of which are slowing down.


Martin Wolf of the FT on the global trade slowdown

“Between 1960 and 2015, world trade increased at an average rate of 6.6 per cent, in real terms, while output grew at an average rate of 3.5 per cent. Between 2008 and 2015, however, average annual growth of world trade was 3.4 per cent in real terms, while world output grew at 2.4 per cent. Not only has the growth of trade slowed, but the gap between trade growth and that of output also fell sharply.”

——————————————

And as PM said, S’pore would find it very difficult to get as advantageous terms, in bi-lateral deals. We are too small.

So even if PM is gross over-paid compared to Ah Beng, Mat, Gregoh or Ah Neh, let’s not diss him for trying to secure the TPP and failing. Juz KPKB that he should take a 90% pay cut but won’t for failing a KPI that is really impt for S’pore.

 

 

When PAP boasts about FDI, remember this

In Economy on 12/01/2017 at 4:54 am

It’s the time of the year when the PAP administration will do via the EDB its regular Trump-like claim that it met the FDI target for the previous year, and talk about jobs and value-add to the economy.

So remember this extract from the Economist, the PAP’s real bible or sacred text*

But these days FDI does not always result in a new factory, research facility or office building, with new jobs to match it. Often it amounts to a transfer of intangible assets for the purpose of lowering corporate tax.

http://www.economist.com/news/special-report/21707836-foreign-direct-investment-mostly-welcome-large-short-term-flows-spell-trouble

*Singkies real dumb. No need pay millions for ministers. Juz subscribe to the Economist.

PAP really loves FTs over locals, really they do

In Economy on 04/01/2017 at 6:47 am

Actually to be fair to the PAPpies, Asian countries generally think FT tua kees. I kid you not.

Here’s why.

S’pore slipped five places to 15th in the latest world-talent ranking by Swiss business school IMD it was reported in November

IMD World Talent Ranking 2016

This despit first in “science in schools”, second in “university education” and “educational assessment – PISA” and third in “educational system” and “student mobility inbound”.

S’pore doesn;t grow its own timber

It fell in the overall ranking because it fell behind in investing in and developing homegrown talent, said the report. It emerged only 38th in the sub-ranking for this.

Arturo Bris, the director of the IMD World Competitiveness Centre, was reported by BT as saying: “There’s no doubt that many Asian economies, Singapore arguably chief among them, remain among the very best attractors of talent from abroad.

“There’s no doubt, too, that they’re able to improve their overall competitiveness as a result of the knowledge and experience this foreign talent brings – but this isn’t enough to compensate for the lack of development of local talent, particularly with regard to the paucity of public-sector investment in education.”

In an e-mail to The Business Times, he identified inadequate investment and development of its own talents as one of Singapore’s biggest weaknesses. He noted that Singapore’s spending on education declined from 3.08 per cent of its gross domestic product (GDP) last year to 2.99 per cent this year, which is lower than 55 of the economies in the IMD ranking.

Singapore also did badly in pupil-teacher ratio, ranking 41st for primary education and 35th for secondary education.

Well one Ngiam Tong Dow (Rememember him?) was very local that S’pore had to “grow its own timber” (his words) to move on up the development ladder. Too bad for S’pore the PAP administration isn’t listening.

But now that an ang moh is saying the sae thing, maybe the PAP adinistration will listen.

“How has the pie been shared during the PAP years”?

In Economy, Property on 09/12/2016 at 4:47 am

Answer: The pie has grown but PAPpies are gorging themselves while ordinary S’poreans get thinner slices of a bigger pie.

In a response to a very negative analysis (sometimes sounding like something a TRELand nut would write*) https://www.breakingviews.com/considered-view/singapore-stresses-under-a-wealth-of-worries/, a Brad Bowyer responded:

As we head in to strong economic headwinds it would be good to reflect on how the pie has been shared during the PAP years.

In the 1970s a 4 room flat in Marine Parade was approx $20k to buy at a time when the median monthly wage was $300 and the PM averaged $3500 a month

In the 1990s a Marine Parade 4 room flat had roughly doubled to $40k , the median monthly wage was growing fast and at around $1200 had quadrupled and the PM averaged $70,000 a month a 20 times increase.

Today that 4 room flat equivalent is over 800k, a more than 40 times increase in 45 years, the PM get $230,000 a month a 50 times increase over the same time but the median monthly wage hovering around $4000 is only a 13 times increase in 45 years.

The PM has done well relative to the HDB pricing as his income has outstripped all increases in costs and he is nett much better off. For the average Singaporean however even though their nominal monthly income has increased in real terms their purchasing power has decreased and they are now 3 times worse of than their 1970’s bretheren in terms of an HDB housing purchase.

Where before you could pay off an HDB in a few years, have a single working parent family with several children and a reasonable life now a 2 income family would struggle to pay off their flat in their lifetimes and having even 1 child is a major challenge.

Singapore may have had economic success in the past in terms of dollars of GDP and be a great place for the top few % who take care of themselves but it has all been done at the expense of everyone else.

This trend of all the benefit only going to the few will continue unless the government changes to one that wants the best for all its people and not one that is focused on wealth for itself and only doing the minimum possible to keep its captive labor force fed and working and not much more.

As times get tougher and even those nearer the top start feeling more pain I wonder will we finally reach a tipping point where true change can finally be considered and made a reality?


 

*Is she seriously trying to compare a US$55,182 GDP per capita country against a US$2765 per capita one? The Philippines is growing , but a weak economy (partly due to a weal global economy) does not mean S’pore has become the Sick Man of Asia? And how come Peenoys still trying to find work here?

Trump is bad news for S’porean mortgagors and property prices

In Economy, Financial competency, Property on 08/12/2016 at 4:36 am

As stated here, The Donald’s warning to US companies to manufacture in the US will only help accentuate two interconnected secular trends that are no good for S’pore’s growth prospects: slower global trade caused in part by onshoring (companies making more products locally).

Slow growth not good for property prices.

Next, Trump wants US cos to repatriate their money overseas (US$1trn is a conservative estimate) to make America Great Again. He’ll offer tax concessions in return.

According to a FT report, the repatriation of billions of dollars of overseas corporate deposits could rattle the global money market, where they constitute an important part of the offshore funding base: think Libor and Sibor.

This will affect S$ interest rates, causiing them to rise further then expected because of Fed actions.

Finally, with a fiscal stimulus in the US, Fed be more prepared to raise US rates. This will affect S$ interest rates, causiing them to rise.

So the vultures are circling and the Singkies with housing loans up to their eyeballs (if car loans and personal loans are included, up to their eyebrows) had better watch out. We’ll be joining Perth.

Will the 70% still vote PAP?

Economic restructuring: This time, it’s really different

In Economy on 07/12/2016 at 4:44 am

Speaking to a group of students at the Singapore Institute of Technology, Prime Minister Lee Hsien Loong said on 24 Oct that he is confident S’pore is taking the right growth strategies to move forward.

“We are feeling the pains of restructuring, but not yet seeing the dividends of our hard work. But we are pursuing all the right strategies, and I am confident that given time these strategies will work for us.”

————-

The Committee on the Future Economy (CFE) will soon issue a report addressing  five key themes: future growth industries and markets; corporate capabilities and innovation; jobs and skills; urban development and infrastructure; and connectivity.
Indeed, in updating the 2010 Economic Strategies Committee (ESC) report headed by Tharman), the 30-member CFE will have to take into account new global and domestic realities. Chaired by Finance Minister Heng Swee Keat, the panel has been tasked with developing economic strategies to keep Singapore competitive; it aims to complete its work by the end of 2016.

As part of this effort, a working group has been formed under CFE to study how to better help small- and medium-sized enterprises (SMEs) “restructure and tide through challenging times”.


I’m sorry but

“We are feeling the pains of restructuring, but not yet seeing the dividends of our hard work. But we are pursuing all the right strategies, and I am confident that given time these strategies will work for us.”

smacks of “Jam to-morrow and jam yesterday – but never jam to-day”*

Pardon my cynicism.

We’ve been here before. How many times has economy been “restructured” since the 80s? And how many times have SMEs been helped to  “restructure and tide through challenging times”?

——————————–

Another decade, another restructuring report?

In the 80s, one Lee Hsien Loong as trade and industry minister headed a committee to recommend changes in the economy. In the early noughties when DPM he headed another committee on the same issue.

 In 201o, one Tharman and his committee produced the 2010 Economic Strategies Committee (ESC). And now there’s the CFE. It’s a bit early, but then there wasn’t a report in the 90s: so maybe making up for lost time?
——————————-
But this time, it’s different, really

In the past the spin before the release of a report was always that it was going to be game-changer, this time to my surprise the constructive, nation-building BT** said don’t expect much from the report (Something that could and should have been said about the other reports too).

First there’s the question that looms large is whether or not the CFE report will contain anything “large and decisive enough to make an impact”, as an economist put it.

What don’t trust PAP isit? See Heng no ak? Why liddat?

And then

private-sector economists caution against hopes for a big bang outcome that will significantly address Singapore’s immediate challenges.

That’s largely because technological disruption and the rapidly-changing global environment make earlier strategies – such as the tactic of picking winning sectors to boost economic growth – tougher to execute.

Other domestic factors weigh heavily as well.

It quotes Bank of America Merrill Lynch (BAML) economist Chua Hak Bin on why restructuring will be difficult.

“It’s that much harder now to retool the economy. Singapore has already reached such an afluent stage, and there’s the sense that there are a lot more constraints now – such as ageing demographics and the inability to tap on talent as freely as before.”


Err what about secular global trends?

[T]wo interconnected secular trends that will affect S’pore’s growth prospects: slower global trade caused in part by onshoring (companies making more products locally).

————————————

He talks about

— most find it difficult to imagine how the panel can match past watershed moves – including the decision to create a private wealth management industry from scratch, or the introduction of casinos to boost tourism, or the slashing of income and corporate tax rates.

— the likelihood of a “tinkering at the margins” is high. “I don’t think the policy flexibility is as wide as it was previously, despite the 2015 election result (in favour of the ruling People’s Action Party). It’s no longer just about reviving growth – a lot of social and political constraints have now come into play.”

BT also surprised by quoting CIMB Private Banking economist Song Seng Wun who said the govt had to restructure itself: the government must also think about how it can restructure itself, so as to support the needs of the future economy.

“Rather than point the finger, the government should maybe take a look back at itself … For example, everything is so intertwined now, so rather than having the EDB (Economic Development Board), IE (International Enterprise Singapore), and Spring Singapore existing as separate entities with different functions, why not regroup them into one again? Singapore is a small economy; it can be done,”.

Ownself reform ownself?

But BT being BT has to have a constructive, nation-building bit to show it isn’t TOC:

Still, even as the country looks ahead to seek sustainable growth and opportunities for all, economists stressed the need for Singapore to hold fast to its existing strengths.

“Alongside these new and higher aspirations, we’ll need to be careful that our policies don’t threaten our existing strengths,” said Dr Chua, citing Singapore’s port and financial services sectors as strategic leads to retain.

And then as if on cue it quotes Mizuho economist Vishnu Varathan who thinks there is scope for Singapore to reinvent its hub status – especially with Asean’s ambition of creating a single market and production base (obstacles to that lofty goal notwithstanding) …”I think Singapore has actually underrated itself in areas of competency like regional law and intellectual property law. We already have a nice network of finance marrying up with legal and accounting standards that we can leverage on … That’s where Singapore will have to position itself – as a premier services producer that will enhance the rest of Asean as manufacturing base. In essence, we become the finance department, the legal department, and the front office of this entire (AEC) institution … Even if I can’t get my finger in that pie my neighbour is having, I want to be the one providing him with the silverware to eat off that pie.”

Evidently, the reporting and analysis of the constructive, nation-building media is not really supposed to be “based purely on facts”, as a CCP document said it should be. It’s all about praising the PAP administration after pointing out its flaws?

Maybe taz why the PAP has forgotten what is economic restructurings are supposed to do?

====================================

*“The rule is, jam to-morrow and jam yesterday – but never jam to-day.”

Jam tomorrow or jam to-morrow (older spelling) is an expression for a never-fulfilled promise. It originates from Lewis Carroll’s 1871 book Through the Looking Glass and What Alice Found There.[1] In the book the White Queen offers Alice “jam every other day” as an inducement to work for her:
“I’m sure I’ll take you with pleasure!” the Queen said. “Two pence a week, and jam every other day.”
Alice couldn’t help laughing, as she said, “I don’t want you to hire me – and I don’t care for jam.”
“It’s very good jam,” said the Queen.
“Well, I don’t want any to-day, at any rate.”
“You couldn’t have it if you did want it,” the Queen said. “The rule is, jam to-morrow and jam yesterday – but never jam to-day.”
“It must come sometimes to ‘jam to-day’,” Alice objected.
“No, it can’t,” said the Queen. “It’s jam every other day: to-day isn’t any other day, you know.”
“I don’t understand you,” said Alice. “It’s dreadfully confusing!”

Wikipedia

**http://www.businesstimes.com.sg/government-economy/singapores-future-economy/harder-now-to-retool-singapore-economy

 

Two global secular trends that will adversely affect us and PAP’s legitimacy

In Economy, Political governance, Property on 06/12/2016 at 4:36 am

The problem has been for the last eight years, there’s been no economic growth. What we saw travelling with the president-elect, at all these rallies, is that for the average American worker they’ve gone nowhere.

The Donald’s nominee tor Treasury Sec Steven Mnuchin

Well that nightmare for American workers, the Obama and Hilary mafia, their liberal supporters and the US MSM will be coming here soon for S’poreans and the PAP.

S’poreans know that the economy is slowing but most expect a rebound to normal times: hence property prices are holding up pretty well.

But there are two interconnected secular trends that will affect S’pore’s growth prospects: slower global trade caused in part by onshoring (companies making more products locally).

Until the 2008 global financial crisis, trade growth outpaced economic expansion in most years. But since 2012, the two growth rates have been roughly similar. The World Trade Organization forecast in September that global trade volumes in 2016 will increase by 1.7% on the year, compared with projected global economic growth of 2.2%.

Improved manufacturing technologies and rising income levels in emerging economies have reinforced this trend. Companies have become better able and more inclined to make products locally. Narrowing wage gaps between developing and industrialized countries have made the conventional system of producing goods in countries with cheap labor and exporting them to richer nations less attractive. Economies have also become more dependent on online services, for which shipping capacity is irrelevant.

 http://asia.nikkei.com/magazine/20161124-S.O.S/On-the-Cover/Shipping-lines-plunge-into-a-war-of-attrition

And The Donald’s warning to US companies to manufacture in the US will only help these trends.

The PAP has what is called “output legitimacy”. S’pore is a de-facto state in large part because of the PAP’s reputation (albeit waning what with cock-ups in public transport, public housing and PR) for competence, particularly in its handling of the economy and its ability to raise living standards.

Coming back to Steven Mnuchin

Wage increases and good jobs. Taz what the PAP needs to do to keep its share of the popular vote closer to 70% than to 60%. The two interconnected secular trends that will affect S’pore’s growth prospects (slower global trade caused in part by onshoring) will not help.

Temasek and GIC had better step up their game so that the PAP administration can make up (via welfare) for the fall in living standards if these trends persist (or worse strengthen): loss of jobs, low or non-existent wage increases (if not pay cuts) and the fall in property values.

Hopefully, the Oppo and others opposed to the PAP’s hegemony speak up to point that it’s S’poreans money that is being spent on welfare, so no need to be grateful to the PAP.

We paid for these PAP goodies in advance via forced savings: CPF contributions and Budget surpluses.

PAP never sleeps, Fintech shows why

In Economy on 11/11/2016 at 1:52 pm

Recently I reported that the authorities seem to understand what fintech is about and I quoted the FT in support of my point.

Here’s another quote from the same FT article which shows why the PAP is so formidable an opponent on the political arena:

In Singapore, Mr Galligan’s colleague, Christopher Wood, refers to “the threat of disruption from government-prompted efforts to promote a new digital economy — be it in fintech, ecommerce, data technologies, transport, cleantech or the so-called sharing economy in general”. Still, Singapore appears to realise that a government that defines its mission as protecting the interests of the establishment will merely accelerate the decline of that establishment. So far, its stance is paying off. “Supportive government policies and the strongest ecosystem in Asia have already spawned the early stages of a new economy,” Mr Galligan says.

Anti-PAPpists are wasting their time?

 

The real reason why productivity is so bad

In Economy on 06/11/2016 at 4:49 am

From young, S’poreans work hard but stupid, not smart.

Longest homework hours

1. Shanghai
2. Russia
3. Singapore
4. Kazakhstan
5. Italy
6. Ireland
7. Romania
8. Estonia
9. Lithuania
10. Poland
11. Spain

In Finland and South Korea, two of the countries with the best student performances according to PISA – the average time spent on homework every week was less than three hours.

http://www.bbc.com/news/world-europe-37873805

(More on the Finnish way: http://www.bbc.com/news/education-37716005)

All the above countries in above table have more than six hours of homework a week. So no correlation or causation between hrs spent on homework and PISA result.

I repeat, from young, S’poreans work hard but stupid, not smart. Who to blame? Blame the PAP administration who is responsible for the education system.

Lim Swee Say (http://www.theonlinecitizen.com/2016/11/02/lim-swee-say-improve-productivity-or-singapores-competitive-primacy-will-be-risked/) should have a word with the relevant minister of education.

Update at 7.45 pm: More evidence we work stupid from young

The OECD’s top 10 highest performing graduates

  1. Japan
  2. Finland
  3. Netherlands
  4. Sweden
  5. Australia
  6. Norway
  7. Belgium
  8. New Zealand
  9. England
  10. United States

http://www.bbc.com/news/business-37649892

We not on it

As BBC says

It casts a light too on how an efficient school system might not translate into success in higher education.

South Korea and Singapore, both high achievers at school level, are below average in the graduate rankings.

Thanks to Chris K for the info in update.

PM contradicts himself: Strategies were wrong? Tailored messages?

In Economy on 02/11/2016 at 6:08 am

Is PM growing old, forgetting what he said a week ago? Or is he really saying that the old policies have failed? Or BSing to different audiences, telling them what he thinks they want to hear?

Despite slowing economic growth, Singapore is “not in a crisis”, said Prime Minister Lee Hsien Loong on Tuesday (Nov 1), calling instead for a longer-term strategy to continue growing and creating good jobs.

Mr Lee outlined the strategy in his speech at a dialogue with labour movement leaders, noting that Singapore’s growth is still positive despite difficult external conditions like slowing trade and sinking oil prices.

(CNA last night)

Speaking to a group of students at the Singapore Institute of Technology, Prime Minister Lee Hsien Loong said on 24 Oct that he is confident the country is taking the right growth strategies to move forward.

“We are feeling the pains of restructuring, but not yet seeing the dividends of our hard work. But we are pursuing all the right strategies, and I am confident that given time these strategies will work for us.”

(CNA a week ago)

I’m sure regular readers can spot the contradiction, but for the cybernuts who will read this piece if TRE uses it, here’s the contradiction.

A week ago he said that he is confident the country is taking the right growth strategies to move forward, but last night when talking to his NTUC running dogs he talked about a longer-term strategy to continue growing and creating good jobs.

The 24 Oct remarks stated that the PAP administration had the right strategies in place, but the latest by talking about a new strategy implies that the right strategies were not in place.

Cybernuts beng pek mah?

The constructive, nation building media will not point out the contradictions. And neither will the mainstream anti-PAP alternative media because they cut and paste unintelligently from ST. More on the latter, later in the week.

 

Property is not a cheong says Nomura

In Economy, Property on 01/11/2016 at 2:05 pm

Don’t believe the hype about a Singapore property pick-up, Nomura said, as it addressed some “half-truths” …

Not touched bottom yet leh despite

Singapore’s private residential property prices dropped 1.5 percent on-quarter in the third quarter, according to government data, marking 12 straight quarters of declines and the largest quarterly drop since 2009, during the global financial crisis.

[T]he first “half-truth” about the market’s next step was that the city-state’s private home sales had seen strong gains.

Second: signs of a demand pickup for prime luxury properties were overstated.

The third half-truth was that unsold inventory was low, especially in the suburbs.

Another myth was that the vacancy rate for private residential property had finally reached the peak.

[I]t was a half-truth to expect that the prime luxury segment had reached a pricing bottom. It noted that unsold inventory in the core central region was equivalent to more than 100 months of demand, with 76 percent more completions slated for the coming 18 months than in the previous 18 months.

http://www.cnbc.com/2016/10/23/singapore-property-market-shows-superficial-signs-of-recovery-but-problems-run-deeper.html

And don’t forget that the economy’s really weak, even if it’s not yet in a recession.

Those who think property has bottomed out should consult M Ravi’s doctor.

Update at 4.30pm: CNA reports

Following surprisingly downbeat growth figures in the third quarter, a number of economists have cut back their expectations for Singapore’s economy, with DBS being the latest to do so.

In a report released on Tuesday (Nov 1), Mr Irvin Seah, a senior economist at DBS Bank, wrote that he now expects the city-state to log economic growth of 1.2 per cent this year, down from a previous forecast of 1.5 per cent.

For 2017, Singapore’s gross domestic product (GDP) will likely expand 1.3 per cent, given that the sequential decline in the latest GDP figures has lowered the growth trajectory, wrote Mr Seah. This is another marked downgrade from the economist’s long-standing forecast of 1.9 per cent.

After the GDP report, OCBC said a downgrade in its full-year growth forecast was “inevitable” and cut its full-year growth forecast for 2016 to 1.3 per cent, from 1.9 per cent. UOB similarly slashed its estimates to 1.4 per cent, from 2.2 per cent.

Economists at Citi were among the most pessimistic. Even after taking into account the likelihood of a rebound in fourth quarter GDP growth on a seasonally adjusted annualised basis to 2.6 per cent, Singapore’s economy will likely eke out a meagre 1.0 per cent GDP growth for the whole of this year, a step down from previous estimates of 1.5 per cent.

Despite the downgrades, these estimates still remain within the Government’s forecast range of 1 to 2 per cent for 2016.

Tharman waiting for Christmas isit?

In Economy on 25/10/2016 at 4:10 pm

Sure sounds like a recession to me:

1 The head of the Association of Small and Medium Enterprises, which represents 12,000 companies, says firms are not expecting a swift recovery like that which followed the financial crisis.

“This is not ’08-’09, it’s not a V-shape. It’s a sustained, deep-end plateau,” said president Kurt Wee. “Industrial support industries or building contractors and oil and gas are very badly affected and that has a broad based effect on everything else on the ground.”

2 “When you talk to building infrastructure groups, it sounds depressing,” said Kong, who faces a 10-15 percent sales drop this year, the firm’s first in its five-year history.

“Everyone seems to be asking ‘what’s going to happen to me in three months?’ Companies are not getting the orders, there are fixed overheads, so the first thing they do is slash marketing budgets and the next thing is they cut the number of people.”

http://mobile.reuters.com/article/idUSL4N1CT0KE?feedType=RSS&feedName=bondsNews

Technically, it may only be a slow down but as a PAP Old Guard minister (Ong Pang Boon when describing how to identify communists) once said

If it looks like a duck, and quacks like a duck, then it is a duck

So where are the measures PAP to counter a recession? Waiting for Chrismas isit?

And for those ang moh tua kees and TRE nuts and Indian supremacists from “The Idiots — S’pore” (TISG is what it calls itself) who think the sun shines out of Tharman’s ass, the light they see is the PAP juggernaut out to crush fools like them.

Still in denial that recession can be avoided?

In Economy on 17/10/2016 at 3:57 pm

The authorities are waiting for a recession to happen before they act to mitigate its effects, say the govt and its running dogs allies in the media and academia and private sector.

Chris K, a cybernut hero (though he’s no nut) has been KPKBing (on FB) that in the West, the authorities start their mitigation measures before a recession hits. The only defence that the PA govt and central bank can make is that a recession may not happen.

Well given the following signs, does the PAP govt and its running dogs seriously expect that we won’t have a recession? So why not start the mitigating measures?

1 Exports in Singapore fell a disappointing 4.8 per cent in September, after flat growth the previous month, according to latest figures released by International Enterprise (IE) Singapore on Monday (Oct 17).

Non-oil domestic exports (NODX) were hit by a decline in both electronic and non-electronic exports.

Electronic shipments fell 6.6 per cent, following a 6 per cent decline the previous month. The contraction was largely due to ICs (-6.3 per cent), disk drives (-55 per cent) and parts of PCs (-22.4 per cent), IE Singapore said.

Non-electronic exports contracted 4 per cent, in contrast to a 2.7 per cent expansion the previous month. The decline was led by structures of ships and boats (-99.9 per cent), civil engineering equipment parts (-47.6 per cent) and petrochemicals (-6.5 per cent).

Overall, shipments to seven of Singapore’s top 10 markets fell, with Malaysia, Indonesia and the US leading the decline. Bucking the trend were exports to Hong Kong, the European Union and South Korea, which rose between 9.9 per cent and 23.8 per cent.

http://www.channelnewsasia.com/news/singapore/singapore-exports-down-4-8-in-september-after-flat-growth-in/3211438.html

2 The Singapore dollar fell to a seven-month low on Friday (Oct 14), as a disappointing growth report card and a dovish policy statement from the central bank fuelled concerns over the outlook of the economy.Gross domestic product (GDP) for the third quarter grew by a slower-than-expected 0.6 percent on-year, compared with forecasts of 1.7 per cent from a Reuters poll. Economic growth also contracted 4.1 per cent on a quarter-on-quarter basis, well off expectations for 0.3 per cent growth.

http://www.channelnewsasia.com/news/business/singapore/singapore-dollar-hits-7-month-low-on-lacklustre-growth-outlook/3205948.html

————————

But fortunately Tharman, Hng Kiang and a Lee will spare us comic routines on inflation because

global food markets were likely to remain “generally well balanced” in the year ahead, as prices for most internationally traded agricultural commodities were “relatively low and stable”.

http://www.bbc.com/news/business-37573785

——————————–

3 Retail sales in Singapore fell 1.1 per cent in August compared with the previous year, with all sectors except motor vehicles in the red, according to figures released by the Department of Statistics (SingStat) on Friday (Oct 14).

http://www.channelnewsasia.com/news/singapore/retail-sales-dip-1-1-in-august-nearly-all-sectors-in-the-red/3205794.html

And this is really terrible news

4 While manufacturers have been under siege for some time on the back of flagging global trade, economists are also becoming concerned about the service sector. “The drag from (weak external demand) has now permeated into the core of the Singapore economy,” said Ms Ling.

The service sector has now logged three consecutive quarters of quarter-on-quarter contraction. The last time this happened was during the global financial crisis, said ANZ economist Ng Weiwen.

“(This reinforces) our view that tough times are here to stay for Singapore, with growth running the risk of remaining stuck in low gear,” he added.

A prolonged service sector slowdown will lead to more layoffs going into next year, given that the sector employs 72 per cent of the workforce, noted UOB economist Francis Tan. “We should be prepared for worse to come,” he added.

The only sector that logged an uptick in output in the third quarter was construction, which grew 2.5 per cent over last year.

Government forecasters expect growth to come in at the lower end of 1 per cent to 2 per cent this year.

ST

3 good signs economy is getting sicker

In Economy, Property on 04/10/2016 at 6:21 pm

Companies (facing cashflow problems?) are delaying payments. This in turn causes cashflow problems for others.

Payment performance of local firms “deteriorated strongly” year-on-year in the third quarter of 2016, said the Singapore Commercial Credit Bureau (SCCB) in data released on Monday (Oct 3).

Prompt payments declined to about 42.18 per cent of total payment transactions in the third quarter, compared to a year ago when 51.05 per cent paid their bills on time. Slow payments also rose, accounting for more than two-fifths of payment transactions in the same period.

http://www.channelnewsasia.com/news/singapore/sharp-fall-in-prompt-payment-by-local-companies-in-q3-2016/3176496.html

Residential property prices remain weakish

Singapore home prices dropped by the most in more than seven years as developers offered discounts amid signals from the government that it won’t roll back property curbs initiated in 2009.

  • Home prices fall for 12th quarter as curbs stay, dropping 1.5%
  • Residential values are down 11% from peak in September 2013

http://www.bloomberg.com/news/articles/2016-10-03/singapore-home-prices-have-biggest-drop-in-more-than-seven-years

Ho ho Ho if u bought a condo in the last few years,

But real wages keep rising

Salaries in Singapore are set to rise 4 per cent next year, compared to an average of 5.9 per cent across the Asia-Pacific region, according to a survey released on Tuesday (Oct 4).

After taking into account Singapore’s inflation forecast of 0.8 per cent, salaries in the city-state are expected to rise 3.2 per cent, the survey by professional services company Willis Towers Watson found.

http://www.channelnewsasia.com/news/singapore/salaries-in-singapore-likely-to-rise-4-next-year-survey/3178352.html

 

 

 

The truth about the loss of IT jobs

In Banks, Economy on 09/09/2016 at 6:13 am
Here’s one TRE poster that I hope doesn’t join the migration to The Idiots  — Singapore or TISG as it prefers to be known. He wrote:
Good News:

This is good news, the Indians will return to India. IT department here all belongs to Indians already, no longer a Singaporean job. We got sold out long ago.

Rating: +18 (from 20 votes)
He’s right up to a point. The IT industry here belongs to FTs from India and locals are discriminated against in the sector according to people like Gilbert Goh and TRE posters.

He was responding to a Bloomberg report carried by TRE that said Barclays intends to cut approximately 100 IT jobs here

The report said that the employees are part of the Information Technology Operations team.The IT function will be moved to India to save on costs.

Barclays has since confirmed in a statement that it is in the process of cutting jobs here saying “identified a number of additional roles that carry out global activity in Singapore which can be relocated”

As I’ve reported before, in the early noughties, the PAP administration allowed the likes of Merrill Lynch, Citi and Beutsche to import cattle truck-loads of Indian IT FTs, in return for the banks promising to set up big chunks their global back office IT ops here.

As I reported beforem one shop in Suntec City had to fold after Citi retrenched its Indian ITs during the financial crisis. The owner’s biz model was premised on Indian FT techies.

Carrefour also closed its section selling freshly made Indian food that it opened a year earlier.

These two businesses show the kind of spin-offs of having FTs here. And what happens when they leave.

In general, the benefit of FTs coming in is the money they spend on entertainment, rent etc. When they leave, this spending is lost.

S’pore: “hewers of wood and drawers of water”

In Banks, Economy on 10/08/2016 at 7:50 am

FT reports that Goldman has 62 per cent of its “strategic location” headcount in Bangalore, 22 per cent in Salt Lake City, 8 per cent in Dallas/Irving, 7 per cent in Singapore and 1 per cent in Warsaw.

We are “hewers of wood and drawers of water” for Goldie. PAP administration will say that we must thank the FTs for this. Given our world beating rankings in academic excellence, who is responsible for ensuring that we (because of the FTs) can only be “hewers of wood and drawers of water”?

The PAP administration is a reasonable answer given its claim that the rankings shows the PAP administration’s long-term planning. To be fair, in the early noughties, the  PAP administration sought to make S’pore a global hub for banks IT operations. FT Indians were let in by the cattle-truck load because Merrill Lynch, Citi and Deutsche agreed to use S’pore as  global hub. I know someone in Suntec City whose biz model depended on the FT Indians Citi employed. When Citi retrenched, he closed his biz. As did the spot in Carrefour that sold great Indian cooked food.

Blame low productivity on NS training?

In Economy on 03/08/2016 at 6:29 am

MORE than half of Singapore companies have experienced staff who are physically present but mentally absent*. BT

That’s a lot.

We learnt this camouflage technique during NS because we had no choice but to do what we were told to do. We became experts at “switching-off”; something even SAF regulars do. Remember the radar operators and the commander of a naval vessel that got rammed by an oil tanker? The courts found they were “switched-off”.

We carry this ability to “switch-off” over to civilian life even if as an ang moh expert from recruitment firm Robert Half rightly says,.employees also need to take responsibility for their satisfaction at work. “If an employee finds they have accepted inner resignation, then they should identify the cause of their dissatisfaction and raise the matter with their employer during their performance review. If the issue cannot be resolved then they are better off seeking a new job than lingering in a role they are unhappy with.

So could one reason for S’pore’s really bad productivity record be the NS training we receive to be physically present but mentally absent? We switch-off too much?

And where we did learn other harmful productivity habits like skiving and coffee breaks? NS.

But let’s not put all the blame on the PAP administration for low productivity. Another probable good reason for lousy productivity is bad management.

Economists reckon that about half the productivity gap between Britain and America is down to bad management. A paper by Nick Bloom of Stanford University and others shows that the David Brents can learn from the Jack Welches: when they take over British firms, American multinationals bring better technology and practices, lifting productivity by up to 10%.

(Economist)

Bad management is partly responsible for the “switching-off” problem :“Inner resignation is often overlooked by employers, especially in workplaces where employees are left alone to get on with their jobs,” explained senior managing director David Jones. “Employers need to be more vigilant in looking for signs that an employee is mentally disengaged, such as a lack of motivation for bonuses or advancement or a drop in productivity.”

Whatever it is, S’poreans are never at fault.

 ———————————-

*This …”inner resignation”, has been observed in 57 per cent of Singapore businesses, according to recruitment firm Robert Half.

It tends be more common in large- and medium-sized companies, with 68 per cent of companies seeing it, compared to 32 per cent of small organisations. The findings came from its survey of 100 chief financial officers and finance directors in Singapore, as part of an international workplace study.

“Inner resignation is often overlooked by employers, especially in workplaces where employees are left alone to get on with their jobs,” explained senior managing director David Jones. “Employers need to be more vigilant in looking for signs that an employee is mentally disengaged, such as a lack of motivation for bonuses or advancement or a drop in productivity.”

Tharman the Joker/ Disconnect/ Not Uniquely S’porean

In Economy on 08/07/2016 at 5:36 am

Must be joking

Singapore must respond quickly and take advantage of technologies so as to create better jobs for Singaporeans, said Deputy Prime Minister Tharman Shanmugaratnam on Monday (May 30)*.

Looks like he’s trying to tell jokes again.

So long as there is a flood of cheap FT labour for PMET tasks, why should employers bother? It’s only when labour is expensive that capital-intensive technology and processes are used: A -levels econs.

Worse, FTs can get jobs as drivers and barbers. So what’s this talk of slowing the flood of FTs?

———————–

Tharman is the Joker

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

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

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


Disconnect on FT numbers

Like other S’poreans, I feel that the govt’s claims of ever decreasing FT inflows doesn’t chime with reality: there is a disconnect.

I came across this report from CNA that may help to partially bridge the gap:

Another factor that may affect older workers is that their compensation packages may be higher than for younger workers with less experience, which may play a role when companies are trying to cut costs,” he added.

In particular, older Professionals, Managers, Executives, and Technicians (PMETs) have borne the brunt in terms of job losses and re-entry into employment as businesses restructure amid a slowing economy.

“It is a reflection of the economic structuring,” Credit Suisse economist Michael Wan told Channel NewsAsia. “As companies continue to cut headcount amid the economic headwinds, older PMETs continue to be retrenched.”

About 46 per cent of residents made redundant in the fourth quarter of 2015 found jobs by March, down from 50 per cent in the previous quarter – marking the lowest since June 2009.

“Amid softer economic conditions and as the economy restructures, redundancies are expected to rise in sectors affected by weak external demand,” MOM said, adding that it will continue to work closely with tripartite partners to help those laid off find jobs.

http://www.channelnewsasia.com/news/singapore/more-older-workers/2867232.html

FT PMET numbers may be down, but when FT PMETs come in, they replace older S’porean PMETs.

Not Uniquely S’porean

But falling productivity is an uniquely S’porean issue . It’s a global problem. Even if there are no FTs, there’d still be a productivity problem.

 

*At the annual Pre-University Seminar, DPM Tharman said in most advanced countries, there is a “real fear” that in 10 to 20 years from now, jobs losses will exceed the number of jobs created, resulting in higher unemployment.

“We can avoid that. First, because we have an advantage of being a small society but with a global market. And secondly, we can avoid that by responding in advance to what is coming – respond quickly to technologies, take advantage of technologies and make sure that we create better jobs for everyone,” he said. 

He added that there is a need to “use technology rather than be used by technology” – and this means using technology “to enhance human abilities in every job and to create satisfying jobs.

And limiting civil servants access to the internet is using technology

 

And govt wants to encourage fintech?/ PAP is never wrong

In Banks, Economy, Internet, Political governance, Public Administration on 22/06/2016 at 6:04 am

Is Tharman trying to tell jokes again? (Examples in the past, another recent one?). He’s the leading advocate of fintech here.

But demand for digital services leaves banks and other financial institutions more open to more risk. The majority of top bankers said they were open to more risks than they could manage as a result of digital developments, according to a global survey of bankers by the consultancy Accenture.

Yet the PAP administration has indicated by its plan to restrict direct access to the internet for civil servants that it is trying to cut cybersecurity risks by cutting internet connections.

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Delinking cicil servants from the internet

‘The Govt’s move to delink computers used by civil servants from direct access to the Internet is “absolutely necessary” to keep govt data and public services secure,’ PM. He cited the possibility of personal data like NRIC numbers, addresses and income tax returns being hacked and put up for sale in the internet.

When this policy takes effect in May next year, civil servants can only access the Internet through dedicated computers or through their own computers. It seems that there have been very determined attacks on the Govt’s IT systems and the threats are getting more severe and sophisticated. Just relying on the system’s defensive measures is looking like a losing proposition? It is best to cut the connections to the minimum?

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So how does the call for more fintech dovetails with the plan to deny most civil servants direct access to the internet?

 

Fintech is all about increasing connections, the civil service delinking initiative is all about cutting connections.

Does the PAP administration think that the banks and other financial institutions can safeguard data better than it can? Or that the data financial institutions hold  is not so impotant?

Or maybe is the delinking policy, is as suggested by Chris K, aimed at avoiding a PR disaster:” PAP must always look good even when PAP goofs”? A variant of “Napoleon is always right”*?

Or is Tharman just joking about the importance of fintech to S’pore?


*Another one of Boxer’s mottoes is “I will work harder”. Sounds so S’porean and something that the PAP encourages. But then why is productivity is so worryingly low. Too many of the PAP’s favoured caste, FTs, isit?

How come HK got minimum wages but more competitive?

In Economy, Hong Kong on 12/06/2016 at 1:23 pm

Don’t PAP ministers insist that minimum wages will destroy the S’pore economy?

These tots crossed my mind when I read the headline:

Singapore Loses to Hong Kong in Race for Most Competitive

http://www.bloomberg.com/news/articles/2016-06-09/singapore-loses-to-hong-kong-in-race-for-most-competitive

But after reading the report, more nuanced tots came to mind.

One tot: S’poreans want to restrict the flow of FTs but this it seems makes S’pore less competitive.

Singapore’s stricter rules on hiring foreign labor, which adds to business costs.

“The key difference between the two territories is Singapore’s restrictions on importing foreign labor, and their policy of boosting labor costs to discourage companies from being dependent on foreign labor,” said Brian Tan, an economist at Nomura in Singapore. “When you push labor costs, that’s going to have an effect on competitiveness.”

… Hong Kong’s labor market as more competitive than in Singapore, with the China-controlled territory improving from 2015 on scores such as working hours, skill levels, unemployment legislation and immigration levels.

Hong Kong also leads Singapore on business efficiency, including productivity and here PAP administration can’t blame the plebs management practices, according to IMD.

Next, there seems to be a disconnect between what the local PMETs (and even this retiree) feel and the “experts” say: FT policy to us is not restrictive what with FTs being allowed to become drivers and barbers.

Another tot:“It’s not just the economy, stupid,” says a poster by the Brexit campaign in the UK.  And one of its charismatic leaders surely is right when he says, “We need to value people’s quality of life and standards of living and not just national GDP figures.” (But Brexit would say these rhings. The conventional economic wisdom is that the UK is doomed economically if it leaves the EU.)

Coming back to HK’s liberal FT policies: HK is Goh Meng Seng’s paradise on earth. Funny he doesn’t laud HK’s liberal immigration policies. He’s got his family there but thinks he is entitled to lecture us on the failings of the PAP. Surely the PAP in doing the popular thing (restricting FTs) is doing the wrong thing, and HK , GMS’s paradise on earth, the right thing?

Juz remember for S’poreans now:“It’s not just the economy, stupid. and”“We need to value people’s quality of life and standards of living and not just national GDP figures.”

 

Not uniquely S’porean/ Don’t shout at S’poreans

In Economy on 07/06/2016 at 4:44 pm

Wages, that don’t compensate for rising property prices  and higher cost of living i are not unique to S’pore.

Taiwan, a place where many paper warriors approve of (rightly in my view), because it has successfully made the transition to democracy, also faces a situation where graduate starting salaries, and wages generally, having stagnated for years despite sharp rises in housing and other living costs.

Likewise South Korea.

As the Economist (from a developed world perspective) put it: While the long period of sluggish growth and low rates has been good for investors, it hasn’t been that great for voters; real wages have struggled to rise.

So those trying to stir the plebs against the PAP should realise that the plebs are not stupid. Yes the PAP administration is repressing wages through the FT policy and NTUC, while keep the price of public housing higher than it should be, but

Real wages in Singapore rose 5.4 per cent last year amid negative inflation, the Ministry of Manpower (MOM) said in its annual report on wage practices on Thursday (Jun 2).

In the private sector, nominal wages grew 4 per cent in 2015, down from the 4.9 per cent increase the year before. When employer Central Provident Fund (CPF) contributions are factored in, growth in total wages remained stable at 4.9 per cent, due to the increase in employer CPF contributions last year.

http://www.channelnewsasia.com/news/singapore/real-wages-in-singapore/2838448.html

No point shouting at swing voters, try to convince them that the PAP’s trade-offs are the wrong ones.  As much as we might disagree with the PAP’s policies, the voters don’t. Ok only 70% agree with the PAP’s position. But that doesn’t mean the 30% must prevail, does it?

As the Guardian talking about Jeremy Corbyn (UK’s very own Mad Dog Chee) and Donald Trump said, both are popular phenomena poorly understood – and in both cases, just shouting at people that they’re wrong has proved spectacularly useless. Asking them why they think what they think may not change anything much. But the conversation is sure as hell overdue.

The govt had its NatCon, and look what happened.  Dr Chee wayanged his way around S’pore after GE 2015 but otherwise the oppo parties have as usual avoided talking to swing voters: in between GEs or by-elections. They leave it to the cybernuts to shout at S’poreans.


*I admit I was one of those who mocked NatCon. But it worked for the PAP didn’t it?

Why PM won’t heed Jap PM’s tots

In Economy, Japan, Property on 29/05/2016 at 1:05 pm

Foreword: Chris K (A S’porean FT living in Japan) commented on Facebook on this piece. I’ve worked his comments into the original piece and added some background info. Hence this retitled piece which is an expanded and reworked version of the earlier piece.

…  ….

Prime Minister Abe … in his latest op-ed in the WSJ says that if developed countries are facing a future of low or no growth, and shrinking populations, then perhaps governments should focus on improving living standards and not simply chase high economic growth rates.

Well as S’pore is now facing a future of low growth and a shrinking population, unless FTs are let in by the cattle-truck load, the PAP administration should focus on improving living standards and not simply chase high economic growth rates?

After all Goh Chok Tong said we should be like the Japanese. And PM and ministers cite Japanese practices: here, here and here.

But then the PAP can’t let in its beloved FTs to eat S’porans’ breakfast, lunch and dinner and all snacks in between. FTs are needed to spur S’poreans to be as cheap to hire as FTs are, despite the higher cost of housing etc here. Hard Truths are more important than the well-being of S’poreans?

Here’s what Chris K says about life in a stagnant, past its prime Japan

Lived in Japan 1990-1995 and then again from 2006, the difference between the 2 periods in my view is that it is more livable today than before despite all the “bad news” of stagnation and deflation. Working hours have steadily declined despite shortage of labour. Total Fertility Rate has gone up.

(Btw, a few yrs ago I reported that HSBC showed that Japan was doing pretty well)

Life can be good in a country with a shrinking population and deflation. The PAP juz doesn’t like stagnation, deflation and a shrinking population.

Chris K then goes on to criticise the PAP’s administration policies here. Pay attention to (and think hard about) the section beginning the entire pension and healthcare proposition have under LHL been tied to ever-increasing real estate prices …

But I completely agree with Cynical Investor, the PM won’t be heeding Abe’s advice. Why? Just 2 simple things.

First the government salaries are marked to GDP growth despite the factthat in today’s digital economy GDP is a terrible measure of progress since many improvements and convenience in life comes free (think on-line shopping vs going to shops) or below cost, thus understating the impact on GDP growth. So nuts and bolts, brick and mortar still rule their head even if they have to accept the digital challenge.


Harry and Dr Goh has things easy when  running S’pore. They grew the economy and jobs and wage rises followed.

Nowadays GDP is decoupled from jobs and wages. I wish someone would do a similar chart for S’pore.

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Second, far more importantly, the entire pension and healthcare proposition have under LHL been tied to ever-increasing real estate prices (think downgrades and LBS to finance you and your parent’s healthcare and pensions). That means forget about quality of GDP growth, quantity is the game where large increases in population are required not just for those nuts and bolts, brick and mortar but with the benefit of keeping real estate prices elevated.

If you think we have a real estate bubble that may or may not be deflating, then equally we then must have a bubble in the government’s projections for our retirement and healthcare. Both are inexorably linked, one cannot exist without the other because of the use of CPF for housing. So 6.9m is a done deal, 10m a very likely eventual outcome. More foreign labour supply to hold down wages, a more crowded country, more stresses and greater wealth disparity. At some point this will stop and then this country will have an almighty day of reckoning.