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

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

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

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

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

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

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

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

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

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

Merry Christmas.

BT inflation headline talks sucks, really sucks

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

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

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

Happily for my inner Grinch , I read this

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

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

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

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

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

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

Read more

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

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

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

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

 

TRE readers are illiterate in economics and finance

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

Or at least many are. Let me explain.

TRE posted this piece of mine on Reits.

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

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

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

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

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

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

Are they that deft?

—-

*Armchair Anarchist:

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

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

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

Rating: +25 (from 25 votes)

Armchair Anarchist:

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

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

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

Rating: +20 (from 20 votes)

Why a 2015 GE is now more probable

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

—-

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

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

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

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

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

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

***

Men in White wearing blue

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

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

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

And it’sw a global first

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

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

Our first multi-story data center

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

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

 

An outdated economic Hard Truth

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

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

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

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

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

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

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

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

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

On the latter, privatise Temasek?

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

Cost of chicken rice, FTs and the BBC

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

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

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

Chicken — 84%

Rice — 90%

Vegetable oil — 100%

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

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

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

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

2014: Last chance for govt to increase prices?

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

(Asean round-up)

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

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

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

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

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

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

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

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

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

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

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

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

In addition to ongoing political unrest in Thailand:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Ageing population Hard Truth is cock and bull?

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

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

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

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

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

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

Healthier and fitter

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

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

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

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

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

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

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

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

Important implications

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

The measure suggests similar falls in many other countries.

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

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

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

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

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

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

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

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

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

S’pore at tech cutting edge

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

To stay competitive, a country needs to constantly innovate.

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

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

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

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

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

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

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

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

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

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

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

— Dan Tan’s case

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

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

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

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

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

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

Tharman trying to tell jokes again?

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

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

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

Historical wage growth 1.3%?

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

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

1% wage growth this year?

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

Gd wage growth? What gd wage growth?

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

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

And this

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

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

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

Inclusive of employer CPF contribution?

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

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

Different from other countries?

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

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

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

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

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

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

Double confirm: FTs displace S’poreans

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

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

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

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

Weakness in PMET job market for locals seen to be dissipating

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

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

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

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

Meanwhile Today reported:

Resident wages up as efforts to stem foreign labour kick in

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

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

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

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

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

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

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

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

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

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

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

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

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

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

On this tot, have a gd weekend.

Proof that FTs displace S’poreans?

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

And ST reported the proof.

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

ITE graduates in demand as SMEs face manpower crunch

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

ST went on

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

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

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

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

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

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

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

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

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

Related posts:

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

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

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

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

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

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

FT policy: Dialogue? What dialogue?

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

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

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

Were things that simple.

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

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

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

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

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

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

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

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

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

BBC says cleaners can afford maids

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

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

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

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

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

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

Not bull: FT policy is bad for productivity and innovation

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

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

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

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

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

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

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

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

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

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

Why economic forecasters underperform fortune tellers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Blame Apple, Google for declining exports, growth

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Global PC shipments drop to a five-year low

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

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

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

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

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

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

Decline

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

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

Not gd news for Msia either.

In other Asean-round-up news,

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

And maybe we can learn something from Indonesia‘s

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

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

Waz the “right” kind of gotong royong?

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

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

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

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

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

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

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

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

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

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

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

— TOC’s and TRE’s continued existence;

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

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

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

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

— Function 8;

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

— pastor Khong’s gang funding a legal suit;

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

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

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

— Maruah**;

— the volunteers who help FT manual workers;

— the LGBT community; and

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

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

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

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

Analysts worried about higher inflation, predict stronger S$

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

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

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

From BT 15th October 2013

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

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

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

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

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

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

Why more FT Indians here than local Indians?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Financial centres’ curses

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

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

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

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

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

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

Why?

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

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

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

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

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

Another US innovation to breed entrepreneurs

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

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

PM’s statement that’s so very wrong

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

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

Three other things wrong about his comment:

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

— Productivity is more impt than working hard

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

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

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

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

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

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

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

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

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

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

Why rising inequality shows that things are working

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

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

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

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

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

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

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

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

Related posts:

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

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

The PAP govt has lost “output legitimacy”: Discuss

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

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

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

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

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

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

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

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

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

Source: book reviewed here

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

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

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

*Recriminations, Accusations, Vilifications, Insinuations & Insults

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

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

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

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

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

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

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

including Switzerland and Israel

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

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

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

Cutting to the chase, I quote the following:

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

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

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

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

Get it PAP govt?

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


PM wrong on haze, hope he correct on “no repeat of 1997 crisis’

In Economy, Indonesia on 15/09/2013 at 5:47 am

(Or “1997/ 1998 revisited”)

Earlier this week, PM said: “On balance, I would take a sanguine view. I think the Asian economies are in a stronger position than they were in 1997 when the crisis came. I think we’ve got more safeguards instituted now, over the last decades since the Asian crisis to deal with the likely consequences of big capital flows. CNA

Well, Indonesia’s central bank has raised interest rates for the second time in two weeks as it looks to stem the sharp decline in its currency, the rupiah.

It raised its key rate to 7.25%, the highest level in more than four years.

Indonesia’s currency has dipped nearly 18% against the US dollar since May this year as investors pull out of emerging markets, stoking concerns about the economic impact.

The central bank also cut its growth forecast for the current year.

On Thursday, it said that it now expects the economy to grow between 5.5% to 5.9% compared with its earlier projection of a growth between 5.8% to 6.2%.

That will be the lowest pace of growth since the global financial crisis in 2009.
http://www.bbc.co.uk/news/business-24075745

But he got the haze issue wrong: he said would return “for weeks”. Hasn’t has it? And haze season is almost over. I’m glad he was wrong on this.

Here’s hoping he’s right on the Asian economies because if not

vivid memories of the 1997 crisis in Indonesia … watching in disbelief as a once stable currency slid, gently at first, from 2,400 rupiah to the US dollar in July, to 4,000 by early December, and then, dramatically to more than 16,000 in January.

The economy seized up, and within months Indonesia was in chaos.

… something else too.

The foreign fund managers, who had been cheerleaders for the investment boom before the crisis, privately admitting that the corporate data they were given by Indonesian companies was suspect.

But they continued buying into the country’s broader economic growth story, despite nagging fears about corruption and the persistent current account deficit.

“Start Quote

Today the Thai economy is very different. Because we learned things like risk management, corporate governance, the ability to be flexible”

Jada Wattanasiritham SCB

I remember the World Bank and other respected international experts telling us, after Thailand’s economic collapse in July 1997, that Indonesia was different, its fundamentals were sound. It would not be infected by the disease, they said.

For anyone who experienced those bewildering months, and especially those who were victims of the crisis, they left a lingering mistrust of official reassurances, and an anxiety that they could be caught out again.

She seems to have forgotten:

— Fresh from leveraging up to buy a stake in insurer Ping An (he borrowed US$5.5bn), Dhanin Chearavanont is borrowing US$6 billion to finance a takeover of Siam Makro. Combining the Thai cash-and-carry group with his 7-Eleven convenience store chain makes sense. He co-founded Siam Makro with Dutch group SHV in the late 1980s, but was forced to sell out in 1998 when the Asian crisis left his empire overextended (soon to be repeated?). Sentimentality aside, the combined business should also be in a stronger position to expand into neighbouring Southeast Asian countries such as Laos and Myanmar.

The reunion is expensive. The offer price of 787 baht per share is 75% above where Siam Makro was trading at the beginning of January, and values the business at 53 times last year’s earnings. The advantage is that both Siam Makro and CP All, Mr Dhanin’s partially listed Thai retail company, currently have no debt.

— And in January another Thai tycoon, Charoen Sirivadhanabhakdi, won the battle for control of Fraser and Neave with a debt-heavy $11.2 billion offer based largely on breaking up the Singaporean conglomerate.

1997/1998 again? Both had problems then, esp the former.

Related post: https://atans1.wordpress.com/2013/08/22/why-regional-mkts-are-tanking-why-its-a-risky-moment/

S’poreans avoiding low-paid jobs are not lazy or daft, juz rational

In Economy, Political governance on 02/09/2013 at 4:47 am

SME employers are forever bitching moaning that they need FTs because S’poreans (esp the young) don’t want to do the jobs on offer, be it factory work or restaurant work. The govt, too, is forever complaining that FTs are needed because there are jobs that S’poreans don’t want to do. The underlying message of govt and employers is “S’poreans are lazy”, echoing and amplifying one LKY’s Hard Truth that S’poreans need to be spurred on, by way of the import of FTs. BTW, strangely, they are silent on benefit of the wage repression that such imports bring them, and people like me.)

Well these employers are not “uniquely S’porean”. Farmers in the UK too complain that they need FTs according to this article

Farmers claim that they will then face a dramatic shortage of labour [when a FT scheme is ended].

Often migration is justified on the grounds that there are jobs young Britons are unwilling to do. They’re lazy and coddled the argument goes, workers from less wealthy countries tend to be keen to get the work. Yet at the same time as around 22,000 Bulgarians and Romanians came to Britain through the SAWS, over 46,000 Britons traveled to Australia last year as part of the Working Holiday Makers program. There, they often get low paid jobs, as farm hands, cleaners or in the catering industry.

The Economist (remember it likes our healthcare, CBD and COEs, and believes in low taxes, GST and liberal immigration policies) goes on to explain this paradox of British youth preferring to take menial, low paying jobs in Oz but not at home, while British farmers have to rely on immigrant labour:

Migrants—whether Romanian or British—usually intend to stay for just a few years before returning back to their country of origin. This means that they’re much more willing to live in cramped conditions, cut their costs and take on low paid temporary work. But Britons who are willing to work as field hands in Australia probably would not consider do so in Britain: they would hold out for a more permanent and better paid job. This is not necessarily evidence of laziness but prudence. It is just that it is much harder to buy a house or raise a family on the wages of a field hand than it is to backpack across Australia.

Likewise, S’poreans want better paying jobs because this is home, and a pretty expensive place to boot. A recent Yahoo article had this quote: I just think there must be something really wrong if the government keeps having to subsidise people like us who are considered middle-income wage earners. There’s a real income inequality problem here and they need to address it.” – Marketing executive Adrian Matthew, 26. Taz a middle income wage earner talking. Imagine what would a S’porean manual worker or waiter say?

True, we don’t have welfare benefits for the unemployed but young S’poreans have their parents. This being S’pore, the son or daughter is likely to be the only child, or one of two, and S’porean parents are likely to understand their children’s situation. And there is a generation that can still afford to indulge their children because they have jobs and have paid off their HDB loans, and are sitting pretty. Taz the welfare net for these young S’poreans.

The piece ends with shumething our PM and his cabinet should be thinking about (I slightly edited the passage to make it fit our situation):

There’s little point in complaining about laziness, those who won’t take these jobs are often making rational decisions. We don’t really want an army of underpaid Brits S’poreans working uncomfortable hours in jobs which pay nothing. It would be better to wonder why they cannot find better ones—and what the government can do to help them to.

The PM should remember that as the Economist agrees with many of the things he is doing such as:

— bring on the FTs;

— GST;

— COEs;

— CDB;

— high petrol prices;

— low taxes;

— no minimum wages; and

— meritocracy,

so he should listen to it when it talks of the need to try  to find better ways of helping the lower-paid workers. After all in S’pore, as I pointed out here, real wage median growth is dependent on govt fiat (raising employers’ CPF contribution.

What better goodie to celebrate 50 yrs of independence?

Even the PAP govt gets a goodie: a continuation of the de-facto one-party state if the govt can find a way to make sure S’poreans have stable, gd paying jobs. And no more subsidising of HDB flats for middle income S’poreans. No more raiding of the reserves as one Mah Bow Tan almost put it. More for Temasek to put on “Red”?

Off-key & jarring: DBS’ trumpeting of restructuring success

In Economy on 29/08/2013 at 4:54 am

(Or Govt decides if there is real median wage growth, not businesses?

When I read this quote from DBS Group Research some time back, I was puzzled,

In this regard, real median income has increased by an average pace of 3.1% per annum since the announcement of the ESC recommendations.

At the current pace, real median income will be 35% higher than what it was in 2010. This is precisely what policymakers have aimed for. By this measure, restructuring is smack on track . http://sbr.com.sg/economy/news/heres-convincing-proof-singapores-restructuring-track

It did not make sense as I remembered reading a MoM report that stated that in recent yrs real median wage growth was negative.

I forwarded the above link to TRE with a note asking why it didn’t publish +ve things about govt policies? Was it the mirror image of the constructive nation-building ST, except that it only published -ve stuff about the govt?

It published the link and asked Uncle Leong for his comments.

His reply is here. DBS took into consideration the employers’ contribution rate increase!

He added

In this connection, I wrote a letter to the media, “asking why a real median income growth rate of -0.6% for 2011 was used in the calculation of the National Bonus for political office-holders, and the Prime Minister’s Office and MOM came out to clarify:

“MOM’s 1.0% real median income growth rate for employed Singaporeans included the employers’ CPF contributions while the -0.6% real median income growth rate used by PMO for the National Bonus calculation did not include it.

PMO said it had computed the National Bonus payout using income figures sans the contributions as it was felt that changes to employers’ CPF rates are decided by the Government and, hence, should not be linked to the payout for political office-holders.” – TR Emeritus link, Apr 7, 2012

So, even the PMO concedes that the real median income growth (excluding employer CPF contribution) is the more appropriate measure.

Going further he added,

14.5% lower & not 35% higher next decade?

Therefore, instead of “At the current pace, real median income will be 35% higher than what it was in 2010. This is precisely what policymakers have aimed for. By this measure, restructuring is smack on track.” – may be it should be “ At the current pace, real median income will be 14.5% lower than what it was in 2010. This is precisely what policymakers have not aimed for. By this measure, restructuring is smack off track .”

Bottom line: Netizens, our local media and the govt are not the only beaters of DRUMS. Investment analysts too can play the DRUMS. And what are DRUMS may be relative. our DRUMs may be one man’s Hard Truths and vice-versa.

Bottom, bottom line: S’poreans are dependent on the govt for real wage increases. Include the 3% (?) increase to 16% in the employers’ CPF contribution, and hey presto median real wage growth is 3.1%. Increase it to 20% and the PAP will win back Aljunied and get 75% of the popular vote.

Shumetime is very, very wrong with the economy or society, or both, if the only way the real median wage can grow is via govt fiat.

Tharman has a point, but Lawrence Wong missed the plot

In Economy, Financial competency on 27/08/2013 at 4:50 am

Speaking at the Network ASEAN forum on Friday morning, Singapore’s Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said there was never a realistic prospect of a smooth and easy exit from quantitative easing (QE).

But the QE tapering will not be bad for the ASEAN economies as it is not in anyone’s interest for very low global interest rates to continue indefinitely.

It also signals an economic recovery in the US — a major market for ASEAN. [Channel News Asia last week].

Investors who have suffered from the flight from regional markets and currencies should look on the bright side. What he said is one gd point to remain calm.

Another reason why tapering is gd: The Federal Reserve is forcing Asia to kick its addiction to hot money. The prospect of higher U.S. interest rates had made the region’s dwindling trade surpluses look an increasingly dangerous habit. Though markets may be turbulent, pricier local money or cheaper currencies will improve the trade balance for most Asian countries. http://blogs.reuters.com/breakingviews/2013/08/22/fed-liquidity-curbs-will-act-as-asias-detox-plan/

But QE tapering is gd news only if investors are not leveraged to their eyeballs and counting, bringing me to the issue of Lawrence Wong (a board director at the central bank, where Tharman is the chairman) talked cock on “over-leveraged” borrowers.

Most heavy borrowers in Singapore have above average income levels, which means they are less likely to default on their loans.

Acting Culture, Community and Youth Minister Lawrence Wong said this [on 11 August] in response to questions in Parliament on household debts from Nominated MP Laurence Lien and Non-Constituency MP Yee Jenn Jong.

He went on to say: On borrowers who are “over-leveraged”, or those with debt service burdens exceeding 60 per cent of their income, Mr Wong said most of them have incomes higher than the median household income of S$6,000.

He added that nearly 90 per cent of these borrowers are servicing private property loans, and more than 80 per cent are servicing only one loan.

The reasons to be concerned about these people is not that they earn a lot and can service a loan while leading the gd life, or that they only got one loan. The issues are:

— What happens if they lose their high playing jobs. Will they find another high paying job before the bank manager starts calling? And if they can’t?

— Do they have the cash to cope with a rise in interest rates, whether they have a job that pays them a high a lot or not?

That they have incomes higher than the median household income of S$6,000 is irrelevant, or only one loan is irrelevant to the issue of whether the level of over-leverage poses a danger to the system. Going by the numbers available, over-leverae borrowers do not seem to pose a danger to the system. But the minister’s explanation does worry me: it could indicate the complacency of the central bank and the govt. Hopefully, I’m wrong about their complacency.

Low productivity: LKY and the DRUMS agree on its cause

In Economy, Political economy on 15/08/2013 at 5:11 am

I kid you not, miracles can happen. LKY agrees with the Blogging 7, Uncle Leong, E-Jay, s/o JBS, NSP, SDP and all the usual players of DRUMS. The latter have always argued that low productivity is the result of the FT policy. Not included Low or WP among the latter as I don’t know itheir stand on this issue.

Stoolies Foils, Comedy Straightmen ST: On the issue of making productivity gains, we lag behind many developed countries. In manufacturing and services, Singapore’s productivity is only 55 per cent to 65 per cent of that in Japan and the United States.

LKY: Because we have large numbers of migrants who do not fit into the workforce so easily and who do not speak English.Some hold work permits and do not stay for long – they leave within a few years, after developing skills.

http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={1072294113-18605-1765558123}

This appeared in Tuesday’s BT:

Manufacturing firms in Singapore relied on low-skilled foreign workers as substitutes for machinery between 2003 and 2008, sacrificing productivity levels in the process, according to a study.

The Ministry of Trade and Industry (MTI) study released yesterday, however, found that other factors – unrelated to foreign workers – could have also caused the decline in automation, underscoring the need for greater R&D and product innovation.

The five years in question mark the government’s most recent period of liberal foreign labour policy. Between 2003 and 2008, the dependency ratio ceiling – which specifies the maximum proportion of foreign workers that companies can hire – was raised to 65 per cent; levies for unskilled work permit holders were reduced; and firms were allowed to hire work permit holders from China.

In its study of 1,500 manufacturing firms over that period, MTI found that those which hired relatively more low-skilled foreign workers relied less on machinery for production.

Doesn’t LKY’s words  and the MTI study show that the govt talk of increasing productivity over the yrs (from 1990s onwards) was juz that: talk? And now, the guy that was charged with leading the productivity drive in the late 1990s is now the chairman of Temasek? Isn’t S’pore a meritocracy, unlike M’sia?

Where LKY and the DRUMS would disagree is what would have happened if FTs didn’t come in by the cattle-truck load:

But you ask yourself how many small and medium-sized companies will pack up if we cut off the foreign workers?

But isn’t it a chicken-and-egg situation? Precisely because it is so easy and cheap to hire foreigners, the SMEs continue to rely on them. If the tap were tightened, they would be forced to find new ways of operation. There will be some that will shut down, but maybe some level of churn is necessary so that the economy can go on to be more productive.

You cut them off and you find the SMEs just caving in.

Would that be a bad thing, or could that just be a necessary transition?

If our SMEs collapse, we will lose more than half of our economy.

In a way, that is what the Government is now trying to do. They are trying to slow down the growth in the foreign labour force.

Yes, because the Singapore public feels uncomfortable with so many of them. Not because of the economics. From an economic point of view, we should grow.

So how do you see this ending now that we have started to tighten the tap? Does it mean that we will lose half of our economy?

As you bleed out the present workers on work permits, the economy will shrink. But we are keeping the same level and just slowing down the inputs of new workers. Not stopping them. You stop it, you are in trouble.

The DRUMS would argue that the SMEs wouldn’t collapse or move on. They would adapt. I don’t think any elected govt would dare take the risk of allowing SMEs to collapse. It could lose power. As Dr Goh liked to say, repeating a Western political aphorism, “Oppositions don’t win elections, govt lose them.”

Related posts:

Jokey

https://atans1.wordpress.com/2012/11/18/why-productivity-is-so-low-here/

https://atans1.wordpress.com/2012/09/30/no-wonder-spores-productivity-so-low/

https://atans1.wordpress.com/2010/08/27/productivity-ntuc-learn-from-china/

https://atans1.wordpress.com/2013/05/22/singas-ft-replacement/

Serious

https://atans1.wordpress.com/2013/05/23/us-experience-on-growing-gdp-via-productivity/

https://atans1.wordpress.com/2013/07/23/insufficient-public-data-a-reason-for-our-low-productivity-numbers/

 

:

Stagnating income: Not fault of locals or FTs, not uniquely S’porean

In Economy on 13/08/2013 at 4:43 am

Our S’pore Conversation committee Chairman and Education Minister Heng Swee Keat noted that overall, the participants at the OSC sessions wanted the assurance that housing, healthcare and public transport will remain affordable.

Well they would be concerned about these things as wages have been pretty stagnant for most S’poreans recently* and the costs of these have risen, faster than the inflation rate, I think.

This train of tot reminded me that I wanted to kick ST and critics, bo0th of the article and the govt,  when I read http://www.tremeritus.com/2013/07/20/stagnant-wages-its-your-own-fault-according-to-st/

Stagnant wages is not a problem caused by S’porean workers (ST’s version) nor by the wholesale import of FTs by the cattle-truck load (netizens’ version).

Taiwan has this problem too.

Those [Taiwanese manufacturers] coming back are motivated by Taiwan’s low wages, which, if factoring in inflation, are back at the same level they were 15 years ago for entry entry level jobs.

In the past, Taiwan’s wages were much higher than those in China. But now, Chinese blue-collar wages are approaching those of their counterparts in Taiwan and in some sectors and big cities in China white collar workers can expect to earn even more than their island neighbours.

http://www.bbc.co.uk/news/business-22754725

So too has HK. Example https://atans1.wordpress.com/2013/05/08/hph-trust-cost-of-strike-settlement/

And in a recent talk I attended, the swing away from BN in M’sia was partly attributable to stagnating incomes.

So ST, it’s not the workers’ fault. And critics, it ain’t all the PAP’s govt’s fault. It’s happening in other parts of Asia and in the West. http://www.economist.com/blogs/buttonwood/2013/08/economies-and-markets-0

BTW, in the Asian countries mentioned, property prices (esp residential ones) are rising too. So stagnating income and rising residential prices is also not uniquely S’porean.

The solution? In Taiwan, profitable, responsible homegrown cos (note not MNCs) investing at home, Foxconn recently announced plans to hire 5,000 technicians to work in two plants in Taiwan. It will be one of the group’s largest hiring sprees here in recent years.

The Taiwanese technicians will research and build factory robots, so that the company, which makes smartphones and computers for top brands such as Apple and Dell, can further reduce dependency on increasingly expensive Chinese workers.

OK lah one company lah. But knowing how Taiwanese society works, others will have to follow to show that they too love Taiwan and its people.

And in HK, workers go on strike, while in M’sia, voters vote against the govt.

In S’pore, S’poreans bitch while the govt talks about productivity, and restructuring the economy, again and again. And cuts and pastes “reform” plans from the time one Lee Hsieen Loong was juz a jnr cabinet paper.

(Related post: https://atans1.wordpress.com/2010/02/04/cutting-and-pasting-the-esc-report/)

Finally shumething for gd-heated kay pohs to think about:If you want to employ current workers at higher wages you either have to make them better workers or you have to take income from someone else—which can be sensible but which can also make for nasty unintended consequences.

http://www.economist.com/blogs/freeexchange/2013/08/labour-markets

*Uncle Leong has talked about this regularly using govt statistics to prove his point: juz google if you want to refesh yr memory.

What the PAP govt doesn’t get it abt the new economy

In Economy on 08/08/2013 at 5:13 am

Two gd links below for yr holiday reading.

The govt fails in its attempts to recreate the economy for the Age of Knowledge because the surest way to guarantee failure in the long term is to be so paralysed by the fear of it that you don’t try anything new. The line that separates a hit from a flop is thin. The govt is always cutting and pasting previous reports on how to create a new, knowledge economy https://atans1.wordpress.com/2010/02/04/cutting-and-pasting-the-esc-report/. Nothing fundamental has changed in its thinking since Dr Goh decided to allow the MNCs in: at the time, it was derided as neo-colonialism. It worked but other countries caught on esp after the fall of the Berlin wall in 1989. So S’pore lost its killer edge.

It can only

— Talk the rhetoric of change. The latest example of which is As Singapore paves a new way forward through inclusive growth, Education Minister Heng Swee Keat said executing these strategies also depend on two important stakeholders — the government and the people.

In carrying out these strategies, the government will need to have foresight, be nimble and take on a multi-faceted role.

Mr Heng said the government must work with businesses to restructure the economy, and must intervene in areas such as healthcare and housing to achieve socially desirable outcomes. [CNA yesterday]

— And import FTs to lower the cost of doing biz here for MNCs.

Coming back to the quote, Look at Disney’s movie making division. Walt Disney has another flop: “The Lone Ranger” is expected to lose up to US$190m. Last yr it had “John Carter”. So is Disney losing money?

The Economist wrote at the time: But the existence of flops such as “John Carter” is perverse proof that the Walt Disney Company is doing something right.

http://www.economist.com/node/21551455

Disney is still making serious money at the movie division, and minting it overall. It had “The Avengers” last yr, and “Iron Man 3″ this yr.

Juz before the above quote, the Economist wrote: Still, the surest way to guarantee failure in the long term is to be so paralysed by the fear of it that you don’t try anything new. The line that separates a hit from a flop is thin. Companies sometimes have to slaughter sacred cows to escape obsolescence: IBM only recovered from its death spiral when it abandoned its focus on building hardware. Some of the most successful products are the result of mixing oil and water—most obviously, phones with computers and entertainment systems.

What looks like a flop can flip into a success. After New Coke fizzled, sales of the original version rebounded, lifting the firm’s stock price and reviving what had been a fading brand. Pringles (the stackable crisps, not the alarming jumpers worn by golfers) started life as one of Procter & Gamble’s greatest flops. They are now munched everywhere, including over this kybard#.

And would S’pore have such a school running such a course?

Inside a US Boarding School for Aspiring Tech Moguls. At the Draper University of Heroes, students in their early to mid-20s looking to break into Silicon Valley apprentice at the feet of the venture capitalist Tim Draper, “trying to pick up the tech world’s own brand of magical thinking,” Kevin Roose writes in New York magazine.

NEW YORK

PM’s right on the Swiss remaining No 1 in wealth mgt

In Banks, Economy on 01/08/2013 at 6:11 am

A recent Pricewaterhouse Coopers report said the S’pore could overtake Switzerland as the top wealth centre in the world by 2015.  Another report says that Singapore is tipped to overtake Switzerland to become the largest global offshore wealth center in terms of assets by 2020, according to London research firm, WealthInsight, in may http://edition.cnn.com/2013/05/13/business/singapore-rich-switzerland-wealth/index.html.

Our constructive, nation-building media was triumphalist.

But our PM is more realistic. He said S’pore is unlikely to overtake Switzerland as the biggest wealth centre in the world any time soon, http://www.tremeritus.com/2013/07/06/singapore-unlikely-to-overtake-switzerland-in-wealth-management/. “I read somewhere that we might overtake Switzerland. I don’t think that’s true. I don’t want that to be my marketing line,” the FT had him saying.

One advantage S’pore has is tax. Deloitte ranks Switzerland only in fifth place for tax competitiveness, behind Bahrain, Singapore, Hong Kong and the United Arab Emirates. S’pore also has an advantage in attracting Asian wealth, like not being part or near of China, while being in Asia.

But I think the PM is right (even though he cannot even get the haze issue right: he talked of the haze coming back “for weeks” about a month ago, but since then the reading was “moderate”, now “good”),

Two reasons

Private banks in the Asian financial hub, Singapore, are the next target of tighter regulations after the crackdown in the U.S. and Europe on tax cheats. From July 1, any banks believed to be abetting tax evasion or having inadequate controls in place may face a heavy fine, criminal charges and possibly the loss of their license to operate in the city state. http://www.cnbc.com/id/100793751

— The G8 countries are getting more aggressive in making sure that places like Switzerland and S’pore cannot hide behind secrecy laws to avoid sharing info. In short, all offshore havens will have to be more transparent, and none will have an advantage over the others. Money moved from Switzerland to S’pore in the noughties because it was tot S’pore would not be forced to be more open; not true anymore.

The only adv that S’pore has over Switzerland, is that Asia is getting richer, esp China, and Asean; the latter with a population of over 620m, would be “the 21st century’s champion in fostering the vast middle class consumer market”, according to the Japanese PM. Asean is in our immediate neighbourhood, a great advantage. And S’pore has been a traditional regional financial, commercial and services centre.

Interestingly, not reported here, Deloitte says Hong Kong could overtake Switzerland as the world’s top wealth manager as early as 2019 if current asset growth rates are maintained. Being part of China has its advantages esp in attracting non-Chinese money that wants a piece of the action in China. And HK’s reputation for financial innovation doesn’t hinder.

Can Oppo MPs ask MoM for FT fake rates here?

In Economy, Public Administration on 25/07/2013 at 5:17 am

And that this isn’t happening here? (Reminder, only recently there was report of  25 FTs convicted for using false education certificates in work pass applications.)

The ABC has revealed that thousands of Indian students, skilled workers and 457 visa holders have been admitted to Australia on dodgy travel and work documents.

Briefings prepared by the Immigration Department and obtained by the ABC’s Fact Check Unit under Freedom of Information show out-of-control, large-scale fraud of the visa system.

The internal audits show fraud rates approaching 50 per cent, and an Immigration Department struggling to properly identify people who are enterin

http://www.abc.net.au/news/2013-07-22/immigration-audits-reveal-large-scale-visa-fraud/4833710

Note that in the US, there are complaints that Indian IT companies are misusing the US visa system: However, critics of the proposed expansion argue that it’s not the future Facebooks of the world that are in desperate need of more H-1B visas but rather large outsourcing firms like iGate Technologies and Cognizant that benefit most from the programme.

Many outsourcing firms are of course Indian and already the Indian government has objected to provisions in the bill that would tax companies whose workforce is made up of more than 50% of H-1B visa holders.

Those provisions are meant to appease critics such as Systems in Motion CEO Neeraj Gupta, himself a former H-1B visa holder who once sold a company to a large Indian outsourcing firm.

Mr Gupta says the cap on visas should not be raised unless serious questions about the programme in general are asked.

“Before you open up the numbers let’s look at how they’re being used today: more than 80% of H-1B visas go to outsourcing firms,” says Mr Gupta.

“Let’s stop the use of these visas for outsourcing and you have more visas available for the innovation economy.”

Mr Gupta and others argue that foreign workers, mostly from India, are not necessarily future innovators but just cheaply educated lower-level engineers.

Because of the strictures of the H-1B programme, they are paid less money than equivalent American workers – and they have less bargaining power.

“If a worker complained about their wages or their working conditions, the employer could just threaten to lay them off and if they did that worker would have to leave the country,” says Rochester Institute of Technology Professor Ron Hira, who is himself ethnically Indian and a mentor to many foreign graduate students.

“It’s a form of indentured servitude.”

http://www.bbc.co.uk/news/business-23010391

Related post: New Citizen Raj talks openly of how his son will avoid NS while becoming a PR

BTW, I’m sure some ultra sensitive kay poh will bitch that I’m targeting Indians. If there are any reports of slit eyed chinks gaming the immigration systems of ang moh countries, send me the links and I’ll publish them here.

 

Insufficient public data: a reason for our low productivity numbers?

In Economy, Public Administration on 23/07/2013 at 4:50 am

Canada like S’pore has lousy productivity numbers. A recent study* has come up with a plausible explanation that could be applicable here. There is insufficient publicly available data for companies (esp SMEs) to benchmark against. They don’t know how badly they are performing vis-a-vis their peers. The solution?

Industry associations could help fill the gap by more consistently gathering and sharing investment information among their members.

The Canadian federal industry department is also working with the national statistical agency and academics to see if some way can be found to release at least some investment data.

*A report … by Deloitte, a business consultancy, offers a novel explanation that may be relevant to other poor performers in the productivity stakes: More than one third of Canadian companies don’t realise they are not making the necessary investments in research, machinery, equipment and technology to keep up with more competitive firms because they lack access to the kind of information they need to compare themselves with their peers. The report calls this group “over-confident” because they think they are doing better than they actually are.

In an age when many feel deluged by the amount of information available, not having enough of the stuff is an odd problem to have. Bill Currie, Deloitte’s managing director for the Americas, says information on how much companies spend on productivity-enhancing measures is collected through tax returns. However, sharing it at the level of detail required to make it relevant raises privacy concerns in a country like Canada where privately owned companies dominate in some regions or sectors.

The problem doesn’t exist in America and other big economies because the large number of companies in such places—the US has about 6m employers to Canada’s 1m—means no one firm will stand out when investment statistics are given by sector or region. (In national data releases in America, statistics are often redacted in sectors where a single firm’s proprietary information could be discerned thanks to its dominance in the category.) But it may be relevant in smaller economies that lag America in labour productivity such as New Zealand or Switzerland. Industry associations could help fill the gap by more consistently gathering and sharing investment information among their members, says Mr Currie. The Canadian federal industry department is also working with the national statistical agency and academics to see if some way can be found to release at least some investment data. Of course that won’t help with another problem (this one not particular to Canada): firms tend to look inward at past practice rather than outward at the current practice of competitors when setting benchmarks.

Canadian firms are terrible laggards when it comes to spending money on research and development, machinery, equipment or technology. In the past, the low level of the Canadian dollar vis-à-vis its southern peer was blamed for dissuading companies from importing what they required.

http://www.economist.com/blogs/freeexchange/2013/06/productivity-growth

Effect here of $ leaving Asia

In Economy on 17/07/2013 at 7:09 am

Ang moh money returning home from emerging mkts

http://blogs.reuters.com/breakingviews/2013/07/11/dash-from-emerging-to-developed-markets-hits-new-risks/

Asian money leaving their home countries

http://blogs.reuters.com/breakingviews/2013/07/15/asian-capital-flight-risk-goes-beyond-hot-money/

Whether some of this money comes here is irrelevant. Our high hsehold debt ratio is likely to give grief to leveraged S’poreans (most of us, self excluded) esp those whose financial asssets depreciate while the debt obligations remain. http://www.cnbc.com/id/100882025 While, rising household debt is a concern, it should also be viewed in context with the asset side of the balance sheet. If needed, they [borrowers] could draw down on deposits,” said Michael Wan, economist at Credit Suisse. 

PC sales see ‘longest decline’ in history

In Economy, Malaysia on 11/07/2013 at 5:43 pm

Not gd for economy of S’pore and M’sia which are part of the PC ecosystem https://atans1.wordpress.com/2013/05/03/1-5-gdp-growth-this-yr/

Global personal computer (PC) sales have fallen for the fifth quarter in a row, making it the “longest duration of decline” in history.

Worldwide PC shipments totalled 76 million units in the second quarter, a 10.9% drop from a year earlier, according to research firm Gartner.

PC sales have been hurt in recent years by the growing popularity of tablets.

Gartner said the introduction of low-cost tablets had further hurt PC sales, especially in emerging economies.

http://www.bbc.co.uk/news/business-23251285

Added on 18th October 2013: Related post: https://atans1.wordpress.com/2013/06/25/missed-smartphone-boom-planners-thinking-about-2025/

 

Where S’pore is not first world: not reported in MSM

In Economy, Political economy, Political governance on 10/07/2013 at 5:18 am

S’pore is richer (per capita) than Japan. Yet as this chart from the Economist shows, its welfare spending is below that of Japan, and is clustered with Thailand and China, with only Indonesia worse-off. Korea is slightly better than S’pore but the president there has promised massive welfare spending. S’pore has not made such a promise.

We should be aiming to be clustered withJapan. And as Temasek’s recent results help show, we got the money. Prosperous Japan is the only country that protects its people both well and widely, according to the index. In Singapore, now richer than Japan, social protection is spread broadly but thinly, the index shows.

For the geeks:The Asian Development Bank’s newly published social-protection index shows both the breadth of coverage (the percentage of potential beneficiaries actually covered) and the depth (the amount of spending per beneficiary, expressed as a percentage of the country’s GDP per person).

PAP’s “right” politics defined

In Economy, Humour, Political governance on 09/07/2013 at 5:48 am

When TRE republished this (where I pointed out PM did not define what he meant by the “right” politics, Orang Miskin posted:

 The PAP’s definition of “right” politics:

 • Always be ready to fix the opposition

• Avoid meaningful debates, stage wayangs to fool voters

• Appoint yes-men into Parliament

• Surround yourself with sycophants, cronies and overpaid army “generals” and “admirals”

• Occasionally whack some young people to teach others a lesson, to silence or intimidate them

• Hide statistics/information from the people

• Surreptitiously flood the country with foreigners without authorisation from voters

• Abdicate state responsibility for taking care of the poor and elderly

• Let males become MPs who have not served NS

BTW, based on his other postings, I think OM is a retired SPH journalist from the old days. Glad to see another imperial storm trooper (keyboard regiment) from the Dark Side becoming Jedi, even if he is anon Jedi.

Another post read

PAP is very bad politics:

July 6, 2013 at 6:45 pm (Quote)

Under LHL PAP is (very) bad politics. Want proof? See below.

(1) low productivity of Singapore economy

(2) low birth rate which started from LKY’s “Stop at 2” policy

(3) depressed local wages

(4) failing to plan for the many foreigners it allowed into Singapore

(5) shortage, “shrinking” and high cost of public housing

(6) shortage of public buses and MRT trains

(7) shortage of hospitals, doctors and nursing homes

(8) shortage of teachers and places in schools for Singaporeans

(9) gave foreigners a big advantage over Singaporeans in job market

(10) shortage of jobs for Singaporeans

(11) foreigners taking jobs away from Singaporeans

(12) frequent breakdowns of MRT trains

(13) overcrowded public transport (buses and MRT trains)

(14) bailout of public transport (failed privatisation)

(15) frequent 50-year “ponding”

(16) high cost of public housing (price doubled over the last 5 years)

(17) high inflation (Singapore now most expensive Asian city)

(18) high cost of education and healthcare

(19) high cost of electricity (failed privatisation)

(20) poor air quality as per WHO Air Quality Guidelines

(21) depleted CPF accounts after buying “affordable” HDB flats

(22) many CPF accounts below CPF Minimum Sum

(23) massive (billions) losses of taxpayers’ money by Temasek / GIC

(24) wasteful purchases by Government agencies like NParks

(25) made Singapore a “tuition nation”

(26) wages lagging behind increase in the cost of housing, education, healthcare and transport

(27) failing to provide Singaporeans with Swiss Standard of Living as promised by PAP

(28) NSF still dying during training

(29) AIM scandal showed PAP corruption

(30) PAP censoring social media and Internet

(31) PAP manipulating PSI reading to report lower readings

Actually, this poster should have said these were “wrong” policies.

And finally, this chap should start a petition to get TRE to stop republishing me:

Cynical investor = PAP:

July 6, 2013 at 11:30 pm (Quote)

Cynical investor is likely a PAP running dog. But a careful one as he/she plays both sides but leaning towards pro-PAP. That way, he will not be dismissed as a member of PAP internet brigade. We should be cynical with him/her.

Rating: +5 (from 5 votes)

He and the likers must be among those who think that voting for Dr Tan was voting for the PAP. They may even think a vote for TKL was voting for the PAP. Only voting for TJS (and Dr Chee) would satisfy them. They are members of the “PAP are always wrong, even if they are right” platoon.

BTW, the first one got a rating of 10 out of 10, and the second 12 out of 12.

China sneezes, effects on Asean vary

In Economy, Indonesia, Malaysia, Vietnam on 29/06/2013 at 8:50 am

https://i1.wp.com/pdf.reuters.com/pdfnews/pdfnews.asp

As these charts show, S’pore’s economy is more exposed to China than Indonesia, Philippines, Thailand, Vietnam and M’sia. (BTW, no Asean round-up this week)

https://i1.wp.com/pdf.reuters.com/pdfnews/pdfnews.asp

https://i1.wp.com/pdf.reuters.com/pdfnews/pdfnews.asp

Missed smartphone boom, planners thinking about 2025

In Economy, Public Administration on 25/06/2013 at 5:34 am

S’pore starts to chart great tech unknown of 2025 Media and infocomm convergence a key theme; meanwhile, business analytics gets a boost

Screamed BT last Wednesday.

As Singapore peers into a future where technology is indistinguishable from media, the government has set about arming itself with the new Infocomm Media Masterplan that will see it into 2025.

Yesterday, the 14 members of the committee tasked with developing the masterplan report were announced by Minister for Communications and Information Yaacob Ibrahim.

This committee, headed by veteran money man Koh Boon Hwee, will release its recommendations in mid-2015. The new 10-year masterplan will pick up where the existing Intelligent Nation 2015 masterplan – developed in 2005 – leaves off.

While the Intelligent Nation plan was preoccupied with keeping the infocomm technology field competitive, the new plan will take into account how media and infocomm interests have become intertwined in the intervening years.

But if our master planners got things so wrong over not moving into the Apple, Google ecosystems, how can be expect them to get this right?

Let me explain: Singapore’s exports fell more than economists estimated in May as manufacturers shipped fewer electronics after an uneven global recovery hurt demand.

Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore said then , “The external outlook is still fragile, particularly when we’re not well tapped into the smartphone boom that’s going on in North Asia.”http://www.bloomberg.com/news/2013-06-17/singapore-exports-fall-more-than-estimated-on-electronics-slump.html

As I’ve blogged before, a major issue for S’pore (and M’sia and Penang in particular) is the decline in PC sales. In April, IDC,  a research firm, said that in the first quarter of 2013 worldwide PC sales fell by 13.9% to 76.3m units, their steepest decline since 1994, when records began. People have been slow to buy PCs with Windows 8, Microsoft’s latest operating system, but they are still buying tablets or smartphones. S’pore and M’sia are major organisms in the PC ecosystem. They are for all intents and purposes non-existent in the Android (Google) and Apple smartphone ecosystems.

Related posts

https://atans1.wordpress.com/2013/05/03/1-5-gdp-growth-this-yr/

https://atans1.wordpress.com/2013/04/11/when-economy-slows-not-nec-its-cause-ft-supply-ltd/

S’pore (like M’sia

Haze: Govt wasting money? Aided & abetted by anti-govt or kay poh activists!

In Economy, Political governance on 23/06/2013 at 4:30 am

The SAF distributed 1m free N95 masks meant for the poor yesterday to “grassroot” leaders. Today, these PAP people will distribute the masks. The anti-govt or kay poh activists stopped bitching against the govt for juz a second , then started bitching, “Why so late leh? People suffering for days.” Obviously nothing will satisfy them.

Actually, they should be bitching about the free masks.

The face masks which are in high demand in Singapore can protect against the worst of the smog.

But Dr Bhaskaran says they are unlikely to provide total protection.

“The masks may be sufficient to keep out some particles, but other gases would go straight through them.”

The British Lung Foundation agrees: “The use of masks is not recommended; they are often ineffective and may make breathing more difficult.”

http://www.bbc.co.uk/news/health-23000409

As this foundation is non-political and is quasi-medical, I have to accept that its view is authoritative and founded on medical evidence, especially given that our govt is trying to bribe us with our money,  and that activists, whether anti-govt or juz plain kay pohs, don’t care if public funds are wasted’ so long as it suits their agendas, whatever that may be.

When anti-govt or kay poh activists, and the govt are on the same wave-length, we get screwed. SIGH.

Meanwhile, the cost of the current haze for Singapore could be hundreds of millions of dollars, brokerage CLSA said in a report.

It said that in 2006, when the pollution index reached 150, it was estimated the haze cost $50 million and in 1997 it was $300 million. CLSA said the 1997 and 2006 figures seemed low when considering the direct and indirect cost of prolonged haze.

And this is what Barclays says https://atans1.wordpress.com/2013/06/22/haze-economy-will-slow/

Haze: Economy will slow

In Economy, Indonesia on 22/06/2013 at 10:35 am

Businesses and analysts have warned that the longer the problem persists, the higher the cost will be for the overall economy.

“Tourism-related sectors such as retails sales, hotels, food and beverage, and gaming, these will take a hit,” Joey Wong of Barclays told the BBC.

Tourism is a big revenue earner for Singapore and according to some estimates industries related to the sector account for between 5% and 6% of Singapore’s total economic output.

The last time the city-state was hit by such bad haze in 1997, tourist arrivals dropped by nearly 15% in a month.

According to a report by Barclays, there are indications that some tourists have already started to cut short their stay in Singapore and some have even cancelled their bookings.

Ms Wong said while it was too early to estimate the overall impact of the haze on the industry, the cost for the sector could be between $200m – $400m (£130m – £260m) if there was an 8% to 10% drop in arrivals.

However, she added that any drop would be temporary and the arrivals will pick up once the conditions improved.

Bad timing?

While a situation like the current one is never good for businesses, it is even worse if it happens during the peak annual period.

That is position that Singapore’s retailers find themselves in. The haze has hit during the annual “Great Singapore Sale”, one of the busiest shopping periods of the year … Singapore Retail Association, says that retailers are already experiencing a marked decline in traffic and sales are down by between 8% to 12%.

“If this continues, the industry – which is already faced with very high cost of operations – would certainly be badly hit and retailers, who are already struggling to hold on to their very slim margins, will see this being eroded further,” said Ms Wei.

http://www.bbc.co.uk/news/business-22999205

Swiss & S’poreans share a concern

In Economy, Political governance on 03/06/2013 at 5:51 am

The number of foreigners in Switzerland stands at almost 25%* … and while many Swiss accept their labour market needs foreign workers, they are unhappy about rising house prices or overcrowded schools.

http://www.bbc.co.uk/news/world-europe-22738774

Fee-fi-fo-fum, the Swiss sound like us S’poreans.

Are they xenophobic? I’m sure our constructive, nation-building media would say they are. Juz as the PAP-stream media would agree with Gordon  Brown, the then UK PM, that this lady’s a “bigot” for being concerned about immigration. He lost a general election and his party has apologised for its immigration policies.

As the above link shows, a Swiss opposition has gained votes by articulating the public’s concerns. Maybe an idea for our opposition parties. But then the Wayang Party wants to be a co-driver, the SDP doesn’t do xenophobe, and NSP stands for “No Substance Party”. Over to you Mrs Chiam.

She shows what an opposition party is meant to do.

—-

*38% here including PRs. Remember PRs here are not “permanent”: renewable, like 99-leases and COEs.

What our local media doesn’t boast about

In Economy on 30/05/2013 at 5:59 am

S’poreans punch above their weight when in comes to lotteries (and taz excluding the casinos) — 11th in the world because “The island-state’s 5m people spend about $1,000 each in the Singapore Pools”.

http://www.economist.com/blogs/graphicdetail/2013/05/daily-chart-16

The casinos juz add to the mix.

 

US experience on growing GDP via productivity

In Economy on 23/05/2013 at 5:46 am

One striking fact is that even among the best performing metropolitan areas, overall increases in output per capita have been hard to come by. They have been limited to a handful of very brainy cities, especially West Coast tech centres. In general, growth has been a product of population increase large enough to offset falling output per person.

http://www.economist.com/blogs/freeexchange/2013/05/migration

Growing via productivity is damned difficult! Only places with brainy people can do it successful. Given that we are “daft”, growing the population via immigration is the chosen way to grow economy. So taz why we need 6.9m people? In addition, according to PM’s dad, FTs are more more productive: locals need to be “spurred”.

Given that there are hordes of M’sians wanting to come, hopefully Lina Chiam will ask for regular updates on the FTs allowed in to see if govt will U-turn on its promise to restrict  FTs from trickling in. (WP too busy giving away contracts to supporters and preparing for ministerial goodies.) In 2008, the M’sian FTs poured in after their GE reduced BN’s grip on power. They were afraid of another May 13.

Related post:

https://atans1.wordpress.com/2013/05/19/estonia-doing-it-spore-still-talking-about-it/

Update on 26 May 2013: http://www.bloomberg.com/news/2013-02-14/ponzi-schemes-built-on-people-always-crash-too.html

Estonia doing it, S’pore still talking about it

In Economy, Infrastructure, Political economy on 19/05/2013 at 7:39 am

The inventors of Skype came from Estonia. More importantly, the economy there is using IT to leverage its productivity. Not like S’pore where FTs are thrown at any problem.

Estonian schools are teaching children as young as seven how to programme computers.

Estonia’s e-revolution began in the 1990s, not long after independence. Toomas Hendrik Ilves, then the country’s ambassador to the United States, now Estonia’s president, takes some of the credit … He read a book whose “Luddite, neo-Marxist” thesis, he says, was that computerisation would be the death of work.

The book cited a Kentucky steel mill where several thousands of workers had been made redundant, because after automatisation, the new owners could produce the same amount of steel with only 100 employees.

“This may be bad if you are an American,” he says. “But from an Estonian point of view, where you have this existential angst about your small size – we were at that time only 1.4 million people – I said this is exactly what we need.

“We need to really computerise, in every possible way, to massively increase our functional size.”

http://www.bbc.co.uk/news/business-22317297

Why gd GDP growth but “peanuts” pay increase

In Economy on 14/05/2013 at 6:02 am

Since I wrote “PM, this can’t be right? 5.9% GDP but 0.4% wage increase?”, I’ve read something that illustrates that it’s the distribution of GDP growth that matters, not GDP growth by itself. Hopefully someone who reads this blog and has personal access to PM will forward to him this extract from an Economist blog.

To see how the distribution of growth affects incomes, imagine a country of just ten people, with one earning $1,000 a month, another earning $2,000 a month, and so on up to the tenth, who earns $10,000 a month. Between them, these ten people earn $55,000 a month. Now suppose that in a year the economy grows by a modest 1.8%, so that there is an extra $1,000 to go around each month. If the richest person captures all that growth, it will give him a 10% pay boost. But he will hardly feel it, because he is already rich, and the average pay rise across the entire population would be just 1%. But if the poorest resident got all the extra money, his income would double. That would make a huge difference to his life—and the average pay rise in our little country would be a whopping 10%, far higher than the meagre overall growth rate. In general, the more of the $1,000 that goes to those on lower incomes, the bigger the average pay rise it causes, and the more impact it has. (Emphasis is mine)

What has happened here is that between 2000 and 2011, the earners of the median wage (those only getting 0.4% real wage increases) have not been getting most of the average 5.9% GDP growth. It went to those above the median wage: hence the ever rising COE prices and private property prices. The latter, meant that under Minister Mah HDB prices (remember the land cost) went up affecting the median wage earners, and the poor.

It also meant that increasing GDP via FT inflows was not in effective helping the median wage earner. The benefits of GDP growth went to the above median earners.

Finally what it means is that S’pore can have slower growth that benefits the poorer and median wage S’porean: provided the distribution of GDP growth is tilted towards the below median and median earners, away from the above median earners.Pigs would fly first.

Related post: https://atans1.wordpress.com/2012/08/13/inflation-why-the-misleading-picture-minister-media/

PM, this can’t be right? 5.9% GDP but 0.4% wage increase?

In Economy on 10/05/2013 at 5:48 am

(Update on 30 May 2014: Related post https://atans1.wordpress.com/2014/03/02/beer-real-wages-next-ge/)

For incomes to rise, the economy must grow, Mr Lee said in his May Day message, making clear the centrality of economic growth which has been disputed by some who are worried about foreign workers and inequality, according to the local media. This is a repeat of, “Everyone would like their lives to become better and one important way of doing that is to make sure your pay goes up, especially with low-income workers. And for the pay to go up, the economy has to grow,” he had said in April. 

So I’m looking forward to hear what the govt has to say about Uncle Leong’s assertion that he estimated that from 2000 to 20111, the real growth in the median wage excluding employer’s CPF contribution was only 0.4%per annum., (FYI, Singapore’s economy grew at an average of 5.9% annum from 2000 to 2011*), After all, the govt was quick to counter his comments about the rent increases on Ubin.

Somehow, I doubt that the govt would contradict him because in a paper sometime ago, the Dept of Statistics  reported that between 2000 and 2011, real wages increased by 1.6% pa including employer’s CPF contribution. Uncle Leong juz took out the employer’s CPF contribution.After all, this money is not easily accessible, given the restrictions on the use of CPF money.

More interesting than Uncle Leong’s comments is that the NTUC minister (Zorro Lim) said:

“Wages can still go up despite slower economic growth.

‘This, provided that Singapore continues to get its policies right, said labour chief Lim Swee Say” on Saturday 27 April, ST reported.

True, this doesn’t contradict what PM said, but does imply that the link between wages and economic growth isn’t as clear cut as what PM says it is. And that it is also dependent on govt getting “its policies right”. But what if it gets its policies wrong (like HDB flats**, public tpt** and FTs by the truck-load).

We suffer while ministers earn their salaries and are protected from being sacked for incompetency, until the voters show their anger, and the ministers “resign”?

————

*

Year GDP%
2000 9
2001 -1.2
2002 4.2
2003 4.6
2004 9.2
2005 7.4
2006 8.6
2007 8.5
2008 1.8
2009 -1.3
2010 14.8
2011 5.2

(Dept of Stats)

**To be fair policies in these areas have undergone U-turns. But S’poreans are suffering from Mah’s and Raymond Lim’s goof-ups. I make no comment on the FT policy because I’m not sure if the govt is walking the talk until I see more numbers. Also after the 2008 M’sian GE, there was a influx of FTs from M’sia, afraid that the Malays would take out their parangs like in 1969. Given the 110% support that the Chinese gave the DAP in the recent election, and the failure to PK to defeat BN, I’m sure the Chinese are feeling vulnerable again.. Will they try to come again, and will the govt allow them in despite its promise to cut back on FT inflows?

1.5% GDP growth this yr?

In Economy on 03/05/2013 at 7:18 am

Yesterday it was announced that the manufacturing sector continued to expand last month, though at a softer pace, in line with expectations of a gradual and modest recovery as global economic uncertainties continue to linger.

Factory activity in April, as measured by the Purchasing Managers’ Index (PMI), was at 50.3, a marginal dip of 0.3 point from the previous month but still above the 50-point line that divides expansion and contraction.

The slight decline resulted from slower growth in new orders and new export orders, said the Singapore Institute of Purchasing and Materials Management (SIPMM), which compiles the monthly figures. (Today)

BT reported last week that DBS cuts growth rate from 3.2% to 2.5% but Credit Suisse reiterates forecast of 1.5%, http://www.cpf.gov.sg/imsavvy/infohub_article.asp?readid={27464576-17231-7047640680}

As I’ve blogged before, a major issue for S’pore (and M’sia and Penang in particular) is the decline in PC sales. Last month, IDC,  a research firm, said that in the first quarter of 2013 worldwide PC sales fell by 13.9% to 76.3m units, their steepest decline since 1994, when records began. People have been slow to buy PCs with Windows 8, Microsoft’s latest operating system, but they are still buying tablets or smartphones. S’pore and M’sia are major organisms in the PC ecosystem. They are for all intents and purposes non-existent in the Android (Google) and Apple ecosystems.

And the bright spot in PC sales is not much help for HP and Dell which sources stuff from M’sia and S’pore. In China, not only are PC sales still rising; they are evenly split between desktops and portable notebooks, which globally make up 64% of the market. China overtook America in sales of personal computers (PCs) last year, to become the world’s biggest PC market. According to IHS, a research firm, shipments to China amounted to 69m units, against 66m to America.

The biggest player in the PC space in China is Lenovo, a home-grown company that bot IBM’s PC biz.

Which bits of world are growing faster or slower

In Economy on 29/04/2013 at 5:45 pm

Fourth yr in a row?

In Economy on 27/04/2013 at 7:31 am

In each of the past three years the global economic recovery (read that of the US) started with a burst of momentum, only to swoon over the spring and summer. Likewise stock markets.

There are now signs of a repeat,what with

— weak US jobs numbers for March;

— US manufacturing sector grew at its slowest pace in six months during April, a survey has suggested; and

— the American economy grew at just a 2.5% annual pace in the first quarter. While that is up from a 0.4% performance in the fourth quarter of 2012, it came in below expectations for growth at or just above 3%.

When economy slows, not nec it’s ’cause FT supply ltd

In Economy on 11/04/2013 at 9:15 am

It could be because the electronics sector here is suffering from lack of demand

Global sales of PCs fell 14% in the first three months this year, the biggest fall since research firm IDC started tracking the industry in 1994 http://www.bbc.co.uk/news/business-22103079

Even our constructive, nation-building media recently admitted that S’pore has a problem in electronics production. It doesn’t do much components smartphones or tablets. Still very PC-based. Windows 8 is designed to work well with touch-sensitive screens, but the displays add to the cost of a PC. Together, the changes and higher prices “have made PCs a less attractive alternative to dedicated tablets and other competitive devices,” Mr O’Donnell said.

Update on 12th April 2013: The PC market may get a fillip from Microsoft. A year from now the company will cease all support for its ancient Windows XP operating system and Office 2003 software package, which remain installed on tens of millions of computers worldwide. Microsoft hopes to bully users—especially corporate IT departments rather fond of the robust XP—to switch to its new Windows 8, sales of which have not been as perky as hoped. But the move might prompt even more users to flock to tablets instead. S’pore will be hoping for the former effect. I’m one of those still on XP.

ST never told you of these comparisons

In Economy, Media on 01/04/2013 at 5:29 am

 

They appeared at http://veritas-lux.blogspot.sg/2013/03/social-darwinism-taking-its-toll-on.html. Thank SG Daily’s Facebook for drawing my attention to them.

https://atans1.files.wordpress.com/2013/04/low-employee-loyalty-in-singapore.jpghttps://atans1.files.wordpress.com/2013/04/singapore-employees-not-happy.jpg

Numbers show GCT & Lee Jnr messed up?

In Economy, Indonesia, Malaysia on 27/03/2013 at 6:45 am

This chart shows all the economies that maintained 6% growth or faster over 30 years. S’pore’s run of 7ish% growthended in 1994, when GCT was PM and Lee Jnr was Deputy PM and in charge of the economy. Going by the things our PM is doing now, maybe GCT held him back? Or LHL has repented? And the changes he is initiating, is his way of saying, “Sorry”?. How about a claw-back of ministerial salaries? Esp of PM’sand DPM’s? If it happens to bankers, it can happen to ministers: after all ministers’ salaries pegged to bankers among others.

Subsidising wage rises good, Minimum Wage bad

In Economy, Political economy on 13/03/2013 at 6:40 am

As usual the grumblers are out on TRE, TOC and Facebook. The question they are bitching out loud is, “Why is the govt spending our money on subsidising wage increases?”. And asking, “What about introducing a Minimum Wage?”

I’ve this fantasy that when the govt introduces a Minimum Wage scheme, these same people who say that this scheme is bad for S’pore: which it is*.

Coming back to subsidised pay rises, other than to win votes from the many S’poreans who don’t belong to Team “Govt, PAP are bastards” or “PAP govt is always wrong” or “We always bitch against the PAP, govt”, there is a good economic reason for the govt subsidising wage rises.

Rising wages give employers an incentive to increase the return to recruiting and training, if they can no longer bring in FTs by the cattle-truck load to off-set rising wages for locals. At the same time, rising wages make it more attractive for older S’poreans to look for work, rather than go online and complain about everything, while making it more attractive for employers to drop their prejudices and discrimination against the elderly.

(Having said all that, there is an educated oldie at the Marine Parade polyclinic that I wish wasn’t working there.)

And given that the SMEs are screaming that the govt is killing them by cutting off the supply of FTS, how else to give S’poreans a wage rise, on top of CPF employer rate rises.

And better to spend our money on fellow S’poreans rather than giving it to our SWFs who will spend some of it on ang moh investment bankers who bring them lousy deals.

Post on Workfare: https://atans1.wordpress.com/2010/10/13/minimum-wages-missing-the-point/

*I wish all those MPs who talked cock about a Minimum Wage would read http://www.economist.com/blogs/democracyinamerica/2013/02/minimum-wage and I’m shocked that the PAP didn’t ensure that its MPs understood elementary economics. (BTW, the piece is entitled “The minimum wage- The law of demand is a bummer”)

Most relevant excerpt: There are conditions under which raising the minimum wage will increase demand, as well as economic efficiency. According to one story, monopsony conditions for low-wage labour, ie, imperfectly competitive labour-market conditions in which there is but a single buyer of low-wage labour (or a colluding band of buyers) that is able to set wages at a level workers have little choice but to accept. Good old Econ 101 shows that under such conditions, a bump in the minimum wage, within a certain range, can boost employment and enhance efficiency. So there’s that. And such conditions no doubt exist in some sectors at some places at some times. One famous, and egregiously misused, study suggests that monopsony-like conditions applied to fast-food restaurants in Pennsylvania and New Jersey in the mid-1990s. But there is basically no reason whatsoever to think that such conditions apply generally, across all sector and regions of the American labour market.

In the absence of special conditions, we have every reason to expect the law of demand to hold, such that raising the minimum wage will make it harder for inexperienced workers—workers whose output is worth less to employers than the mandated wage, and especially teenagers from low-income families looking to get a first footing in the labour market—to find work. And this is, in fact, what empirical studies tend to conclude. A comprehensive 2008 survey of the empirical literature from David Neumark, a professor of economics at the University of California, Irvine, and William Wascher, an economist for the Federal Reserve, found that, as one would expect, “[M]inimum wages reduce employment opportunities for less-skilled workers, especially those who are most directly affected by the minimum wage.”

Again, it doesn’t have to work this way. Employers can cut hours rather than hiring fewer workers. They can turn down the air-conditioner, strictly police the length of breaks, and otherwise reduce the cost of amenities previously enjoyed by employees. They can shift to off-the-books employees willing to work for less than the legally-mandated minimum. They can raise prices, passing on increased labour costs to consumers. It’s conceivable that the only consequence would be that a larger share of profits gets distributed to low-wage workers. Conceivable and exceedingly unlikely. In reality, we probably get small adjustments along each of these dimensions.

Of course, there is some newish empirical research contesting the disemployment effect of increases in the minimum wage, and then there is even newer research debunking it.

S’pore can learn from BMW

In Economy, Political economy on 28/02/2013 at 6:28 am

And Western countries on how to create the conditions to optimise the working environment for an older work force. http://www.bbc.co.uk/news/business-21535772

ST editor calls leading economists and us daft

In Economy, Humour, Political economy, Political governance on 12/02/2013 at 6:06 am

According to ST editor Han Fook Kwang in his weekly SunT column (pg 37) “it isn’t possible for ordinary Singaporeans to absorb and fully understand all the arguments and implications. arguments and implications highlighted in the Population White Paper”. Hence our opposition. Hello Mr Han, so how come four leading S’porean economists, scholars all wrote this http://www.tremeritus.com/2013/02/09/economics-myths-in-the-great-population-debate/ (I’m linking to this republishing ’cause of the comments section)

So these four are daft too?

He was riffing on what the PM said, “Govt could have presented Population White Paper better”. And going further anddaring to call us openly what PM didn’t dare?

So how come,

— the Chief Communications Officer of the govt, s/o the former disgraced president,

— an unemployed MP who was the head of the regional business of an int’l PR firm,

— the editorial teams at SPH and MediaCorp,

— CoC Yaacob and his team at the Ministry of Truth & Spin, and

— the numerous PR senior managers in the govt and its agencies,

didn’t advise the PM and DPM Teo to take account of our daftness when presenting the PWP?

They too out of touch with us daftees? Or they dafter than us? Or did PM and DPM Teo ignore their advice? Hence they more dafter than everyone else in S’pore.

The ST Managing Editor, as a member of the Dark Side, should be using his skills to prevent us from thinking? Not provoking us to think “unhealthy”, non-constructive tots: like there are daft Men In White on the Dark Side.

White Paper fiasco: Who goofed?

In Economy, Media, Political economy, Political governance on 03/02/2013 at 6:39 am

So we now know that the 6.9m figure in the White Paper is a “worse-case scenario”

— “Reiterating that the 6.9 million figure should be viewed as “the worst-case scenario”****, Mr Khaw wrote: “We hope we do not reach that figure; we may never reach that figure.”

–” Prime Minister Lee Hsien Loong said … he fully agrees with Mr Khaw’s explanation that a 6.9 million population is not a target, but just a worst-case, aggressive scenario the Government must prepare for.”

(Excerpts from MediaCorp)

So why didn’t the media tell us this when the media reported the White Paper? The media reported the figure of 6.9m as though it was set in reinforced concrete that had platinum bars rather than steel bars. Surely when the staff of the s/o the disgraced president, and Yaacob*gave the local media their instructions local journalists and editors the customary briefing, they made it clear that the 6.9m figure is a “worse-case scenario”? And that the figure was used to ensure that there would be adequate infrastructure should this happen, which the government didn’t want to happen. And that if it didn’t happen, S’poreans would have even better facilities for which they should thank the PAP on bended knees.

But these messages were never reported. They came to the attention of “the inhabitants of cowboy towns” who were happily shooting holes into the White Paper, and other S’poreans only when the PM Facebooked and Khaw blogged these messages.

Then the local media parroted reported what the PM and Khaw had said.

Either the local media are staffed by stupid people, or are full of subversives, who take their 30 pieces of silver ** while saboing the PAP government. Or maybe the going rate is a lot more than 30 pieces of silver? And they are not getting it? Hence the government’s messages didn’t get broadcasted.

Or were the minions of s/o Devan Nair, and Yaacob, incompetent, stupid spinners? Journalists and editors are claiming that they were never ordered briefed that the 6.9m figure was a “worse-case scenario”. They claim to be as surprised as us netizens that the PM and Khaw are now making this claim.

Whatever it is, if WP Low is to get his wish of continued PAP hegemony, PM should get a grip on the PAP spin machine. He and his ministers can’t do all the spinning themselves. Maybe Auntie Sylvia or Show Mao, in emulation of a Tang dynasty official, can whisper this to the PAP, “behind closed doors”. Remember WP, yr mission is to preserve PAP hegemony.

**He used the phrase “worse-case scenario” when one LKY gave his Hard Truth on Malay Muslims not integrating.

Book PM could cite in validation of “Growth, ‘cheong’ all the way”

In Economy, Humour, Political economy, Political governance, Property on 01/02/2013 at 7:37 am

In “Planet of Cities”, by Shlomo Angel*, a professor of urban planning at New York University, argues that cities must prepare themselves for rapid growth, citing New York and Barcelona: In the 19th century both cities decided to prepare themselves for rapid growth. In 1811 New York’s city council approved a plan which allowed all of Manhattan to be built up and included the island’s now famous street grid. In 1859 Barcelona followed suit with a similar concept to expand the city nine-fold.

Err PM not planning to increase the population that much.

And on why working-age population matters:

http://www.economist.com/blogs/buttonwood/2013/01/demography-0

Netizens, pls realise that the intellectual underpinnings are there for the White Paper. It’s the conventional wisdom. Raving, ranting and screaming will do no good.

Nothing will, not even the ballot box: “A vote for the WP is a vote for the continuance of PAP policies” says WP Low. So lie back and enjoy being raped. Think of the value of your property when you cash out and move on overseas.

SMEs: Problems getting finance, but govt U-turn on FTs?

In Banks, Economy on 31/01/2013 at 4:53 am

http://sbr.com.sg/financial-services/news/over-half-singapore-smes-application-financing-got-rejected-in-2012

And wonder if the SME financing target mentioned in this BT report from sometime in the middle of 2012, was met. As not heard any more, I suspect not.

UP to $175 million of the $250 million the government has earmarked for investment in small- and medium-sized enterprises under the first phase of its public-private co-investment funding programme for local SMEs will be seeded with private equity funds by year-end.

The programme includes a fund-of-funds called the SME Catalyst Fund, which the $175 million investment falls under, and a direct co-investment fund called the SME Co-Investment Fund.

This means that some $350 million will be placed with the PE funds by the end of this year for investment in SMEs, as the private sector has to match dollar-for-dollar what the government is putting with the PE funds.

The $350 million is part of the first phase of the co-investment fund that is expected to come up to $500 million – $250 million from the government, and the other half from private sector capital.

As to whether the White paper on population reflects a U-turn on the policy of starving SMEs of cheap FTs, only time will tell. Watch and wait. Remember the WP was bitching in parly about the shortage of labour among SMEs. Chinese-owned SMEs fund the WP.

PM, what about asking the right questions? Or at least different ones

In Economy, Political economy, Political governance, Private Equity, Temasek on 29/01/2013 at 7:52 am

“Do you want faster growth or do you want fewer foreign workers? Do you want more hard work or more leisure? Do you want more competitive schools and good results and good futures, or more relaxed schools and fall behind? How can we find that balance in between?” the Prime Minister asked. Whatever the hurdles, he emphasised that the PAP had always been open with Singaporeans, even when these trade-offs may be unpopular — SPH.

I got two gripes with the above remarks by PM.

Firstly, as usual he is framing* the issues in such a way so as to try to get us to answer the way he wants us to answer them. Dad used to do this successfully when we didn’t have the best education system in the world, when issues were less complicated, and when there wasn’t the internet. But times have changed, but PM hasn’t shaken off daddy’s influence.

— “Do you want faster growth or do you want fewer foreign workers?” Well how about asking, “How can we have faster growth without FTs? Can we substitute robots, or pay higher wages?” And more fundamentally what about, “Do we need faster growth? What about better quality growth?”

— “Do you want more hard work or more leisure?” What about asking,”Can we work smarter to have more leisure?” Or more fundamentally, “Are we working smart? Or are we working harder because we are not working smart?”

— “Do you want more competitive schools and good results and good futures, or more relaxed schools and fall behind?” Shouldn’t we be asking, “Are there other ways of educating S’poreans that ensure national prosperity and self-development?”

Now the answers to these alternative questions may well be those that the PM thinks are the solutions to the problems that we face. Fair enough, then. But let’s ask alternative questions, think thru the answers, and also think blue sky. The great and the good don’t always have the answers. Even Bill Gates got Google wrong, badly wrong http://dealbook.nytimes.com/2013/01/21/prophesies-made-in-davos-dont-always-come-true/

And lest the PM forget, the PAP has not always been open with us.

The FTs came pouring in on the quiet. The government was not open on this issue, public housing and transport, and inflation.

Mah Bow Tan was telling us that his HDB building programme was sufficient when S’poreans were saying it was insufficient. Well fact that Khaw has accelerated and expanded the building programme shows that Mah was wrong, if not in denial.

And remember Raymond Lim said GST had to rise when we bitched about overcrowded trainds and buses: he implied that we juz wanted more comfort and so should pay for it. He was wrong or in denial about the problem. Well the massive spending plans, shows that we were right to get upset.

And inflation. I’ve gone on and on about Tharman and Hng Kiang saying that higher inflation doesn’t affect S’poreans who don’t buy cars. That is obfuscation, not openness.

But never mind, the PAP can remain complacent because Low has publicly implied that a vote for the WP is a vote for continued PAP rule.

Not that I’ll complain too much. The low-tax environment and the emphasis on making sure property prices “cheong all the way” have allowed me to stop working in my 40s. And have the time to think; and grumble, constructively, I hope.

And oh, keep on spending our money on ourselves. And double it, or triple it. Better return on investment for the PAP, then letting Temasek lose it like in here http://www.breakingviews.com/tpg-runs-rings-around-li-ning-shareholders/21064940.article. And anyway, , potential returns for investors are not going to be that great anyway http://www.economist.com/blogs/buttonwood/2013/01/investing. So it’s a better investment for us and the PAP: make life more comfortable for us using our money.

*Read this on the science of framing questions, to get the “right” answers http://www.bbc.co.uk/news/uk-scotland-20512743

Population cliff: Even China has a problem

In Economy on 28/01/2013 at 5:20 am

Updated to include links to analysis of  the White Paper on FT growth released on 29 January 2013)

There is a a demographic cliff ahead: even for China

http://simonhedlin.com/2013/01/21/demographic-cliff-ahead/

Chinese statisticians are screaming about it: In the past the NBS has counted anyone between 15 and 64 years old as of working age. That age range is consistent with international convention and China’s own statistical yearbook. But in announcing the decline last week, the NBS adopted a narrower definition: 15- to 59-year-olds. By doing so, it drew early attention to a demographic downturn that will soon apply to 15- to 64-year-olds and to the population as a whole. Ma Jiantang, head of the NBS, said he did not want the population data to be “drowned in a sea of figures” released at the same time.

http://www.economist.com/news/china/21570750-first-two-articles-about-impact-chinas-one-child-policy-we-look-shrinking

Sadly, the PAP is no longer believed because its habit of prophesying doom and gloom went too far. Biy like boy who called “Wolf”, too often.

Update on 29 January 2012 http://www.bloomberg.com/news/2013-01-21/singapore-turns-against-itself-as-pressure-for-babies-irks-women.html

http://www.tremeritus.com/2013/01/29/population-white-paper-projecting-6-9m-u-turn-on-influx-of-foreigners/

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

When 55% of voters were FTs

In Economy, Humour, Political economy, Political governance on 25/01/2013 at 5:03 am

(Update on 29 January 2012 http://www.bloomberg.com/news/2013-01-21/singapore-turns-against-itself-as-pressure-for-babies-irks-women.html

http://www.tremeritus.com/2013/01/29/population-white-paper-projecting-6-9m-u-turn-on-influx-of-foreigners/)

TRE readers are forever screaming that the PAP govt wants to swamp S’pore with citizens born overseas. They might like to know that  in 1959, according to the u/m book, only 270,00 out of the 600,000 voters were born here. If TRE readers are correct, the PAP is only restoring things to as they were when the PAP came into power. Is that so wrong? LOL.

Interestingly the author reported that when one LKY revealed the above fact in 1959, LKY also said,”we must go about our task (of building up a nation) with urgency … of integrating our people now and quickly”. Maybe he repented building up a nation?

Singapore Correspondent. Political Dispatches from Singapore (1958-1962)

(http://artsonline.monash.edu.au/mai/new-book-singapore-correspondent/)
by Leon Comber*

Publisher:  Marshall Cavendish International Asia

Singapore Correspondent Book CoverSingapore Correspondent” covers five years of Singapore’s colourful political past – a period of living turbulently and sometimes dangerously. It is a collection of eye-witness dispatches, sent from Singapore to London, spanning a time when Singapore was emerging from British colonial rule and moving forward to self-government and independence. Many of the early struggles of the People’s Action Party (PAP) are described as the focus is on the political struggle taking place in which the PAP played a major part. Many important events which have long been forgotten are brought to life. These dispatches prove that political history need not be dull, and indeed can sometimes be entertaining and lively.

* MAI Adjunct Research Fellow
 

.

More FTs on way, a lot MORE!: DBS

In Economy, Infrastructure, Political economy on 22/01/2013 at 6:29 am

OK, OK, I exaggerate: only 8% more of population if S’poreans don’t start breeding like rabbits.

DBS Vickers expects an upcoming white paper on Singapore’s population to raise its population target to 7 million from 6.5 million, which will benefit construction, land transport, property and healthcare companies. http://www.reuters.com/article/2013/01/18/markets-singapore-stocksnews-population-idUSL4N0AN3GR20130118

SMRT is not on the “buy” list. It too has concerns about SMRT, like me and many others.

Try this to curb car growth?

In Economy, Uncategorized on 17/01/2013 at 6:04 am

Every time, COE prices rise, there is sure to be a rant from Ravi the NSP member that will appear on my FB wall that “Shumething must be done”.

But what should be done? Our mega-millionaire ministers and civil servants only mutter about tinkering with the COE system. They can afford the COEs, after all.

As to the impact on inflation and economy generally, DPM and finance minister, and trade minister say,”No sweat, if not planning to buy vehicle”. Err vehicles also used to transport goods and dispatch service workers: when I got a PC issue, I don’t expect IT techie to walk or take the bus.

San Francisco is trying out car-sharing using Beemers.

With a large and growing number of people here choosing not to own a car, German manufacturer BMW has decided to branch out into car-sharing services with a fleet of 70 cars spread around the city – initially in 14 locations, with a further 100 being added gradually …

— If drivers share rather than own cars, the overall number of vehicles in the city is reduced. Each car in a car sharing scheme results in 10 cars leaving the street, according to consultants Frost & Sullivan.
— Shared cars that are actively used most of the day do not clog up parking places while on the move.

http://www.bbc.co.uk/news/business-20638779

Here is urban planning experimentation at its best.

No free market mantras or rants. Be constructive.

 

 

Stagflation here to say: UBS

In Economy on 14/01/2013 at 5:26 am

Well OK, “mini stagflation”, though I’m sure in other countries, the word “mini” would be omitted. But there is the ISA here, while cynical me knows that all investment banks are hungry for biz from Temasek and GIC.

Singapore is experiencing “mini stagflation”, as its inflation is likely to remain high for structural reasons even as growth stays weak this year, said Kelvin Tay, UBS regional chief investment officer, Southern Asia Pacific, at a seminar on Friday.

The restructuring of the economy, shifting from indiscriminate growth to the quality of growth, means lower growth and high inflation. It’s a structural problem, “Singapore is suffering more from structural inflation.” He was speaking at a business outlook forum organised by the Singapore Chinese Chamber of Commerce and Industry and SPH.

Even though the headline inflation rate may subside, as it did in November on high-base effects (this is a highly technical reason, that doesn’t have real world effects on us consumers), higher labour costs due to tighter foreign labour policies and efforts to boost low-wage workers’ salaries will continue to push prices up. Profit margins will also be squeezed further as businesses (esp SMEs) are forced to invest to raise their productivity.

And he thinks cost increases are likely to be be passed on: not shumething that is likely to please consumers, who are suffering from higher COEs, and property prices, and real wages that are stagnating. PAP govt will not be too happy too with stagflation, as grumbles grow during NatCon.

Why S’pore wants to be Arctic Council Observer

In Economy, Energy, Logistics, Shipping on 27/12/2012 at 5:50 am

And it’s not because of the polar bears, or Santa and his elves (FTs?) or reindeer.

It’s the new sea route: the NE passage. It’s nothing for the “We love to rubbish S’pore” readers of TRE and TOC to get worked up about. Very few ships use this route (I think 40 this year). And while this number will increase, most ships will sail the traditional route via the Malacca Straits. For one, ships have to be specially built for this route. First gas tanker crosses the Arctic to Japan.


Polar route

Govt may be right on limiting access to uni education, discuss.

In Economy, Political economy, Political governance on 19/12/2012 at 5:46 am

Given that Christmas is the season of goodwill to all men (including the PAPpies) and given that the PAP has had a torrid time, and given that Fabrications about the PAP is not doing its job, I tot I should post some facts and analysis (not Hard Truths) that support a policy that has pushy parents and netizens upset.

Sometime back, when

— PM said the desire  for “personal growth” 9i.e. a university degree has to be balanced with jobs; and

— the education minister said that while the govt would increase the number of places in local universities for locals, there would be a limit (I think he said 40% of some “mark”),

both were given a hard time by netizens and pushy parents.

I was reminded of the above recently, when I surfed across a few articles recently that discussed the skills needed to get jobs in a developed economies.

In a McKinsey survey of Western countries, nearly 70% of employers blamed inadequate training for the shortfall in skilled workers, yet 70% of education-providers believe they suitably prepare graduates for the jobs market. Similarly, employers complain that less than half of the young whom they hire have adequate problem-solving skills, yet nearly two-thirds of the young believe that they do have such skills.

Perhaps the young and their teachers need to take a reality check said the Economist writer who reported this.

Then there is thisAs some Canadian industries struggle to find skilled workers, others face a glut of qualified candidates and not enough jobs to go around. University professor Peter Fragiskatos says emphasising the importance of a university education only makes the problem worse.

He writes: Notions of success in Canada have been, and remain, intimately connected to obtaining a university degree. Why? After all, Plato, Aristotle, Nietzsche and Heidegger can be discovered just as easily at a public library and for a much cheaper price.

All of this might sound strange coming from someone who teaches at a university. While the joy I feel when working with my students cannot be put into words, the experience has made me realise that a love for learning is not their leading motivation, if it ever was.

Most have been raised with the idea that a secure future will only be possible with a BA or a BSc, and they enrol in university for this reason. As they get older, today’s students are likely to pass along the same message to their kids.

The reality is that Canadians are living in a new era, one where a technical education – usually obtained at a community college – has the prospect of delivering not only a steady job but better pay than what university graduates typically make.

Engineering, mining and many health-related professions – the three areas identified by Tal’s report as most in need of qualified applicants – do not require a university degree.

Finally from an Economist blog  the work of Cambridge economist Chang Ha-Joon, has noted that Switzerland*—one of the richest countries in the world and the nation with the third-highest ratio of Nobel scientists per person—has a lower rate of college enrollment than every other rich nation, as well as other beacons of prosperity like Argentina, Lithuania, and Greece. In fact, once a country has crossed some very low threshold, there is no relationship between the number of graduates and national wealth. The explanation is simple: a typical college education does not linearly increase labor productivity. This is not necessarily a bad thing—there is more to life than making money, after all.

http://www.economist.com/blogs/freeexchange/2012/09/college-enrollment

So maybe, the govt is right to put the emphasis on vocational education, with scholarship schemes like this?

Fat chance that most readers of TRE and TOC, and pushy parents would concur. For the former, the govt, PAP, NTUC and related entities are always wrong. Take Zorro Lim’s statement that NTUC says ‘no’ to equal pay for all nationalities because “Same job-equal pay” rule will put local workers and families at a disadvantage. Facebookers and some bloggers were bitching about this. If he had said “yes”, they would be bitching too.: S’poreans must come first. Wonder how these people feel, now that ST (whom they rightly bitch abt) agrees with them that sMRT should only use the English station names in its public announcements. LOL

—————————–

*S’pore’s spending on education is only around 3% of GDP (about halve of Switzerland which is in line with developed countries), so we got to spend a lot more to have a Swiss-style standard of education. Unless the govt wants us to be third world in education, like on workers’ and refugees’ rights.

 

S’pore: A great place to be born in

In Economy, Humour, Political economy on 05/12/2012 at 5:39 am

In 1988, S’pore was the 36th best place to be born in: same as East Germany. M’sia was 38th and HK was 7th. In 2013, according to an article (The lottery of life) in an Economist publication, S’pore will be the 6th best place to be born in, M’sia will be 36th and HK 10th.

Switzerland will be 1st, followed by Oz, Norway, Sweden and Denmark.

Bang yr balls in frustration S’porean self-loathers: KennethJ, Goh Meng Seng, Tan Kin Lian, Tan Jee Say, Ravi, and born- loser readers of TRE and TOC.

Maybe the WP MPs have a point in being so supportive of the PAP govt? Maybe NSP is right that the party is not ready for govt: PAP still going strong?And maybe PM Lee and Chief Clerk Goh ain’t that bad?

I’m surprised that ST didn’t see fit to publicise this. Must be full of subversives.

But this good ranking does raise a question: If so good leh, home come S’poreans are refusing to breed? Shumething must be wrong? Maybe with S’poreans?

Or do the stats leave out things that matter most to S’porean couples that decline to breed or stop at one.

“For they have sown the wind, and they shall reap the whirlwind”

In Economy, Infrastructure, Political economy, Political governance on 27/11/2012 at 6:01 am

Well, well. So 102 FT drivers recruited from China (5% of all SMRT’s drivers) refused to work yesterday, disrupting SMRT bus services. They were not happy about their pay. Happily for commuters using the affected bus services, they agreed to return to work while talks continue.

Whither the FT policy, and LKY’s pride in FTs? Striking was a no-no for workers (except, as I recounted yesterday, when the govt had another agenda). S’porean sheep workers did not strike partly because they were afraid of retribution. Now FTs have led the way and have so far got away with it. They might even get more money. If they do, will locals realise that they too can get away with striking? If immigrants whom LKY respect can strike, why can’t they?

And if S’poreans start striking, will the MNCs move on?

Something for the cabinet, PM and his dad to ponder.

“For they have sown the wind, and they shall reap the whirlwind: it hath no stalk: the bud shall yield no meal: if so be it yield, the strangers shall swallow it up.”

As for SMRT, time to forget about the stock. Management is still dysfunctional, despite having a ex-SAF chief and scholar in charge. Err might even turn into another NOL, where as I have recounted another ex-SAF chief and scholar has run it aground (Search “NOL”  on this site).

Typical S’porean way

In Economy, Humour, Political economy, Political governance on 21/11/2012 at 6:29 am

In a 2010 paper in the journal Tobacco Control, a group of Singapore-based cancer specialists proposed phasing-out tobacco by denying access to tobacco for anyone born from the year 2000 onwards. The researchers said their idea introduced the concept of tobacco-free generations that would “never legally be able to take up the harmful habit of smoking, at any age”

So very S’porean.

I came across the above when I read Should you need a licence to smoke?  This is something experts in the West are now thinking of recommending.

S’pore’s juz the place to introduce it, less draconian than banning youngsters from smoking.  We got licences to own cars (COEs) , licences to drive into the city (ERP charges),  licences to buy “subsidised” public housing (got to have marriage licences first), and local media journalists need licence to think (juz kidding).

And the govt could introduce the mandatory death penalty for smoking without licences. Shan could justify it on the grounds that smokers are all going to die one day, anyway.

S’pore in the 12% that made it (M’sia didn’t)

In Economy on 14/11/2012 at 6:34 am

Look at this chart from the World Bank (via BBC). Of the 101 countries that were “middle-income” in 1960, only 13 had managed to break from the pack to become advanced economies by 2008. S’pore is there. While one LKY was wrong to say S’pore was “barren” when he, Dr Goh Keng Swee and gang took power in 1959, let’s give them credit for getting us to be an “advanced” country. And even Goh Chok Tong and Lee Jnr, even though during their time (1990s- 2011), there were no new ideas: juz following the old road map and Hard Truths. Even now, PM Lee doesn’t have any new Hard Truths. But at least he is trying finally to force the SMEs to restructure. But no thanks to George Yeo, Raymond Lim, Minister Mah or Lim Hng Kiang.

And of course we must give credit to civil servants like Hon Sui Sen (also a technocratic minister), Sim Kee Boon, Howe Yoon Chong, Pillai, Herman Hochstadt (my ex-boss), Ngiam Tong Dow and many others. Err but not including Philip Yeo and one TJS. And in response to this, Ngiam never ever wanted to be a minister or the president.

KennethJ, TJS, Dr Chee and readers of TRE and TOC: don’t always say bad things about the PAP. Be more nuanced. But pigs will fly first.

World Bank chart

Pricing is not the only way PM! Try cooperative game theory?

In Economy, Political economy, Political governance on 05/11/2012 at 4:57 am

The Economist, a British weekly newspaper, seems to the PAP’s bible*. It believes that pricing is the best way to allocate scare resources and long before the government introduced road pricing, the Economist was advocating it: just like high taxes on petrol (we got this) , permits to drive cars (our COEs), consumption taxes with rebates for poor (GST and rebates) , low rates of corporate and personal income taxes, and no tax on savings (All present and reporting). Oh yes and it believes low fertility rates are bad and that immigration is to be encouraged, screw the social problems.

But even the Economist accepts that there are limits to using prices to allocate resources. It recently wrote:

People often exclude financial considerations from their most important decisions, from the person they marry to the foster child they adopt. Even some transactions that do involve money are not really about price. Universities in America do not admit students based on who pays the most, for example. Rather, they select students based on complex criteria that include grades, test scores and diversity. Similarly, students choose their university on more than just financial factors.

Money is not essential to a market. After all, economics is about maximising welfare, not GDP. But the absence of a price to allocate supply and demand makes it harder to know whether welfare is being maximised. This year’s Nobel prize in economics went to two scholars—Alvin Roth, who has just joined the economics department at Stanford University, and Lloyd Shapley, a retired mathematician at the University of California, Los Angeles—who have grappled with that very problem http://www.economist.com/news/finance-and-economics/21564836-alvin-roth-and-lloyd-shapley-have-won-year%E2%80%99s-nobel-economics.

— Mr Shapley’s and Mr Roth’s Nobel prize illustrates a larger point about economics. Undergraduates often study “utility functions” to learn how people choose alternative consumption baskets in a way that makes them better off. Once they go on to graduate school and then a job, they deal almost exclusively with priced transactions: for wheat, autos or equities.

Yet in countless private and public policy questions, welfare can be improved in ways that do not show up in the price. Mr Roth’s work on public school admissions and kidney donations are an obvious example, but there are countless others.  I recall reading that Starbucks had a plan that would let an employee in one store trade jobs with an employee in another so that both could work closer to home. The result would not change either employee’s output or wages, or Starbucks’ profits. Conceivably GDP would fall because the employees would spend less on petrol or bus fare. But provided the swap was voluntary, the welfare of both would without question rise http://www.economist.com/blogs/freeexchange/2012/10/understanding-economics.

(Cooperative game theory is waz the above is all about. It looks at how well people can do when acting together; by examining all the possible combinations, theorists can spot outcomes that individuals acting alone cannot achieve http://www.economist.com/blogs/freeexchange/2012/10/microeconomics)

Well one hopes that the government too recognises the limitations of using prices to allocate everything. And that bit about “maximising welfare, not GDP”. It’s in the PAP’s bible. Juz read it, not juz Hard Truths which incidentally is derived from this book book.

*Where they differ is on democracy and a free media. The Economist is a strong advocate and proponent of both these principles, unlike the PAP. BTW I used to joke that the government doesn’t need high-salaried ministers and civil servants to think up policy. They need to read the Economist. Declaration of interest: the Economist is my favourite source of info and analysis. I like its combi of social liberalism and conservative economics and its style of prose, entertaining, and irrelevant irreverent.

It says things like: “The branding function of philosophy in politics is to give individual conscience a form congruent with group interest, to transform the mathematical necessities of coalitional partisan politics into many millions of separate acts of self-congratulating private virtue. It’s a neat trick. It would be neater still if fewer pundits played along.”

Jos too is talking cock

In Economy, Political governance on 26/10/2012 at 5:42 am

Shouldn’t Jos Teo bitch about the Integrated Programmes that make PSLE such an impt exam today, rather than against employers that offer PSLE leave for their employees, and parents that take time off to coach their kids. In my time, PSLE was important to get into RI, Victoria and Serangoon English: once in if no major balls-up could do PreU in these schools (Integrated Programme is juz modern variant), but if one went to mission primary schools, going to mision secondary schools (and PreU) wasn’t that dependent on PSLE results, unless one was stupid. Things got even better when the govt started NJC.  More places for PreU studies.

But then the cycle turned and now PLSE is the exam to pass.

“We are quite mistaken to behave as if PSLE is THE defining moment in a child’s development.”: Err not all parents can afford to send their kids overseas to make sure they get a good education, if the kids get culled here.

And following the logic of her outburst, wouldn’t the logic of her argument mean that the government is wrong to continue curbing the number of COEs? As even ministers and MAS concede that the rising costs of COEs adds to inflationary pressures, even if ministers are wrong to say that rising COEs don’t affect the cost of living of us plebs (those unable to afford owning cars, and have to use public tpt).

Which brings me to the inflation situation.

Remember me bitching in early August that MTI jnr minister Lee Yi Shyan, and the local media covering him, were misrepresenting the pix on food inflation? I had pointed out that there were reports of rising food prices.

Well now MAS validates what I was saying. MAS warned on Tuesday about upward pressures in imported food prices over the next few months and into early 2013 due to weather-related supply disruptions.

Jos has gd company. And this ST guy should be in line to be a jnr minister.

Note: Last sentence and link to Jos piece added at 9.09am on day of publication.

 

Dr Goh’s Diamond Hard Truth reaffirmed

In Economy, Political economy on 19/10/2012 at 6:49 am

As a retiree, I was getting worried that PM, Tharman and gang had abandoned a Hard Truth that Dr Goh Keng Swee had laid down (and which has served us well, unlike some of Hary’s Hard Truths): Singapore’s exchange rate policy cannot be used as a tool to manage the country’s export competitiveness.  It was a Diamond Hard Truth, engraved in granite, that the Singapore dollar is a key macro-economic policy tool to keep inflation under control.

Increasingly based on the comments of forecasters and the central bank’s actions, I had gotten the impression that the exchange rate policy was being used as a tool to manage the country’s export competitiveness.

This worry got worse earlier this year with inflation above 5%, ministerial jokes about inflation (that even BT contradicted), and the tightening of the FT policy that had employers screaming.  

Until last Friday that is, when the central bank, in a decision that surprised the market, decided not to ease its monetary policy in spite of slowing exports due to a weaker global economy. (The S$ has appreciated since January by 6% against US$.)

And the  Trade and Industry Minister Lim Hng Kiang said on Monday, “The [central bank] recognises the need to strike the right balance between ensuring exporters are not unduly hurt by a stronger currency in the short-term, and capping underlying price and cost pressures in the economy. However, the exchange rate cannot be used as a tool to manage Singapore’s export competitiveness.”

 Over the longer term, he added, competitiveness could only be achieved through higher productivity and innovation such as creating new products that the market demands. (Ya been hearing this rubbish since the 1980s but the new products and productivity never appear, bit like Godot)

(He could, and should, have added that S’pores exports require imports. Dr Goh used to emphasise that a cheap S$ means export costs go up because the prices of imports used to make the exports goes up. Minister Lim did not make this point. He should have reminded S’poreans of this Hard Truth.)

Mr Lim was responding to a question posed by an economic literate NMP, Tan Su Shan, who is MD of wealth management at DBS Bank. She asked if the central bank would “consider recalibrating its strong Singapore dollar policy and allow the Singapore dollar nominal effective exchange rate to appreciate at a slower pace”.

“The strengthening of the Singapore dollar is a key macro-economic policy tool to keep inflation in check over the medium term,” he added.

Finally, readers might want to send this BBC clip  about local inflation fears to the junior minister who talked rubbish on inflation in August https://atans1.wordpress.com/2012/09/03/err-lee-what-did-you-say-abt-food-inflation/. It’s not juz me, it’s the BBC

A plug for something S’pore from Chilean official

In Economy, Political economy on 18/10/2012 at 7:18 am

Hernan Cheyre, the boss of CORFO, a government body that oversees Start-Up Chile and other initiatives to support entrepreneurs, argues that while Brazil will inevitably be seen as the China of Latin America given its size, Chile can become the region’s Singapore, which has prospered by welcoming foreign talent and providing businesses with a stable, well-regulated base for their operations throughout Asia.

Singapore, however, has a long track record. Start-Up Chile is only two years old, and it is closely identified with the current centre-right government, which may be turfed out at the polls next year.

(Excerpt from article in Economist’s latest issue)

I’m sure those S’poreans who hate S’pore’s success (thinking of the many TRE readers) will be banging their balls.

NatCon: More cynical than Wayang?

In Economy, Political governance on 10/10/2012 at 5:52 am

Many (self included) think that NatCon is Wayang. But could it be even more cynical? Is NatCon’s aim  to distract us from the govt’s mismanagement of the economy. This unworthy tot struck me when I read DBS’ analysis of the S’pore economy last week.

DBS says that high inflation in recent years is mainly made in Singapore and this has affected overall competitiveness. High COE premiums and rentals, as well as the continued increase in labour cost are the key drivers. Ironically, the bulk of these were policy-induced, it said. [Translation: Inflation is fault of the govt leh]

It goes on, “The tightening in foreign labour inflow in particular, is creating significant strain on enterprises and eroding Singapore’s cost competitiveness. The near- term impact is higher labour costs, compression of profit margins and the tendency for companies to pass on this higher cost to consumers, resulting in higher inflation. Thus, in a bid to restructure the economy, growth and competitiveness have been affected, and just when the global cycle is weak.” [Translation: The govt’s policy of reducing FT inflow is making it more difficult to growth the economy]

So given that stagflation (economy not growing or is shrinking, but inflation is remains high: “Singapore’s consumer price index rose 3.9 percent in August from the year before, more than double the 1.7 percent rate in the U.S., the world’s biggest economy. Inflation in the island state averaged 5 percent for the past year<” reports Bloomberg) is the fault of the govt, what would distract the masses and netizens more than get them engaged in something irrelevant and entertaining? Even if the netizens don’t take part, they are so busy bitching abt it that they forget (or don’t realise the economy ‘s failings) to criticise and highlight the mismanagement of the economy by the government. So NatCon is the PAP’s answer, juz like in Roman times, the emperors had “Bread and circuses” to keep the rabble in Rome happy and distracted when the barbarians were crossing the frontiers?

Waz sad is that PM thinks he has to resort to gimmicks like this. He made a gd start getting rid of underperformers and supernumeries in the cabinet. He then started spending our money on making life more comfortable for us. He should execute the latter well, not get distracted by PR gimmicks.  If executed well, spending more of our money on ourselves will win back the voters.

 

“Honest conversation” on FTs: Let’s have it, not juz pretend that we’ve having it, Iswaran

In Economy, Political economy, Political governance on 05/10/2012 at 6:16 am

S’poreans must have honest conversation about immigration: S Iswaran late last week. But will we be allowed to, minister?

No, I’m not talking abt what Uncle Leong pointed out about the growth in FTs despite all the talk of by the government of it being curtailed. The analysis and comments of Uncle Leong and many others based on the government’s very own data has resulted in this attempt via originally new media (then amplified by the constructive, nation-building media) at damage control.

And let’s ignore what rogue scholar, TJS, has somewhere analysed*: that it’s not true declining population lead to economic ruin. He is after all, as Lawrence Wong, would put it “anti-PAP”. And he could even, at a stretch, be classified as one of Sim Ann’s  demons who  “spew hate and prejudice against individuals or groups”. Remember, he bitched against bungalow owning ministers, when, I’m told, he too has a bungalow.

No: My complaint is why don’t we get told how well Japan is doing?

A country has three choices when its TFR (total fertility rate) drops Get the TFR back up; encourage immigration; and do nothing i.e. let the population age.

Most countries try to increase TFR, some succeed. Japan tried it, failed and as it doesn’t do immigration, it prefers to use robots, it is managing the decline in population.

Japan has shown, a country with a declining population can still do better than other developed countries as figures from HSBC (published earlier this year) show which contradict the doom and gloom that one LKY says abt Japan.

Growth per capita in the 2001-2010 decade

Japan 1.6%

UK 1.2%

Germany 0.8%

US 0.7%

France 0.6%

And looking at the overall GDP numbers, Japan’s record is as good as that of the Germans, who now have created the Fourth Reich in Europe.

US 1.6%

UK 1.5%

France 1.2%

Germany 0.8%

Japan 0.8%

So the Japanese have well, considering their aging and declining population. Perhaps our PM should be listening to them, and trying to take some tips, especially on the use of robots (say to replace Lawrence Wong and Sim Ann who seem to be stuck with some PAP robotic messages that are a throwback to when LKY ruled the roost). And get dad to stop talking rot on Japan.

As to the need of the elderly population needing younger S’poreans to pay taxes to keep the place going, that both PM and Tharman mumble about, ain’t the governing PAP forgetting that it instituted the CPF system precisely to avoid a “Pay as You Go” social security system. (OK, OK, I’m unfair on the PAP on this but two can play the BS game.)

It’s you die, if you got no CPF (Don’t look to VivianB for help. He will only sneer at you for being poor) So by the PAP’s own account, the elderly (like me) don’t need a growing and younger workforce to support.

So Minister, although you are a Hindoo, somehow I think this verse from the bible is applicable to you (and your fellow ministers) when it comes to having an “honest conversation” about FTs:

(Note “mote” means “a particle of wood or chaff” i.e. it’s very, very tiny)

Either how canst thou say to thy brother, Brother, let me pull out the mote that is in thine eye, when thou thyself beholdest not the beam that is in thine own eye? Thou hypocrite, cast out first the beam out of thine own eye, and then shalt thou see clearly to pull out the mote that is in thy brother’s eye.

—–

*Sorry no link as I’m not too impressed by his analysis. He left out that his favourite Nordic countries tax its people too much for my taste.

F1: Sharing the $1bn in value add with the losers?

In Economy, Media, Tourism on 01/10/2012 at 5:46 am

Singaporeans must accept F1 race as necessary event: MTI (The Trade and Industry Ministry says the community must accept the Singapore Formula One race as a necessary event in Singapore. This is because the race has reaped benefits such as enhancing Singapore’s image and bringing in more tourism receipts.)

And

Teo Ser Luck: Singaporeans must accept F1 as a necessary event

So how abt sharing the benefits with the losers?  Especially since F1 will bring S$1b “additional value-add” for economy, says Iswaran. (S’pore expects expenses to drop about 15% to 20%, according to the Ministry of Trade and Industry. The cost of the race is about $150 million, with the government co-funding 6o% of the amount, reminded S. Iswaran, “Singapore’s second trade minister, who’s responsible for developing the tourism industry”. What he didn’t say is that hotels have to pay a special levy of 30% on room rates during F1 period, if they are “track-side” hotels and 20% for the others. )

Compensate the retailers at Suntec City  and those who work in the city? Tax rebates for them? If no such sharing of the benefits, then it’s some private profits, and big state windfall (via taxes and other levies), and public inconvenience and some private losses. Readers might also like to know that it costs at least US$120m to build a dedicated F1 circuit (excluding, it seems, land costs), so by inconveniencing commuters and some retailers, the government is passing on the one-off cost of building a F1 track to some S’poreans annually. Whoever said there isn’t a free lunch? More reason to offer compensation.  

BTW, before the race, our constructive, nation-building media gave the impression that a deal-breaker was S’pore’s demand that it be charged a nominal fee for the race (Monaco pays nothing because until S’pore’s F1, it was the only F1 race on public roads.) Well it seems, S’pore was told to f***off and it got buggered: “Ecclestone refused to confirm the cost of the new contract, although he did hint that negotiators for the Singapore race had failed to extract a Monaco-style race fee exemption. It is thought that they argued for one, pointing out how successful the race has been for sponsors. http://www.telegraph.co.uk/sport/motorsport/formulaone/9560875/Singapore-Grand-Prix-secures-its-place-on-F1-circuit-after-organisers-agree-a-new-five-year-contract.html

Mr Iswaran only said there has been “a discount in franchise fees for the new contract”: whatever happened to the deal-breaker? The silence from our media on the issue is deafening.

Seems that Bernie said that the Thais willing to stage a F1 night race in Bangkok if he pulled out of S’pore.

Related post: https://atans1.wordpress.com/2011/09/25/is-f1-worth-it-updated-with-2011-estimate-of-additional-tourism-revenue/ BTW not seen any details of estimated 2012 revenues despite all the talk of benefits.

Why the moderately well-off don’t feel that rich

In Economy, Political economy on 19/09/2012 at 5:37 am

The rising inequality of incomes mean that even moderately well-off people do not feel that rich; not least because the elite have driven up property prices in desirable areas … to levels that those not working in the finance sector cannot afford. Meanwhile, the very elite can insulate themselves from everyday life. Think of the experience of the average first, or business, class air passenger. They sit in a different lounge from the other passengers, enter the jetway through a different door, sometimes enter the plane through a different door as well, sit in a curtained-off section and then leave the plane before everyone else. They could make an entire transatlantic flight without coming into contact with the hoi polloi.

The problem is that the political elite tend to mix with the financial elite … and, for security reasons, also have to cut themselves off from the average voter. So it may be doubly hard for them to understand the pressures of those who are actually on median incomes.

http://www.economist.com/blogs/buttonwood/2012/09/economics-politics-and-financial-markets

NatCon: What Dale Carnegie & dad can teach PM

In Economy, Humour, Political economy, Political governance on 10/09/2012 at 4:46 am

Two quotes from Dale Carnegie’s How to Win Friends and Influence People, that could teach PM, Heng, Sim Ann and other ministers a trick or two:

— “No one likes to feel that he or she is being sold something or told to do a thing. We much prefer to feel that we are buying of our own accord or acting on our own ideas. We like to be consulted about our wishes, our wants, our thoughts.” (Actually Auntie Sun’s hubby, pastor Kong, could teach them this, what with his Sentosa Cove penthse to prove it. But PAPpies prefer to learn from FTs.)

— “The only way on earth to influence other people is to talk about what they want and show them how to get it.”

The second quote explains why PM’s dad (and a hero, flawed, of mine) was successful in getting S’poreans to vote for him and the PAP despite his bullying, thuggish ways.

He spoke to S’poreans of his and older generations what they wanted to hear: “A better life for yrself and yr family.”

And how to achieve it: “Vote for the PAP and accept my policies be they throwing dissidents into prison without trial (anyway they are commies who want to steal yr money or work you to death), and have union leaders like Devan Nair who are my running dogs, and accept my lectures, hectoring, thuggery and bullying.”

He got the message right* and delivered the prosperity bit (whether or not the prosperity was the result of his** policies and methods is open to debate***) for most elderly S’poreans. True, there are some elderly S’poreans who missed the prosperity (and who now need to be helped), but in general, many are reasonably well-off, especially if they suffer from severe illnesses. I’ve relations much older or juz slightly older who have benefited from the then HDB housing policies of the 70s and 80s. And who are benefitting from the present healthcare system.

(One said during the Chinese New Year, “We were poor when we were young. Thank the Lord (her family are Christians) that in our old age we are comfortable. Nothing worse than being poor when old.”)

They are the first to admit it, their children and grandchildren are not finding life that easy. But hey LKY’s only a mortal, even if at times the constructive, nation-building media, esp ST, portrayed him as a demigod.

———————–

*And he is a genius when it comes to marketing “Authentic marketing is not the art of selling what you make but knowing what to make.” Philip Kotler, academic (1931–), Marketing Management (1967)

Above and more marketing quotes from http://www.economist.com/blogs/schumpeter/2012/09/z-business-quotations

The problem. is that since the late 1980s or early 1990s, the PAP wants S’poreans to do want the PAP wants them to do; but it is unwilling (and unable) to promise S’poreans material prosperity in return. It is only willing to say,”We will try to help you achieve material prosperity. But we still want yr soul.”

The governing PAP used gimmicks, like asset enhancement inflation and indiscriminate importing of , that have backfired on the PAP because of their negative consequences, intended or otherwise, on S’poreans.

**And don’t forget the role that Dr Goh Keng Swee, Lim Kim San, Hon Sui Sen and Ngiam Tong Dow played in the economic policies. They wisely left the bullying, lecturing hectoring and thuggishness to LKY.

***Remember that in the 1960s and 1970s, S’pore was one of the few places (HK was another) that welcomed MNCs to set-up factories. MNCs were looked upon as a form of neo-colonialism by most of the developing world. Today, every developing country wants MNCs to set-up factories. So credit must be given to the PAP for this policy. But as we know, this policy resulted in the lack of home-grown companies like Foxcomm and HTC in Taiwan and Samsung in Korea. But breeding these cos led to problems in these countries.

More tots on the National Conversation

In Economy, Political economy, Political governance on 07/09/2012 at 5:09 am

Shumething I came across on Facebook: To be frank, I think the default is now, “Why should we listen to the government?” and we should all realise that they’re listening more and we’re listening less. Old knee-jerk political reflexes are not useful anymore. We need to be clear-minded and work on both qualitative and quantitative data and input, not just the same old stories on all sides.

He is spot-on.

Then this: “S’poreans [are] urged to share and listen with open minds and  hearts” said Education Minister Heng Swee Keat who “is heartened by the many conversations that are going on about the national conversation and follows them with great interest.” Mr Heng had been tasked by Prime Minister Lee Hsien Loong to lead a team of younger ministers to engage Singaporeans in a national conversation about the country’s future direction.

So how come

— a “CNA producer rescinds invite to bloggers to a forum with Prime Minister because her ‘bosses bosses have decided not to have bloggers on the forum because apparently bloggers have already had a private session with the Prime Minister already” http://www.raviphilemon.net/2012/09/because-pm-has-engaged-dr-jiajia-he-has.html

–” TOC was uninvited to the Singapore National Games”

Now to a suggestion of a topic.

The conversation, to be meaningful, must include the issue of public access to govt data bases. This explains why it should give access: In knowledge discovery in datasets, the major barrier to entry is access to the data. When corporations, governments or other private firms jealously guard their proprietary data, the number of people playing with the data and trying to discover valuable things, or putting that data to good use, will remain small. When data is made public, anyone can put that data to work. In recent years governments have begun making large troves of their data publically accessible. The U.S. government’s open-data project, data.gov, for example, has begotten over 200 citizen-developed apps. Similarly, the city of Vancouver, an early mover in the municipal open-data space, opened up their data in 2009, spawning valuable mashups of transit data, the water grid, and common spaces.

It’s gd for a knowledge-based economy.

Netizens who want to take part should take time to read this http://www.spp.nus.edu.sg/ips/docs/events/p2012/SP2012_Bkgd%20Pa.pdf. Written by some of the best economists in S’pore (Jedi Knights all: wonder who is their Yoda? Tommy Koh?), it gives plenty of information to counter the governing PAP’s Hard Truths.

Finally, the calls by some netizens for a debate rather than conversation are misguided. Debates are by their nature rigid. The emphasis is on point scoring. This format suits the government. So better to keep it at the conversational level.

Related post: https://atans1.wordpress.com/2012/08/20/nation-conversation-nah-sounds-like-another-attempt-at-conversion/

Why not to expect recovery anytime soon

In Economy, Emerging markets on 05/09/2012 at 7:48 am

(Or “Kishore Mahbubani’s thesis about Asian power proven wrong again”)

It seems likely the long-term recessionary scenario as described by Mr Taylor, Mr Reinhart, and Mr Rogoff is what economies in the West are now experiencing. Within developed markets, the financial sector occupies a larger proportion of the general economy than ever before. In the 1990s and 2000s, the level of private debt on bank balance sheets far outweighed that held by sovereigns, despite a simultaneous increase in sovereign debt levels. Given the greater severity of recession Taylor concludes is likely following a period of both private and public debt accumulation, the damaging effects could go on for some time.

http://www.economist.com/blogs/freeexchange/2012/09/financial-crisis  Warning: very chim

Let’s see if the BRICs and other Asian economies can save S’pore from a recession or slow down like what a certain PAP apologist is implying about the days of ang moh and Jap tua kee are over: now China, India and Asian (ex Japan) tua kee. He got his balls blown-off over Standard Chartered!

Not reported: banking jobs being relocated out of S’pore systematically

In Economy, Media on 04/09/2012 at 7:10 am

Credit Suisse is relocating dozens of back-office jobs from Singapore to India and Poland as part of efforts to cut costs, the FT reported on Monday. It also reported that Morgan Stanley last month completed shifting about 80 back-office jobs to India and Hungary, from Singapore.

And that other banks were planning to move back office jobs to “cheaper” countries.

Our constructive, nation-building media were very quick to report a survey that UK investment bankers wanted to come here, but while Today and BT (online) reported bits of above, ST never did. And BT (the paper) does not seem to have reported it.

AND they all don’t publish the bit about Morgan Stanley and the other banks. Remember you read it here.

Err Lee what did you say abt food inflation?

In Economy, Media, Political governance on 03/09/2012 at 5:13 am

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

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

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

Funny then that on 30 August BBC Online reported

Global food prices have leapt by 10% in the month of July, raising fears of soaring prices …

The bank said that a US heatwave and drought in parts of Eastern Europe were partly to blame for the rising costs.

The price of key grains such as corn, wheat and soybean saw the most dramatic increases, described by the World Bank president as “historic”. http://www.bbc.co.uk/news/world-19431890

So the issue is not even that only in the long term food prices here will rise, but how soon. That it will rise in “the near term”, despite his denial, is a probability. Even before the spoke juz before National Day, prices had alread risen. I mean as a MTI minister, surely he would have access to that information, unless his officials hid data from him to make him look stupid?

Discounting that possibility or the possibility that MTI does not have access to near-live data (highly unlikely),  either this jnr minister doesn’t know economics (maybe taz why he did not get promoted to minister?*) or he was juz mindlessly spinning knowing that the constructive, nation-building media would not challenge him, and that people would believe him.

Methinks one test of whether the government is sincere about having a national conversation is for ministers to stop assuming that the people are simple-minded to believe whatever ministers say. Those days are over. S’poreans have the internet and social media to keep tabs on waz happening in the rest of the world and in S’pore. The days when the constructive, nation-building local media filtered everything are over.

——

*Unlikely given Tharman’s and Hng Kiang’s grasp of basic economic theory 

https://atans1.wordpress.com/2012/05/25/will-hougang-make-the-pap-moan-the-inflation-blues-not-joke-abt-it/

https://atans1.wordpress.com/2012/05/08/tharman-has-a-point/

Why Tharman will be the next PM

In Economy, Humour, Political economy, Political governance on 24/08/2012 at 6:21 am

(Or “How S’pore’s PMs are chosen”)

We know that Tharman as finance minister has failed to control inflation (Yes, yes, I know latest number is 4% but remember grain prices are flying), when all he can do is to make jokes about it, and that the government (where he is now the senior most minister in charge of the economy) has consistently failed to raise the productivity of S’pore workers* despite talking the talking on this since I started working in the late 1970s. I’m now a man of leisure and the government is still talking about raising productivity. SIGH.

I was reminded of another failure of the government’s economic policies when the July export data came out last week.  No it wasn’t the failure of the government policy to diversify away from electronics. If S’pore has a comparative edge here, so be it.

No, it was the failure many yrs ago to realise that pill-making is not a steady business. Example: in July, while pharmaceutical shipments were up 1.3% after rocketing 24% in June. It was brought in to smooth the volatility of an economy dependent on the export of electronics, a volatile commodity.

It didn’t work because while selling drugs is a steady business in gd times and bad (unlike electronics), making pills is not. It’s a very volatile business. Drug cos are forever tweaking their supply chains to minimise production costs and inventories. Production is not smooth.

So while pill-making has become an important driver of economic growth, it has not made the economy any less volatile. In fact combining it with the manufacturing and export of electronics causes the economy to gyrate wildly at times.

Guess who introduced pill-making? One Lee Hsien Loong. He was once responsible for raising the productivity of S’porean workers? In the UK, a Chancellor of the Exchequer, who goofed on two major policy decisions, would not get to be PM.

Looks like better not bet against Tharman being PM. With the failures on inflation, productivity and the following on his CV, nap that he will become PM:

— Another failure is the rise in the number for homeless S’poreans at a time of reasonably gd economic growth.

— They are exemplars of the “working poor”, something articulated so well here. Read it.

— Article also explains why Workfare, as it is constructed, doesn’t help the poor. Related posts: https://atans1.wordpress.com/2012/02/27/budget-a-plague-on-both-your-houses/

https://atans1.wordpress.com/2010/10/13/minimum-wages-missing-the-point/

Update after posting: Promotion here is via failure? Presidency of S’pore and Temasek. So the PAP’s meritocracy is achieved via failure, not success? So Orwellian. Reminds me of Beckett’s, “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”

Inflation: Why the misleading picture, minister & media?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Links on inflation

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

http://www.bloomberg.com/news/2012-08-10/singapore-economy-contracts-as-pressure-gains-for-policy-easing.html

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

http://sbr.com.sg/economy/news/singapore-struggle-one-highest-inflation-rates-in-southeast-asia)

—————-

*OK, OK I exaggerate but only a little.

Macau: NO FTs as croupiers, dealers

In Casinos, Economy, Political economy, Political governance on 30/06/2012 at 7:01 am

And local poly provides training to work in casinos.

Citizenship has its privileges in Macau (and there is no NS).

Yet casinos are still expanding in Macau despite not having cheap FTs as croupiers and dealers.

Must have lessons for S’pore?

 [I]t’s a world where young people like Tommy hold all the cards. With the law favouring local workers, jobs are handed to the polytechnic’s graduates on a plate. Many receive offers of employment from casinos long before they finish their courses.

http://www.bbc.co.uk/news/business-18099525

No wonder world’s in a mess

In Economy, Energy on 14/06/2012 at 9:32 am

Brent crude reached its highest-ever average price at $111 a barrel in 2011: from BP’s  Statistical Review of World Energy 2012 published on June 12.. Oil prices were consistently high last year affecting economic growth and investment plans

Update on S’pore as hedgie home

In Economy on 06/06/2012 at 6:21 am

Smaller Asian hedgies are closing (US$120m is “peanuts”). http://www.reuters.com/article/2012/06/04/lehman-hedgefund-closure-idUSL3E8H420G20120604

Not gd news for S’pore’s financial centre aspirations. It once (pre 2007 crisis) had lax rules to get these guys in, hoping they would grow.

But hope springs  eternal. 

Coming our way? Many of  funds in Switzerland had juz relocated from London. But now the Swiss government is considering rules that would turn a relatively “light-touch” regulatory environment into “one of the most exacting jurisdictions in the world to run a hedge fund,” the Financial Times reported about two months ago.

Funny that our constructive nation-building media don’t report this news. Been too busy sliming WP, to report on a possible positive development.

S’pore bashing at its worst

In Economy, Political economy on 05/06/2012 at 7:27 am

Reading this, one ends up asking, “If things are so screwed up here, why isn’t S’pore as poor as Bangladesh, Laos, Cambodia or Burma?”

http://www.atimes.com/atimes/Southeast_Asia/NF05Ae01.html

There are problems: rising inequality, persistent low productivity (despite all the govmin talk and campaigns), lack of local entrepeneurs complacent BSing ministers, and bad public transport. But taz not the same as saying that S’pore is an economic disaster like Bangladesh.

What the fall of Roman empire can teach the PAP

In Economy, Political economy, Political governance on 01/06/2012 at 6:13 am

(Or “Why group feeling is so impt” or “How times have changed since the late 70s (Worth of being a S’porean)”) 

Reading the u/m, I was reminded that Ngiam Tong Dow (Sparta, Athens and the Chinese imperial exam system) and the PAP (George Yeo and his mis-readings of history, one being why Venice did better than Genoa*) have used history to preach to S’poreans

First was the widening gulf between the social classes, rich and poor. When rich and poor start to live completely different lives this leads (then as now) to the poor opting out of the state. All studies today show that society is happier when the gap between rich and poor is reduced …

Widen it and you affect the group ethos of society, and also the ability to get things done through tax.

In the Roman West real wealth lay more in land and property than in finance (though there were banks) – but in the 300s the big land-owning aristocrats who often had fantastic wealth, contributed much less money than they had in the past to defence and government.

That in turn led as it has today to a “credibility gap” between ordinary people and the bureaucrats and rich people at the top.

Other strands in the collapse of the Roman West are more difficult to quantify, but they centre on “group feeling”, the glue that keeps society working together towards common goals. Lose that and you get a kind of nervous breakdown in the social order, which leads to what archaeologists call “systems collapse”.

http://www.bbc.co.uk/news/magazine-18159752

The growing inequality in S’pore society we know and bitch about, but the loss of “group feeling” is shumething “we see through a glass, darkly”.  We sense it but we have problems articulating this loss of group feeling. Symptoms of it are often ascribed as the problem. Examples: The

— unhappinness that male FTs (like PAP MP Puthu) have a free ride here because they don’t have to do NS;

—  resentment against the PAP government because it appears to elevate FTs to a higher status than locals; 

— resentment against one LKY who called S’poreans “daft”, who needed to be “spurred”,

are symptoms of this loss of group feeling, not the problems themselves.

The government is largely to blame for this loss of group feeling thru its strategy of keeping the economy growing by using FTs to keep wage costs down because otherwise the strong S$ would make S’pore an uncompetitive economy.  Its asset enhancement policy and forcing S’poreans to leverage to their foreheads to buy property, has it made it impossible for S’pore to have low economic growth without triggering serious problems for the PAP and S’poreans. Imagine all HDB owners having -ve equity on their flats?

The sad, funny thing is that the PAP government fostered the sense of collective identity through schemes like NS to strenthen its grip on power after S’pore was ejected from M’sia. Older S’poreans like me can remember the days when the government told us that we S’poreans were special, compared to the Indons and M’sians. Look at the M’sian and Indon Chinese trying to get in. Today, according to the then PM, S’poreans are “daft”, and need “spurring” (or is it to be “spurred”?).

Oh and as the extract showed, “group feeling” is linked to wealth inequality. The bigger the gap, the less “group feeling”.

—————

*Actually, I’m surprised that he didn’t put in down to the Venetians having a more authoritarian form of republic with power centralised in the doge). A rebuttal.

Unexpected bad April nos. for S’pore, Thailand: M’sia to follow

In Economy on 28/05/2012 at 7:09 am

On Friday, the Economic Development Board (EDB) said April’s manufacturing output shrank 0.3%  from a year ago, after a revised 3.1% drop in March.

This poor showing surprised economists, whose consensus forecast was for manufacturing to grow 4.1%  and could not be blamed entirely on the 7.6%  fall in volatile pharmaceuticals output. The poor showing is because of falling demand from key markets such as Europe and the US especially for electronics.

Thailand has reported a surprise fall in its exports for April because of falling demand from key markets such as Europe and the US. Shipments fell 3.7% from a year earlier. Many analysts had forecast an increase of more than 3% http://www.bbc.co.uk/news/business-18203209. Remember that Thailand has replaced S’pore as the world’s manufacturing hub for hard disks.

Expect weak manufacturing numbers for M’sia.  It too is a big manufacturer of electronics for export. And Najib is planning an election later this yr.

Will Hougang make the PAP moan the inflation blues, not joke abt it?

In Economy on 25/05/2012 at 5:41 am

(Or, “Isn’t high inflation and misrepresenting its effects a local issue, Desmond, Tharman & PM?”)

Update on 27 May: The PAP are singing the blues! Gd for you 62.1% of voting Hougangers))))

Should rich kid Tharman (he from ACS) and poor RI  boy, but now multi-millionaire, Hng Kiang (The model examplar that ministerial performance is irrelevant so long as the voters don’t get too upset?) be punished by the voters of Hougang for their tasteless jokes on inflation? Latest stats: inflation at 5.4% (even higher than March’s 5.2%)

Deputy Prime Minister Tharman had said the “average Singapore” will not be affected by the high inflation after the latest set of Consumer Price Index (CPI) figures for March was announced only https://atans1.wordpress.com/2012/05/03/telling-coc-jokes-ministerial-coc-needed/.

Minister Lim Hng Kiang when explaining in Parliament why most of  will not be ‘directly’ affected by inflation said, “The two largest contributors to CPI inflation are expected to be imputed rentals on owner-occupied accommodation and car prices. Together, they will account for more than half of the inflation this year. As the majority of resident households in Singapore own their homes, they do not actually incur rental expenditure. Likewise, the majority of resident households will not be directly affected by the rise in COE premiums as new car buyers make up a small proportion of all resident households. “

And a few years ago, when the price oil rise was leading to higher inflation, he recommended that people switch to “cheaper” brands, as if people don’t know that already.

According to Jentrified Citizen:Every average person whom I have talked to from the aunty who makes my favourite teh tarik to the taxi-driver say that they are feeling the pinch of inflation every single day. Most Singaporeans who pay their own bills would know just how hard inflation has hit them. The list of prices increase seems to get longer every day – the infamous housing and car/COE prices, the higher charges for public transportation (yes including taxis as they are a commonly used form of public transport),  petrol, car-parking, healthcare, vitamins, medicine, groceries, food and electricity and water bills.

They are not trying to be comedians, I think and hope.  Trying to be fair to them, their comments show the difficulty of representing complex arguments over policy in terms that average voters can get their heads around. Problem is that they are so out-of-touch that they end up insulting our intelligence.

But I’m sure by DPM Teo’s, extremely high standards (DPM, Png made “an honest mistake”, he is no lawyer or scholar, juz one of the “little people”, so a little inaccuracy is surely acceptable?) , they would not be men of intregity, if they were not PAP cadres and leaders.

Remind yrself, not us PM

In Economy, Political economy, Political governance on 11/05/2012 at 5:10 am

(Or “Is PM on the same channel as S’poreans?”)

“Prime Minister Lee Hsien Loong has said the Hougang by-election should not distract the country from focusing on national priorities and building an inclusive Singapore,” CNA reports.

Either this is the latest of PM’s tasteless jokes in his attempt to outdo Tharman as the cabinet’s and PAP’s mgt committee’s stand-up comic, or it shows us that he doesn’t even bother to glance thru the nation-building constructive local media.

Because if he does, he would realise that “national priorities and building an inclusive Singapore” are at the top of most voters’ concerns: the state of the economy and public transport infrastructure, and of family finances. Examples:

— a MRT system that does not breakdown almost every other day,

— less crowded trains and buses,

— lower inflation (even the crown prince of jokers says the latest inflation number is “a high figure” though he quickly quipped that it didn’t affect most of us “lesser mortals” (my words not his),

— how to earn more money,

— how to afford to own a HDB flat on $2,000 a month,

— how to buy a van (what with escalating COE prices), or

— worrying that ”Our system of integration doesn’t work. Why? Because before we were able to integrate those who were received on our territory, others arrived. Having taken in too many people, we paralysed our system of integration.”

A worrying tot has juz struck me. What if his (and the PAP’s) “national priorities and building an inclusive Singapore” are different from us “lesser mortals”? He wants faster economic growth via becoming a low-cost producer as “national priorities”, while “building an inclusive Singapore” means treating FTs better than locals?

Corporate governance: Better value elsewhere in region?

In Corporate governance, Economy on 23/04/2012 at 7:24 pm

Chart shows that the authorities are pricing S’pore out of fees to themselves, and to the accountants, lawyers etc based here by making S’pore more expensive than HK when it comes to charging cos fees to set-up and maintain here. HK is the leading Asian centre for registrating and maintaining offshore companies outside of the “Sunny places for shady people” to misquote Somerset Maugham.

And S’pore non-executive directors are well paid and do less work vis-a-vis our neighbours.

Non-executive directors (NEDs) in Singapore got the second-highest pay when compared with directors in Malaysia, Indonesia and Thailand, a report by Hay Group showed yesterday. Those in Indonesia were better than S’porean NEDs.

But boards in Singapore also meet the least often, and hold the least number of committee meetings compared with their regional peers.

The management consultancy analysed data collected from 200 large companies in the four countries from 2008 to 2010.

The results showed that at the median level, NEDs from large companies in Singapore were paid US$75,300 in 2010, second to those in Indonesia, who took home US$178,600.

By comparison, NEDs in Thailand and Malaysia received US$46,600 and US$46,300 respectively.

In Indonesia, NEDs take home a substantially higher pay because state-owned companies and some private companies stipulate their pay to NEDs as a percentage of the president-director’s compensation for both the salary and bonus portions. These which are supposedly linked to performance – already made up about four-fifths of NEDs’ pay.

Most of the remuneration for NEDs in Singapore, Thailand and Malaysia is made up of a flat fee, not performance-linked.

The salary of NEDs in the region have been heading higher over the past few years.

In Singapore, the increase was 9% in both 2009 and 2010, while in Malaysia, the NED pay rose 17% in 2009 and 3% in 2010.

In Indonesia, the increase was% 13% and 10% respectively in 2009 and 2010. In Thailand, the NED pay rose 14% in both years.

Thai companies held the most number of board meetings between 2008 and 2010, on a median level. In 2010, an average of nine board meetings were called by the 48 Thai companies reviewed.

Singapore fared the worst, with the 50 companies calling just five board meetings each in 2010. Malaysia’s top companies held six meetings, while those in Indonesia conducted seven.

Indonesian companies also had their audit committees meet more than 10 times a year between 2008 and 2010, which is significantly more often than in Singapore – at four times a year – and Malaysia, at five times a year.

As audit committees have a heavier responsibility than other committees, in Singapore, the chairman and members of the audit committee get higher annual retainers than those in other committees. Thai cos also do something similar

The median tenure of independent directors is the highest in Singapore, which stands at seven years. Malaysia follows with six years, Indonesia is at four-and-a-half years and Thailand has a median tenure of three years.

Proposed revisions to Singapore’s Code of Corporate Governance note that companies must explain the reasons that a director who has served more than nine years on the board is still deemed independent.

Hay Group’s review showed that 62% of the top companies in Singapore have at least one independent director who has served more than nine years on their board.

Analysing Ngiam Tong Dow’s March 2012 speech (Part I)

In Economy, Political economy, Political governance on 15/04/2012 at 6:56 pm

Given that Professor Lim Chong Yah’s “shock therapy” proposal is a variation of what was implemented the early 1980s (until the 1985 recession: neutral article on the recession and one blaming it on the original “shock therapy”), when one Ngiam Tong Dow* was Permanent Secretary in the Ministry of Trade and Industry, I thought it would be interesting to reread a speech Ngiam made in March because MTI had once upon a time analysed the problem of severe manpower shortages and the economy’s increasing reliance on lowly paid foreign workers. Its solution was to restructure the economy by raising wages substantially to dampen employers’ demand for lowly paid workers, what Professor Lim is recommending.)  

Rereading Ngiam’s speech, I don’t think he would agree with Dr Lim’s proposal because Ngiam says, “Rising productivity enables workers to be paid more. Inflation sets in only when wages are raised without any increase in productivity.” So productivity comes first, then wages rise as a consequence. Dr Lim would go back to the 1980s plan of raising wages to force up productivity.

(BTW, the government, especially Tharman, keeps “talking the talk” of raising productivity, despite not walking the walk. I’m sceptical of its announced plans to cut the “FTs are betterest” policy until I see how it is being implemented.)

The speech is long and can be divided into an economic analysis of S’pore and a sociopolitical analysis of S’pore,

In this post (Part I), I report and comment on the economic part of the speech**. In Part II (later this week), I will report and comment on the sociopolitical aspects of his speech.

——————————————–

Evolution of the policy of importing cheap foreign labour

“Singaporeans of my generation remember vividly the slums, joblessness, dirt and disease of the 1950s. Through dint of hard work and discipline, we moved rapidly from a labour to a skill-intensive economy. By the early 1970s, we achieved full employment with an unemployment rate of 3 per cent.

‘In the early 1970s when we achieved full employment, some of us in the EDB began to ask the question about the critical size of populations. We did some desktop research and found that there were several industrialised European countries with population size of around 5-6 million. These were Israel, Norway, Sweden and Finland. Our town planners went to work and concluded that Singapore with a land area of 670 square kilometres can comfortably accommodate a population of 5-6 million … we allowed in one million foreigners in the last decade.”

He went on, to give another reason for the FT policy, “As our births fell below replacement levels, we resorted to immigration as an instrument to top up the babies that young Singaporean couples are not having. There are also elements of political re-engineering. Submerged in our immigration policies is the belief that to maintain racial harmony, we need to keep the current population balance constant.”

He challenged the premise that S’pore needs a bigger population pointing out that

– “Singapore is already straining at the seams with a current resident population of five million … The economic assumption is that we can increase our GDP if we can accommodate more people … even doubling our population to 10 million people will not make things better. More likely, a larger population can only make matters worse.”

– “[C]omputer technology has made many manual operations in production obsolete. The key is to produce more with less manpower.”

Knowledge-based economy

“The great challenge … is that we have reached the limits of our skill-based model of growth. Singapore has to move from a skill to a knowledge-based economy. The products and services … are characterised by high technological content. To position ourselves for such an economy, Singapore devotes the greater part of our national budget to education and training.”

“When I was in school in the 1950s, only three out my O level class of 40 went on to university. Today, 30 per cent of a primary school cohort enrol in tertiary education. Raising our average educational level from primary to post-secondary should make a world of difference for our international competitiveness.”

“Our higher education levels and superior infrastructure enable us to compete in knowledge-based industries and services.”

Productivity

“I observe with some dismay that the manufacturing share of our GDP dropped from a high of 30 per cent in the 1980s to 20 per cent currently.”

“Our total factor productivity should be rising not stagnating. In my view, productivity and real wages of the bottom 20 per cent of our work force have not risen because our labour policies allow employers easy access to low wage foreign labour.”

He explains that for S’pore as a whole, there are costs to this easy access to cheap foreign labour, “If we add the cost of housing, transportation, health and other social services which employers have to provide for their foreign work force, they may be better off training and equipping their Singaporean employees to raise their productivity. Rising productivity enables workers to be paid more. Inflation sets in only when wages are raised without any increase in productivity.”

“Productivity can only be raised when CEOs … take direct charge of the production process. They have to be hands on, not resorting to outsourcing. Productivity should be the key KPI (key performance indicator) for the award of bonuses to CEOs and management.”

“Like any other country in the world, Singapore now competes in a global economy. In such an economy, importing cheap foreign labour is no longer a viable strategy. It is a dead end.”

“We have to grow through raising productivity, not higher headcount. We need to be smart enough to produce more with less. Our higher education levels and superior infrastructure enable us to compete in knowledge-based industries and services. We transformed ourselves in the 1970s from a labour to a skill-intensive economy.”

But he accepted that “raising total factor productivity .. is not easy. A Japanese scholar pointed out … that the optimum rate of productivity increase achieved by [Japan] averaged 4 per cent annually … Japanese are one of the most diligent people in the world.”

Why importing cheap labour is not the solution – it’s a race to the bottom

“Singapore now competes in a global economy. In such an economy, importing cheap foreign labour is no longer a viable strategy.  It is a dead end.”

“In a global economy, you will be competing not only with friends and classmates but with the best and brightest of your generation in India, China, Brazil, Russia and Eastern Europe. University graduates in China and India are willing to work for a tenth of what our young engineers and scientists expect. If we fail to raise our total factor productivity, Singapore would just be an also-ran in the race to be a knowledge-based economy. The window to raise total factor productivity through application of knowledge and training is fast closing with the opening up of India, China and Indonesia. Singapore has lost two decades relying on low-wage, low-skilled foreign labour to drive economic growth.”

What can help

– “Our managers and administrators are among the best paid in the world. They will have to get off their high horse and personally lead the drive for higher productivity. Outsourcing is a bad word in my vocabulary. Companies and government ministries should figure out how to train their staff and redesign jobs and processes to achieve more with less.”

– “[I]nterest free loans should be given to enterprises with clear roadmaps to re-equip and raise the productivity of their workers.

What he is against

“Grants should not be given to management (consultants) to do a job they are already paid to do.”

‘I am against job credits in any form because they are simply wage subsidies which do not raise productivity in any way. My personal observation is that job credits simply add to the bottom line for payment of bonuses to management who do not have to lift a finger to raise the productivity of their enterprises.” Based on this, I suspect he would also be against having a minimum-wage.

“The 2012 budget is politically adroit, replete with spending proposals which basically are income transfers from the taxpayer to the poorly paid, the disadvantaged and the aged. Income transfers are palliatives, temporary reliefs to abate rising social discontent. They do not help to raise productivity.”

Final warning

“We failed to bite the bullet in the 1980s to restructure our economy. There may be no second chance the next time around.”

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*Ngiam was in the 1980s one of Lee Kuan Yew’s and Goh Keng Swee’s most trusted civil servants and if anyone, could be called a co-driver of S’pore’s drive from third world to first world, it would be he.

**The quotes are taken from a transcription published in BT.

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