Archive for the ‘Political economy’ Category

S’poreans are rich

In Economy, Political economy on 08/11/2011 at 4:20 pm

Wonder why!/FabricationsAboutThePAP or YPAP or SDP don’t tell us things like these? Don’t know economics or money not enough?


Healthcare: Who is subsidising whom?

In Political economy, Political governance on 12/10/2011 at 8:30 am

So, we the people, are going to get more help from the government; and in particular the Health Ministry will do more to help those suffering from chronic illnesses. My friend who suffers from a chronic illness will be hoping the government walks the talk.

He tells me that the cost of buying “unsubsidised” medicine in Johor Bahru is more or less the same as the same “subsidised” medicine bought from SingHealth via a polyclinic. As the price of the medicine bought from SingHealth is roughly half that charged by a private clinic here, he thinks that is why the govmin claims it is “subsidising” the medicine bought from SingHealth.

He thinks maybe the government’s medicine procurement policies are inefficient. How come a profit-making M’sian pharmist chain can match SingHealth’s prices? Or maybe that the government is paying the drug makers more so that they will make pills here and invest in R&D facilities here.

In other words, are polyclinic patients subsidising rich MNCs so that the government can boast of its success in attracting drug companies to set up pill-making plants and R&D facilities here? Their presence here, incidentally, boosts GDP growth and, indirectly, the bonuses of ministers and senior civil servants.

S’poreans have long asked where’s the subsidy in public housing? The government ties itself in knots, trying to explain where is the subsidy. So much so that many S’poreans don’t believe that there is such a subsidy.

So here’s another “subsidy” that should be queried by the public.

On a wider point, ordinary S’poreans should join the Opposition and activists in querying how the government defines any “subsidy”. We are unlikely to get straight answers, but the questioning ensures that they know that we are not daft.

S’pore: The trouble with AAA-status

In Economy, Political economy on 10/08/2011 at 6:59 am

Singapore is one of the few remaining AAA sovereign borrowers, especially one without any fiscal issues.

So money will pour in, interest rates will drop, and property prices will fly.

The banking system may soon have more cash deposits than it knows what to do with. In the 1970s in  Switzerland, banks were paid to accept deposits i.e. negative interest rates.

This is a tough problem to solve. If our central allows the exchange rate appreciate  in order to slow the inflow, a more expensive Singapore dollar will hurt exports and tourism. If it doesn’t act, then Singapore will face significant inflationary pressures. House prices will fly even higher, SBS, SMRT and the electricity suppliers will fleece us even more, and CPF rates will drop to 0.1%, if not negative. We will pay the government interest on our forced savings. OK I exaggerate on the likihood of this.

Even the late Dr Goh Keng Swee might not have been able to solve this problem.

S’pore still has AAA- status

In Political economy on 09/08/2011 at 6:21 am

So all those S’poreans who believe that their CPF monies are not safe, should think again.

As the US loses AAA, where is a safe harbour?

In Economy, Political economy on 08/08/2011 at 2:50 pm

Nowhere as everything is priced in US$. In the 1970s, a US Treasury Secretary said to the Europeans and Japanese, “Our dollar, your problem”.

Today, the US should say to China etc, “Our debt, your problem”.

“If I owe you a pound, I have a problem; but if I owe you a million, the problem is yours,” John Maynard Keynes

Spending S$4.9bn justification for S$470bn +++ reserves?

In Political economy, Political governance on 24/05/2011 at 9:37 am

President S R Nathan said recently that the recent recession, in which the government for the first time sought his office’s approval to draw on reserves, has validated the need for Singapore to have strong national reserves.

He must be talking of the S$4.9bn that was used to fund the government budget in 2009 and which has since been returned.

Juz taking into account the monies managed by GIC, and Temasek’s funds,  our reserves then were at least S$470.3bn. This means that only 1% were used to fund the recession budget.

Do we need such massive reserves when we draw-down so little, given that the reserves are not the result of nature’s bounty but of the people’s savings.

SingTel dividend helps pays the bills

In Political economy, Political governance on 22/05/2011 at 10:20 am

SingTel is paying a dividend of S$0.258 a share.

For those S’poreans like me who have kept the SingTel shares we were allocated all those many yrs ago, the money is coming in handy. I still have the 1667 shares I was allocated and this means I will get S$430.09. Peanuts compared to the 8 months bonuses’ coming the way of ministers, but for a retiree (with no pension, only CPF) any little bit helps.

Sigh: once a upon a time S$500 was “peanuts”; not any longer.

Give PM a 100 days

In Political economy on 20/05/2011 at 5:35 am

PM after the election said he had listened to the voters. I for one was sceptical, thinking it was 1984 all over again, when newbie LHL said the PAP had to listen. The PAP fixed the system instead.

But he has turned from Clark Kent look-a-like into a tiger that has got ministerial duds to want to get out. The dysfunctional duo, MM and SM, have left (after publicly stating they wanted out). The three stooges (Wong, Nah and Lim) are no longer ministers, after telling him privately before the GE that they wanted to quit. If you believe this …

Since six ministers have “retired” (the sixth is Cry Baby Lim), let’s give him the benefit of the doubt. Let’s give him 100 days to prove to us he is walking the walk of listening to us and amending policies to meet our concerns.

Wondering abt the origin of the term “100 days”?

It originally refered to Napoleon’s return from exile on Elba to Paris on 20 March 1815 and the second restoration of King Louis XVIII on 8 July 1815 (a period of 111 days). During this period, he became emperor again, fought and lost the battle of Waterloo, and abdicated again.

BTW empty vessels seem to be making the most noise. The SDP and RP seem to be releasing media releases left, right and centre. Both parties did not do well. The RP even had to borrow candidates from SPP to field teams.

Returning to the past

In Political economy, Political governance on 15/04/2011 at 5:54 am

Lucky Tan reminds that we have been here before. While the GRC helped to retain seats for the PAP …  If nothing was done, there was a good chance the PAP would lose a few GRCs in the 1991 elections. The PAP had 2 choices – fix their policies so that ordinary Singaporeans will benefit from them or tweak the system to retain their dominance. The PAP chose to do the later by linking votes to estate upgrading … sad to say their “kiasu” nature got the better of them and the % votes for the PAP went up after that.

Well we are back to 1991, and the PAP has the choice of listening or tweaking again, to avoid losing a few GRCs. It is clear from the PM that the PAP “don’t do listening”. NTUC minister’s “Deaf frogs” comment comes to mind.

So it’s tweaking the system again.  But what can it tweak? The PAP is still trying the upgrading approach. But I’m sure the PAP knows that this is not enough, so what else can it do? What is the 2011 equvalent of upgrading for PAP areas? 

I don’t think there is one major new tweak, but here are several tweaks that it can do.

Given the reserves that the PAP-managed town councils have built-up, the PAP could offer voters the carrot of lower maintenance charges. The town councils could even afford to pay part of the utility bills of poorer residents.

The excuse: allievating inflation pressures, is now a better use of town council reserves since inflation is so much higher than bank deposit rates.

The the government can increase welfare spending and use the PA to administer it.  

I’m sure that the combi of asset enhancement,, smaller bills for residents in PAP areas, and increased welfare spending via the PA will win the PAP the Kiasu votes, juz as asset enhancement in PAP areas did in 1991.

The disconnect that matters

In Political economy on 31/03/2011 at 6:36 am

The disconnect that matters is not the one that exists between what the government does and what the media says. It is the one between what the media says and what people actually think about their lives, blogged Alistar Campbell, once Tony Blair’s spin doctor.

In S’pore, the disconnect is even worse. The disconnect is between what SPH, MediaCorp and government say and the facts on the ground as perceived by reasonable people.

Anyone relying on SPH, MediaCorp and government statements for their understanding of Singapore would have believed that there was no poverty here; that social workers would deliver delicious cooked meals to welfare receipients; that all FTs were talented people that S’pore needed; that FTs did not put a cap or drive down on the salaries of S;porean PMETS; that the liberal immigration policies did not strain the public transport and housing, and social infrastructures; that public security was good; and that ministers were all worth a lot more than they were being paid. Read the rest of this entry »

RP: Boorish behaviour

In Political economy on 24/02/2011 at 6:02 am

When the news broke that there were resignations from RP, the Sec-Gen issued a statement. It made allegations and insinuations abt those who had quit:

— The timing of this departure, its highly co-ordinated and planned manner and the way the individuals then went to the Press, hardly seems an appropriate response to personal incompatibility.

— an action designed to do maximum damage to The Reform Party and gain maximum publicity for the political careers of the individuals involved.

then there was an account of an “ang pow” incident which seemed to insinuate that there could be corruption (although the Sec-Gen denied making an allegation of corruption.)

Contrast this with the response of Tony Tan and Hazel Phua. They wrote, In the short one year plus that we have been in the Reform Party, although we have our disagreements, we have also seen the SG’s drive and dedication.  Since we cannot achieve agreement, we do not wish to be in his way. 

They also answered the “ang pow” allegation, an explanation that sounds reasonable, though $400 sounds a bit too  rich for kids.

The Sec-Gen is a gd economist, speaker and writer. But he is no gentleman as this statement shows and his petulance over the leaking of his letter to SDA showed.

Now not being a gentleman may not be be important in S’pore*, but being accident prone is. Can anyone trust a guy who has been involved in disrupting three parties: SPP, SDA and now his own RP?

*Example- the letters of condolences that MM, PM and SM sent to the sons of JBJ

Waz the point of stability?

In Economy, Political economy on 22/02/2011 at 8:43 am

We are told that stability is to be prefered over democracy because investors want stability. But the rapid collapse of the autocratic governments in Tunisa, Egypy and Libya should make one reflect whether stability is over-rated. These countries economies and politics are now in utter chaos.

India, S Korea, M’sia, Indonesia, the Philippines and Taiwan (with their messy democracies) are safer places to invest in. They may be less stable than places like Libya and Egypt, but they don’t go from stability to chaos in 21 days.

S’pore Inc: 21 years and still in transition?

In Corporate governance, Political economy on 18/02/2011 at 6:34 am

All my old colleagues have left. I am alone of the old team. I am staying on for a while to help the transition. According to “Confucius Confounded: Analects of Lee Kuan Yew” by Francis Seow, Forward by Dr M, this was said by LKY at Davos in February 1990.

As it’s 21 years since MM said this, we can only conclude that for MM, time passes very slowly: the US is on its fourth president (two of them serving two terms), China has had several leadership changes, M’sia is on its third PM, and Indonesia has had five presidents.

And little us are still transiting leaders?

But maybe the on-going transition is the fault of GCT and LHL? They are slow learners, GCT not mustering his ABCs by the time he stepped down as PM?

BTW, in 1990, the Internet had yet to spin its web, the US was the unchallenged Hegemon and China wasn’t yet an economic superpower.

How time flies, outside S’pore’s political system.

Better and funnier than Hard Truths

In Political economy, Wit on 15/02/2011 at 3:15 pm

Get hold of this: “Confucius Confounded: Analects of Lee Kuan Yew” by Francis Seow, Forward by Dr M.

Like Hard Truths, it quotes MM. But unlike HT, it keeps its quotes pithy and concise. MM should have consulted Francis Seow, and not ST, on how to produce a book that the young will want to read.

Sumehow I doubt any bookseller will bring this in.

Why PAP can’t do coups or violence

In Economy, Political economy on 13/02/2011 at 6:21 am

Sumetime back I flippantly blogged on a “Klingon election”.

Seriously this or military intervention is unlikely because it will shake confidence in the rationality of the PAP internationally, especially its willingness observe the letter of internationally accepted rules.

S’pore is trying to attract foreigners to set up oil  and chemical plants, and R&D facilities here. These projects are expensive and have long lead times. So if there is military intervention or “Klingon election”, they will fear that somewhere down the line, their expensive investments may be at risk.

Then there is plan to get more MNCs to base their regional HQs here. Overturning a “freak” result will scare them away because they want a quiet place.

And then there is the attempt to build a wealth mgt centre to rival Switzerland. Would people want to keep their money in a country where there is a military intervention or “Klingon election”? Next time, their assets could be seized. Read the rest of this entry »

S’pore Inc: The Achievement Test

In Political economy on 06/02/2011 at 2:53 pm

Here’s an idea (from the NYT) that could make a difference in the usually sterile election debates.

The best way to measure government is not by volume, but by what you might call the Achievement Test. Does a given policy arouse energy, foster skills, spur social mobility and help people transform their lives?

Translated into the S’pore context: Do the govmin policies on say casinos, housing, FTs, breeding, transport, education or R&D arouse energy, foster skills, spur social mobility and help people transform their lives?


MM and Lucky Tan could both be wrong

In Political economy on 28/01/2011 at 5:28 am

MM and Lucky Tan disagree on many things (see this piece by Lucky) But as the piece shows they agree that if the PAP cannot deliver material prosperity, it will get kicked out fast. They of course disagree on whether the PAP is delivering prosperity, and what is prosperity

But they both could be wrong on the PAP quickly losing power if the PAP cannot deliver prosperity. Think Japan and the LDP. After holding power continuously from its inception in 1955 (with the exception of a ten-month period in 1993–1994), Japan’s Liberal Democratic Party (LDP) lost control of the national government only in September 2009. This despite failing to fix the economy for 16 years. An economy that had crashed after a huge bubble had burst in the early 1990s.

One reason, among several. The people knew the LDP was incompetent but they tot the Opposition was worse. So they kept voting LDP, in the hope that the LDP would get its act together, until they decided that the Opposition could not do any worse. Note the party in power, the JDP, since 2009 has been lurching from crisis to crisis.

Improve Workfare not press for Minimum Wage

In Economy, Political economy, Political governance, Public Administration on 13/10/2010 at 6:34 am

By arguing the case for minimum wages, the SDP, Tan Kin Lian, RP etc are allowing the govmin to get away with being mean to the poor under the present arrangement which does have an element of “minimum wage”.

Tharman said in February this year that the enhanced Workfare scheme will cost the government S$100 million annually and benefit around 400,000 low-wage workers. S$100 million in the S’pore context is “peanuts”. It is 0.3% of the operating expenses under the latest Budget*.

And Workfare payments end up largely locked up in never-never CPF land. OK I’m being unfair, but the fact is that the poor need cash now. Yes they will need it in the future, but when you are living hand-to-mouth, and hungering for hawker or restaurant food (as the welfare minister insinuates), you need $ now.

So the Opposition and others like TKL  should be pressing for more to be spent on Workfare and for more $ to be disbursed today rather than at 65. The govmin cannot argue against Workfare, juz how much to give, and when to give it. The government will have a hard time defending the tiny amount set aside for Workfare.

BTW, I’m surprised that the do-gooders have not raised Kaushik Basu’s suggestion of how to help the poor.

Kaushik Basu of Cornell University and chief economic adviser to India’s finance ministry says it is not enough that the income of the bottom 20% rise at the same percentage rate as the average. Instead, they should get an equal absolute share of the income the economy.

Let’s translate this into S’pore terms.According to the CIA Fact Book, in US$ terms (using purchasing price parity) the S’pore’s GDP was US$235.7 billion. Based on MTI’s latest growth estimate of 4.5-6.5% growth in 2010, this would work out to GDP of US$246.3 — US$251.0bn. The increase would be S$10.6 — 15.3bn. If this formula were adopted the poorest 20% would get S$2.1 –3.1bn.

And election winner? A one-off transfer of US$2.1 or S$3.1 billion to the poorest 20% of S’poreans. Less than GIC’s paper loss on its investment on UBS or Temasek’s realised loss on Merrill Lynch.

And as it’s one-off, there is no fear of welfarism creeping in. The govmin is right to be fearful of welfare getting out of hand. The BBC reported that 40% of UK  govmin expenditure goes to welfare payments. Talk of entitlements running riot.

Update — Academic research supports PAP view

Update in Dec 2010

*This may give the impression that that is all govmin spends on Workfare. If so I apologise.  “[A] total of $1.65 billion in the last five years, or $400 million a year, to help 400,000 low-income workers” ,the PM reminded in November. So the spending in Workfare is now S$500m or 1.5% of the operating expenses under the latest Budget. Still peanuts and remember the Kiddie Games cost S$387m. It was budgeted at S$122m. And yes I know that 1.65bn divided by 5, doesn’t equal 400m. Taz why I quoted PM.

Update on 4 January 2011

The meanness of Workfare in $

A gd writeup on the nitty gritty of WF