MM Lee : Subsidies will not solve Singapore's problems!

"Yeah but what about removing the excessive fees, taxes, monopoly profits that resulted in our govt accumulating one of the biggest reserves per capita in the world" - Lucky Tan

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Subsidy is bad, welfare is worse. If that is so, doing the reverse has to be good - squeezing the citizens for more, huge surpluses etc. The govt of Singapore has done alot of good in recent years. It is easy to argue that subsidies are bad - they result in misallocation of resources, a crutch mentality and very often they allocate govt funds to those who don't need. Subsidies are bad...bad...bad.....lets see.

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For some reason, I have to bring people to the A&E more often than I want neighbors, family members ...I did it 5 times this year! Many years ago, there was this problem of people going to the A&E when they didn't really need to - one reason was the lack of 24 hour clinics so people with slight fever, coughs and cold problems turn up at the A&E. The problem was you can't turn people away when they go there. To solve this, the fees at the A&E were raised so that it would be a pinch to go there unless you really needed to. So it has been increased from a subsidised rate to $70. $70 is higher than what you would pay if you were to go to a "for profit" private clinic. In order to have an effect, it was raise so that the middleclass would feel the pinch. But what happened to the lower middle and poor people - they actually avoid going to the A&E even when they need to. For them a $30 fee would be sufficient deterent but $70 deters them from seeking treatment even when they need to. When subsidies are not given to people who need it, they do suffer.

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Subsidies are still bad...bad..if your electricity bill is subsidized, you will not think twice leaving your air-con on all night, you might not be so conscious to buy the "inverter" type air-cons that uses less energy. One colleague actually think of saving power more proactively when a rude awaking electricity bill of $420 hit him last month. So no subsidy is good. Lets do away with subsidy. Lets do the reverse, let Singapore Power make money. So while the poor families are squeezed to saving those precious watts by diming their homes or living in darkness - Singapore Power ends up with a pile of several billions in profits. So we are told that subsidies result in misallocation so they are removed, and GLCs are allowed to make monopoly profits. So where does Singapore Power put its billions - not back in the pockets of the poor folks they have squeezed but buying assets in Australia. So how does that benefit Singaporeans? Isn't there misallocation when billions are made in providing services to Singaporeans are used to invest overseas? Subsidies are bad but at least it goes back to the citizens. Sure the rich don't need it but they also pay more in taxes, the poor need and get it. What about identifying the poor and then giving them a lower utilities rate relative to their income rather than the price of oil? Even some of the most capitalistic societies do that.

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One cannot discuss subsidy without talking about the "market subsidy" given out by the HDB. You know if subsidies are so bad, why not do away with them for housing. They are there for the simple reason that is the same in every land scarce country/city, if there is no subsidy, you will find many people homeless. Reluctant as they are, the PAP govt is compelled to give this "market subsidy". While Singapore's HDB flats are the most expensive public housing in the world more expensive than private property in many countries, they are priced to prevent homelessness. Unless every Singaporean can afford a private condo, HDB has to keep building these "subsidised" flat. So subsidies are not so bad?...They are bad but necessary? The HDB system is really fine tuned for the poor especially the poorest people. They can't afford to buy flats so they have to rent. HDB checks their income level, as their income rises, HDB increases the rent and reduces the subsidy to absorb the increase in their income.

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"Is anyone complaining about the subsidised service Singaporeans contribute when they serve their NS? Subsidies are okay if the govt is the one receiving it..." - Lucky Tan

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I guess that MM Lee is right as usual. Giving subsidies will not solve Singapore's problems. But what are Singapore's problems? If you read his speech carefully, the main problem in Singapore is to keep society competitive and grow year after year. The answer to our problems is for ordinary Singaporeans to keep working harder and longer. That has always been the answer - working harder and longer.

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MM Lee says giving subsidies will not solve Singapore's problems
By S Ramesh, Channel NewsAsia Posted: 25 May 2008 2021 hrs


Minister Mentor Lee Kuan Yew

MM Lee says giving subsidies will not solve Singapore's problems

SINGAPORE: Singapore's problems cannot be solved by giving subsidies, but by having a dynamic economy, said Minister Mentor Lee Kuan Yew.

Speaking at the Tanjong Pagar Day celebrations at the Queenstown Stadium on Sunday, Mr Lee drew lessons for Singapore from how countries in the region are tackling their problems.

The world has moved into years of high prices for food and oil, said Mr Lee. But Singapore does not have agriculture, so people have to earn enough money by working hard and smart to pay market prices for food.

He made it clear that Singapore cannot go the way of welfare systems in Europe, which have lowered incentives to strive and excel.

The minister mentor said: "I read many letters in the press urging subsidies for all manner of things – seat belts for school buses, food for the poor, medical fees and so on. Singapore must remain a competitive society to generate growth year after year.

"The government must ensure that everyone has the highest paid job he is qualified to do. If his salary is below the minimum for a decent life, the government will top up with Workfare. When everybody knows the cost of what he consumes or uses, he will spend his money more to his benefit."

Mr Lee noted that countries in the region have taken different approaches to worldwide problems.

In Indonesia, there are riots over an anticipated lowering of oil subsidies, while in Malaysia, the newly elected government has not reduced the oil subsidy so as not to upset the electorate.

In handling natural disasters, Myanmar's military leaders had refused foreign aid for weeks after Cyclone Nargis left millions homeless. But the reaction was different in quake-hit China.

Mr Lee said: "Premier Wen Jiabao immediately flew to the quake areas. 120,000 troops were sent by air. The people were united and rallied to help victims by donations, and many went to Sichuan to do relief work.

"The Confucian habits of communitarian solidarity and mutual help have again surfaced, although Communist ideology marginalised Confucian values for 40 years."

The minister mentor added that Singapore does not have earthquakes, tsunamis or typhoons because of the country's favourable geographical location.

His call to Singaporeans is to be grateful that the nation has long-term stability, continuing high-value investments and good growth. Mr Lee said he is confident that in five years, Singapore will be a more lively and beautiful city.

Mr Lee, who cut short his speech because of a sore throat, said he needed to save his voice for a court case involving Dr Chee Soon Juan on Monday.

"I've got to save part of my voice to let him cross-examine me. Of course, in the course of the cross-examination, I have a few things to say," he said.

The High Court has set aside three days for the hearing on damages claimed by Prime Minister Lee Hsien Loong and the minister mentor against the Singapore Democratic Party and its leaders.


- CNA/so

The economy in the coming months....

"Every recession is different...just like each poor
Russian family is miserable in its own way" - Bernanke
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I remember the last recession very well. Businesses were spending in like there was no tomorrow in 2000. In those days, a Java programmer was paid $10,000 a month and businesses couldn't wait to spend money. If you look back, it was obvious the dot.com craze was one big bubble but when you were in the midst of it the excitement was contagious and businesses wanted to outspend their competitors. Every thing came to a halt in mid-2000, the crash of Nasdaq and the collapse of several prominent dot.coms knocked some sense into everyone. Businesses became cautious, caution turn into parsimony and retrenchments came fast and furious. If you were a retrenched IT worker, you would feel like the world had no use for you. Things got from bad to worse and when you thought that things were about to get better a group of terrorists hijacked several planes and slammed them into skyscrapers. I had the great misfortune of investing all my spare cash on 10 Sept 2001 thinking everything was about to get better- incredible timing some would say. The economy headed nowhere and had a mild recovery in 2002 only to be hit by SARS in 2003. April 2003 was the bottom and the economy has been growing since...
The coming slowdown will be totally different from the 2001 recession. It will be caused by the housing slump in the US and a slowdown in consumer spending. Along with the slowdown we have an inflation problem to contend with. The strange thing about the current slowdown is the unemployment rate in the US is still very low 5% and job losses contained. I remember in the last recession at the same point in time, the US economy was losing jobs by the hundreds of thousands per month. We don't see this happening in the current slowdown. The explanation for this is the US has lost most of its manufacturing jobs in the past decade and replaced them with service sector jobs. Employers are reluctant to fire people from these jobs because they require a lot more training than manufacturing jobs. While the subprime crisis, credit crunch and housing slump probably caused more losses than the dot.com bubble, except for banks and businesses that depend on the housing sector, most US companies will go into this slowdown with best balance sheet in their history (post dot.com bubble many became conservative in their spending). If you take out the banks, S&P 500 companies showed an earnings growth of 10%. In the coming slowdown individuals (US consumers) are suffering while companies appear well-heeled.

During the last recession almost every company got hit. How well you do in this slowdown depends on which sector you're in. In Singapore, construction backlog stretches well into 2010 so we won't be seeing a slump in construction, companies involved in shipbuilding have full order books for the next 5 years. The IT sector which was relatively flat when other sectors were booming in 2006/2007 will remain about the same. Companies involved in infrastructure in China + India will keep growing because of the urbanization - something that shouldn't be underestimated as 15 million people move from villages to cities every month. Companies that will do poorly in the coming months are involved in property and banking. I think it is mostly psychological - 1 year ago, the condo market was so hot, people couldn't imagine prices coming down and now we have a small glut. Banks will see a slowdown in housing loan applications and will see slower but still decent earnings.
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It looks like most of the pain will come from inflation rather than unemployment. The people in India and China are getting richer and would like to live like us. They want to eat the same high quality Thai fragrant rice, they want to drive around in their TATA or Geely cars and they too would like to fill their cities with skyscrapers and they need steel, copper, etc. you get the picture. Mother earth does not have enough for the world's population to live like Americans. We now have to share with a growing middle class in China, India, Russia & Brazil (collectively known as BRIC). Our lives will be worse because we now have to share. You will still have your job but there is less you can buy with your income.

We had some exciting times in the financial markets earlier this year. During the turmoil there was little time to differentiate, investors sold their stocks in banks infected subprime along with the shipping companies that are still having blockbuster earnings....I think the markets will face some headwinds in the coming months but we won't see the type of indiscriminate selling we saw in early part of the year. Exactly 1 year ago, the stock markets could do no wrong and everyone thought it was the best time to invest only to be hit by the financial typhoon a few months later. Many investors learn their lesson like this, they pick a time when everything looks rosy to invest which is usually the tail end of an economy boom, then when the stocks they bought falls, they swear to stay away from the stock market forever. I've always maintained that investors should invest at regular fixed intervals to overcome the volatility in the markets - better still but harder to do is to invest when economic problems abound and when there is general feeling of negativity about the economy. Warren Buffett often says he gets an "F" for economics but over time I came to realise that he probably knows as much about economics as anyone else. He also understands that it is useless to invest based on the state of the economy because it is the easiest piece of information to appreciate and discount. By the time you know that the economy is in bad shape, so does everyone else and prices have already adjusted for it. If you look back in time, when was the best time to invest? When everyone thinks the economy is entering recession or when the economy is firing on all cylinders?

Understanding US$130 Oil

Oil is now trading at $130 per barrel. There is a hearing in US to pinpoint the cause of the high price of oil. Yesterday night at 11pm almost every single gas station in Singapore increased their pump prices. My colleagues complain everyday during lunch about their petrol bills.

So far the fingers are pointing everywhere:

1. OPEC - did not increase production as demand rises.
2. Oil Companies - did not increase production.
3. China + India contributed to rise in demand.
4. USA did not tax oil prices enough to curb demand. In Europe the taxes are much higher.
5. Speculators.
6. Subsidies in various countries like Malaysia keeps the pump prices artifically low hence demand remain high in those countries.

Who is guilty? Why is oil trading at $130 and not $60?

The demand for oil is relatively inelastic in developed countries. You drive your car to work so if petrol prices rises by 10%, you still go to work by car. The demand remains about the same regardless of price so is the supply. Supply is close to capacity. There is also no shortage of oil, nowhere in the world are there reports of people queuing up for limited amounts of oil.

When it comes to rising oil prices, subsidy plays an important role in the rise. In countries like Indonesia and Malaysia, petrol is subsidised. This means the govt foots the bill as oil price increases and the drivers pay a low subsidised rate that they can afford. If there is no subsidy in developing countries, the demand will fall alot further because the income level is low and rising oil price will make it unaffordable causing demand to fall. In Singapore, petrol is still a small component of household spending, so the impact of higher prices is limited.

Are speculators to be blamed? Is there a bubble in oil?
Speculators are out to make money and many simply follow trends in price movements. The fact is at $130 per barrel, there has been no significant change in the demand or supply....so the speculators are saying "why not?"...lets push it higher and see what happens. $130 is suppose to hurt enough for consumers to change their habits but they still haven't due to subsidies in developing countries and high income in developed countries.

The good news is the Indonesian and Malaysian govts have announced that they "tak buleh tahan" the price increase and will slash subsidies. The Saudis will increase production slightly and the US will stop topping its strategic reserves. More govts are looking at the high price of oil as an important issue that has to be tackled and they are starting to be pro-active.

At $130, the total value of OPEC's known reserves is worth US$137 trillion. This means the OPEC nations have more than the total financial assets of the rest of world...the Chinese with all their success being the "workshop of the world" has only $1 trillion in reserves. I'm very sure OPEC nations will be very eager to encash all this selling at today's prices....so supply isn't going to fall even if oil price falls to $80 per barrel.

What is needed for oil prices to fall is a slight shift in the demand downwards, this will cause the inventories to buildup as OPEC maintains its production levels and speculators seeing there is no meat left in the oil rally start to sell. This will result in oil prices going down to a "reasonable" level below $100 per barrel.

Despite the reports we see frequently in the papers today about ever rising oil prices and analyst predictions that it will hit $200 per barrel, I believe oil prices will cool off soon.

Explaining the UGLY SINGAPOREAN!!!

Seah Chiang Nee wrote an article on The Ugly Singapore in his Malaysia Star column. This article is interesting but it lacks an explanation of the phenomena which I've inserted between the lines.
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The ugly Singaporean
INSIGHT DOWN SOUTH
By SEAH CHIANG NEE
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Have affluent, educated Singaporeans become too self-centred and insensitive to other people’s plights? Can Singapore be considered a First World city with such boorishness? A mature, developed country isn’t defined only by wealth and education; it is also about humanity and concern for others.

Mahatma Gandhi once said, "The best test of a civilized society is the way in which it treats its most vulnerable and weakest members". I believe it is the only test that matters because if the weakest are well taken care of, everyone else has to be alright.

JUSTIFIABLY or not, the disastrous Sichuan earthquake has sparked off a re-look here at a Singaporean characteristic that overshadows his economic achievement.

In a TV interview, a tourist who just returned unhurt complained angrily about his encounter with airport delay and telephone breakdown at a time when the Chinese were frantically rescuing people.

One viewer commented: “He kept complaining bitterly as if the whole world owed him an explanation about the airport delay.”

Another added: “the man was practically shouting at the camera. His behaviour was really shocking.”

In the face of the terrible suffering, the middle-aged Singaporean’s insensitive complaint about his personal inconvenience spread consternation and a sense of shame among viewers.

I wonder why MediaCorp did not cut that clip out. Many Singaporeans are so used to whining about everything around them, it is hard to stop even when they are overseas and 32,000 people have just died from an earthquake. This "complain training" starts when we are children. Parents teach their children to complain about cleanliness, delays, etc. Favorite complaints include people not being considerate towards them or civil servants not doing their jobs. Very often it becomes a vicious cycle. Because there are so many complaints no matter what they do, the civil service tends to do nothing until a complaint comes in. As everyone is complaining, you learn to complain louder to get yours heard and the service providers learn to respond to the loudest complaint first. That is why that middle age man was shouting - he feels that is the only way to get his answers but he forgot that he was not in Singapore - in China, they handle complaints by ignoring them. He was probably angry because he had been ignored for several hours.

It highlighted a trait often attributed to affluent, educated Singaporeans that they have become too self-centred and insensitive to other people’s plights.

Would you be able to get to work on time if you spend a minute with every homeless person you see at the interchange? We have been conditioned to "move on" and are able to walk past the poor homeless folks like they don't exist. Our govt tells us that giving these people welfare will result in a crutch mentality so we don't feel obliged to help them.

After years of social campaigns, tales still abound of people rushing for train seats or refusing to give one up to the elderly, ill treatment of maids, littering or inconsiderate driving.

Affluent but insensitive?: Commuters travelling on the MRT in this file picture. After years of social campaigns, tales still abound of people rushing for train seats or refusing to give one up to the elderly.

Many of the offenders are middle-class, young and educated who seem to have little interest in other people’s feelings.

The Singaporean tourist, instead of lending a helping hand, was fuming about his own safety – even after he was safely back home.

“Typical ugly Singaporean the sort that makes other people dislike us – totally self-centred,” said a blogger.

Others disagree, with one defending it as a normal reaction for a foreigner desperate to escape quickly. “He may have put it badly, but he was scared and obviously wanted to return to his family,” he said.

“Realistically speaking, not every one can be highly principled about helping in a disaster in a foreign country,” he added.

Most, however, condemned his insensitivity. “It reflects the overall selfishness and self-centredness of middle-class Singaporeans,” said ‘investor’.

“My general impression is that they are the second most selfish and self-centred people in Asia, next only to Hong Kongers.”

The debate raised the question whether Singapore could be considered a First World city with such boorishness.

A mature, developed country isn’t defined only by wealth and education; it is also about humanity and concern for others.

We all know what happens to people who speak up strongly for the poor, jobless and exploited in our society. They are labeled as trouble makers and there are laws to deal with troublemakers.

Several days earlier, a girl who refused to give up a seat (meant for the elderly and the handicapped) to a pregnant woman, called her a “bitch” because she had stared at her and shook her head.

Why is the girl expected to make such a painful sacrifice? She got to the seat first and the seat is hers to enjoy why must she give it up? Singaporeans have to learn to stop demanding painful sacrifices from little girls and their leaders.

Some blame it on the environment, especially an elitist, each-man-for-himself mentality.

“There’s no such thing as a free lunch” is a theme that has been drilled into every child and adult. A whole generation has grown up believing that if Singaporeans get into trouble, they can expect no help from anyone.

In Singapore you learn to help yourself whenever you can. Our leaders show the way. They helped themselves to millions in ministers' salary once they were voted into parliament.

It may be a good teaching for a small city without resources, but it has also spawned an antithesis: If you can expect no help from others, you also do not need to care for others.

Did Seah Chiang Nee not listen to our SM? Helping the people with welfare and subsidies will make them unhappy. The PAP govt has the interest of the people in its heart - they give little or no help because they don't want to undermine the happiness of Singaporeans.

“Living in a society where only money talks makes all of us less human and less caring,” says ‘Anonymous’.

Another writer said he was a typically an apathetic, uncaring Singaporean until he went to live in the United States.

“Two years into my stay there and having been offered help by plenty of strangers on the street, I found myself doing the same,” he said.

“The typical Singaporean reaction when they are offered unsolicited help is a suspicious glare. Certainly not encouraging to would-be helpers,” he added.

You cannot blame Singaporeans for this. Why? Every time they get something they didn't ask for (progress package) from the govt like they did before the last general electons in 2006, there is a tendency for something else to happen to take it all back (GST hike, ...).

The person who has the single biggest influence on how Singaporeans think and behave is Lee Kuan Yew. Many of the current leaders and civil servants as well as older Singaporeans, emulate him.

The Minister Mentor has never been too concerned about his own – or Singapore’s – popularity as much as its interests. Giving charity to countries in need, for example, has rarely been its forte.

The political elite, followed by and large by the citizenry, takes after Lee’s generally no-welfare, harshly competitive and unsentimental leadership.

Who says the PAP is not generous?! Just go ask the foreign students with all expenses paid scholarships given out by the PAP govt. I'm sure many will say that our govt is the most generous they have ever seen.

Last year, the “survival of the fittest” type view, believed to prevail among the top elites, burst into a public furore following remarks made by the scholar-daughter of a government MP.

Condemning a young professional, Derek Wee, who wrote about the pressures faced by the common people, the student, Wee Shu Min lambasted the critic as wretched, an idiot and “leech”.

She appeared to be defending the class divide in Singapore or “a tyranny of the capable and the clever” saying that “the only other class is the complement.”

She ended by telling Derek: “Please, get out of my elite uncaring face.”

Her MP father criticised her intemperate language, but supported some of her sentiments expressed.

A nationwide condemnation ensued.

The issue would have ended there if it were just regarded as a teenager’s rants. It was more than that.

Because Shu Min was a scholar designed for a possible leadership role and daughter of a People’s Action Party MP (from Prime Minister Lee Hsien Loong’s constituency), it instantly became a political hot potato.

The critics said it reflected a government perception that a class divide was inevitable and may even be necessary to encourage people to strive harder in life.

The target of her invective, Derek Wee, was actually echoing a popular public sentiment when he said Singaporeans were suffering partly because the government failed to understand their plight.

Shu Min’s message was that failures were caused by laziness or lack of capabilities, which the persons themselves were responsible – with no words of support or care for those in need.

I think Shu Min is only partially right. Failures are caused by laziness or lack of capabilities if we are talking about the failures of ordinary Singaporeans. Our leaders don't fail, they can only make honest mistakes. Nobody failed when Mas Selamat escaped only the guards down the line deserve punishment. Nobody failed when billions are lost in investments such as Shin Corp or Citibank, they are for the long term. Only ordinary Singaporeans can fail and when they fail it is due to their own lack of ability. When they fail, they become a burden for our leaders to shoulder.

Libya's Gaddafi Confirms Singapore Govt is RIGHT!

I guess we don't have that much more to learn from 1st world western countries. That is why SM Goh visited Libya and he learned something important - that the Singapore govt has been right all along on not giving the people subsidies. You see, according to Gaddafi the Libyan people are totally unhappy because they have been pampered by their govt (see article below). When they get married, they are given a 3 room flat, petrol is 14 cents a litre. Education and healthcare are free in Libya. All these freebies have made the Libyan people miserable! Now I understand why the PAP govt does not give subsidies to help its own citizens because they don't want us to be unhappy. In fact the PAP govt has gone to the extent of implementing the opposite of subsidy - the negative subsidy (I'll explain a little later) - to make us happy. See how lucky Singaporeans are to have a govt that secures their happiness by not giving subsidies.

"Isn't an all expenses paid free education to foreign students a subsidy? I guess it is all right to make foreigners unhappy. Singaporeans get to be happy by paying" - Lucky Tan

Being a Singaporean all my life, I have realised my happiness is not free and I have to pay for it. The more I pay, the happier I become. With much of the essential services provided for by GLCs - transport, utilities, etc, my happiness is very much secured as the govt does not subsidies much of it. In fact to make me happier, they have implemented what is known as a negative subsidy. You see the GLCs are usually monopolies that don't have to compete. You don't have much of a choice when it comes to, say, the SMRT which saw profits soar to $150M but had no choice by to increase fares last year. Singapore Power had no choice but to hike electricity tariffs although it makes enough to buy up the major Australian power companies.

I know many of you are worried about the subsidies for public housing. Yes, this is a cause for concern and many fear that it will cause us to be unhappy. I would like to dispel all misconceptions and fears surrounding subsidies for HDB flats. The HDB does not give a typical subsidy which is a "cost subsidy". The Libyans get a 100% subsidy since housing is free when they get married. This is something Singaporeans don't have to worry about given our public housing is the most expensive in the world and more expensive than private housing in most countries. What we get is actually a "market subsidy" which is the difference between HDB price and the price you pay for the same flat on the open market. Of course the open market price depends on many things besides the GDP & population density, it also depends on rules surrounding financing such as the use of CPF and 25 year housing loans. If housing loans are limited to 10 years and CPF is not allowed for housing, Singaporeans would be able to enjoy affordable housing at lower prices and retire with sufficient cash because they would have finished paying for their homes alot faster and CPF would be preserved for retirement. Having rules and policies that are favorable for the housing market helps to enhance this market subsidy - a subsidy that doesn't even help the people save enough for retirement.

"Do Singaporean men subsidise the SAF by serving their NS for a few hundred a month? Surely, SAF with its gigantic budget can pay market rate for labor and do without this subsidy. I guess it is okay for ordinary Singaporeans to give subsidy but it is not okay for them to get subsidy" - Lucky Tan

The Singapore govt works for the interest of ordinary Singaporeans. Giving them subsidies will cause them to be unhappy and it is good that our govt has confirmed this by checking with Gaddafi. Gaddafi is now a good leader although he once ordered the murder of dissidents overseas. Gaddafi's mistake was giving his people too much and he now has to take it back. Our govt has been wise enough not to make the same mistake and better still they will be taking more from the citizens as they take more steps in the right direction. Singaporeans, you should be happier now that you're means tested when you're critically ill to make sure you pay as much as possible - this will help you to get well fast as you see your bills piling up.

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May 10, 2008 SM GOH'S VISIT TO LIBYA
Gaddafi tells SM: Subsidies can ruin a nation
Admission from Libya's socialist leader affirms what S'pore leaders already know
By Chua Lee Hoong

TRIPOLI - FOR Senior Minister Goh Chok Tong, the most important takeaway from his four-day visit to Libya this week had nothing to do with memorandums of understanding or other cooperation agreements. It was the simple message: A welfare state and subsidies will lead a nation to ruin. And he heard it from none other than Libya's socialist leader for 38 years, Colonel Muammar Gaddafi. Speaking to reporters before flying home on Thursday, Mr Goh said: 'For me the most important lesson is the affirmation of what we already know - that a welfare state and subsidies will lead Singapore to ruin.' Libya lavished subsidies on its people because it had enormous oil wealth, he noted. But despite that, its people wanted more. 'Gaddafi himself told me the people are not happy. They want more and more...(He's come to the point where he acknowledges the system) is not working,' said Mr Goh. The difficult task facing the Libyan leader now is how to remove, whether partially or totally, the 'many heavy subsidies', he added. In Libya, education and health care are free. Petrol costs 10 US cents (14 Singapore cents) a litre, 'way below market rates'. When a Libyan gets married, the government provides the couple a flat about the size of a three-room flat in Singapore. One option the Libyan leader is considering, said Mr Goh, is to use a portion of the country's reserves to give cash transfers to the people, and move from there to a market economy. The reasoning: It is better to give cash - 'they can spend it, save it or invest it' - than to give subsidies, as they lead to 'wastage, abuse and distortions of the economy'. This, noted Mr Goh, may sound very familiar to Singaporeans, as it has echoes of Singapore's policy of preferring cash handouts to price subsidies. 'For me, coming to a country with so much oil wealth, saying that heavy subsidies is wrong...that is a very important lesson for us,' said Mr Goh. He added: 'We must never make the mistake of changing our own policy and going the other way, of giving more subsidies to people. 'Even when we give out cash to people, in terms of growth dividends for example, (we already see people saying) this is not enough. 'At some stage I will have to tell the Prime Minister - please be careful, it's never enough. We must find a formula that will ensure we don't go down that route (of ruining the nation).' Mr Goh was in Libya to strengthen bilateral ties and explore opportunities for economic cooperation. He was the second minister to visit the country after diplomatic ties were established in 2006. Foreign Minister George Yeo visited Libya last year. Colonel Gaddafi took power in a socialist coup in 1969, 10 years after oil was discovered in Libya. Sanctions imposed by the United Nations in 1991 kept the country in isolation until 2003, when the country renounced its nuclear weapons programme and rejoined the international community.

Opposition Member votes for PAP!!!

http://www.straitstimes.com/Latest+News/Singapore/STIStory_237744.html
Ha ha ha. This is really a good one. They go round asking people to vote for the opposition while they are voting for the PAP themselves. See! What did I tell you about the opposition...they cannot be trusted. Yaw Shin Leong of the Worker's Party admitted voting for PAP's Teo Ho Pin over Ling How Doong. As a PAP supporter I find it difficult to understand why people would vote for Ling given his performance in parliament but I guess members of the opposition "die die" have to support the opposition. Those are the ground rules. Let me explain further.
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The opposition recruits people for their rabid hatred of the PAP govt. Before someone is allowed into the opposition he is asked 3 questions (1) Do you hate the PAP? (2) Do you hate all their policies (3) Do you hate everyone that works for the PAP govt? The answer has to be "yes" for the person to be admitted into the opposition party. Apparently, the Worker's Party slipped up when they recruited Yaw, his level of PAP hatred is too low for him to be a worthy opposition member. His hatred for the PAP is not even high enough to overcome his unwillingness to support Ling How Doong, a former MP who couldn't speak one line of proper English and whose Chinese is equally bad..... after one term in parliament, the constituents really "tak buleh tahan" him and couldn't wait to voted him out. Still, as an oppositiom member, Yaw Shin Leong does not have the luxury of choice that other citizens have, he "die die" must vote for the opposition. If anything, he has to show how rabid his hatred for the PAP is to be acceptable to diehard opposition supporters. Rational thinking is simply out of the question.
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As a PAP supporter, I welcome hateful opposition members. You see our MM has prepared the system well for this kind of opposition. At this point, it is time for a story from the book "No Man is an Island" to illustrate this. MM Lee (who was PM at that time) in the 70s was rehearsing for a TV broadcast at RTS (now known as MediaCorp). While rehearsing, an irritating fly was buzzing around him and he couldn't get on with his speech. There was panic among the staff at RTS who didn't know what to do. MM Lee ordered all the lights to be turned off and asked for a flashlight. He turned on the flashlight at one corner of the room and waited patiently. The fly flew towards the flashlight and was expediently destroyed. The next day, the walls were sprayed with fly repellent to make sure the same thing did not happen. You see, over the years, our MM treated the opposition as expediently as the fly. Our laws are strengthened to make sure that the opposition can be taken care of the moment they are not careful in their speech, their actions or their publications. The ordinary citizens who are generally well fed and well entertained by the media wouldn't care much if a few pesky opposition members are bankrupted, detained, arrested or jailed. But what has this whole thing got to do with the Yaw Shin Leong episode. Everything......
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Being an opposition has to be perceived by the public as being involved in something very risky so people wouldn't join the opposition and the recruitment of opposition members will fail. To show how risky it is, opposition members have to be arrested, jailed or sued for defamation. This can only be done if they break one of the many laws the PAP govt created over the years. Certain opposition members are the easiest to handle under the system, they just get low ranking police officers who are paid to enforce the law to do it....they don't even need to waste their time and get their hands dirty. The next day the newspapers reported that the police acted because laws are broken and the public get the message that "opposition politics = breaking the law = jail". So how to recruit people like that? Only heroes need to apply.........but our society won't appreciate self-proclaimed heroes and despises martyrs we did not ask for.
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The problem with Mr. Yaw is he is a moderate. Arresting him is like arresting the man on the street. Criticizing him is like criticizing ordinary Singaporeans. It is a problem when nothing can be done to people like Mr. Yew. He is very cunning too. By saying he voted for PAP's Teo, if anything is done to him it is like the PAP going after the people who voted for them. As a PAP supporter, I fear opposition members like Yaw who appeals to the ordinary Singaporeans and make themselves palatable to the majority. The bigger problem is if Yaw does not get into trouble, people may perceive joining the opposition is something safe and worthwhile doing. People like Mr. Yaw are the real danger to system because if they manage to get into parliament in large enough numbers they can demand changes. I warn my fellow PAP supporters that while we are vigilant against the vocal activist opposition members who are easily handled by our laws and police, it is those that work quietly among the population to gain support that threatens our beloved system.

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May 15, 2008 I voted for PAP in 2006 elections: WP candidate
Opposition party leader Yaw Shin Leong draws online flak for revelation in his blog
By Sue-Ann Chia

HOW should an opposition leader vote in a general election (GE), especially one who is contesting the polls?
For Workers' Party leader, he voted for the ruling People's Action Party candidate in the 2006 GE - and has now found himself in the eye of an online storm.
Mr Yaw, a Bukit Panjang resident, had revealed in his blog that he voted for the PAP's Teo Ho Pin who was contesting the single-member ward against Singapore Democratic Party chairman and former opposition MP Ling How Doong.
The disclosure was just a one-liner: - Teo Ho Pin (MP) - Good MP. I voted for him in GE06.
And it was hyperlinked to Dr Teo's blog.
However, it soon appeared on a popular online forum and sparked a furore among netizens who registered their ire and disappointment in more than 100 postings.
http://www.straitstimes.com/Latest+News/Singapore/STIStory_237744.html

1994 : Dick Cheney on Iraq....

What you find searching around in youtube can be very interesting. Here's an interview with Dick Cheney just after the 1st Iraq War in 1994. He was asked why the American troops did not go into Iraq to bring down Saddam Hussein at that time. Listen to what he has to say....there was real wisdom in then.

And the pain deepens........

Life gets really interesting when the price of rice rises 50% in 2 months. Inflation has now spread to food and the rise is astronomical. If you're a rice farmer in Thailand life is sweet, but if you're a construction worker in Philippines with 5 kids to feed, you'll be on the streets demanding Arroyo's resignation. It is estimated that oil producing countries will make US$1 trillion due to higher oil prices this year, they make money just by pumping this black liquid out of the ground while the rest of us have to work in factories and offices to survive. I know many of you "tak buleh tahan" the price increases. Unfortunately it is here to stay.....many of you would like to give all the credit to our great govt for all this, but I think they are only partially responsible. If you want to understand inflation and why you're so unhappy today....read on!
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In the past, economists used to think that inflation is correlated with employment. Employers who were able to raise prices are more willing to hire workers. It was Friedman who warned that this correlation might not hold and something known as stagflation (inflation + recession) can take hold and one can have both inflation & recession at the same time. Friedman argued that workers are not dumb, they will figure out prices are on the rise and demand higher wages thus discouraging employers from hiring more workers. Friedman was vindicated in the 70s when stagflation occurred and a recession occurred at the same time of great inflation. What occurred at that time was the wage/price spiral as workers demand higher pay to protect real incomes, that in turn leads to more inflation and the economy enters a vicious cycle. The back of inflation was broken when the US Fed under Paul Volcker broke the back of inflation by hiking interest rates to astronomical levels - my late grand mother used to tell me stories about how she got more than 10% interest on her savings account those days vs 1% today. ...while Volcker managed to kill off inflation, he caused a deep recession that saw unemployment rising to levels not seen since the Great Depression. At the same time, Ronald Regean became US President and introduced "Regeanomics" which was a policy of lower taxation, supply-side economics and a laissez-faire philosophy. One aspect of Regeanomics was to help employers to stand up against unions which were seen as a socialist corruption of capitalism - over time the power of the unions were broken....the same thing happened in UK under Magaret Thatcher. At the time people could see the problems caused by unions and their demands. The elimination of labor unions also broke the wage/inflation spiral....prices can rise but don't spiral out of control. The 80s/90s saw the triumph of capitalism over socialism,.....governments delivered high growth rates, low unemployment and low rates of inflation. The formula worked .....
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Over time without strong unions, the rights of workers started to erode. By the time we got to 2008, a record number of workers are on contract terms, companies have a hire/fire policy, pension schemes were a thing of the past, working hours increased, minimal retrenchment benefits etc. Singapore to attract investments had to follow the global trends otherwise companies will just move to cheaper places. What we see today is corporate profits is now at a historic highas a % of GDP (the implications I'll explain later). Our govt can claim the credit for happily embracing global trends. Isn't low wages, high profits great for businesses? ....Great if it is sustainable - remember workers are also the end consumers. Bear with me for a few more paragraphs and the big picture will be formed.
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Today we see in the US Presidential elections is a strong demand for change by Americans. Americans see themselves "short-changed" by "new" economy. Ordinary Americans now live from paycheck to paycheck. ...my point is this, the trouble we are seeing today is not just happening in Singapore but in all over the world. However, the income inequality in America is nowhere near what we are seeing in Singapore.
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The thing about unfettered capitalism is pressures tend to build up over time. Suppose you play poker with players slightly better than yourself every weekend. Sometimes you win and sometimes you lose but in the long term your losses start to mount because the others are better than you. You stop playing when you run out of money. To keep you in the game, the other players give you some of their money out of pity and because it wouldn't be fun to play without you or they offer to change the rules so that you won't be so disadvantaged.. ...however if they refuse to do that, the players will start dropping out of the system until there is no one left to play. Successful societies learn over time that it is destabilizing to run the system without some kind of social safety net or they empower the weakest members so that they have a voice because the longer you run the system the fewer winners you get. The whole idea behind the one man one vote system is to put in place a govt that runs the place to benefit as many people as possible.
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Here in Singapore, since welfare is a dirty word...what do you think people get when they go and see the MP? Maybe the MPs can provide some words of comfort. But seriously speaking, if you're qualified, the MP will refer you to the CDC to get some help or give you a few utilities vouchers so that you can keep your lights on for a few months and have water to bathe. The idea is to give you just enough to ease your pain so that you will not to join some guy who set up shop in Toa Payoh to criticise the govt. With inflation an increasing number of people are pushed towards poverty and they find themselves getting poorer working as if not harder than they did last year.

But what would the MP tell the person if he believes his plight is due to the govt policy of allow hundreds of thousands of imported workers? If he believes the system is unjust because he works full time and cannot afford to feed his family? Or if he believes the PAP govt formulates unbalanced economic policies that favors its numerous GLCs which are run by the power elites?
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For you to remain happy, you have to believe these answers:

1. Foreign workers create jobs for you. Without them, you won't even have a job so the FT policy is a good one. Why no other countries import as many foreign workers as Singapore per capita? That is because their govts are no good, they are not as interested as the PAP in creating jobs for the people.

2. The reason why many Singaporeans cannot afford to feed their families even when they work full time is because they have not upgraded their skills sufficiently to meet the needs of the economy. After a decade of skills upgrading, the number of workers who can't feed their families has increased significantly, so what is going on? Well, the needs of this economy appear to be changing faster than the workers can upgrade their skills.

3. The GLCs (like SMRT, SingPower) need to increase their fees although they are making record profits and Singaporeans are feeling the pinch from inflation because they need higher profits to maintain their service quality. Incidentally the profits is so high for some of the GLCs which are monopolies like SingPower, they are able to takeover the Australian company Alinta for $7.4B....so some Singaporeans cannot afford to pay for their electricity but SingPower is able to make billion$ acquisitions overseas. This is something we can all be proud of because we have all struggled to contribute to the wealth of GLCs
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We have the highest income inequality among developed East Asian economies and the highest rate of inflation in 25 years. This combination means our MPs have longer queues than before during their "meet the MP" sessions. They can write letters for you and say a few words of comfort.

MM Lee Speaks - Ultimate Wisdom on Protests.

MM Lee has spoken again. This time on air quality and the Beijing Olympics.
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXex8X6R9JMI

The article has this interesting bit :

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If protesters get into the Olympic stadiums waving ``Free Tibet'' banners, China should Shrug it off, he said. ``If I were them I would expect that and say `so what?''' Lee added. ``Unfortunately they are still in the old set way they react, but they're learning.''

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Wow! I used to think that he or his son or DPM Wong orders the arrest of protesters in Singapore. I didn't know that the Singapore Police Force was acting on its own initiative to ensure that the laws in Singapore are followed. Our MM actually thinks the arrest of protesters is an old fashion idea that govts should give up. Think about it - Chee Soon Juan will soon be irrelevant!!! Once the Singapore allows protests and complete freedom of speech, Chee will have nothing much left to protest about (except maybe inflation). No more "Freedom Walk", no more marches to protest the ban on protests. The Singapore govt will be able to neutralise Chee by "shrugging him off". Smart!

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No wonder our police made no arrests last week when the SDP held the "Tak Boleh Tahan" event at Toa Payoh. I counted more than 4 people gathered for the event which means illegal assembly laws were broken and Chee went round to make this content-less speech about about how our ministers make $10K a day …and somehow it is linked to inflation….if that is not speaking in public without a permit which is a serious offense in Singapore I don’t know what is. I think by shrugging Chee off, our govt can get foreign journalists to stop covering these events because no more drama to look forward to, no arrests, nobody biting the police etc. You see those foreign journalists actually think people getting arrested for protests and speaking in public is news worthy and like to report these things which are totally mundane to Singaporeans - don't know why but foreigners seem to think that arresting people for protesting and speaking in public is a big deal - something that doesn't happen in their own countries.....so they come all the way here to report Chee & company getting arrested. Once our police stop arresting Chee, he will disappear from international news the same way Mas Selamat disappeared from our local news recently....and he will be a forgotten man (just like Mas Selamat).

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As usual our MM Lee's wisdom cannot be surpassed by anyone, he is giving good advice to the Chinese to shrug off protests. Chee will now get to protest all he wants and the police will leave him alone turning his protests into non-events. Chee will lose his voice shouting at passerbys during those protests which makes freedom of speech meaningless for him. Our govt will triumph over those pesky members of the opposition once again and Singapore will be saved!

Inflation Cause and Effect.

Singapore's inflation rate is double that of Malaysia, it is higher than Hong Kong and Australia. While inflation is generally higher around the world, Singapore's inflation is far higher than the average for several reasons, here are the main ones:
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• One mllion people added to our population in recent years causing the population to rise from 3.7M to 4.6M
• An overheated economy that grew by 7% per annum.
• GST hike, transport hike, utilities hike, kindergarden fee hike etc etc.

Growing the population to 6+M and fast GDP growth are both established goals of the PAP govt. Singapore has the highest influx of people per capita in the world, our import of foreign workers is not some kind of scheme to supplement locals, it is an all out aggressive effort to bring in workers to fuel GDP growth. No other country, except for a handful of oil rich middle eastern state that ensures its indigenous population sits comfortably on top of imported labor, even come remotely close. Singapore is a very special country - our esteemed PM told us on May Day that the foreign workers create jobs for Singaporeans - we are dependent on imported labor in a way that no other country is. The large number has cause strains to appear in our housing, transport and healthcare. The govt's method of relieving the strains is to hike prices - cannot find taxis during peak hours, hike taxi fares...congestion? raise the ERP...long queues at hospitals, increase fees.

I would like to urge my fellow Singaporeans not to worry about inflation because our govt is on top of everything. They have your interests in their hearts and are bringing more foreign workers to create even more jobs for you. Don't worry there will be so many jobs around you can work 2 jobs, one during the weekdays and the other on weekends so that you can afford those price hikes.

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Coping with rising prices and high cost of living
INSIGHT DOWN SOUTHBY SEAH CHIANG NEE
Singapore’s annual inflation rate was at 6.7% in March – the highest since 1982 – and the republic is now paying a high price in becoming a global city of fine living.
HOW are Singaporeans, South-East Asia’s wealthiest people, coping with the city state’s worst inflation in 26 years?
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On the streets and in homes, skyrocketing prices are shaping up into a terrible nightmare that is eating into their income, their savings and even their confidence.
Hardly a week passes without news of one price rise or another, with each increase seemingly begetting another. And on the horizon is the prospect of a deep global recession.
For a generation, with inflation generally hovering around 2%, Singaporeans have never experienced this sort of crazy price increases.
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Kindergartens run by the ruling People’s Action Party were the latest to raise fees (by 30%-100%), joining schools and universities.
Earlier, cinemas increased the price of a ticket by 50 cents and S$1 (RM1.17 and RM2.34), making movies a luxury item for many Singaporeans. A weekend outing for a family of four now costs between S$40 and S$43 (RM93 and RM100).
Singapore’s annual inflation rate was at 6.7% in March, the highest since 1982, a figure more than double that of Malaysia – and higher than those of Hong Kong and Australia.
Rice and petrol prices at the pump – as well as the cost of driving on the road – have gone up beyond recognition.

If you can name it, whether a product or a service, it’s likely that they’ve raised the price – electricity, milk, coffee and sugar down to the cost of postage.
Living in a small island which has to import its food, oil and natural resources has put Singaporeans these days in a spot, worse than for most others.
The middle class (average monthly income: S$2,800 or RM6,560) and the low-income are taking it on the chin. In some ways, the Singaporean Dream is being blurred.
Inflation is, however, not entirely imported. In fact, government policies have a great deal to do with it since it raised the Goods and Services Tax (GST) from 5% to 7% last July.
In quick order, it also raised the cost of services – from buses, MRT and taxis to hospitals and schools.
Drivers are now charged more often and more regularly when they drive on certain road at peak hours.
The ill-timed GST increase was the trigger point, but it wasn’t the main reason.
The two biggest factors that pushed up inflation are:

• A strong overheating economy that grew by 7% annually for the past four years; and,
  
• An open door immigration (the highest inflow rate in the world) that brought in a million foreigners and pushed the population to about 4.7 million.

The republic is paying a high price for becoming a global city of fine living comparable to the likes of Paris, New York or Tokyo. It has created something more than high inflation: A permanent high-cost structure – from property to taxi fares and restaurants.
To be a London or a Brussels would mean having to live with their high costs.
People are responding in different ways. I know of several young graduates who have just started working, moving back to live with their parents to save on expenses.

Mr and Mrs Singapore are going out or eating out less, buying fewer luxuries, including cars, and reducing the use of taxis. There are social costs to all these.
“My wife and I no longer go out very often on weekends. Every time we do so, we feel the pinch,” said a young salesman who had just got married. “Having children? Not now. We can hardly feed ourselves.”

Nine in 10 people polled by the Sunday Times now find Singapore an expensive place to live in.
While eating at a food court recently, I sat next to a couple in their 20s sharing a lunch – a plate of mee goreng and one bottle of orange squash.
On another time, I saw a Bangladesh worker lunching with just a can of black coffee and a large loaf of plain bread.

For some like Janice Tan, 35, who works at a travel agency, the soaring prices have forced members of her family to shower only once a day to cut down their water bill.
She told a reporter that water (which is also dearer) used to rinse vegetables is also now recycled to flush the toilet.
“Except for the ultra-rich, the impact of the sharp price increases has cut across social classes in one of Asia’s wealthiest nations,” wrote a foreign correspondent.
Charities are offering free food to the needy – a page from America’s soup kitchens – and the queues are getting longer. More people are also approaching community bodies for help to make ends meet.
A government website is listing food stalls that offer S$2 (RM4.68) meals. The most popular dish that I know of: Vegetable economical mee hoon at S$1.60 (RM3.75).
The government has just dished out cash averaging S$1,000-S$2,000 (RM2,340-RM4,680) (as well as top-ups in mandatory savings) to each family, depending on its size, age and poverty level.

The complaints are loudest from the middle class, with some people questioning whether Singapore is still a good place to live in.
Inflation has made them worried about savings, family life and old age.
Aret says “it’s not a place for dreamers”. Another added that after 10 years of struggling, “I am very tired and stressed”.
But others are more optimistic, believing the problems are largely global, and as the world picks itself up, so will Singapore.
To those who say Singapore is not a good place to live in, he said: “If it is so, then nowhere else is a good place.”