Wednesday, August 27, 2008

Going into recession....AGAIN!

Our industrial production output plunged 21.9% compared with Jul 07. This is a leading indicator and it tells us that we are likely to see a recession by the 3rd quarter and this data will be out in October. The main culprit is the biomedical sector which basically "fell off the cliff". Some silver lining in our electronics export which grew 5.9% from a year ago. Looks like Singapore will be among the first batch of countries to go into recession.
Given the challenges we faced during the Golden Period, imagine what a recession would feel like when it hits. We already have one MP shouting in parliament for help for her constituents. Here we go ago...recession = tighten belt = not much we can do for those in dire straits. You would think that given the numerous recessions we have been through we should be more systematic in giving out help.
"They are the cleaners, the hawker assistants who, despite the Government's mantra of helping citizens help themselves, are so down and out they have no way of helping themselves" - MP Lily Neo
It is all very simple. During the good times about 20-30% of Singaporeans earn barely enough to make ends meet - there is no way for them to save up for hard times. When the recession comes and they are retrenched, they are underwater almost immediately. Our govt schemes like workfare assumes that times are always good and jobs (though low paying) are plentiful. So what happens during recessions? In 1998, many were retrenched including professionals - when they run out of spare cash, had their electricity cutoff and defaulted on their HDB payments, they would queue up at the MP's office to ask for help. I'm not too sure what help the MP gives them - maybe ask Singapore Power for a grace period. Bills run up very fast because people have little savings. We have a system in place to go for the highest GDP growth, when that growth stalls...things unravel quickly.
"What is worse than being poor? Being poor in Singapore!" - Lucky Tan
“But the only viable long-term solution is economic growthincreased productivity, the retraining of workers and, consequently, higher salaries for them."
- Minister Yu-Foo on the poor.
"But Mrs Yu-Foo....the growth of the last 4 years did nothing much for the poor, they became poorer. Shouldn't we be looking at something else?" - Lucky Tan
I guess the PAP govt has it all figured out. The best solution is higher productivity (work harder), retraining and economic growth. This is the mantra for the past 20 years. Yet our income gap keep widening. So the poor worker isn't working hard enough, he hasn't gone for enough retraining....20 years of retraining is not enough lets make it 30 years. Their plight is not a function of the system the PAP put in place - an erosion of workers' benefits, relentless import of foreign workers, refusal to put in place a minimum wage, GLC greed and lack of social safety nets. It is the worker himself who is to be blamed - he did not up his productivity although he puts in 12 hour days, he did not undergo enough retraining...since he needs to work 12 hours a day he probably has to forego his sleep to get retrained.....The system is is the poor themselves who have to be blamed for their own plight. The system is just ...the public transport fare increase is also just, the rise in utilities rate is also just, GST hike is also just so was the ministers' pay increase. If the system is just, then it becomes unjust to interfere with it by giving more help to the poor. The poor have to accept their poverty is their own doing and not the work of this great govt of ours.


Anonymous said...

Come on Mr Tan, the MPs have their ways to help and resolve. If you are not sure, ask LEE BEE WAH...

yamizi said...

After reading this entry of yours, I feel a certain sourness in the heart.

If the bad times is really coming, how bad will it be?

Will it affect me in changing job?

Sick of my workplace already...

Onlooker said...

Shifting blame again....
what a complacent gahmen....
And they still haven't found what they are looking for.....

Anonymous said...

In the end, we, the citizen will be blamed for being complacent.

I guess the garment need to import more FT to create more jobs and to increase their salary by another 30% or to further increase GST to 10% to help the poor and the jobless.

Uniquely Singapore, World class garment.

Anonymous said...

Well, at least someone is shouting from that camp for the garment to do more.

The rest are still stuck in the grand illusion that we are in the "golden period". But with the salary they are drawing, who can blame them.

Anonymous said...

Lucky Tan, have you stopped reading our wonderful Straits Times recently? Why is your writing style so different nowadays? I miss your old self.

Would the original Lucky Tan please return? Have you changed now that Hong Lim Park is under the NParks?

Anonymous said...

I think Lucky Tan also getting numbed.

From the way he writes, he had lose his witty sarcasm.

Life is getting numbed for these poor folks too.

Let's Move On.

Anonymous said...

Our golden period look more and more Dickensian rather than Utopian.

Pity Mdm Yu-Foo, she has to take up the heavy guantlet left by Vivian, I mean she tried the rhetoric, some rousing mantra about productivity and self-reliance, too bad when you ask for more in the workhouse, all you get is a wallop.

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Anonymous said...

In this article, Lucky Tan was still sarcastic.

On the other note, how come principles of economics in Singapore are very different from the rest of the world?

Any economist worth his salt would never ever confused between cost of living and standard of living in tackling inflation.

But how come halimah said if chicken is expensive buy fish.

But how come lee said if branded bread is expensive, buy in house bread. Do you know that the price of wheat has gone up more than double for this year? So what happens when price of in house bread also went up?

Answer: Eat grass lor!

Hello PM, how about cutting the GST on staple foods but at the same time increased the GST for PRADA, GUCCI, ROLEX (basically stuff that we don't need to survive).We should pass the burden of tax to millionaires that are going to watch the F1, gambling in the 2 super mega casinos.

If Singapore is going to become MONACO of Asia then inflation is going higher and higher, then I'm afraid alot of old, poor people going to commit suicide since welfare is a DIRTY word. Why stay and suffer in singapore when politicians only pay lip service to you. Politicians earned $30,000 a month, so why would they care about a 45 yr old who got retrenched but still need to feed 2.5 children and a dog.

Economist with a heart :)

ps- PAP your time is almost over coz more and more singaporeans are getting hungrier and also angrier.

Anonymous said...

Adam Smith did say that taxes on necessities are sheding the blood of the poor. Somehow our government does not seem to agree with Smith.

Let's hope that truth, integrity, and compassion prevails.

singapore stock market said...

Anonymous said...

Dear Lucky

Remember your old friend Bart?
It looks like I am right and he is wrong.

The trickling down effect never came.
And this looks like the worst financial crisis in the last 20 years.
Inflation at a high.
Poor hit hardest.

I feel very sad recently. Jaded. Impotent rage.

I have been told of less well off relatives running away from loansharks. Leaving behind families.
I have seen friends and relatives stricken with cancer.
Friends die before their time leaving behind young children and shattered spouses.
Friends divorced.
Friends leaving Singapore for good.

All around me, I see already rich and intelligent people focused on making more $$$.

Friends, neighbors envy the performance of my kids in school. While I see them struggling with the sheer amount school work, CCA. And then the competition, expectation and pressure from their teachers, classmates and myself. The bar is continuously raised.

And means-testing is to come.
And a slew of half-arsed measures to encourage more children.

In the meantime, I see CSJ. intelligent, charismatic and ... out of touch. WP is cowed. PAP is still very much LKY + 91 others. In the blogsphere, the Mr Wang once social commentator now self-styled new age guru. Among the so-called neutrals, u see that half truths repeated often enough becomes the truth. The intellectual elites no longer care. Those who still speaks just want to sound intelligent and impartial.

The Bible says the meek shall inherit the world.
Will it happen soon enough for Singapore?
I am becoming an alien in my own country.

PS: Sorry for the long and pointless comment.


Anonymous said...

Dear Lucky:

Your post is a sad one as it is a painful reminder of how little it pays to work hard in Singapore.

I have countless of examples of ex-colleagues who worked hard in GLCs (Pioneer batch staff with 30 years experience + project leaders of countless projects) to only have retired colonels parachute over him and take up their promotions. (What were their mistakes? They were neither scholars or degree holders). Whenever there is a bonus payout, the president of the company changes a new luxury car/property...etc

So where did this culture come from? Just look at our whole country's system and we should have a pretty good idea.

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