Saturday, November 14, 2009

Prof Hui Weng Tat: Slow the foreign influx.

You can read the article on Prof Hui's view here[Link]. The article can be summarised as follows:

1. Singapore in maximising its GDP growth went overboard to import foreign workers. In 2007, of the 235,000 jobs added in 2007, six in 10 went to foreigners. The ratio rose last year, with foreigners taking seven in 10 of the 222,000 new jobs.

2. Importing foreign workers in large numbers has worsened the income gap. The depression of low wage workers' income, Prof Hui believes will lead to social problems.

3. 5000 Singaporeans seek residency elsewhere. These are usually the higher skilled workers.

4. His solution is to tighten the foreign influx, accept moderate growth and allow dual citizenship to retain talent.

For those reading my blog there is nothing new in Prof Hui's views except that he is an associate professor at the Lee Kuan Yew School of Public Policy and his views appeared in the Straits Times.

With the income gap that is so large, our problem is one of wealth distribution. There is no point in maximising GDP growth when a large segment of the population does not benefit from the growth and have to shoulder the disproportionate burden of the side effects of such growth in the form of rising cost of living and depressed wages. A few years ago, when the govt discovered that the wages of many Singaporeans have fallen below subsistence level, they implemented Workfare to keep these Singaporeans afloat - just enough for food, housing and transport - but it is capped at $100 per month and workers have to:

  • Be a Singapore Citizen; and
  • Have a monthly salary of $1,500 or less; and
  • Be above 35 years of age; and
  • Stay in a property with an Annual Value of not more than $10,000; and
  • Have worked at least three months in any six month period in the calendar year for half the payout, or at least six months in the calendar year for the full payout.

Workfare is a small patch so that the PAP govt can avoid major policy changes and keep the system going. But what is really so appealing about a system that have Singaporeans working full time jobs to stay just above the subsistence level?

The main reason why the PAP has not done more is because we have a political system in which the people whose benefits have been traded off suffer in silence because they have no voice and can do nothing in this climate of fear. If you look at the Prof Hui's table on the widening wage gap, it is no coincidence that every country above us has more political freedom and democracy.

20 comments:

Anonymous said...

"There is no point in maximising GDP growth when a large segment of the population does not benefit from the growth and have to shoulder the disproportionate burden of the side effects of such growth in the form of rising cost of living and depressed wages."

Not true, Lucky. Not true.

The very top civil servants and ministers are paid a GDP bonus every year, which amounts to a huge portion of their salaries.

It is in their best interest to improve the GDP at whatever reasons and costs, since they alone benefit directly from it.

The overwhelming majority of civil servants are not entitled to a GDP bonus.

Anonymous said...

I believe the whole thing is due to MM Lee's advice and mentor.

If he think it's OK, then it's OK. Also his target of 6.5 million is not even reached yet.

By the way, has he ever got it wrong for the past 44 years where political stability (at least 98% seats for PAP) is concerned?

In other countries, all the strongmen have gone, he is the only one still standing and going strong and at least for another 10 more years.

So Singapore is really unique, not a country but a city state.

Anonymous said...

We should bear in mind that though a lot of people are unsatisfied with the current trend, there is no assurances that the future will be better in 10 years time...

A lot of things will have changed and many will not be necessary good. Probably chaotic as many people are out there with agendas.

Anonymous said...

Expected you to quote him. Why? Coz just nice ma. Can use him to justify smething to badmouth gahment.

Now you beli ze look up prof hui hor.

Out of 100 minister, only he say something that you can use to attack pap of course u will use la! LOL!


Typical anti pap action.

Lim Leng Hiong said...

Great article, thanks Lucky.

Exerpts:

1. "According to his latest projections, there could be more than three million foreigners working here by 2030, forming half the workforce. That will jump to almost 10 million by 2050, making up 75 per cent of employees here.

It is a frightening leap from the current figure of one million, or 36 per cent of the workforce."

Singaporeans are an endangered species.

This year, our total fertility rate is 1.09 children per woman.

We have the third lowest fertility rate in the world (after Hong Kong and Macau) and the third highest proportion of foreign-born persons in the world (after UAE and Kuwait).

If the current policy direction is maintained, we may become extinct in few generations.

2. "This was attributed to the extraordinary growth in 2007 and first half of last year, which led to record-busting job creation of more than 200,000 each year.

Of the 235,000 jobs added in 2007, six in 10 went to foreigners. The ratio rose last year, with foreigners taking seven in 10 of the 222,000 new jobs."

During boom years, the vast majority of new jobs created went to foreigners, at an increasing proportion.

Recall the ST report about "Social divide inevitable":

"That is why Singapore's approach has been to create as many jobs as possible, while leaving the market to decide the right level of pay. The rationale for this is that having any job is better than having no job at all. "Never mind your Gini coefficient. If you don't have a job you get zero against those with jobs. So our first priority is jobs for everybody," he said (MM Lee)."

With stagnant/depressed wages and increasing cost of living, more Singaporeans will face unemployment and underemployment even while more jobs go to foreigners. This indicates that job creation alone is not the answer.

No potential mother would like to see their children struggling in a society of relentless competition, uncertainty of employment, high income inequality, uncertainty of retirement benefits, etc.

Hence a vicious cycle.

Anonymous said...

According to world bank data, singapore per capita GDP is now third in the world, surpassing USA, HK and
even Switzerland. Yet, many are poor and the average person is worse off than those in other developed countries.

Anonymous said...

basically, it's money not enough for everybody lah.

the richest 10% still want more $$$ by insisting on gdp growth tied to their performance bonus.

the poorest 10% want more $$$ because they are living on subsistence level.

how? the final solution:

VOTE VOTE VOTE!!!

sgmortal said...

Pro-govt anonymous-hokkein-pretend-to-be here to agitate and spew nonsense. Typical pro pap action.

Anonymous said...

pretend to be voice of the people by using broken English. Same same like mee siam mai hum....haha

Anonymous said...

Another fake PAP IB who uses broken English to pretend to be Lesser Mortal.

Typical Running Dog action.

"Expected you to quote him. Why? Coz just nice ma. Can use him to justify smething to badmouth gahment.

Now you beli ze look up prof hui hor.

Out of 100 minister, only he say something that you can use to attack pap of course u will use la! LOL!


Typical anti pap action."

Anonymous said...

Using soccer as an analogy (our ministers likes to do that), Singapore is akin to a soccer team which has a highly attacking philosophy - Manager play 8 strikers in every game and the team score an average of 10 goals every game but let in an average of 12 goals every game.

The Manager then boosts that his team has the highest "Goals For" statistics and claims that his strikers are world class.

When the fans challenge the Manager's playing philosophy which despite the high number of goals scored still see the team relinquish near the bottom of the league table, the Manger says it does not matter, as the "Goals For" statistics ranking is more important than the position in the league table.

Anonymous said...

Have you guys ever wonder why GDP has quietly taken over GNP as a measure of success? LOL

GNP as a measure is more sustainable but will expose the incompetence of policy makers who pursue high growth that is ultimately unsustainable.

xl said...

GDP is a flawed indicator.

More people busy & neglect spuse->divorced.
GDP expands.

Parents busy ->Childcare service.
GDP expands.

Overconsumption-> eg. change hp every year.
GDP expands.

Too busy to cook ->Eat out.
GDP expands.

Eat out too often -> Fall sick see Dr.
GDP expands.

Too sick -> More medication purchases.
GDP expands.

Cancer type of growth so long is growth is counted as good. Never mind the healthy cells being wiped out by cancerous cells. -PAP philosophy

Anonymous said...

The cancer analogy is very apt. PAP does not distinguish between ordinary growth and abnormal cancerous growth. To PAP, only the numbers matter and ANY growth is welcome. That it will eventually kill the host, native Singaporeans, is unimportant.

Our country now harbours at its heart a terrifying worm that feeds on growth and gnaws away to destroy the body that gives it shelter. How did we end up cursed with this mad old man who will not die and his party?

Anonymous said...

@ Anon 22:41,

Please allow me to answer your question; how we end up like this?

"When good men do nothing, evil triumphs"

This tragedy plays out all over the world, again and again.

Cheers

Economist

Anonymous said...

In the past, government statistics used to emphasise one figure: indigenous GDP.

GDP = Value of all output in Singapore disregardng whether from local/foreign worker and/or company.

GNP is a not a good figure for the government to use either as it is

= GDP + income from Singapore companies overseas - income remitted from foreign companies/workers in Singapore.

So the figure of the 3rd highest GDP/capita in the world which looks impressive doesn't really mean much for Singaporeans, even for the middle class.

Anonymous said...

"When good men do nothing, evil triumphs"

We do have a few good men but they were all hammered by LKY up-side-down and left-right-centre.

Surely we can still find them around. But you have to go to the US, UK, Australia, Germany and Malaysia.

Some are so much treasured by the pap that they are not allowed to go oversea.

Our problem is: when these few good men tried to do something good for us, a good number of other Singaporeans who know what was going on chose to turn their heads away.

That is how we ended up like this.

Clear eyed said...

Anon@11.41
Agree with you. The few who are treasured by the PAP and are not allowed to leave the country are still fighting for Singaporeans. It is late, but not too late. If we know what is good for us, we will give these courageous and selfless souls our wholehearted support.

xl said...

To add on to flaws of GDP indicator, french president Sarkozy proposed:

"Let's measure happiness, not just economic growth" - http://www.bi-me.com/main.php?c=3&cg=4&t=1&id=40259

Finding new ways to measure growth taking into account social well-being.

Anonymous said...

Did anyone notice that the countries that top the list are the ones with mediocre governments and the one right at the bottom is the one with the division one government with the higest salary in the whole wide world. As the great one said, we need a dose of incompetent government, perhaps then we will move up the list.