Thursday, February 04, 2010

The main problem with the ESC Report.

Reading newspaper summary of the ESC report, I found 2 decent ideas - nuclear energy and increasing the foreign worker levy. Surprisingly, many bloggers take issue specifically with these ideas and many people have commented on my blog about the flipside of these ideas. I think the concerns are valid ....hmm..you guys actually found nothing good or new in the report?

You can read the full report here :[Link].

The ESC was tasked to look for strategies for "sustained economic growth". I thought the overaching goal should be to improve the economic well being of the vast majority of Singaporeans thereby raising their quality of life. While the 2 goals are not mutually exclusive, going for "growth" may not lead to any improvement in the quality of life - we saw that in the past decade when GDP growth was strong but a large segment of the populace did not enjoy the benefit of this growth.

If the ESC had been given what I see as the correct goal, the next step would be to study and understand the key economic problems faced by Singaporeans:
  • Highest level of income inequality in the developed world.

  • High cost of living.

  • Structural unemployment and underemployment.

  • Inability of a large number of workers to retire despite working the most number of hours in the world.

Without identifying the causes of the above problems, how do we know that we are not embarking on strategies that will worsen these problems? By focussing on growth rather than the economic well being of Singaporeans, the biggest economic challenges faced by ordinary Singaporeans may go unsolved in the coming decade. Singaporeans already have the 2nd highest stress level in the world[Link] and work the longest hours in the world according the last ILO Global Wages Report[Link] yet the burden of sustaining this economic growth again put on the shoulders of Singapore workers to retrain and be more productive (otherwise the ESC report says we will need more foreign workers!). Why not find strategies to reduce the cost of living so that Singaporeans are able to better compete in the global economy?

The ESC did not suggest any fundamental change to Singapore's export oriented model of growth so Singapore will again be depending on external demand which we have no control over. We had 3 sharp recessions in the past 12 years (Asian Crisis, post dot.com + 911+ SARS, subprime crisis) and before each of these crisis with had bubbles (Golden Age + Golden Period predictions) followed by a sharp painful declines. Despite the volatile nature of our economy, we don't have safety nets in place - no minimum wages, no unemployment insurance, no free public healthcare etc. and the increasing income gap causes a larger and larger segment of our population to be economically vulnerable to poverty and other downsides of this economic model.

The ESC composed mainly of ministers and business leaders with its pro-business goal recommended pro-business strategies that did not put ordinary Singaporeans and the problems faced by ordinary Singaporeans at the center of these strategies. We see the same old ideas rehashed because they are the same old strategies - strategies in which Singapore Inc rather than the interests of ordinary Singaporeans comes 1st. It is no different from the past 10 years and will lead to results for Singaporeans no better than what we have seen in the recent past.

16 comments:

Lim Leng Hiong said...

"We see the same old ideas rehashed because they are the same old strategies - strategies in which Singapore Inc rather than the interests of ordinary Singaporeans comes 1st."

Well said, and the comments were an eye-opener for me too - I see a fundamental distrust in the government's intention, best encapsulated by this comment:

"Lucky, under PAP's control, what was 'cheap and affordable' HDB public housing became expensive pigeon holes requiring a lifetime to pay up.

Likewise you simply don't expect any energy alternative to be cheap. PAP is well known for milking the citizens to the last drop. They aren't referred to as "Pay And Pay" for nothing!" - Anon 2/2/10 13:44

In other words, Anon 13:44 foresees that despite all those social and political burdens that Singaporeans have to bear in order to fulfill the government's desire for nuclear energy, there is no guarantee that the government won't use it as a pretext to increase energy prices or to blame Singaporeans yet again if something goes wrong.

A lose-lose situation for the people, unless there is direct accountability and external checks and balances on the government.

Aurvandil said...

With the exception of the hare brained nuclear energy option, I was actually not very surprised by the findings of the ESC. Long before they came up with their “learned” report, I had already written an opinion in Tan Kin Lian’s blog. You can read the full text and discussion here http://tankinlian.blogspot.com/2010/01/apply-foreign-worker-levy-to-other-jobs.html


A summary of that opinion is:

1) Due to the internet and other related technologies, it is now very easy for business to cross national boundaries. Even the smallest SME can cross national borders and operate like an MNC. There is a fundamental re-ordering of the world economic order because of this technological revolution. China and India will emerge as the predominant super powers of the world due to their supply of almost unlimited labour.

2) While popular, a policy of keeping foreigners out is doomed to failure. The most likely consequence of this policy is a hollowing out of the Singapore economy. A good example of this is Japan which is in the process of being hollowed out.

3) Due to 1) and 2), the income of Singaporeans will stagnate if not fall over the next 5 to 10 years. There is NO KNOWN ECONOMIC POICY which can stop or prevent his.

4) “Productivity Improvement” is a completely ineffective political half truth. Anything Singaporeans can learn to do, foreigners can learn to do too.

Instead of selling koyok and pretending to have all the answers, the responsible thing to do would have been to be open and honest with Singaporeans about the future. I believe the that original PAP leaders before 1965 would have done this. The current crop of PAP leaders seem intent to stay in power at all costs. I suppose if you can gerrymander and use other tactics to “fix” the opposition, lying to the Singaporeans about their future is a small thing.

Perhaps most frightening is that I had written a proposal to extend the foreign workers levy to EP holders and other foreigner. My argument was that the only thing which could realistically be done would be to adopt policies which ease the pain of transition. I had therefore proposed to use the money collected from the levies to be distributed to Singaporeans as a Foreigners CPF contribution in place of the Employer CPF contribution. In this way the more foreigners that we admit into Singapore, the more Singaporeans CPF would increase. At the same time, we lower business costs and help keep business in Singapore.

If we see some variant of this being adopted in the upcoming budget debate, then it is time to get really scared. This is because either I have become a prophet (why can’t I predict 4D numbers instead of PAP economic policy !) or our million dollar ministers are relying on bloggers to make policy. Wasn’t it only recently that bloggers were described by being some kind of bacteria?

PS I described the nuclear option as being hare-brained as it does not take into account the reaction of the Malaysians and the Indonesians. We already have testy relations with both countries over a number of issues. I shudder to think of the foreign policy implications of Singapore having a nuclear power plant and access to material/technology that can be used to build a nuclear bomb. Singaporeans might believe the story that it is for peaceful purposes only. Malaysia and Indonesia are likely to look at us as if we were Iran.

Anonymous said...

I have a simple reason why we should not build a nuclear plant. In times of war, it would be a major liability.

In fact, we can forget about teh SAF. One missle into it and there goes the whole island. We would also become terrorist target number 1.

Anonymous said...

When are you ppl going to start blaming yourselves instead of those on the ivory tower? Your very own greed has brought all the social ills in our society.

By engaging in investment related activities (e.g. Playing stocks, buying up investment link products) and all these activities of trying to make/grow more $ out of doing 'nothing' (ie. Not selling/producing products or providing a service), you are creating all the stress we experience in our lives.

You demand /expect good returns in your investment, the mgmt of the company squeezes cost, worker's salary, ignore their welfare, get cheap labour & etc to max out profits for the sake of better returns in your investment & the mgmt bonus+resume.

So who is to be blamed?

When someone says that you are 'daft', you get fired up, upset, etc. But look at what has happened.... Cost of housing has gone up & yet ppl still oversubcribe the new flats which are already ridiculously priced .

So who is 'daft'?

You hv the power to make the right decisions yet you ate blinded by GREED. Your very own greed has caused your own downfall.

Do you hv an option out? The answer is YES. And many young & productive aged ppl has done it. They seek greener pastures elsewhere. So many has done it to the point where we hv to remind thier roots by organizing SG day in melbourne & London. Offering them Mee Siam, chic rice, roti prata to woo them back. But I think those ppl's brains are up in their head not in their stomach.

Any other option ? YES ! Do not engage in greed related activities. Go develop your inner talent, spend time doing what you are good at and what fulfills you. Do not chase for $.

The more you give, the more you receive.

No new & good ideas from those scholars, Phd & consultants for future of SG?

I think each of you are better off not listening to them and focus on your core strength that will bring you to greater heights. But if you are Greedy, you will pay the price.

Do u need nuclear energy? Don't be greedy, your utility bills are not gonna get cheaper!
Best example? The forbes top ten most 'powerful' person lost $58b . No need to elaborate further.

cy said...

Albert einstein said

Insanity is doing the same thing over and over again and expecting different results.

Onlooker said...

I think an apt description for the ESC report is:

Ostrich head in the sand syndrome aka "low crime doesn't mean no crime"/ "I don't see a problem, do you?(while wielding a whip with spurs offhand)"

And one could even say it is a lip service that does not be fulfilled after election.just a published report to "Promise" reduction in the employers(including GLC) addictions to exploited migrant labour that is non binding and thus no need to be adhere to after election.

Because they have a elite uncaring face.

Anonymous said...

That is the way the opposition should attacked the papist leegime. Why the obsession with economic growth when it is actually bringing hardship to the average Singaporeans.
U r dam right. They have to focus on the problems of Singaporeans before they can help to improve the quality of lives of Singaporeans. The ESC was shooting in the same old direction when a new direction is needed to adjust the course the country is heading. If they continue to do more of the same as the ESC seems to suggest, then there is little doubt that the quality of lives of Singaporeans will deteriorate further.

Anonymous said...

Actually the nuclear plant may be built on an offshore island. The idea is actually not that new, as it had been explored. That said, the liabilities of it being a target in the event of war is a huge issue.

A lot of the ESC ideas are not new, as they are already rehashed and updated, being implemented on a smaller scale or already discussed inside our stat boards and ministries.

Lim Leng Hiong said...

"When are you ppl going to start blaming yourselves instead of those on the ivory tower? Your very own greed has brought all the social ills in our society.

By engaging in investment related activities (e.g. Playing stocks, buying up investment link products) and all these activities of trying to make/grow more $ out of doing 'nothing' (ie. Not selling/producing products or providing a service), you are creating all the stress we experience in our lives."

Blame myself? How?

I have not engaged in those investment activities you mentioned.

I don't own any of those investment products you mentioned.

Only savings account which gives me a smaller and smaller interest every year.

For eight years in science what little I have was tediously obtained by my sweat and tears with working with hazardous chemicals, radioactive materials and viruses.

How many people in your ivory tower make their living this way?

"So who is to be blamed?"

Me?

"So who is 'daft'?

Me?

"You hv the power to make the right decisions yet you ate blinded by GREED. Your very own greed has caused your own downfall."

What talking you?!??

Are you shifting all the blame on Singaporeans yet again, just like I mentioned earlier?

"Do you hv an option out? The answer is YES. And many young & productive aged ppl has done it. They seek greener pastures elsewhere. So many has done it to the point where we hv to remind thier roots by organizing SG day in melbourne & London. Offering them Mee Siam, chic rice, roti prata to woo them back. But I think those ppl's brains are up in their head not in their stomach.

Any other option ? YES ! Do not engage in greed related activities. Go develop your inner talent, spend time doing what you are good at and what fulfills you. Do not chase for $."

Your view sounds very much like a government sycophant.

What you saying essentially is: "NOT happy ah? MIGRATE lah!"

Actually there is another option.

Vote.

Anonymous said...

a nation without natural resources need to rely on human resource.
so long as they can attract talents to create wealth here(that's their ONLY plan actually) and keep the jobs coming, there will be a way(perhaps several) to work out a decent living for everyone who is willing to be part of spore success.
the key now is to make this city an attractive option for foreign and local talents to live, learn, work and play here.
the good news is that they have came out with many good ideas to transform itself into a global city. yet, somehow there is a missing link that will connect global citizens and make them feel at "home" here?
if we can make these global citizens feel at "home" here, we can rejuvenate ourselves and survive long term(i am beginning to sound like govt sycophant) lol.

and when that happens, anon 11:28 can then kick back and opt for a leisurely pace of life only if, he/she has invested wisely of course. :)

as for the rest, work harder lol

Anonymous said...

to anon @ 4/2/10 11:28

yes, it's very telling that you are pap internet insurgent brigade.

you didn't want to remind singaporeans that we can VOTE to solve at least half of our problems.

VOTE - because that is the ONLY one thing the PAP fears.

Anonymous said...

oddly, when u think carefully about it, nuclear energy may not provide us with the energy-independence we hope for. Singapore does not have uranium reserves after all, and will need to import uranium. Only thing we have is abundant sunlight :)

At any rate, if we are going down the nuclear path, i hope the gahmen will pursue the route of thorium instead of uranium. Thorium is more abundant, more efficient, safer, and possibly a lot cheaper.

Annual fuel cost for 1-GW reactor $10,000 (estimated) :)

http://www.wired.com/magazine/2009/12/ff_new_nukes

Anonymous said...

The nuclear power plant idea is daft.

We now use natural gas to power our stations, and we still are at the mercy of PUB and their cut-throat prices.

Unless our PUB gives us in black-and-white that our electric bills will decrease significantly with nuclear energy, there is no point even considering this avenue.

Anonymous said...

Hello anon 18.38, what u said resonates anon 11.28 final words.
Quite interestingly, anon 11.28 also highlighted that $58b was lost, so dun expect flats to be cheaper, gst reduced, utility bills reduced, public transport fare reduced, ERP cuts. Expect the opposite. Need to recoup losses lah, so that woman can still be forbes list of most powerful woman. Err... Maybe also soon to be the first female president in this region if my crystal ball is correct.


May I remind that they also lost in styvessant apartment NY and only $58b is reported. What about the unreported? Maybe daft ppl dun need to know too much. 

Perhaps LimLH was too infurated and took anon 11.28 ideas and suggestions too personal. Btw, LimLH, cool down. I dun think anon 11.28 is a papist. He/she merely presenting ideas from a different angle. Anon 11.28 suggestions are not directed against ppl like you who does an honest day job.

As for voting, I think u can forget about this. With so many walkover and continuous scrutiny on opposition & ISA. I think voting has little impact for u to expect change to happen. U want change to happen , Do It, u hv timake it happen.
But then again, most of us are gutless, myself included. U better thank the FTs for showing u how to hv balls!
http://www.littlespeck.com/content/people/CTrendsPeople-100123.htm

Maybe mr lucky can comment about anon 11.28, but I think he is also the culprit in causing stress in society. So mr lucky, r u still making the max profit out from your investments? I think and hope you are, so that u can retire with lotsa cash in the Bahamas or Hawaii.

Anonymous said...

PAP looks after the interest of SIngapore.

BUT that doesn't mean it coincide with Singaporean interests!

Examples:

1. NS is for Singapore interest but is a huge sacrifice for male born Singaporeans!

2. Super pay for ministers is in Singapore interest (LKY's logic) but majority suffer from wages that does not keep pace with inflation, especially sky high HDB prices.

3. Lots of foreign "talents" is good for Singapore but not Singaporeans.

4. 98% seats for PAP is good for political stability in Singapore but not good for Singaporeans.

You name the rest.

Anonymous said...

I'm not wasting my breath arguing about PAP. PAP is the shittest government I have ever seen and maybe only the Bush administration is worse than them. Or are they worse? Rock-bottom (let alone blow what trumpet). Any new administration can do a better job. We paying morons and idiots big $$$$$$$$$$$$. Vote them out and stem our losses!