Tuesday, May 31, 2011

Consequence of hire-fire policies: Unhappiest Workers in the World.

I remember a few years ago when the lack of  requirement to pay workers a fixed proper retrenchment in the Employment Act was discussed , PM Lee was interviewed on TV and what he said I can't forget. He told the reporter that Singapore must make it easier for companies to lay off workers so that they would be more willing to hire them. Over the years, Singapore moved from a management style that treasured worker loyalty to one that hire and fire workers based on how it affected the profitability of company...very often short term profitability. Many ordinary Singapore workers became expendable in companies they worked in hired quickly and retrenched quickly when the business slows.

A few months ago, I interviewed a candidate for a position in my company and he showed me his certifications for various software skills, He had worked for 10 years and collected quite a few of these training certifications. However, not a single one was paid for by the 3-4 companies he worked in. As a IT graduate, he was hired on one 2-year contract after another. When his contract ended and the company didn't have work for him, they would lay him off and he would look for another job. Because the companies only plan to keep him for short periods, they were unwilling to invest in training and he had to get to those certifications on his own to stay employable. Over time, workers like the one I interviewed lose this concept of loyalty to company. They expect to hop from one job to another not staying at a place for more than 5 years.

"Sales assistant Janice Lin, who turns 26 this year, 'hopped' five times before landing her current job"
 - Article below.

This whole system spirals into a vicious cycle. Companies don't expect workers to stay hence they invest less in training. Workers sensing that employers can and will retrench them at the slightest change in demand for the company's products, will just hop to the next job for a small increase in pay. The worker who hops around fail to build up any domain knowledge that distiguishes him from other workers. Now throw in the ease of hiring foreigners in Singapore and you realise employers can easily replace Singaporeans who are older and higher paid. Managers primarily manage cost of manpower not the build up of capability and productivity - instead of maximising the people they have, it is easier for them to cut cost by hiring cheaper workers. Now you superimpose this whole situation with Singapore's 3rd World wage structure that resulted in the largest income gap in the developed world. Is there any surprise that Singapore workers are the most unhappy in the world (among 14 countries surveyed)?

In the absence of independent unions - they all disappeared thanks to our half-enlightened former MM - the PAP govt pandered to the demands of businesses and foreign direct investments for lowering workers' benefits and importing foreign labor...to grow the GDP quickly. In the process, they destroyed this great francise known as the 'Singapore Worker'. They wrongly believed that PAP leadership was solely responsible for Singapore's success. Singapore workers were once ranked number 1 in the word in the 80s and early 90s.....now they are ranked number 1 in unhappiness and have one of the lowest productivity growth among workers in developed nations. 

S'pore workers 'world's unhappiest'

Survey of 14 countries finds local employees are also the least loyal

By Melissa Ho


HATE your work? Dread going in on Monday? Considering quitting your job?

Well, you are not alone. Most of the Singapore workforce is with you, according to one survey.

A poll of employee attitudes in 14 countries has ranked Singapore last in workplace happiness. Unsurprisingly, this correlates to loyalty to employers, where Singapore is again ranked at the rear.

Talent management company Lumesse polled about 4,000 employees from a wide variety of industries.

People were asked about how happy they were at work, whether they felt their skills were properly utilised, the career paths open to them, and the training and career development opportunities they had.

The results put Singapore last in three major areas - we least enjoy going to work, are the least loyal and have the least supportive workplaces.

Only 17 per cent of Singapore's workforce see themselves staying with their current employer forever. The global average is 35 per cent.

'Clearly, very few employees feel bonded to their companies. This is going to be a problem as companies are not getting the full potential of workers,' said Mr Rolf Bezemer, Lumesse's managing director for Singapore, Malaysia and Australia.

At the same time, only 19 per cent of those polled in Singapore look forward to their work each day, compared to the global average of 30 per cent.

When it comes to positive and supportive workplaces, only a paltry 12 per cent vouch that they exist in Singapore. Globally, 20 per cent believe so.

Mr Bezemer attributes Singapore's poor showing to the lack of transparency and consistency in workplaces here and an absence of stimulating jobs.

Ms Wong Su-Yen, senior partner and Asean managing director for human resources consultancy firm Mercer, said: 'Strong economic growth in Singapore has led to increased job opportunities, so organisations must work harder than ever to attract and retain people.'

Mr Phillip Overmyer, chief executive at Singapore International Chamber of Commerce, agreed: 'There are so many opportunities to be employed (in Singapore) that people don't mind job hopping as they know they can always find something equally good, if not better, elsewhere.'

That might suggest that monetary incentives are the way forward but money does not always make the world go round.

The Lumesse survey found that Singapore performed well on pay, with 14 per cent commenting that their salaries have gone up by at least 20 per cent over five years. The global average is 9 per cent.

Yet people are still leaving.

Ms Majella Slevin, manager for secretarial and support division at human resources firm Robert Walters, added: 'People stay in jobs also for a good work-life balance and clear career paths.'

They must also feel that they are valued employees, she added

Sales assistant Janice Lin, who turns 26 this year, 'hopped' five times before landing her current job.
'It's very common for young adults to try out different things for novelty's sake. A lot of my friends do it,' she said.

She estimates that an average working person like her will job-hop three times, staying in each place for about a year, before settling down.

In today's talent-scarce society, perhaps this should be taken as only natural. Rather than fight it, embrace it.

Do not focus on seeking long-term employment from all employees, advises Mr Josh Goh, assistant director, corporate services, for HR firm The GMP Group.

Instead, he said: 'Focus efforts on building a strong employer brand by harnessing the best from employees during their employment.'


Source: http://www.straitstimes.com/Money/Story/STIStory_673999.html

Thursday, May 26, 2011

Is this the PAP value system?

"If the annual salary of the Minister of Information, Communication and Arts is only $500,000, it may pose some problems when he discuss policies with media CEOs who earn millions of dollars because they need not listen to the minister's ideas and proposals, hence a reasonable payout will help to maintain a bit of dignity."
- Dr Lim Wee Kiat, PAP MP for Nee Soon GRC, 24
May 2011 in Lianhe Wanbao.Link

So they don't listen to people who are lower paid than themselves? People's worth is measured in terms of salary in the PAP?  If you're lower paid, you have no dignity?  Those highly paid executives won't listen to a minister because he is paid $500,000? That is silly isn't it? Even if a minister gets $50K a year, his policies will have far reaching effects so the stake holders have to be morons not to listen carefully to him.

His equating high pay to dignity give us an idea of the value system among members of the PAP - a rich person should be shown more respect than a poor person. A person higher up in the corporate hierarchy should be listened to more than a person lower in the hierarchy.

Ordinary Singaporeans listen to people who talk sense and have good ideas. They are not going to listen to a minister just because he is paid $2M a year.When Obama speaks, even billionaires listen to him even though he makes only one-fifth the pay of a Singapore minister.

How to contain the effects of foreign buying of property....

Yesterday, a study by DTZ research shows that the % of private property sold to foreigners (non-PR)  has reached a record high of 16% up from 15% in the last quarter. One of the potential reasons I mentioned in a previous post for rising prices is the buying by foreigner investors and speculators. The DTZ  shows that a higher of % foreign buying is found in higher end properties costing more than $1.5M and for lower end property below $500K the % of Singaporean buyers  (citizens) actually rose from 72% to 80%. Singaporean buyers fell from 70% to 67% of all buyers.

Basically, the data shows Singaporeans are increasingly being squeezed down (to the lower end) and squeezed out of the property market. For land scarce Singapore with the highest income inequality among developed countries, how should we view property? Is it an investment like Singapore stocks which we should allow foreign investors to enter market?
Many countries have curbs on foreign buying even when the country has a lot more land per capita compared with Singapore. While the govt restrict foreigners from buying HDB, the impact of foreigners buying private property has caused middle class Singaporeans to be squeezed out and this has pushed up demand for resale flats. Purchase of landed property used to be restricted and foreigners had to apply for permits which were not granted unless there is good reason. However, in recent years, such permits are granted routinely.

There are several things govt can do about this:

1. Restrict foreign buying. Foreigners can always rent if they need a place to stay. It does not make sense for land scarce Singapore to allow foreigners to use our housing market as a form of investment.

2. Require foreigners to sell to Singaporeans. Here is a rule that is implemented in Australia which has much more land than Singapore- allow foreigners to buy but they have to sell to locals.

3. Impose higher levies/taxes on foreigners buying Singapore property.

4. Limit the % of new property that can be sold to foreigners.

While there are ways around these rules such as appointing a local proxy to get around them like what some Singaporeans do in Indonesia, putting them in place with deter most foreign investors.
16% of private home buyers in S'pore in Q1 are foreigners: DTZ
25 May 2011 0047 hrs (SST)
URL : http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1130960/1/.html

SINGAPORE : Foreign buyers accounted for 16 per cent of private home
purchases in Singapore in the first quarter of this year, setting a new record
high, according to real estate consultant DTZ Research.

The previous high of 15 per cent was recorded in the fourth quarter of 2007.

DTZ defines foreign buyers as non-Singaporeans and non-permanent residents.

Singaporeans' share of private property purchases fell to 67 per cent in
the first quarter, from 70 per cent in the previous three months.

The proportion of mainland Chinese among non-Singaporean buyers - comprising
foreigners and PRs - hit a new record high of 24 per cent in the first quarter
of 2011.

It is the first quarter that Chinese nationals are the top
foreign purchasers of residential properties in Singapore.

"The residential market appears to have taken the January 2011 cooling measures in
its stride," said Ms Chua Chor Hoon, head of DTZ South East Asia Research.

"However, local concerns about high housing prices and the influx of
foreigners that were magnified during the recent General Election will be a
catalyst for the review of immigration and housing policies, which could dampen
demand in the residential market in the coming months," she added.

According to DTZ, small units continue to be popular among home buyers,
especially the HDB upgraders.

The proportion of buyers with HDB
addresses who bought units below 1,000 square feet increased 5 per cent in Q1
2011, compared with a 2 per cent increase among buyers with private addresses.

DTZ's analysis also revealed that a higher proportion of foreigners
bought into the high-end market during the quarter.

For transactions
costing S$1.5 million and above, the proportion of purchases made by foreigners
increased the most - from 17 per cent to 21 per cent.

For purchases
below S$500,000, the proportion of transactions made by Singaporeans was 80 per
cent, up from 72 per cent a quarter earlier.

This reflected the smaller
budget among Singaporean buyers. "At the lower end of the price scale, locals
are the main drivers of demand," said DTZ.


Monday, May 23, 2011

Fears spark selling on stock markets.

I think it started with talk about Greece considering restructuring its debt and later on S&P threatening to downgrade Italy's debt sparking fears of a contagion in the financial markets. As the entire global financial system is debt laden and unstable, it is a matter of time before the fears of investors come true and a crisis of sizeable proportions occurs. That is why investors are in a perpetual jittery state fleeing at the first sign of trouble. This is not necessarily a wrong strategy because a few mis-steps by policy makers in the EU or US Fed and the economic prospects for the world economy can change very quickly These sort of fear generating events occur roughly once approx. every 3 months

.The above is the chart of the Hong Kong's Hang Seng Index. It zig-zags wildly like the emotions of investors. I have a good memory of what I read in the articles in the  finance sections of newspapers over time. For example in mid-May 2011, the newspapers were full of articles on the adverse impact of the Japanese quake and how it can take down the whole supply chain triggering massive economic disruption around the world....many investors sold out of fear and that happened to be a "bottom" for the stock market. I remember the good news surrounding the economic recovery published in the newspapers in Nov 2010 and how there was great positive momentum in the global economy and many writers expressed great confidence in the economy going into 2011 - it turned out that Nov 2010 was a peak for the market and you're better off selling stocks than buying.

Investors' and news writers' mood swing from dispair to exuberance then to dispair every 2-3 months generating fluctuations in the market. Now I think we are back to dispair over the troubles in Europe. One day one of these market downturns will really turn into a bear market and dispair becomes despression when the fears of investors come true. However, very often the market get jittery over what turns out to be nothing...and then it gets exuberant over what turns out to be nothing.

I can't tell for sure if we are looking at another false alarm - the Europeans might really do something silly and sink their own economy...and take us along with them tomorrow. My gut feel tells me the Europeans are in for big trouble but not today, next week or next month, it will eventually come but later. All the major players have the ability to push the problems further into the future and there is no reason why they wouldn't do it. I don't think they have suddenly found the resolve to "face the music" once and for all....and take the pain that comes along with it. They like the Americans will buy some time, buy some hope and just kick the can further down the road...

PM Lee : Nothing's sacrosanct in Government review of policies....

I remember in 2002 sensing that there was desire for change on the ground,  PM appointed Vivian Balakrishnan to head the Remaking Singapore Committee [Link]. It was committee was split up into 5 sub committees called  Beyond Careers, Beyond Condo, Beyond Club, Beyond Credit Card and Beyond Cars were also formed to review specific areas. Minister Vivian as chair of the committee quickly proclaimed that there would be no sacred cows (except meritocracy & racial issues). If you go through the recommendations, it talks about a more consultative govt, better transport system, more help for low income families, etc. Most of the 70 recommendations were accepted by the govt in 2004. In 2006, the PAP won by a landslide with 66.6% of the votes. Although support fell by 6% from the previous election in 2001, it was seen as okay because it was viewed that the high support in 2001 was due to the 911 terrorist attacks which boosted the PAP's election results.

Yesterday, the PAP govt announced a committee to review ministerial pay chaired by Gerald Ee (yes, him again...called again to do National Service). The high pay of ministers, has always been an issue with people like myself and perhaps most of the people who read my blog. I spoke about those million dollar salaries in 2005 when this blog was started. In 2001 & 2006, when PAP won by a landslide, ministers' pay was also abnormally high. I think when Goh Chok Tong was PM, there was a severe recession in 1998 and a reporter asked him whether he would revise ministers' pay given workers are suffering from painful job losses. Goh Chok Tong arrogantly replied that if there was any revision it would be upwards! It infuriated some people, but he still got his landslide  victory in the next election. I'll explain why this is so later in the posting...

The environment has changed so much the PAP of today cannot be the PAP of yesterday. It cannot do the same things in the same way. Doing the same things in a different way might or might not be sufficient to maintain the support of the people. It has to risk doing something different to try to regain support. The PM has done of the complete reverse of what he did shortly after the last election - he is going to implement a pay cut for ministers and today he announced it will be backdated to 21 May 2011 after the panel headed by Gerald Ee makes its recommendations.
While cutting ministers' pay is not in itself going to solve any of  the problems faced by ordinary Singaporeans, it is a very important move because it signals a desire to change the value system in govt. Singapore has the biggest income gap in the developed world with only the US having something that is close to  our income gap. None of the developed Asian countries, S. Korea, Taiwan and Japan have anything close our income gap. Over the years we imported a lot of the American style of management - hire and fire, high executive compensation, war for talent. Singapore became Singapore Inc and our ministers linked their income with the top earners in the private sector. As the income gap rose, instead of examining what has gone on wrong in the private sector compensation system, our ministers' pay rode the widening income gap upwards.....in some ways participating in a culture of greed that has crept into corporate culture in the past few decades.  Warren Buffett has spoken extensively on this topic and sees no economic reason for top earners in a corporation to have their pay increased from 20 times the lowest paid worker in the company to 500 and in some places 5000 times.

"'Too often, executive compensation in the U.S. is ridiculously out of line with performance.'
- Warren Buffett.[Link]

Similarly, as the pay of workers at the bottom 20% of our workforce fell, our ministers' salaries were linked to top earners rose over the years. For many this was the act of a govt that has lost its way because it failed to see that the compensation system in corporations and the Singapore govt was starting to run counter to the value system of our society. It is not acceptable to most ordinary Singaporeans that a person working a full time job cannot make enough to start a family and lead a full life. Redistributing wealth to achieve a more just and equitable system became more important than the all out pursuit GDP growth. The reason for widespread resentment over high ministers' pay was the desire of ordinary Singaporeans to see leaders with the same values as themselves and not leaders who partake in what they saw as wrong in the system we are in. Over time, more and more people could see what was wrong. 

Over the past 2 decades, lower paid workers' benefits and job security were eroded - companies adopted hire and fire policies, seek out cheap foreign labor instead of increasing productivity, there was constant downward pressure on their pay. CEOs would squeezed down the pay of the lowest paid workers finding ways and means such as hiring foreigners to save a few hundred dollars and then paying themselves millions extra in bonuses - at the aggregate cost level, the companies did not become more competitive and over the long term less competitive because they were less incentives to invest in productivity.  Singapore workers reciprocated to this harsh environment and became the least loyal in the world[Link]. The once great francise known as the "Singapore worker" built by our parents, the children of coolies and fishermen, was destroyed by this culture of greed and Singaporeans saw the PAP with its tendency to pay itself high salaries as part of this. Other countries such as S. Korea did not adopt the same culture and they are world beaters. The first act of their president (also called Lee) was to donate all his own wealth to charity - they set the example at the very top to to foster the right model for their corporations and the rest of society.

PAP's change is off to a powerful symbolic start with the revision of ministers' pay and I strongly believe they are sincere. There is, however,  plenty to undo or redo and 20 years of going in the wrong direction cannot be reformed overnight. Still,  I'm encouraged because they look more enlightened this time round to do a real remake of Singapore. Remember the PAP still holds the power in Singapore, at the end of the day, whether we like them or not, we need them to start this process of change and fix what has gone very wrong in our society.

Sunday, May 22, 2011

Taiwanese Current Affairs on Singapore...

Extensive coverage of everything - our political system, defence, Ho Ching, COE etc. The good, the bad and the ugly.


Greek Economic Troubles...

Here is a table of who owes who in Europe:
One reason why Germany and other economically stronger EU nations have to bailout the indebted PIIGS nations with its public funds is their banks are the biggest lenders to these nations. If there is a default, the Germans might have to deal with a banking crisis at home. Looking at the above table, you can see how a contagion can possibly occur at some point in time.
The Greeks are eventually not going to pay their debts in full - given their size of debt which is 160% the size of their GDP. They have a govt budget deficit of 13% of GDP.  Many pundits are saying Greece will soon default on their debt[BBC Report] by rescheduling it because they can no longer service the debt that is due. Default fears has cause markets to fall as it will most certainly revive the panic of May 2010 when the situation reach crisis proportions. However, what is likely to happen is they will kick the can further down the road to deal with a Greek default at a better time on the assumption that the global economy will eventually recover. Allowing Greece to default now creates a lose-lose situation immediately - the Greek economy will just collapse taking many of the the European banks down with it.
The problems in Europe just shows how fragile the global economy is. Right now central banks have pumped money and keep their fingers cross that the whole system can reach a better state so that more permanent solutions can be found for many of the problems. However, if something derails the economy - terrorist attacks, natural disasters, market disruptions - these fissures in the global economy will blow open and the system can sink very quickly.

Saturday, May 21, 2011

Why property prices will fall ......soon(?)

I was watching at Robert Shiller's video on housing bubbles around the world. What strike me is the similarities in price rise and the subsequent bust among western countries. There were a few countries such as France where the govt intervened early to prevent a housing bubble that avoided much of the pain later. However, many other govts did not have the foresight and allowed the banks, developers and speculators to party on until the bubble burst and took the banking system down with it.

The charts above shows the 2nd bubble that occurred among countries with banking system intact after the financial crisis after the western housing bubble became deflated. If you compare the gradient of the price increase, the price increase in Singapore and Hong Kong  is sharper that the price rise in all of the western countries on the left.

Late last year I met a housing agent who was promoting a new condo at the bus interchange. I was quite shock at the $1200 psf price for a condo quite far from the city. The agent said that housing prices will not drop in Singapore because more foreigners are coming. While it is true that the population expansion has lead to higher demand for housing, if you look at the chart on the right, housing prices also rose sharply in Australia and Hong Kong where there is no significant increase in population size and the govt there did not open the immigration floodgates. A second reason could be figured out from ex-Minister Mah's last set of cooling measures that include restriction on how much corporations can borrow to invest in property. Foreign speculators, both individuals and corporations looking for assets to buy in a low interest rate environment, added to the demand. There is a belief that cash rich Chinese restricted by China's property curbs, went to Hong Kong to buy causing prices there to shoot to the moon and some of the buying spilled into the Singapore housing market.

While there may be many factors associated with the current rise in property prices, there is only one factor that can hold up prices in the long term - rise in median income. Tharman has said that his goal is to increase median income by 30% in 10 years. Even if he miraculously achieve this goal in 5 years, the median income rise cannot support the current housing prices. The recent cooling measures have slowed the price increase and flatten prices in certain categories of housing. While it is hard to pin-point the peak of the market, there are downside risks that one should worry about. The high housing price has caused Singapore's competitiveness to fall as cost of living rose. The global economy does look too healthy with sovereign debt problems threatening to erupt into a new crisis ...and even if there is no severe economic crisis, inflation worries have led to govts tightening up and slowing growth.

Under the PAP govt, housing has become interlinked to retirement and a fall in housing prices will have an impact on Singaporena's ability to retire. Once prices rise too quickly, history shows there are few elegant painless solutions. We can learn fromn an earlier property bubble in 1996. The govt/MAS intervened too late and when the Asian crisis came along, the prices had a long way down to fall and that led widespread problems in the economy - at that time, Alan Greenspan still had many tricks in his bag to get the global economy out of the woods...3 rapid interest rate cuts and the global economy was back on its feet in 1999.  However, we may not be so lucky the next time housing prices come down. As the cooling measures contain further gains in housing prices, this could be a market just waiting for something to happen. ....according some experts the debt levels due to property has already risen to dangerous levels:

Remember a while ago, Tharman went on CNA in a political forum with Gerald Giam and Vincent Wijeysingha plus other opposition members. When asked about the high housing cost, he said it still looked okay because the average debt servicing ratio of 28% of income is sustainable. However, if you watch the above video clip, this 28% is due purely to the articifially low interest rates we are seeing today and when interest rate rise this ratio will shoot up quickly. ...and problems can get very big very quickly.

Thursday, May 19, 2011

Sweeping Cabinet Changes

In the last part of the 1st video, PM Lee says they will relook at the policy tradeoffs including safety nets as long as it does not undermine work ethics and Tharman reiterated that with more technical language saying the changes in cabinet will result in a relook at policy "parameters". If you look at every minister that spoke in the video, you get a sense that they have realised the need to do things differently. GE 2011 did send a very strong signal to the PAP govt and it is wise for them not to miss it otherwise the electorate will send an even stronger signal in 2016. For most Singaporeans, it does not matter if  they have a 2-party system or a 1-party system, what matters is a govt that delivers or try to deliver a better quality of life - they have never hesitated to give PAP dominant power in the past when their could see lives improving year after year.

A few general comments about the cabinet reshuffle. It looks like PAP ministers are versatile. Khaw for example can jump from being health minister to minister of national development in charge of housing. All the portfolio changes just show you that the technical expertise in each ministry lies with the permanent secretaries and the whole "army" of civil servants. Ng Eng Hen, who was a surgeon in his past life, is now defense minister helped by the experts in the SAF and DSTA - he just has to decide at the top level how "hawkish"  we should be on defense matters.

For the PAP to find areas where things can change "safely" is actually not difficult given how "extreme" this govt has been in its policy making.  A few examples of extremes - Singapore govt has the lowest healthcare expediture as a % of GDP compared with all other developed countries. While the govt scrutinise every drug and every procedure to find ways to cut subsidy and pass the burden to sick Singaporeans, Singapore spends more on defense than the two nearest neighbors combined and not too many questions are asked because the "Singapore govt is committed to defense"....it should also be more equally committed to helping Singaporeans who are burdened by healthcare costs. Another example of extreme is the COE system which led to Singapore having the most expensive cars in the world. It allocates cars purely on the ability of drivers to pay completely ignoring the needs of the people. In the past when the income gap was not so large, lower middle income families would still have a chance of car ownership. However, as the income gap rose, a larger mismatch between the needs and ability to pay emerged. The fall back was the public transport system which became for-profit entities when the govt privatise them - these entities always have to trade off between quality of service and profits. The more packed the trains and buses are in the morning the bigger their profits because commuters have no choice but to take them because cars are the most expensive in the world. A millionaire's son drives his car for dates but lower middle income families with grand-parents to look after struggle to own one.

Another extreme is the govt's fixation with corporate tax cuts and cuts in  high income brackets. One of the policy moves I cannot understand is the implementation of means testing that hurt the middle class financially folowed by a tax rebate and tax cut that the middle class probably don't really need. While everyone welcomes some kind of  income tax cut, it is the high medical cost for uninsured parents and healthcare cost without class "C" subsidy for those who have fallen through the cracks that keep many middleclass breadwinners awake at night.

There are many things for the PAP govt to fix, adjust & change and they have to look at policy making with a new pair of eyes. The populace can understand trade-offs and don't expect everything to be done for only short term benefit or 'self-benefit'. Why do you think the Aljunied people voted for the WP despite the millions in upgrading dangled before them? Intelligent Singaporeans have been asking what is the long term nation benefit of the excessive foreign influx for native Singaporeans - surely the benefits cannot be so elusive and difficult to comprehend that nobody can understand except the PAP govt. On the other hand, the long term negative effects of the income gap and high housing cost on Singaporeans is very clear but the PAP govt was less than determined to address the situation. Mah Bow Tan, who will be a great asset to any profit-making company, was still explaining why those prices are affordable days before Singaporeans went to the polls.

The govt has to respond more flexibly given effects of globalisation. Govts around the world have been voted out or forced out in authoritarian states because they failed to adjust and change fast enough. The PAP policies appeared to be exacerbating the effects of globalisation such as the income gap,, importing cheap labor and not doing enough to stop the speculative inflows into our housing market. I hope the sweeping changes in the cabinet comes with sweeping changes in the way the PAP thinks and operate.

Wednesday, May 18, 2011

Teo Soh Lung : The Demise of Fear...

As a young man in the 80s, I had very little interest in politics. I had experienced the Singapore economic miracle first hand. I stayed in a kampong without paved streets, without street lights at night and without toilets with flushing systems. While the PAP govt was in charge, the streets became paved and lighted. The toilets were later upgraded to have a flushing system. Consumer goods such as TVs, radios, fans and refrigerators began to appear in homes as incomes rose. You don't think too much about politics when you can see your life improving year after year. I grew up not knowing the difference between a socialist and a Marxist.

For the many young Singaporeans of today,  their political awakening came in the past decade when the Internet and social media began playing a bigger role in politics and the great economic miracle ended without any clear vision by the PAP on how the country should progress. Years of fumbling along followed with only one clear goal to grow the GDP by any means possible - expanding the foreign influx, casinos, tax haven for the rich and so on. The end result of rising income gap, rising cost of living and deteriorating quality of life woke many people up and they become interested in politics and political alternatives.

My own political awakening came in 1987 when a group of young men and women were arrested and detained without trial. I had great difficulty believing the official story presented to me that these people were out to overthrow the Singapore govt by force and they were part of a Marxist Conspiracy. For many Singaporeans, it was hard to believe how a small group of unarmed men and women can take on and defeat the Singapore Police Force and the SAF which was armed with billions worth of equipment. It didn't matter whether there was proof or no proof. It didn't matter whether ordinary citizens believed what they were told. It didn't matter what international human rights organisations or foreign govt concerned about human rights said. They were locked up and abused and there was nothing anyone could do to help them. The event ignited the fear in many people of the authoritarian govt that will go after people for doing what they believe is right for the country to preserve its own dominant power.

The WP winning Aljunied is a major political milestone in 2011. The other great milestone of equal importance is the demise of fear. 24 years after her unjust detention, former detainee, Teo Soh Lung, contested in Yuhua SMC. Ordinary Singaporeans came out in full force to attend rallies and capable people stepped forward to say and do what they believe is right and good for this country. The demise of fear ushers in a period of hope and change for Singapore.
Demise of fear

by Teo Soh Lung on Monday, May 16, 2011 at 3:48am
The recent retirement of MM Lee Kuan Yew and Senior Minister Goh Chok Tong from the cabinet was welcome news to many Singaporeans.
Both men would like to be remembered as having brought Singapore to what it is today. Certainly we will remember them as having contributed to the economic success of Singapore. History will no doubt remember the good deeds of the two men. But history will also slowly but surely reveal the dark deeds of the two men.
There was a time when MM Lee as the first prime minister of Singapore could have achieved unparalleled greatness in this region if only he had been kind to his friends who helped propel him to fame. I am thinking of the greats of Lim Chin Siong, Dr Lim Hock Siew, Dr Poh Soo Kai and Loh Miaw Ping, who together with so many others helped him win his first general election in 1959 and unselfishly let him assume the office of prime minister. What he did to them in 1963 and to hundreds if not thousands more in the years that followed was unforgiveable. We know today that they were locked away under the Internal Security Act for decades and silenced for more than half a century.
Senior Minister Goh Chok Tong who was First Deputy Prime Minister in 1987 learnt to be ruthless from MM Lee when he agreed to arrest and detain 22 innocent people that year. For three decades thereafter, the PAP appeared to be invincible. GE 2011 changed all that. In a matter of days, the prime minister and other ministers came out to apologise for their mistakes. It took many by surprise. Have leopards changed their spots?
I don’t know. All I know is that the young have taken control of Singapore and are determined to put a stop to the arrogance of the PAP. The young and articulate opposition candidates came out in full force. They campaigned without fear. The people responded and suddenly, fear disappeared and they regained their voices. Both the people and the candidates realised in the course of just nine days that they have the power to change Singapore.
For me, GE 2011 is the most important GE after 1984 when two opposition members, namely J B Jeyaretnam and Chiam See Tong were elected into parliament. With six members of the Workers’ Party in parliament this year, we, the people of Singapore can have the confidence to feel free once again and to look forward to a PAP government that will be more accountable to us in the next five years. We can be sure that if they do not listen to us, the next GE will see more losses for the PAP.
As for the passing of MM Lee and Senior Minister Goh, they will soon be forgotten except in the pages of our history book.

Tuesday, May 17, 2011

Singaporeans : 2nd biggest gamblers in the world

Report from the Economist : Link

"Seeing Singapore so near the top is surprising, but don’t get used to it. Three years ago the country had no casinos; today the Marina Bay Sands and Resorts World Sentosa alone nearly outgross the entire Las Vegas Strip, but outside of Macau they enjoy first-mover advantage in betting-mad Asia."
                                                                                                                                     -  The Economist

If you still have any doubt about the harm caused by the casinos, please just look at the spate of crime reported in our papers linked to them. The govt justification is the casinos create jobs for Singaporeans. But what kind of jobs? Casino croupiers, pit managers etc. But Singapore has never been short of jobs otherwise why do we need hundreds of thousands of foreigners here to fill them. What we need are jobs that pay good income and match the skill set of Singaporeans - the casinos do not create these jobs.

There is only one other country where gambling is a more severe problem than in Singapore - Australia. Australians gamble slightly more than Singaporeans but in Australia the gambling problem is now a national crisis[Link].

I will keep tracking the social cost of the casinos because I strongly believe the decision to allow them is a big long term mistake one taken for small short term gains.

Why people should not hate Tin Pei Ling....

If you met her at somebody's birthday party, she would have been like any other ordinary girl.... as long as you don't discuss politics with her you will probably walk off without a negative impression of her. While she appears immature, naive, sheltered, materialistic and less than qualified, the vitriol directed towards her has more to do with her party, its selection system and undemocratic ways than Tin Pei Ling herself. If someone like Tin Pei Ling appeared in the opposition camp, she will simply be ignored...and if attacked by the mainstream media, would win some sympathy.  While she has flaws, how did Tin Pei Ling come to symbolise many things that is wrong with the PAP?

1. GRC system. She was put in a GRC so that she is rides the coat-tails of ex-SM Goh into parliament. This is a mechanism used by the PAP to bring in candidates that the electorate is unfamiliar with and cannot get elected on their own. Tin Pei Ling was a candidate that the public really feels is not ready to be an MP, yet the PAP used the GRC to bring her in against the wishes of the public.

2. Selection System. For years, the PAP has told Singaporeans that it has a stringent selection system that ensures quality and continuity of leadership in Singapore. This selection system seemed to have primacy over our election system which the PAP tweaked to "force" the people accept the selected PAP candidates. For years, the selection system brought in many"yes-men" and "yes-women" from the power-elite network who hardly said anything of significance in parliament. Most have very busy career and served as part time (quarter time) MPs. Tin Pei Ling came out of this selection system and most people can think of someone in their circle friend or colleagues more qualified than her to be an MP. She was the final proof people need that they cannot trust this selection system anymore - it will throw up sycophants who won't find anything to change in the system.

3. Excessive Compensation. For years the PAP claimed its compensation system for civil servants MPs and ministers will bring in the best people. This excessive compensation for the upper rungs of govt reflected the income gap in our society that has troubled many Singaporeans ...it goes against our value system and many questioned whether people are really getting paid what they deserve when some Singaporeans working full time jobs are getting less than $1000 a month while an elite civil servant delegating away his work could go to France for cooking lessons. Many find it hard to accept that Tin Pei Ling will be getting $15,000 a month for a part-time MP job. This is again proof that the compensation system put in place by the PAP is unjust.
Think about it - you don't really hate Tin Pei Ling. What you really dislike is the PAP system of GRC, selection and compensation. Tin Pei Ling did not select herself to be MP, PM Lee and other senior leaders did. Tin Pei Ling did not ask to be paid $15,000 a month, that is the PAP way of over-compensating elites who help to preserve their system. You love Tin Pei Ling not....but your hatred, she really does not deserve.

US National Debt : A lesson for all nations

Today the American Congress is debating whether to raise the debt ceiling of $14.294 trillion so that the govt can continue to spend. Not raising the debt ceiling will result in a payment default that will send, the US economy & govt straight into another crisis. So there is little choice but to raise the debt ceiling, borrow more money and "kick the can" further down the road.

I once had a conversation with an American who was furious at his govt for the national debt and he felt strongly that his govt should be forced to default on that debt and be taught a lesson on prudence. That was 1994! 17 years later the debt is even bigger and a default would be instant disaster because it will plunge the global economy into a crisis that will perhaps take decades to get out of.

Many people have the misconception that Western govts get into this type of trouble overspending on welfare. This is not true. The US national debt fell steadily until Ronald Regean became president. He cut welfare spending, increased military spending and cut taxes. His deputy George Bush senior and his son continued the tradition piling up more national debt and fighting wars in the middle east. In the 80s, when the national debt was low, the US had what many saw as an overly generous welfare system. One of Regean's achievement was to slaughter the "welfare queen"[Link] the sterotype of a lazy woman who did not work and lived on govt handouts. Research later showed the "welfare queen" was a myth[Link]. Regean proceeded to put US into a path of large budget deficits by spending on the military after cutting taxes. A one point, Regean decided cut govt funding for mental institutes  [Link] saying it was not the state responsibility to take care of these people sending thousands of mentally unsound individuals onto the streets. Whatever he saved by cutting welfare program, he spent on the military - he would later claim victory for the Cold War saying the Soviet Union bankrupted itself trying to keep up with the US in military spending. This again proved to be another myth [Link] and Gorbachev explained that the inefficiency in the Soviet economic system was what did them in not the Cold War.

Recently, the US debt ballooned due to the need to rescue the financial system with bailouts and the US economy had to be revived with massive govt spending. During the financial crisis, people like Jim Rogers suggested allowing the system to fail. reset the financial system and rebuild it to fix all the problems. That was not do-able politically as there would be too much pain for the populace to take in a major disruption of the system.

Today for every dollar the US govt spends, 40 cents is used to service its debts.[Link].

What got the US govt into this situation is not welfare spending but tax cuts, military spending and bankers who created the financial crisis.

Beware of govts that exercise extreme parsimony in social spending but love tax cuts, military spending and deregulating the activities of banks. You have to ask whether a govt that debate vigorously for a $1 per day increase in assistance should also have its defense budget scrutinised because a weak social infrastructure will make us just as vulnerable because we are counting on ordinary men to be willing to die for their country in battle.

Monday, May 16, 2011

MM & SM Leave Cabinet.: A break from the past...

While I disagree with many of their policies especially those that shaped the kind of political system in Singapore which I believe will be a long term liability, they deserve the credit for leading Singapore from the 3rd World to the 1st. They couldn't have done it without the contributions of Singaporean workers who were ranked number 1 in the world for 2 decades during the period of our most rapid economic development.

The problem is after we acquired our developed country status, they became as clueless as anyone else in the PAP on how to move Singapore ahead. MM Lee published his "Hard Truths" book which tells us to drive this country forward using rear view mirrors. I can't remember anything of significance SM Goh did in the past 5 years except his conversation with Gaddafi after which he praised Gaddafi for being an astute leader[Link]. Other than the strange things SM Goh said during the 2006 and 2011 election campaigns - I can't remember anything else of significance he did in the last 5 years - he served as an envoy meeting leaders from other counrtries, an overlap with George Yeo's post as Foreign Minister.....feel free to comment on this and correct me.

Together with his apology, the resignation by MM & SM offered PM Lee one of the best opportunities to show that he can lead the change in Singapore. However, PM Lee instantly drop the ball saying he needed time to consider the resignation of these senior citizens. This is really strange. Is he be able to say "no"? Is he going to call them up over the weekend to persuade them to stay on to "mentor him"? He should have decisively accepted the resignation, thank them for their contributions and declare himself firmly in charge of this country.

Globalisation has unleashed forces that make our collective social goal for a prosperous and more equal society harder to attain. We need leadership that can break free from the past to chart new direction based on a deeper understanding what is happening to the Singapore society and economy to counteract the forces that will lead to poor outcomes for Singaporeans. The PAP came into power on the wings of socialist ideology and then dazzled the people with an economic transformation that harnessed capital and investment from capitalist states. We need leadership again tto navigate this tough uncertain world where the free market and unbridled capitalism is yielding results inconsistent with our collective social goals. If we can't get this leadership from the PAP, the electorate will start to seek alternatives in the next election.

Saturday, May 14, 2011

Healthcare cracks as wide as Bishan River....

I wanted to post this yesterday but Blogspot was down.

I read with sadness the plight of a cancer patient in The Online Citizen. Here is the case in detail  [Why cancer patients are not subsidised by the govt]. The story tells us the enormous financial stress put on cancer patients and their families. Mdm Choi was diagnosed with incurable myeloma and needed medication to stay alive and improve her quality of life. The cancer treatment was not subsidized and she was not allowed to use Medisave which was her own money.Only after "haggling" with officials she was allowed to use her own Medisave for medicatiion which costs $500 per pill and chemotheraphy cost $1000 per session. Her Medisave ran out of money and she had to tap on her son's Medisave. As she could use only $450 from Medisave per day the amount of oustanding bills mounted as treatment can cost several thousand per day. When the bills mounted, credit collection company on behalf of SGH would harass them for payment.

“They’re like a licensed loan shark” - Mdm Choi [Link]

This is not an isolated case. Many Singaporeans face such hurdles and financial stress when they get cancer. A few months ago,  Singapore's 1980s' cultural icon, singer,  Yue Lei passed away in Malacca where he was seeking treatment for cancer. He sold his home in Singapore to pay for his cancer treatment at Mahkota Hospital in Malacca[Link]. Singapore's olympic hero, Tan Howe Liang, incurred a medical debt of $100,000 for his wife's breast cancer treatment[Link]. A donor helped him to pay for the bill. Tan Howe Liang earns $1000 per month working at a gym yet there is little financial aid available for his wife's treatment.

This is the real state of healthcare in Singapore - not the rosy affordable 3M picture painted by Minister Khaw. During the election campaign, an senior consultant,  Prof Paul Tambyah  from NUH spoke up at SDP's lunch time rally about healthcare financing and he paints a true picture of the situation : Link.

The PAP govt has kept its own expediture down by passing the rising costs of healthcare on to Singaporeans. Our govt expediture as a % of GDP is the lowest among developed countries. It is less than one third the average expediture of other govts.  As the govt aspires Singapore to be a medical hub for the rich in the region, costs goes up (double digit per year) as capacity does not expand fast enough to meet demand. Specialists and experienced surgeon are drawn to the "for profit" medical hub where they can make much more money doing less work. The increased cost is then passed on to the sick and their families by means testing and subsidy cuts.

The govt says it is not financially prudent to do more to help the sick. However, to win more votes at Ang Moh Kio GRC, the PAP promised to build an artificial river running through Bishan Park that cost $1.2B[Link]. Yes, $1.2B for pork barrel but they cannot do more for cancer patients. There are 8000 new cancer patients per year. Over the next 5 years, there will be 40,000 Singaporeans who will be diagnosed with cancer. $1.2B works out to be $30,000 for every cancer patient for the next 5 years.  The PAP instead chooses to use this money to build an artificial river to buy political support (after it did so many things wrong in the past 5 years). This a govt that has lost its morality. This is a govt that has lost its way.

Thursday, May 12, 2011

PAP searches for answers....

Your rubbish is collected everyday. Our streets are safe. Most people have jobs. You have electricity, water and gas. The trains and buses may be crowded but they still take you where you want to go. Singapore is a stable place - we don't have riots, different races and religious groups live in harmony.....

"It is a surprise for us that the resentment is so deep and the unhappiness is so deep." In fact, it was only during the campaign, that "we began to fully appreciate the extent of the unhappiness and resentment towards the Government, hence the pledge by the PAP team led by Mr George Yeo for us to have a strong role in the transformation of the PAP itself."[Link]

Why is Nicole Seah so well received? Why are so many people hoping that she will be an NCMP to be their voice in parliament?  It is not just her pretty face or the ease with which she handled the media - she is afterall in advertising - it is her understanding of the concerns of the ordinary Singaporean that impressed many:
"Singapore has really developed as a country on a whole, but what we do not realize is that there are many cracks beneath and there are many Singaporeans who are falling through these cracks." - Nicole Seah, at the start of her election campaign.
The great mystery here is not why people are angry and unhappy. Ordinary Singaporeans know why - for those of you who still don't understand I suggest you read some of the postings in this blog on various issues. The real mystery is how the PAP with its vast grassroots network, meet-the-people sessions, feedback unit and forums can miss this. The answer to this question consists of 3 parts - PM's deep denial, elitist yes-men and the ivory tower. I guess when the PM saw the faces of men and women who turned by the tens of thousands it suddenly dawned on him that things are not okay\. However, he has no excuse for being surprised at what he saw. Over the years, strong signals have been sent to him on many issues including high ministers' pay, GST hike, the income gap, overcrowded buses and high cost of housing. At every point in time when he could have proactively done something he lost the opportunity by denying the problem is serious. For instance when asked about Singapore's high GINI index, his response was the GINI was not a good measure and he gave an example of Carlos Slim coming to Singapore which he saw as a good thing but will cause the GINI to go up. When asked about the crowded buses and trains I remember he said that people were still able to open up and read their newspapers so it was still okay. There were many opportunities if the PAP govt bothered to listen but I suspect they thought that ideas from blogs like mine echoed the resentment of a small vocal minority....

The truth is resentment runs deep and those who voted against the govt are much more unhappy than those who voted for the PAP are happy. There is net unhappiness. The PAP, I would argue, didn't acrually get a strong mandate to rule Singapore. Many voted for the PAP for estate upgrading rather than PAP policies. PAP policies carry an ideological extreme that few people in society would accept. For example, increasing the healthcare burden of Singaporeans as costs go up just to keep govt expenditure on healthcare as a % of GDP low - it is hard to accept such policies, It is hard to accept that car prices and public housing prices are their highest in the world. It is hard to accept our income gap -   bottom 10 percent of Singaporean households had an average monthly income of $1,400  last year, versus \$23,684 for the top 10 percent.

There is plenty for the PAP to fix. Be it reform or transform, they have to make major changes or more people will reject their system...and more people will reject them at the next election.

Wednesday, May 11, 2011

"REFORM" or "TRANSFORM" - Change in what form?

On 4th May 2011, sensing the voters were very angry:

"WHATEVER the results of the general election.......And if elected, Mr Yeo, who leads the PAP team in the fiercely-battled Aljunied GRC, pledged that he and his team-mates would be 'advocates of reform' within the party, the government and the Cabinet."[Link]

On 10 May 2011 at his press conference after losing his seat and a few days of reflection:

"I would help in whatever way I can to bring about this transformation of the PAP" - George Yeo.

The elections results appear to have sent a signal for change. But how much change? How strong was this signal? I believe the electorate sent signal for reform not incremental transformation. If you look at the results, the PAP interprets that it has a strong mandate with 60.1% of the votes and 81 seats. However, the election is not fought on a level playing field - massive upgrading carrots and propaganda are used to sway voters and GRC average the votes to keep number of opposition seats down. Without these, the PAP would probably lose close to 20+ - 30 seats and we would have a 2 party system overnight. These barriers have kept worthy opponents out of parliament for the past 2 decades. As a result of a lack of competition, the much vaunted PAP selection process picked uninspiring 'yes-men', 'yes-women', they lost the ability to campaign for the hearts of citizens and became terribly reliant on threats, carrots, propaganda and goodwill for their past achievements.

It is no longer sufficient \just to  take care of the tail-end  problems caused by various schemes and policies. We have to rethink, restructure and reform many policies/schemes to benefit as many people as possible. For example, in healthcare, the Medifund is suppose to be the "catch all" if one falls through the cracks but the NUH consultant speaking at SDP's lunchtime rally revealed that one has to lose his home before he can get access to Medifund, that is a huge crack and a long way down to fall when one gets sick. We need to completely relook at healthcare financing in Singapore. The CPF after so many tweaks and liberalisation for "every other thing" such as children's education, housing and medicare, will not be adequate for a good retirement for many Singaporeans in the future. It needs to be reformed so that our CPF savings earns a high enough rate of return above inflation for Singaporeans to have a proper retirement - we cannot continue to 'transform' and tweak it by pushing back retirement age every few years and stretching these funds further with schemes like CPF Life.

We can all wait to see if the PAP figures it out. I'm not optimistic. The PAP is already starting to slide by from talk of "reform" to "transform" ...in a few days we will hear "adjustment" ...a few weeks the PAP might conclude that it has done everything correctly but only forgot to communicate well...

Tuesday, May 10, 2011

Fellow Singaporeans, I think we have made a big mistake.....

"Dr Balakrishnan said the election has been a good learning journey and at the strategic level, many PAP policies are right but their implementation and communication can be improved "

- Vivian Balakrishnan, 9 May 2011.

"2011 has seen a generation that does not remember from whence we came, but that is to be expected. But I do, and those amongst you who are over 50 will remember"

- MM Lee, 9 May 2011

We have to thank the Aljunied people for doing the right thing. However, it seems that losing Aljunied is not strong enough a signal to wake the PAP up. As soon I heard Vivian Balakrishnan say that PAP's problem is not its policies but communication of its "right" policies, I realised that the PAP has gone into relapse and denial just 2 days after polling. I suspect after its soul searching, the PAP leadership will come back to say that everything less the few clear-cut mistakes like Mas Selamat + crowded trains, everything it has done is right and the only problem is with their style and communication. We should have voted in the WP East Coast GRC team, we should have listened to Goh Meng Seng and voted Ncole Seah's team in Marine Parade into parliament to tell the PAP and SM Goh that he is accountable for policies such as asset enhancement, GRCs and broken its promise of a Swiss standard of living. We should have sent a stronger signal.

More people have come to understand the effects of PAP policies either because they are directly or indirectly affected by it. That is why the PAP is losing votes. We are talking about a wide range of policies from housing to foreign influx to high ministerial pay that Singaporeans have come to understand much better because the effects of these policies are becoming apparent. It has nothing to do with PAP's style or the  way they communicate these polices. It is the polices themselves that are the problem. Although 60.1% voted for the PAP, about 10-20% disagree with their policies but voted for them due to the upgrading carrots. Among the silent majority that voted for the PAP, many did so for the simple reason that they don't want a sudden change of govt although they don't support the PAP policies. PAP policies that allow the foreign influx are opposed by the majority of Singaporeans.

As for MM Lee's remark that the young are a generation that "does not remember whence we came", it is not true. It is precisely because the young today know how things have worked in the past - good affordable housing, drive to higher productivity, strong national identity and social cohesion, the time before GRCs + upgrading carrots, reasonable ministerial salaries etc - that they know that the Singapore govt has lost its way. We cannot be ethernally grateful to a govt that is no longer the same.

Singaporeans have made a mistake. We thought that putting the WP team in Aljunied GRC is sufficient to wake the PAP up and create a 1st world parliament but denial runs deep in the PAP - they still believe they have the right answers to the people's problems. What was needed was a mini- tsunami that we never got. Now it could be back to business as usual for the PAP after they hire a PR team to sugar coat their pills. What is needed is not softening the hard edge of their policies but serious reform. Our CPF funds need higher returns to beat inflation or many are doomed to a poor quality retirement because the GIC borrows our money at a low interest rate to invest for higher returns that are not given back to us. We cannot continue to allow the govt to keep healthcare expediture so low as the cost of healthcare goes up and the burden is passed onto the sick and their families. We cannot continue with the foreign influx of cheap foreign labor as it is a vicious cycle taking us away from higher productivity, better incomes and ultimately a higher quality of life. We also need to reform public housing to deliver greater affordability and public transport to deliver better quality of service.

There is plenty of change needed. I'm not hopeful the PAP will get any of it done. They might just change style and not substance believing that 60.1% and 81 seat is a strong mandate to just continue doing what they have been doing.

Monday, May 09, 2011

Election Numbers : What they tell us...

1. The PAP had 60.1% of the votes lowest since 1966. The last time it was this low was elections 1991 when the PAP had 61% of the votes. 1991 was Goh Chok Tong's maiden election as PM. From the chart showing PAP's % of votes, a few things - first there was a very large 10% swing against the PAP in 1984 and the next 2 elections in 1988 and 1991 % votes kept falling. The 1984 plunge was due to one really extreme eugenics based idea by Lee Kuan Yew known as the "Graduate Mother's Scheme". Under this scheme, graduate moms would be give all sorts of benefits such as priority for their children for primary school entry etc. Ordinary Singaporeans found this hard to accept and voted against it. In the 1991 elections, when % votes fell to a new low, Goh Chok Tong attributed the loss of support to his soft "consultative style" (no kidding!). He then increase the % votes  for the PAP by linking votes to upgrading in the 1997 and increasing the GRC sizes. The 60.1% of the votes that PAP probably underestimates the loss of support for PAP policies because many people voted for the PAP due to upgrading carrots. In 1991 when Goh Chok Tong's team got 61%, there was no upgrading.

3. The opposition had 39.9% of the votes but only 6.7% of the total seats. Four out of 10 Singaporeans did not vote for the PAP are represented by 6 out 87 MPs. The averaging effects of the GRCs produces this kind of under-representation of people who don't support the PAP. Still the results yesterday is far better than the one we got in 2006 when we have 2 out of 87 MPs representing the 33% who voted against the PAP.

2. WP took 46.6% where they contested, followed by SPP's 41%. WP's branding did make a difference. The WP ran a well coordinated campaign. They addressed voter issues systematically with a detailed manifesto and speeches were very well prepared and delivered at rallies. They ran a very clean campaign seizing the moral high ground right from the start. On thing is clear is the electorate does not like negative campaigning. Harsh attacks on the WP manifesto, Chen Show Mao, Tan Jee Say etc bombed badly. In the last elections, the PAP attacked the WP 2006 manifesto calling it full of "time bombs and poison" - one of those "poison" ideas was the reform of the GRC system something most people think is very clearly needed after this election. That attack didn't win any votes. I'm surprised the PAP did it again. Name calling, threats ("you will regret") and smear campaigns tend to backfire because the electorate is educated and today we have the social media that neutralises propaganda and gimmicks. The SDP made also made huge gains this time because it had a good marketing with the "Its about you" concept.  The things that work are getting good candidates, having a well coordinated campaign with good ideas, treating voters with respect and fighting a clean fight.

3. SM Goh team got only 56.6% of the votes.  The last time Marine parade was contested SM Goh's team had 72% of the votes. SM Goh was running a 1990s campaign taunting his opponents arrogantly calling them "no ideas" and so on. In the 1990s when the PAP was still popular, the upgrading carrot and propaganda was working well, the PAP could carry out these attacks and actually win votes. SM Goh forgets he is in a different world today. Nicole Seah who incidentally is in advertising handled the media extremely well and took every opportunity to portray herself as a champion for the downtrodden, overworked Singaporean and could show herself to be some who can empathise with them. SM Goh's support was also brought down by his own creation, the GRC. Having Tin Pei Ling on his GRC team was a big negative - ironically TPL was in charge of PAP's social media.

4. PM Lee improved his vote share to 69.3% Well shows that it really pays to be humble. I think there were many undecided voters that were won over by his apology. You  may think it is insincere or too late, but the simple fact that he realised that he needed to apologise tells voters that the PAP is not completely lost. The change of opponents from WP to less established RP also help him to secure more votes this time.

5. Voter turnout of 93% is the lowest in history In places where the people have not voted for a long time e.g. the absence is close to 10%. Some people may have forgotten that they need to vote. 25% my office did not vote because the people were overseas.

In my opinion,  the best election strategy the PAP could have adopted was to take on a more humble apologetic tone to give the people some hope that change is coming and they are sincere. The PAP instead executed a very different strategy for a large part of the campaign e.g. they denied housing problems existed by saying it is still affordable.  At the end of the day, they were rescued from disaster by the "silent majority" that still support the PAP simply because things are generally working in Singapore although many things have gotten worse the idea of a govt change is just too drastic for most Singaporeans who are risk averse and will play it safe. Another loss of 6% of votes in future elections even the "silent majority" cannot rescue the PAP from a massive loss of parliament seats.

PAP's ideology - state corporatism + elitism + authoritarianism - is a longer term problem. Unless the PAP repositions itself closer to the middle of the political spectrum by implementing balanced policies, it will see long term erosion of support. Their problem is not just an image problem. The WP has shifted itself from the left to the middle - moving away from a completely socialistic approach, it is not organising labor unions to go on strike, it is asking only for re-nationalisation of the transport and not of all sectors. The PAP is positioned too much to the right. It tells the populace to accept the "free market outcomes" as it pursues GDP growth - income gap, rising cost of living, stagnant wages etc It expects the populace to be resilient and intervenes only in the worst cases of poverty. However, it is time for the PAP to go back and ask itself more fundamental questions : "What is the purpose of GDP growth if it does not benefit as a many Singaporeans as possible?". When the free market is not producing the outcomes you want, you have to intervene sufficiently to deliver the quality of life to your people. Telling people they deserve what they get simply because these are free market outcomes will not be acceptable to a growing number of people - they will see their own situation more as a result of PAP policies because it is not the same in other developed countries where govts have intervened in a different way.

Sunday, May 08, 2011

Election Results : Joy, Sadness and Optimism

On polling day, I was only sure of 2 things - Hougang will be won by WP and there is a vote swing against the PAP. As a Singaporean voter, I have learned not to expect surprises especially surprises in favor of the opposition. But still a tsunami type results like the one we saw in Malaysia was a possibility because you cannot guess what goes on in the mind of voters. There was also a fear of a 86-1 result in spite of a vote swing against the PAP because of the averaging effects of the GRCs.

I was estatic when I heard that WP has won in Aljunied. I shouted "Workers Party!" from my apartment and a few voices in the neighborhood joined me. There was great joy and a bit of relief - a WP loss there would have been disastrous for Singapore when overall votes have swung against the PAP. I would even argue that it would be bad for the PAP because they will not be able to find impetus for policy adjustment as dissatisfaction rises among the populace if they had a clean sweep of the GRCs. If there is any good leadership left in the PAP, they will use this defeat to make changes to prevent a more precarious situation for themselves in the next election. It is also heartening to know that when it is critical to do so, most Singaporeans will overcome their self-interest of estate upgrading and do the right thing for Singapore. The breakthrough by WP pave the way for greater things for the opposition..it is like breaking the "4 minute mile" once the first team does it, many more will come forward to try knowing it is possible. The WP has to be saluted for running a well coordinated, inspiring and passionate campaign touching the hearts of many Singaporeans.

I'm very disappointed that there were so many close contests that were lost by the opposition. In particular Joo Chiat SMC and Potong Pasir SMC where the results were close. There were also a number of GRCs won by the PAP with results in the ballpark 54% to 60% of the votes. Those would have produced many seats for the opposition if not for the GRC system that averaged the votes in those areas. These GRCs include East Coast GRC, Bishan-Toa Payoh GRC and Marine Parade GRC. I'm very sad Chiam See Tong lost his gamble to move to Bishan-Toa Payoh. He has won our hearts with his perseverance - despite his stroke, he has continued to fight for Singaporeans. Singaporeans will always remember what he has done to keep the hope of democracy alive in Singapore.

Today's Straits Times reported a 6.5% vote swing against the PAP with its vote share dipping to 60.1%. This is not the correct way to look at the support swing. The opposition contested in almost all constituencies including strongholds that were not contested in the previous election. If you look at only areas that were contested in both 2006 and 2011, we see about 10% swing against the PAP e.g. East Coast GRC. The surprising result was in Marine Parade where Nicole Seah's team  garnered 43.4% vs SM Goh's 56%. Marine Parade has not been contested for a long time. Many years ago, SM Goh would win by 70+% of the votes. If you discount the voters, probably 5-10%, who disagree with PAP policies but still voted for them due to the upgrading carrot, I think the % of voters who don't support PAP polices is roughly 45-50%.

Overall, the outcome is something that the opposition can build on to move the Singapore govt towards more balanced policies that will prioritise benefits for Singaporeans. The vote swing hopefully will be a wakeup call for the PAP to start a process of reform within itself and make significant changes to CPF, public housing, healthcare, transport and address the problem of rising income gap. I'm not  certain if the PAP will do that or just fall back to its "business as usual" mode...it will be a big mistake for them to ignore the clear signal that has been sent. One thing that has become apparent during this election is the flaws of the GRC system which resulted in weak candidates like Tin Pei Ling getting into parliament while voters in Aljunied had to undertake the very painful task of voting out of a fairly popular George Yeo so that Singapore has a strong opposition voice in parliament. The GRC system imposes such choices on the electorate and produces results that the electorate does not want. I think many see the need to remake the system limiting it to fewer seats (2?) or dismantling it all together.

I thank the passionate people in the opposition who stepped forward to put up such a strong fight with limited resources on an unlevel political playing field. Their grit and determination inspires all of us to continue to press on to make this country a better place for all Singaporeans.

Unconfirmed Results : WP has won Aljunied by a wide margin

Saw this in Yahoo!


WP wins Aljunied GRC: reports[Link]

Early reports say the Workers' Party has won the key battleground of Aljunied GRC, beating the PAP team led by Foreign Minister George Yeo.

The WP win in Aljunied was reportedly more than 2 percentage points, which means it did not require a recount.

According to a Yahoo! source, the winning margin was more than 10 percent. An aide to Minister Yeo also told the Today newspaper that "we have lost."

Aljunied GRC, comprising of over 143,000 voters, was the most hotly contested ward in this General Elections. It is the first time that a GRC has fallen into Opposition hands. 

A comment by Sad Day on Yahoo!'s live blogging coverage of the results said losing Minister George Yeo was a big blow.

He said, "Losing George Yeo... Singaporeanought to see the system overseas, I was in UK for more than ten years and couldsee the big difference. Very sad."

Aljunied voter Nuraini Malik, 22, an NTU student told Yahoo! Singapore," I’m reallyhappy that WP won... I’m sadthat George is no longer a minister, because he was a very good one. But thenagain, I’m still very happy because this WP team has been really outstanding withtheir speeches and manifesto."

Saturday, May 07, 2011

Remember Our Pledge today....

As Singaporeans, we have recited our pledge thousands of times in our lives. If we do what we pledge to do for Singapore and Singaporeans, this country will never lose its way. If we stand united to build a democratic society based on justice and equality, we can overcome any challenges we face as a people and build a better future.
Let the ideals in our pledge guide us in the choices we make and the path we take. Lets take a step forward to fulfil the dream of our forefathers to achieve happiness, prosperity and progress for the nation. If ever we lose our way, our pledge is our compass that will help us to find our direction.

We are today a undemocratic society with rising inequality. There is increased unhappiness as our income gap push more people into poverty and Singaporeans have to struggle with the rising cost of living. We have a govt that has lost its way as it constructed an undemocratic political system to maintain its dominant power and created inequality with its unbalanced policies. It has lost its moral compass as it pursued economic goals as an end in itself.

Lets do today what we pledge to do all our lives. Lets overcome our fear, our self-interest and our apathy.
Lets do what is right by voting wisely.

Need for Change in Healthcare System

I would like to thank the person who brought my attention to this speech by Paul Ananth Tambyah. In his speech he brought up many issues that have been discussed in my blog about the healthcare system. The important thing is Paul Ananth Tambyah is in an insider, a professor, who works as a senior consultant at NUH.  He is not a candidate for the General Elections and not a member of the SDP but he stepped forward to tell us the need for change in this area:

"Medifund the endowment fund is limited to those who have already sold their homes and exhausted their children’s Medisave. Every year it is not fully utilised as it is so restrictive." - Paul Ananth Tambyah.

The problems with our healthcare system is also well known to medical social workers. You sit down with one and they can cite numerous cases of families that have been put through great financial strain when they fall through the cracks in the system. Singapore govt has the lowest healthcare expediture as a % of GDP among developed countries as healthcare cost escalates. The increased burden is passed on to the sick and their families. What good is all this wealth (concentrated in a small % of people) and GDP growth when the govt don't even take care of the sick - some have to go to Malaysia because they can't afford treatment here.

2 days ago, Mnister Khaw was still saying how good our healthcare system is and he attacked the changes proposed by the SDP. His strategy has been very simple - keep govt expediture down by passing the increasing healthcare cost to the sick and their families. We need major changes in healthcare just like we do in public housing.

Today think carefully about all the issues and vote wisely.

Friday, May 06, 2011

See you on 8 May 2011....

I created this blog before the 2006 elections because I saw the need for change in the country. In 2006, various problems started to show up and worsen in Singapore.  I posted my observations and thinking on what was going on in this country. The most serious problem I thought had to be addressed was the widening income gap, We had people so old and poor they had to collect cardboard boxes and did the trash for aluminium cans for a living at the same time we were creating the most millionaires per capita in the world. I was quite surprised after the 2006 elections, the PAP govt just went on in the same direction - increasing the foreign influx, raising the GST, opening casinos, raising bus fares etc. The rising cost of living eventually started to hurt the middle class in the form of higher cost of housing, cars and medical care. The PAP govt embraced free market capitalism with GDP growth as its primary goal. We as citizens were supposed to accept the consequences of its policies because they think higher GDP always result in overall good for the citizens. However, wealth created has been not been distributed to the majority of Singaporeans and concentrated in the top few % of the populace.

Other govts in developed countries have always intervened to bring about greater equality with social safety nets, universal healthcare, minimum wage etc. The PAP's political solution to falling support for its policies has been to erect barriers of entry to its opponents. In the past they jailed, sued and bankrupted their opponents. They tweaked the system with GRCs and linking vote to upgrading. They control the mass media to influence the publc. When you put all this together, you get a govt that retain its dominant power without having to address the most pressing problems faced by the citizens. Many people who don't like the PAP policies vote for them because of upgrading. These barriers to keep the opposition out of parliament also causes frustration among the people to rise.

The opposition has put up a strong spirited fight this time. The % of votes is expected to swing in their favor even as the PAP dangle billions of upgrading carrots to entice voters. However, with the GRC system in place we do not know if the rise in support will translate to (non-NCMP) seats in parliament. I worry for Singapore and Singaporeans if it does not. The PAP has selected "next generation"  leaders who look like they will simply preserve the status quo and without a strong opposition voice in parliament and willingness of voters to overcome the barriers of upgrading and GRCs, the PAP will not be motivated to make the necessary changes that will bring about a better quality of life for Singaporeans.

We will only know on 8 May 2011 if change will come to Singapore. We can only hope for the best. See you then.

Thursday, May 05, 2011

A Tribute To The Opposition

A week ago, a group of courageous Singaporeans began a campaign to win the hearts and minds of their fellow citizens. They have limited resources but are driven by conviction, passion and a desire to do what is right for Singaporeans. They echoed how we feel in their speeches. They inspired us with a vision for a better tomorrow. They fought the best fight they could with what little resources they had to give us a chance to bring about change in Singapore.

After 45 years, this country has reached a cross-road, these men and women have done all they can against great obstacles to create an alternative path that leads to a better future. It is now up to us which path we choose to take....

CNBC : Singapore's Fast Growth Creating Rich-Poor Divide?

This article from CNBC is worth a read. It describes the trade-off between Singapore's pursuit of GDP growth and the income gap. People are poor and struggling not because of globalisation or their lack of willingness to work hard - people are suffering because we have a govt that puts GDP growth above other things like quality of life and social equity. I have hightlighted the more interesting parts.
Singapore's Fast Growth Creating Rich-Poor Divide?

Published: Wednesday, 4 May 2011
9:53 PM ET Text Size By: Jenny Chan Vheng Yern

CNBC Asia Pacific

Liyana Dhamirah, 24, her husband Fazli bin Mohd Jailani, 31, and their three young children lived in a tent on the beach in Singapore for four months in 2009 when their Housing Development Board flat was repossessed as they were unable to service their mortgage loan.
Household incomes in Singapore have grown only 21% in the past decade, compared to real GDP growth of 72% in the same period.

The Singapore government provides subsidized housing via the Board to its citizens. Liyana and Fazli now share a rented flat with another family.

"It's unfair. I'm a Singaporean, yet I'm not benefiting at all from how rich Singapore has become."

Liyana and Fazli earn a combined S$800 ($652) a month but have been unable to make ends meet. "Sometimes I can't even afford a S$1 ($0.80) ice cream cone for my kids," says Fazli, a former mechanic apprentice, who is now unemployed and depends on the income from his wife's online handmade trinkets business.

Singapore, which goes to the polls on Saturday, reported sterling growth in the first quarter of this year. The economy expanded 23.5 percent quarter on quarter and 8.5 percent over the previous year. This was on the back of an unprecedented growth of almost 15 percent in 2010.

But not everyone in this island nation of 5 million people is celebrating. Irvin Seah, an economist at Singapore bank DBS says, "Plainly, not everyone has benefited equally from the economic growth that has occurred over the past decade."

Median household incomes have grown only 21 percent in the past decade, compared to real GDP growth of 72 percent in the same period, according to government statistics.

In 2010 when GDP expanded by 14.5 percent, household incomes rose on average just 0.3 percent after adjusting for inflation.

"In any capitalist society where profit maximization is key, this gap will widen unless we get heavy government intervention.”  - Song Seng Wun Economist, CIMB-GK Researcg

Take the case of Rokiah Ahmad, 46, a librarian at the Singapore Department of Statistics. Her salary was S$1,500 ($1,222) per month 10 years ago, and after a decade of small increments, it's now S$1,700 ($1,385) a month.
"It's not enough to raise three daughters and one son. We have financial difficulties."

Chow Penn Nee, an economist at United Overseas Bank says, "Wage growth is clearly not keeping up with GDP growth and the divide between the rich and the poor is getting bigger."

Asked for the government's response, Singapore's Minister for Manpower, Gan Kim Yong said income growth cannot be equated with GDP growth, "as the former is also influenced by other demand and supply factors."

The opposition Workers' Party candidate, Chen Show Mao, who was a corporate lawyer before he joined the largest opposition party in Singapore, said during the party's election rally that the benefit of Singapore's economic growth "went to corporate profits and the wages of top earners".

Government data showed that last year the bottom 10 percent of the population had a household monthly income of S$1,400 ($1,141) compared with S$23,684 ($19,308) for households in the top 10 percent.

Singapore has the highest concentration of millionaires in the world. According to the Boston Consulting Group's Global Wealth 2010 Report, 11.4 percent of Singapore’s population is millionaires.

Prime Minster and the Secretary General of the People's Action Party, Lee Hsien Loong, leads a cheer together with the party members during a rally on May 3, 2011 in Singapore.
And it has the second highest income gap among 42 nations “with very highuman development,” according to the United Nations. Singapore's Gini coefficient, a measure of income inequality where zero is complete equality and one maximum inequality, was 0.472 in 2010.

CIMB-GK Research economist Song Seng Wun believes that growth itself partly explains the widening income gap. "In any capitalist society where profit maximization is key, this gap will widen unless we get heavy government intervention."

According to Leif Eskesen, HSBC's chief economist for India & ASEAN, some inequality is integral to the effective functioning of a market economy, "but too much inequality could also hurt growth."

When contacted, Singapore's Ministry of Finance cited the recent budget in which the government promised to raise the productivity of Singaporeans via training and other benefits.

In its budget in February, the government handed out one-time benefits valued at S$3.2 billion ($2.6 billion) targeting lower-income citizens. The ruling People's Action Party has also promised larger bursaries and grants in its manifesto.

OSK-DMG economist Enrico Tanuwidjaja says these handouts can only cushion the impact of inflation temporarily since they are one-offs. “Purchasing power actually stays the same.”

Liyana and Fazli say since 90 percent of their wages are used to pay bills, the extra money ensures that they don't fall behind in arrears too much. "It's only enough for survival."

Current DateTime: 06:45:39 04 May 2011

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