Monday, November 21, 2011

DPM Tharman : Slowdown will test leadership....

First I would like to show this short video from 2006:

Our ex-MM Lee tried to explain to MP Low why being in a "Europe situation" is highly advantageous and being surround by the type of neighbors we have our situation is a lot more difficult. Well, look at Europe now and the sa-called "European situation". I didn't dig out the video to show ex-MM's comprehension of the world   but to show how uncertain the world is even for someone as wise as Lee Kuan Yew. How can ordinary Singaporeans prepare and become completely resilient in such an uncertain world with their limited resources? Anyway, the leaders in Europe are not asking for more pay because they are solving bigger and more intractable problems - in fact the situation today requires them to cut their pay to elevate the declining morale and earn the trust of their citizens. 5 govts in Europe have been replaced in the past few weeks so it is not easy to be the leader of a European country.

Well I guess Minister Tharman has a clearer assessment of the current situation given he is in the IMF and has access to data not available to analysts and commentators. IMF conducts audits on European countries that it bails out so they have the "real" picture. DPM Tharman tells us the situation can get quite bleak:

"We have to prepare for the possibility, the very real possibility, of rough
times ahead, a severe slowdown in the global economy," - DPM Tharman[

Tough times are nothing new these days. In the last 12 years we have had 3 recessions and 2 major crisis. The one that is happening now will the the 3rd  crisis and the impending recession will be the 4th. As we go through one recession after another and one crisis after another, the underlying situation for ordinary Singaporean families is not the same. We are entering each recession with bigger income inequality than the last one. We are going into each recession with more people at the borderline of poverty than the last recession and higher cost of living - medical care & housing costs.

""That has been the way we have dealt with past crises, not become all defensive, not retreat, but use the crisis as an opportunity to build up skills and build up competitiveness."- DPM Tharman

Each crisis should seen as an opportunity. However, these crisis are occurring at a higher frequency than ever before and the ordinary Singaporean is put in a highly unstable situation sometimes unable the build up his financial defenses given how fast things turnaround. For a large number of Singaporeans, they may be trained in sectors that go into secular downturns and slumps. It is easy to just say retrain yourself for another sector but much of the job experience is no longer applicable and workers have to start over. You superimpose this situation onto what we the system we have for  housing, transport, healthcare and retirement, yuo can see why worries have started spreading to the middleclass. Even before our next recesssion, the bottom has already fallen out for the lower income group. This issue was discussed in today's mult-page feature in the Sunday Times describing how bleak the situation for those belonging to the bottom 30%. The cost of living incease has simply pushed many of these Singaporeans to a level where they are struggling to make ends meet and keeping their heads above wate - how is this different from living in a third world country?

The fear now is spreading to the middle class who are starting to experience the instability and insecurities that previously affected poorer Singaporeans. With the increase in healthcare costs and housing outstripping middle income growth and middle class comforts like a family car moving up the classes and out of their reach, the middle class is sliding down and falling towards a quality of life that the poorer classes are experiencing. A few days ago, it was reported that the best selling car in Singapoe is the BMW - with more people and fewer COEs, the quota now goes up to richer classes where wealth in concentrated. The COE goes not to the middleclass father who has to send his children to school and his wife to work but to the teenage child of one of our multimillionaires - a mismatch of needs so common in a society where the wealth distribution has become the most unequal in the developed world.

Minister Tharman says the challenge is for Singapore to bounce back from the slowdown. But Singapore recovers when the global economic demand picks up and the usual influx of foreigners will always boost GDP artificially. The real challenge is to contain the income inequality and poverty that expands after every recession. There is a growing number of families that are taken down after every recession and never make their way back when the economy recovers. There economic sectors that decline and don't recover when the economy recovers. Many will face a permanent loss of income and degradation in quality of life. While Singaporeans are told to be resilient, many of them are suffer from the consequences govt economic policies to always grow the GDP as fast as possible - sometimes shifts to industries that no longer require their skills but that of foreigners. While it often ideologically argued that any aid to Singaporeans in the form of subsidies and direct help should be avoided, the expanding inequality and rising poverty makes it unavoidable. Workfare, for example, is necessary in recent years because many low income Singaporeans work full time jobs but cannot make ends meet. We are not talking about a small number here but 400,000 Singaporean workers[Link] who cannot keep their heads above water. But for every Singaporean that has sunk below the poverty line, there are many heading down from the ranks of the mddleclass that will thin out as income inequality expands.

The real leadership test is not whether we can recover when the global economy recovers but whether the leadership is able to solve the real problems faced by Singaporeans. GDP growth is starting to mean very little to Singaporeans, if anything, more people are become very wary what is traded away to achieve this growth. We need leadership to think hard what was the purpose of having GDP growth in the first place - ultimately it is to better the lives of ordinary Singaporeans. But the high growth of past decade came a double digit rise in the cost of housing and medical care that outstripped the rise in income of most Singaporeans. The wealth creation was highly concentrated in the top 5-10% of the populace with the rest of Singaporeans sufferring from effects of high income inequality. For the ordinary Singaporean, what is the purpose of growth when it does not narrow the income gap and grow their income at a fast enough to make housing, medical care and transport more affordable? The frustration with the PAP in the 2011 elections showed up after the economy rebounded from the financial crisis when people realised they did not benefit much and many saw a marked deterioration in their quality of life.

Make housing affordable, make medical care truly universal, narrow the income gap and provide safety nets.  The basic 1st world safety nets of good universal healthcare, unemployment insurance, affordable public housing and transport, aid for poor, sick, elderly and disabled....are the real benefits of becoming a 1st world nation. We arrived in the 1st world with a 3rd world wage structure and many did not benefit from the economic growth of the past 2 decades. With or without a slowdown, the leadership of this country faces a test whether they fix the imbalance in our economy and the real problems faced by Singaporeans today.


Anonymous said...

"Make housing affordable, make medical care truly universal, narrow the income gap and provide safety nets."
Lucky Tan

If I were the PAP, why should I?

It's not as if PAP will lose its 2/3 majority or voted out in elections if they don't do that.

And far from it, despite all the bad things Lucky Tan pointed out.

Of course, publicly cannot say like that lah, so must say nice things mah.

Anonymous said...
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Veritas said...

"Make housing affordable, make medical care truly universal, narrow the income gap and provide safety nets."

I estimated that by early 80s, we already have saved enough to have free healthcare (housing was cheap then), and put woman back home to have babies.

Instead LKY went the other way, makings everythings more ex for us and vacuum all our monies into -- GIC and Temasek.

Many of GIC savings were in terms of US treasury which everyone knows US will default either directly or inflation.

Others are being thrown into the shit bowl, only to give Ho Ching, and guys in GIC like Tony Tan, LKY, Ng Kok Song bouts of ecstasy in gambling in Wall Street.

LKY is a fucking idiot.

Veritas said...

Other than letting us enjoy or savings, LKY and his pigs has squandered them.

We do not need that much reserve, because ultimately, those FX reserve denominated in USD is going to be worthless.

Instead, LKY import more FT to earn reserve.

For the past 30 years, LKY has already destroyed Singapore. The only way to bail us out is to destroy PAP.

Anonymous said...

We are a first world country run by 3rd world gahmen, paid first world pay, but produces 3rd world policies, who treats its citizens as 3rd class ppl and welcome 3rd world foreign workers as 1st world talents. Uniquely SG

Anonymous said...

anon 9:48,

Just to add to that our leaders believe our future lies with importing masses from 3rd world countries like Philipines, China and India...and that is supposed to be the best way to retain our 1st world status.

hyom said...
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hyom said...

Hi Lucky,

While you have pointed out the importance of solving the income-inequality issues, there are internal barriers to get this done.

The incentive structure may not be right for our policy-makers to solve this problem. To ease the income-inequality problem, the easiest is by raising taxes on those who already have more than enough and transfer to those who do not even have enough to meet their basic needs.

Our senior policy-makers belong to the upper income tax brackets. Asking the senior policy-makers to raise taxes on the upper-income is like asking them to rob themselves to give to the poor. Given human nature, I doubt this can happen unless it comes from the very top. Given human nature, what has happened is a tilt towards consumption tax(GST) which cuts taxes for the upper-income(a group whom our senior policy-makers belong). Given that the poor spends a higher proportion of their income on unavoidable expenses for basic needs, the burden of taxes is disproportionately transferred to the poor from GST. Give human nature and high intelligence, policy-makers will write eloquent papers on the rationale behind GST, why it is good for the economy and people but remain silent about their hidden agenda of lowering their own taxes. Some may not even realize their own internal biases and succeed in deceiving themselves. Such self-rationalisation is a common problem among intelligent people.

Having said the above, there is nothing evil about such behavior. Chances are that I would have behaved in the same way if I were in their shoes. It is just human nature.

Anonymous said...

"The COE goes not to the middleclass father who has to send his children to school and his wife to work but to the teenage child of one of our multimillionaires - a mismatch of needs so common in a society where the wealth distribution has become the most unequal in the developed world."

You also forgot that the COE should also goto the business that we depend on, eg hawkers, school buses, supermarkets etc. A squeeze in COE will cause these business costs to go up

Clear eyed said...

The deaf frogs ensconced in our Cabinet and Parliament are too well-fed and drowsy to know what is happening outside their super comfortable world. They are the last people we should look to, to lead us recession or no recession. We need to kick them out and let leaner, hungrier, cheaper, more competent leaders who have their heart in the right place to reclaim our country for us.

Anonymous said...

Singaporeans will get to know why there is free flowing in of immigrants as the World Economy goes down.
These immigrants are the very people that will keep Singapore afloat!

Without them Singapore will sink without tsunami or flood.

Anonymous said...

The 'cheaper, fasterer, betterer ' MP has already announced more workers layoff is expected. The reality we can all wait to see if whether Tan Chuan Jin 'guideline' for 'no place for workplace discrimination' will be enforced. Let's see if this will be another familiar rounds of 'singaporeans first' when it comes to Victims.

All I can say now is this - Thankful that we have voted in 6 Opposition MPs (still not enough in my view) who hopefully will be speaking out for the unfortunate and affected lot. Imagine if there were only 2 like before.

Anonymous said...

Apart from bankers and bank managements - protected species - who screwed the working class twice (1998 and 2008)and got away scot-free, in fact the real middle class died after and since the first Gulf War 1990/91. They've been a disenfranchised lot for 20 years. The Spore majority has only been caught up in this great divergence, in last decade.

Anonymous said...

Will LSS be saying "cheaper, better and faster" again? What will he be saying this time round? As a chief of Labour Union, he is bloody useless!

Anonymous said...

I am quite sure a very high proportion of Rochor Centre residents voted PAP in GE2011 as they fit very well PAP's power base profile of very daft Sinkies. Continue voting PAP and you will be evicted not only for a highway, and they can ensure you of a retirement in JB to enjoy affordable housing, healthcare and generally a lower cost of living, after the next recession of course.


Veritas said...

I am quite sure a very high proportion of Rochor Centre residents voted PAP in GE2011

If we never import so much FT, our population will probably be around 2.9-3.5 million. We do not need so much road.

PAP take over the whole massive estate just because a narrow stretch of road run through it. In short, lots of land acquired will not be use for building roads.

After the road is completed, I bet PAP will sell the acquired land at a profit to developer. Rochor Singaporeans get screwed.

PAP rob their $.

Anonymous said...

The bankers, property developers and politicians are the biggest cons of this era. There are many things the gov can do to make singapore better for singaporeans.

however, they are making malaysians better. malaysians can sell up sg assets during good times and live in my and buy sg assets cheaply during bad times and make tons of profit doing that without paying tax.

NS men are the most poor treated subjects. They are trained to protect a country and assets belonging mostly to foreigners with little pay and high risks especially commandos who are usually born and breed sg.

Anonymous said...

With regards to the video shown, if I were Mr Low, I would have requested for WKS to step down as the Minister for Home Affairs. Reason being that the prisoner that escaped is not any "tom, dick or harry" but MAS SELAMAT, probably our top terrorist ever in the short history of our country! They wanted to bomb the surroundings of Yishun MRT station, if you recall.

The ministers should be accountable since they draw top pay. Why not keep the high pay, but make sure that ALL talented people can apply for high ranking government positions instead of only people from the PAP. In the US, the President is elected by the people, and he chooses his own cabinet from both the public AND private sector. This ensures quality of the cabinet but in the event that someone screws up badly, he can be replaced. With so many big MNCs operating in Singapore, surely there are enough talented Singaporeans in the private sector nowadays.

Anonymous said...

The PAP government does not respect Singaporeans. Neither does it like or even care for fellow Singaporeans.
We are just economic digits to them.

So why would PAP want to help alleviate the sufferings of fellow Singaporeans?

We need a strong Opposition to protect us from an uncaring PAP government.

DanielXX said...

It is very clear to the common man that the key KPI for our garment should be median per capita income (even if they don't understand the technical terms). I cannot understand why our garment fails to define that as their key objective.

hyom said...
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hyom said...

"the key KPI for our garment should be median per capita income"

Hi DanielXX,

I cannot help but agree. The salaries of our policy-makers should be pegged to a high multiple of the median income. I think they should be well-paid but not to the extent that respect is lost to the people.

The present scheme which pegs their salaries to the highest-paid individuals of the country means that they have internal biases to design policies that favour the rich. Hence, there are biases to support GST, lower income taxes for the rich which eventually lead to more income inequality.

The problem with this bad incentive structure is that even if you put men of integrity in our civil service, it is still doubtful if they can overcome their own biases to work objectively for the good of the people. Hence, the people get the impression that the ruling elite is self-serving and out of touch when the real problem comes from the bad incentive structure. What do you expect when the system rewards people to behave against your interest? Even good people become bad. The interests of the people and the ruling elite are not aligned with the present salary scheme.

By the way, DanielXX, why aren't you blogging anymore? I miss your writings.

Anonymous said...

We need more opposition.
We need more opposition.

WHY NOT we need more sinkies
to wake up to reality and to
realize that they have to act
before it is too late.

Anonymous said...

Proverbs 16:19

19 It is better to be of a lowly spirit with the poor than to divide the spoil with the proud.

DanielXX said...

to hyom,
No stick and an oversized carrot makes Jack a lazy and misdirected ass.

Cracks are showing and really smart people would rather join the opposition to make a difference. This is the situation with Singapore today. We are definitely not corrupt. However, we definitely lack bright sparks in every department as well. We need some real entrepreneurs who can craft things out of nothing, people like Tony Fernandes, Ananda Krishnan, Syed Mokhtar.

Frankly I have more optimism for our neighbours up north than ourselves. We seem to have lost the spark of yesteryear.

Anonymous said...

There is one thing that can help Singapore citizens in this recession is to tighten the quota for foreigners to come here for all kinds of work passes, including employment passes and the quota must be based on dependency of Singapore citizens only, excluding permanent residents as permanent residents are foreigners.

This is only a wishful thinking, never will we ever see this happening.

A worse scenario will be the floodgate will be torn down and any foreigners will be rushing here at the peak of the recession.
The frightening end result is the arrival of tsunami of foreigners who will inflict more pain to Singapore citizens than the recession.

Anonymous said...

"Each crisis should seen as an opportunity. However, these crisis are occurring at a higher frequency than ever before and the ordinary Singaporean is put in a highly unstable situation sometimes unable the build up his financial defenses given how fast things turnaround."

This is a keen insight.

I would like to add that the real battle is not convincing the male Singaporean voters. It is the female voters that we need to persuade as most are voting apathetically.

It would do everyone good to study the profile of the female Singaporean voter.

Anonymous said...

Anon 9:48,

You really say it like it is. Unbelievable!

My take is that the real agenda of the incumbent is to make the Singaporean soft so that they won't be able to punch above their belts at their greedy masters.

All policies are orchestrated to make the Singaporean financially weak and thereon politically weak so that they can retain their power.

They are megalomaniacs. They have established themselves financially and have been short-changing the SIngaporeans for the past 3 terms they have been in parliament.

The first order of business is to get their HDB policies right. Many can't afford to pay the half-a million dollar pigeon holes for 30 years now.

How is the young ever to reproduce? Singaporeans are saying to one another that they can't do a second child as the cost of living is too expensive. Is it because the Singaporean is not working hard enough or do we have an ineefective and complacent government these last 15 years?

THey build 2 gambling centres in this tiny island, mind you.

Will the true Singaporean plesae stand up?

There are so many fucking pinoys, PRCs, Burmese, Indonesians and India Indians in this country that SIngaporeans themselves have to ask each other: "Are you a Singaporean?" first before they begin a conversation.

Will the real SIngaporean please stand up?

1000 Singaporeans revoke their citizenship here each month.

Anonymous said...

The Incumbent President in Sin had said that he foresee the World will be in some economic chaos. Singaporeans were assured that he had the financial acuity and expertise to assist the country and the people to overcome problems arising from global financial turbulence.

Our Sin Finance Minister is another expert at money and has a seat at IMF, he too had said that Sin had learnt much from each crisis and turned out BETTER each time.

Our sweet saying Union Minister Lim Sweet Say is even better in money matters. He could 'upturn' economic downturn and with his command over all the Unionized Workers, me have faith in his claim.



Anonymous said...

"Having said the above, there is nothing evil about such behavior. Chances are that I would have behaved in the same way if I were in their shoes. It is just human nature."

Really? Is it human nature for Buddha to help the people?

Or has it something to do with the quality of our leadership?

Is human nature completely greedy? Or are our leaders incompetent?

Or is because our leaders have spent so much time with the filthy rich businessmen and seen the crazy bonuses that Wall Street investors earn; that haveing been in these environment for such a long period of time coupled with lording over Singaporeans for nearly half a century has led to these traits of kiasuism and greediness in them being developed over time?

Singapore a first world is like saying SIngapore is a democracy or the PAP has the Singaporean at heart.

Come on lah! THey know, you know and I know. DOn't pretend lah.

Anonymous said...

Have you ever wonder with so many foreigners on this island (36%), what would be the state of affairs when there is a recession here? There will be more crimes and social disharmony.

Anonymous said...

I am an average Singaporean.

What does "median per capita income" means?

Thank you.

Anonymous said...

Anon 21/11/11 18:31: "We need a strong Opposition to protect us from an uncaring PAP government."

We do not need a strong Opposition to protect you for an uncaring PAP government. But, you need to change the government to one that will care for you. Who did you vote for in the recent GE2011?

Anonymous said...

Anon 21/11/11 19:53: "We need more opposition.
We need more opposition."

You do not need more opposition. But, you need a new government with strong opposition (perhaps MIWs as opposition). Real change is required. Leopard will never change its spots. The history told you only change like revolution can really change the system. The system will never change by itself.

You ask for more oppositions. I guess you are one of those who actually voted for PAP in GE2011. If you did, then good luck to you and please do not make noise. If you did not, you belongs to the group of political immature Sinkie. So, who did you vote for in GE2011? Why do you believe more oppositions (how many more?) will make PAP a better government? Continue to dream please.

Anonymous said...


Anonymous said...

Marney marney marney, always sarney,
In the reech man's werl...

Anonymous said...


I read this post 2 times. It is very useful.

Pls try to keep posting.

Let me show other source that may be good for community.

Source: Safety KPIs

Best regards