If you want to throw a spanner to this whole review, the question to ask is why we can't peg the pay of our political leaders to those of political leaders in other countries instead of the highest paid members of our society. Before you start asking the hard questions, I suggest you listen to Gerald Ee's explanation on how he and his team came up with the new pay structure. I think we should all thank Gerald Ee for taking up this unenviable task. Remember this is the same feller who was called up to take sort out the mess at the NKF. We have all done our national service but Gerald Ee has to do extended national service many times. A review like this will not yield recommendations that will satisfy everyone and exposes Gerald Ee and his team to criticism. How much we should pay a person in the absence of a free market mechanism for political leadership is highly subjective and depend very much on your own value system. Ultimately, the system has to work effectively to attract good honest people who will can secure future progress for Singapore to enhance the citizens' quality of life. Progress means different things to different people and finding a set of perforamnce measures that is widely acceptable is not so easy. You can design a pay structure that looks fair and later on find out you cannot get good political talent.
What I want to do in this posting is not to go through all the findings of Gerald Ee's team but to look at the larger system in place. Why do we have to pay so much more to get good leaders? Are our leaders so much better? What is so unique about our system that leads to the current situation? Why are there so many SAF generals and rear admirals in the cabinet?
"When I made the decision to join politics in 2006, pay was not a key factor. Loss of privacy, public scrutiny on myself and my family and loss of personal time were. The disruption to my career was also an important consideration. I had some ground to believe that my family would not suffer a drastic change in the standard of living even though I experienced a drop in my income. So it is with this recent pay cut. If the balance is tilted further in the future, it will make it harder for any one considering political office" - Grace Fu on her Facebook
Grace Fu now says she was "mis-understood" but what she said is no different from what the PAP has told us in the past and what it believed or used to believe. One just has to look up old youtube videos on the ministerial pay debate [Link]to see that she is fully consistent.
How did we end up with such high pay for political office holders? The story begins many years ago.....
The war for talent which people talk in recent years began in very early in Singapore. The PAP govt strongly believed in good leadership which in itself was not a bad thing. However, it also had this highly elitist belief that ordinary Singaporeans will go nowhere without the PAP and this belief amplified the importance of leadership over the contributions of ordinary citizens. While good leadership is important, believing that success is primarily or solely due this leadership is another matter. Today all East Asian countries have succeeded under various styles of leadership even thriving under bad leadership for certain periods - one just have to look at Taiwan, S. Korea, Hong Kong, Japan etc. This "without the PAP, Singapore would have failed" belief drives Singapore's early war for talent. To capture the best talents, the PAP govt expanded the scholarship scheme to harness talent signing up the best "A" level students - not just the president and SAF scholarships but a long list of scholarships from PSC, various GLCs and stat boards. 30 years ago, ordinary Singaporeans couldn't afford to send their children overseas and these scholarships were the only way to get an education at top overseas universities. You take a quick look at the ministers who were scholars, top civil servants....even Straits Times reporters like Chua Mui Hoong, former Straits Times editor Han Fook Kwang, ...even the opposition now has ex-govt scholars ... Tan Jee Say, Hazel Poa, Benjamin Pwee. This system was already extensive decades ago but when Singapore became more affluent, the PAP govt expanded the war on talent by giving scholarship to foreigners. It even had civil servants going to China to get the best students to come here. With so much emphasis on getting top talent, getting the best, nurturing them and allocating resources and opportunity to selected talents, you would think that Singapore would be running circles around our competitors - but we have not, we grow by importing labor, having casinos ....our productivity has been falling , we appear to be less innovative than most developed countries, we seem to have fewer home grown industries per capita than our competitors.....what has gone wrong?
Along side this "talent war" was the growth of an extensive network of GLCs that own businesses ranging from supermarkets to transport services. Think about where you buy your groceries, where you do your banking, who owns the shopping mall next to your home, who owns the airline you take to go overseas, ...the taxi you take to the airport, the newspaper you read, the cable service you subscribe to, your telephone service, your power supply, your gas, your water supply....and so on. If you tabulate your family expenses, you will find the amount that goes to these companies is not small because the GLCs form a large part of our economy and many are monopolistic rent-earning businesses with little competition and/or had benefited from access to vast state resources. These GLCs crowds out local private enterprises and cut off market-based paths of upward social mobility.
There is spectacular social mobility for our elites in this system:
"My mom is a machine operator" - Chan Chun Sing., 1988
Minister Chan's humble background probably account for his folksy ("kee chiu") style. Recently, the Straits Times featured him as one of those with the potential to be our next Prime Minister[Faces of 2012: Chan Chun Sing - Next PM?]. There are many examples of such cases of social mobility among the selected elites. Their own success reinforces their belief that the "meritocratic" system and PAP ideology is the best for Singapore. That is why the PAP recruits from this power-elite structure - this is where they find people loyal to their system. If you look through the list of ministers, most, if not all, are recruited from GLCs, SAF, stat boards or the civil service. The reason why they have to be so highly paid is there are many opportunities in the network that are more financial rewarding and possibly more "cushy" than political appointments. For instance, Chan's fellow general in the SAF, Ng Yat Chung, transited to a newly created Temasek Holdings position ("portfolio management managing director") and he will leave Temasek this year to take up a CEO position at another GLC, NOL. Yes, our SAF generals are highly capable and can move one industry to another easily without any prior experience. So one cannot fault Chan Chun Sing for feeling he is making a sacrifice when he takes up a political position as minister of MCYS putting himself under the scrutiny of the public. Similarly, PM Lee has had a much tougher job than his brother, a former SAF scholar-general who became the CEO of SingTel. I'm sure many ex-SAF generals would rather take up a post in Singapore Power, ST Electronics or one of the many GLCs than be in poltics.
Cutting the high pay to "less high" is necessary to placate an increasingly angry public. The anger is at a level that hinders the PAP govt ability to lead. However, reviewing the high pay without looking at the whole system that drives the demand for high pay misses the big elephant in the room. Although it is always true that good leadership can elevate a country and make life better for everyone, the PAP has pushed the idea of grooming and nurturing selected talent to a detrimental extreme. Allocating disproportionate state resources and opportunities to a group of selected elites puts them on a virtuous cycle of upward social mobility at the expense of everyone else in the society. The close link between the ruling party and this network of businesses that form our GLCs and the PAP's links to the civil service & SAF has resulted in interests that diverged from those of ordinary Singaporeans. That our political leaders' salaries are not peg similarly to the political leaders of other developed countries, is the result of this skewed system... the basic architecture of which has to changed for Singapore to progress. For those who still argue that this system is good for everyone, the decades of talent war and talent grooming of scholar-elite should have elevated the quality of life of ordinary Singaporeans to superior levels not seen anywhere else in the world since no other country practises this extreme form of elitism....but that has not happened and for many ordinary Singaporeans quality of life has fallen. Today we see the best quality of life for ordinary people in egalitarian societies such as Finland which is also the most competitive economy in the world[Egalitarian Finland most competitive, too]....over there, the govt does the opposite and allocates the most resources to the weakest members of society to build a cohesive society the strength of which is the ability to compete as a team. Singapore has to find a new system structure for future success because we are starting to see the cracks in the current system and outcomes that are increasingly unacceptable to a growing number of ordinary Singaporeans.