Saturday, April 28, 2012

Plight of 60 Immoral Men Part 2...

In an earlier posting [Plight of 60 immoral men], I discussed the  case involving an underage sex worker and 60 men who would be charged in court. The names of 48 of them have since been revealed and 2 have pleaded guilty. None of these men work looking for sex with a minor as she was advertised by the pimp to be 19 years old  It looks like a case of bad luck more than anything else - had they chosen another girl, they wouldn't be in this predicament.

"The girl lacked maturity and was entitled to legal protection, .... Any "presumed willingness" on her part had no mitigating value"  - Senior District Judge See Kee Oon


Former principal Lee has been sentenced to 9 weeks jail. During his sentencing, the judge said the behavior of the girl and her "presumed willingness" does not matter. This is very interesting. In the application of a law that is intended to protect victims of exploitation, it does not matter if girl is exploited or a willing party that benefited from the transaction.Looks like defense counsel Subhas Anandan's  'a hardcore prostitute' defense might not be enough to get his clients off the hook with this judge.  It was also reported that the girl was 6 months shy of her 18th birthday - 6 months later she did not need protection....a real befuddling technicality. 18 is just an arbitrary age set by law makers in parliament but the law is applied mechanically

I looked around to check versions of similar laws in other countries. In a case involving French footballers, the police dropped the case when they were satisfied the men did not know the girl was underage[French prosecutors accept that Ribery did not know prostitute was a minor].  California allows the following defense:


"You honestly and reasonably believed that the alleged victim was over 18


If you honestly and reasonably believed that the all
eged victim was over 18 at the time you had sex, you can't be convicted under California statutory rape law.14 The types of evidence that can support your claim could include, for example:
  • statements made by the alleged victim that he/she was over the age of 18,


  • his/her attire and general appearance, and


  • where you met the alleged victim (at an adult party or venue, for example." [Link]

Allowing such a defense may lead to fairer outcomes.

The judge insisted that  the onus is on the man to check:


" Given the circumstances, Lee's suspicion ought to have been aroused and he should have asked for proof of her age, the judge said. "Had she refused to show identification, he should have walked away".....

Most sex workers will never show their identity cards or passport to a customer because they don't know who the customer is and are afraid of blackmail or harassment later on - for this reason, working girls don't use their real names. The judge expects men to walk off should the sex worker refuse to show their identity card. I wonder how practical it is given that these men are already overcome by lust and have gone all the way to meet the woman at the hotel room....the judge expects them to "walk away".

At the end of the day what these men have done is morally incorrect. However, there are many men who commit adultery and part-take in worse forms of immorality - the law does not go after them....this piece of law is not intended to go after men for their immorality but set out to protect the vulnerable. These men have their lives, families and careers crushed to protect someone who may not need protection. They had no intention to break the law, didn't know they broke the law and following the law would have required them to do something that is impractical and unnatural  - so how many men asked the 17 year old for her IC and walked out when she refused to show it?

There are some who always enjoy watching the rich and successful fall, shamed and exposed But they deserve to be treated fairly like every other Singaporean even when they have done something wrong.

Friday, April 27, 2012

Excessive executive compensation hurts competitiveness

When it comes to making the economy more competitive, the PAP govt always focuses on workers becoming more productive - be better, cheaper and faster. They never ever bring up making rentals, govt fees, utilities and transport cheaper. What about making housing cheaper so that our workers are better able to compete? The burden of Singapore's competitiveness seems to always rest on the shoulders of workers especially the lower paid workers.

The article below discusses how the bonus culture among top executives can ruin an economy according to a report by the British govt.

"The New Few: Or a Very British
Oligarchy," looks at how power and wealth in the UK has been concentrating in
the hands of a small elite while the rest of the country struggles
." - from article below.


UK is a much more equal society than ours if you look at the income distribution - power and wealth here is so much more concentrated and we have a more deeply entrenched power-elite without a fully democratic system.

We can be more competitive as a country if we eliminate excessive compensation among top executives and properly structure our wages so that those at the lower echelons are properly rewarded and motivated for their work.

"According to Smithers, the change
in corporate behavior due to the bonus culture has been "a major case of
increasing disparity of incomes in the UK and US" which have seen "a large rise
in the incomes of the highly paid at the expense of the rest."

"Indeed, a bias to focus only on the external market in recent years has helped push executive compensation way out of whack. Because of the yawning gap between the leaders and the led, employee morale is suffering, talented performers' loyalty is evaporating, and  strategy and execution is suffering at American companies.

Employees really do care about this issue, and a smaller gap makes for greater solidarity, and as a result better performance, throughout the workplace."[Link]

The British govt is taking measures  to restructure bonuses and wages to narrow the wage gap to make companies more competitive. Here, our leaders insists that productivity of  lower paid workers who are already underpaid have to go up before their wages move up. Our leaders also insist on linking their pay to that of top earners and this link makes it unlikely for our leaders to make Singapore more competitive through a proper and fair wage structure.
-------------------------

Published: Friday,
27 Apr 2012 | 6:55 AM ET

By: Antonia Oprita
Deputy News Editor,
CNBC.com
Friday is a busy day for UK
executives—dubbed "oligarchs" by some critics—as the bonuses they get and their
effects on the wider economy come once again into the limelight.
On one hand, Barclays shareholders hold their annual meeting, and there are reports that
some of them may protest against pay
deals
awarded to Chief Executive Officer Bob Diamond.

<>



Barclays chairman Marcus Agius
apologized to shareholders at the meeting for badly communicating the bank's
policy on pay.

"There is a significant minority
of shareholders who feel that we got some of these judgments (on remuneration)
wrong for 2011 and that we have not sufficiently taken their views on board,"
Agius said according to Reuters.

On the other, the deadline for the
business community to submit opinions on proposals by the UK government to make
executive pay more fair expires on Friday.

That consultation process was
launched in mid-March and tries to address growing public unhappiness at the
fast growth in executive pay, with many critics saying it is not always linked
to performance and some even warning that it will harm companies' and countries'
long-term prospects.

The UK government's Department for
Business (BIS) said in a paper on executive remuneration that the median total
remuneration of FTSE100 CEOs rose from an average of 1
million pounds ($1.6 million) to 4.2 million pounds ($6.7 million) in the period
between 2008 and 2010.

"This is more than a four-fold
increase; significantly greater than the increase in the FTSE100 index, retail
prices or average pay over the same period. This comes at a time where growth is
strained across the rest of the economy," the BIS said.

Also this week, a new book about
the bonus culture in the UK hit the shelves. Written by famous novelist and
Conservative party member Ferdinand Mount, "The New Few: Or a Very British
Oligarchy," looks at how power and wealth in the UK has been concentrating in
the hands of a small elite while the rest of the country struggles.
In an editorial in daily newspaper
"Evening Standard," Mount wrote that, for 30 years after WW II, the UK had
become a more equal and open society but now "it is painfully obvious that
social mobility has slowed again and a new super-class is soaring out of
sight."

"Without knowing why or how, we
seem to have hatched our own oligarchs, and we stand aghast and bewildered at
this flock of monstrous cuckoos," Mount wrote.

Change in Corporate
Behavior

He commended the UK government's
initiative to give more control to shareholders over what bonuses are awarded,
but one analyst said the changes in policy must go much further to reverse a
harmful shift in the way companies operate.

The rise in the bonus culture,
especially in the U.S. and the UK, has led to a "marked change in corporate
behavior" that may, over the longer term, put those companies at a disadvantage
compared with peers in other countries, economist Andrew Smithers wrote in a
report headlined, "The Change in Corporate Behavior."

Not just the private sector is
likely to suffer, Smithers argues. Bonuses awarded for short-term results rather
than long-term business development measures are likely to force governments to
keep spending in order to boost their economies, as companies refrain from
making investment in order to deliver short-term returns for shareholders,
rather than investing it for long-term gain, Smithers says.

He explains that business
investment has been on a declining trend in the UK and the U.S., while profit
margins have been rising, meaning that there is a savings surplus in the
business sector that cannot be explained by the economic downturn alone.
Because the calculations behind
bonus payments depend on short-term results, there is resistance to cuts in
profit margins and to increasing investment, Smithers wrote.

"If no public pressure is exerted
to change bonus systems, large fiscal deficits will need to continue if
recession is to be avoided, at least until there is another change in corporate
culture," he said.

According to Smithers, the change
in corporate behavior due to the bonus culture has been "a major case of
increasing disparity of incomes in the UK and US" which have seen "a large rise
in the incomes of the highly paid at the expense of the rest."

Government policy should tackle
bonuses as the cause of the savings surplus in the business sector and should
set increases in output and investment among the requirements that would need to
be met for bonuses to be paid, he wrote.

UK Government's
Proposals

The UK government's proposals
advocate an annual binding vote from shareholders on future remuneration policy,
increasing the votes required on future remuneration policy, an annual advisory
vote on how remuneration policy was implemented in the previous year, and a
binding vote on exit payments over one year's base salary.

In its consultation paper, the BIS
said that those measures would give shareholders more leverage on executive pay
and would promote "a stronger, clearer link between pay and performance in order
to prevent rewards for mediocrity or failure, while still allowing for
exceptional performance to be rewarded."

Representatives of businesses have
hit back at the proposals, saying that they would put UK companies at a
disadvantage.

The Confederation of British
Industry (CBI), representing around 240,000 businesses employing around a third
of the private sector workforce, warned in a press release against what it said
was "blurring shareholder and management responsibilities on pay."

The CBI also said that claims that
there was no link between executive reward and company performance under the
current system of awards were "misleading."

The Institute of Directors—an
organization with around 38,000 members in the UK and abroad, comprising
directors from various businesses—said it was concerned about the level of
executive pay at "some of the largest UK listed companies."

"Out of control remuneration at
some FTSE companies is damaging the reputation of British business as a whole.
Giving shareholders a binding vote will help to rein in the excesses, and
restore faith among investors and the wider public," Simon Walker, director
general of the Institute of Directors, said in a statement.

However, Walker added that any new
rules should be "properly designed" and that raising the number of votes on
executive compensation beyond a simple majority is "flawed."

© 2012 CNBC.com

Wednesday, April 25, 2012

The ugly truth about TFR and foreign influx....

Yesterday we heard this argument again - if Singapore's fertility rate does not go up, we have to import more foreigners. A paper from the National Population and Talent Division, suggested that unless we get our TFR (Total Fertility Rate) up from 1.2 which is the lowest in Asia, we need an inflow of 25,000 to keep our working population stable[Immigration crucial in baby-scarce Singapore: Govt paper].

"Without immigration, the paper shows that citizen deaths will exceed births in 13 years. By 2025, the population will also start to age and shrink, with the median age being 45 - up from the current 39 years.

The citizen workforce will also start to shrink, with fewer working-age citizens supporting each elderly citizens.

Currently, there are 6.3 working-age citizens supporting each elderly citizen.

By 2030, this ratio will drop to 2.1 is to 1." - Today Report [Link]


 I haven't gone through the numbers but lets take it that it is correct and reasonable to maintain a workforce of a constant size. That is not what the PAP govt did in the last 10 years - they were not maintaining the workforce but expanding it to ramp up the GDP:

The above chart shows just the new PRs + new citizens [Link]does not include the large non-resident workforce of more than 1 million (see previous posting). Lets get this clear : the large foreign influx of the last 10 years was not about maintaining our workforce due to declining TFR but to expand the workforce - the numbers of 100,000 (2008) is just too big to justify using declining TFR.  Also, when you import an adult, you're compensating for lower TFR of 20-30 years ago when that adult should have been born in Singapore - our TFR was about 1.7 to 1.8 during that time. By expanding the workforce so rapidly in the last 10 years, we have a even bigger ageing workforce to replace in 2030 .....the PAP worsened the original problem through its liberal immigration policy now tells us that it needs to import people to fix it!

There are 3 options for a country when its TFR goes down 1. Get the TFR back up 2. Import people 3. Let the population age.

Most countries have taken option 1 and succeeded. Japan tried option 1, failed and are now at option 3. Many countries don't have the low TFR problem e.g. Malaysia, Indonesia, USA.

How did our TFR fall to the lowest or one of the lowest in the world? If you check the list of countries with lowest fertility in Wikipedia, Singapore appears near or at the bottom depending on data set[Link]. We are close to Macau and Hong Kong - 2 territories with similar combination of  traits of very high population density and high income gap - in fact if you get another list of highest population density and income gap in the developed world, you find Singapore, Macau and Hong Kong right on top.  The relationship between high population density has been found and researched [Link, Link].The PAP compounded the low fertility problem by importing more people causing the population density to increase and the HDB adds to this vicious cycle by shrinking flat sizes arguing that Singapore families are now smaller when in fact people have fewer children because they cannot afford bigger better housing.

Once the TFR falls, govts intervene to get it back up. In most cases, they are able to stabilise it to prevent it from falling further or better still get it back up.

"History shows that governments can raise birthrates close to replacement levels if they adopt the right policies. France and Sweden, for example, have crafted thoughtful, comprehensive and consistent policy responses that have largely reversed their declining birthrates over the long run."Mind the Baby Gap

However, TFR in Singapore fell and kept falling until it became the lowest in the world [CIA Factbook]. How did this happen despite PAP govt claims that it was encouraging families to have more children?

The PAP efforts to get the TFR back up is tainted by other goals. In the late 80s when the problem was detected, the PAP govt wanted to take an eugenics approach to solving this problem with the graduate parents scheme - they wanted only graduate parents in particular married graduate women to have more children[Graduate Mother's Scheme]. The scheme neglected ordinary citizens, most of whom were not graduates and the govt saw a backlash at the 1986 elections and the scheme had to be scrapped. To get the TFR back up, govts that have succeeded implemented simple and non-discriminatory schemes e.g taking care of the delivery and medical expenses for the child during the early years. Giving financial aid, say,  to families who need help to care for a child encourages more people to have children. However, these are not the type of schemes PAP implemented - the policies implemented by the PAP are highly discriminatory and tainted by other objectives.

Take the HOPE scheme as an example. It is meant to help poorer families with children's education and housing. However, families only qualify for aid if they have only one or 2 children - they get nothing if they have more children. Doesn't a family with 3 children need more help? How does denying help to families with 3 or more children lead to better outcomes for them? This help scheme is hijacked for the purpose of social engineering  to discourage certain groups from having more children. How can our TFR be raise when hundreds of thousands of families belong to these groups are discouraged from having more children? How many of you come from modest income families with more than 2 children...you wouldn't even exist if your parents went on the HOPE scheme!

Instead of simple financial incentive given to all women who have children, the govt decided to give financial incentives in the form of tax rebates - $20,000 for the 3rd & 4th child[Link]. These tax rebates have to be used within 5 years. Such financial incentives are targeted at high income families who can fully utilize the rebate because they pay higher income taxes - those earning $40K and below claim less than one tenth the rebate. Anyone with common sense knows that giving more money to those who are already highly paid and less or nothing to those who need it most is a bad incentive scheme to encourage Singaporeans to have more children. These schemes are not effective and have failed to boost our TFR.

We are in our present situation because of various policies the PAP has pursued over the years. Now they are using the current low TFR figure to justify importing more foreigners. Why not revamp the incentives scheme and encourage more women to have children by removing the discriminatory nature of the current schemes? Why not solve the housing issue and ease the burden of married Singaporeans?

The ugly truth is this ....I don't think the PAP govt cares if the workforce is largely native Singaporeans or imported. Only ordinary Singaporeans care and worry about this. For the PAP, Singapore is Singapore Inc and they take a corporatist view of things. Companies love to recruit trained personnel from other companies especially their competitors.  It is cheaper to let other countries educate their people and supply us with a workforce. The moment China opened up, the PAP leaders were eager to conduct a war for talent to bring Chinese students here. In other countries, it may be done by private companies but never at the govt level in such a big scale. Leaders of other countries, be it South Korea, Japan or Taiwan focus on developing their own people to the fullest and relying on their own people to compete globally - they may recruit a small number of special talents e.g. S. Korean national soccer team coach but it is their own people that do the heavy lifting. It is this faith leaders have in their people that  takes a country forward to achieve great things. Leaders who get into power and wished they had some other country's people will lead its own citizens from one disappointment to another.

For the PAP, it doesn't matter if this economy runs and hums with your children when they grow up or the somebody from the Philippines,  China or India. But ask yourself, if you do not defend this island and contribute to its development for your family and your children, what else is it worth doing for?

Sunday, April 22, 2012

Our income gap reflects the power distribution in our society.........

I looked around the Internet forums, blogs and spoke to a number of people about the debate surrounding the proposal by Professor Lim. Some people are angry with the responses from our ministers because when it comes paying low income workers more, they say that productivity needs to be raised, company revenues needs to go up and the economy has to be good. However, when they debated their own  ministerial pay hikes in 2006, they didn't talk about the need to increase their own productivity first - the main justification put forth by LHL was they can't recruit people if the pay is not the highest in the world. Our bus companies say they can't recruit enough bus drivers. Instead of raising the pay to a level that attracts Singaporean drivers, they go to 3rd world countries to recruit drivers. Today the pay of bus drivers in Singapore is less than half that of Taiwanese bus drivers[Link]...not just our bus drivers but our cleaners, kindergarten teachers, hawker assistants are the lowest paid in the developed world. Contrast that with the highest pay in the world we need to pay for political office holders and high ranking civil servants. Some thing has gone very wrong.....

Professor Lim, in response to criticism from ministers, said that productivity is not the issue because our workers are already underpaid for their current level of productivity.

"My position, however, is that our lowly paid workers have been underpaid by much more than 100 per cent of their pay when compared with their counterparts in countries with comparable national affluence like Hong Kong, Japan or Australia," - Professor Lim[Link]

Some are critical of PAP ministers' argument that govt shouldn't intervene in the labor market. But allowing a massive influx they have in fact intervened in the labor market and it was this intervention that brought the wages of low income earners way down:



More than 1 million non-residents added to the workforce and this number does not include the PRs and newly minted citizens. If this is not intervention, what is?

The PAP ministers also claimed that raising the wages of our low paid workers will undermine Singapore's competitiveness. This is not true. Finland, the world's most competitive economy does not use cheap labor, they have a much flatter wage distribution - you can be competitive by paying those earning low wages more and paying top executives less[India 50th, Finland most competitive nation]

How did the wage structure become so distorted? Kenneth Jeyaratnam has a very good answer - he says lets forget about "shock therapy", the answer is greater democracy[More Democracy is the solution not Shock Therapy]. A more lasting and broader solution can perhaps be achieved by distributing  power in our society more equally . I was at an SDP rally in the 2001 GE and remember Chee Soon Juan telling the audience that the increasing influx of foreign workers would depress Singaporeans' pay. At that time, I think most people didn't suspect these policies would just be expanded even as the cracks appeared and widened. Nobody had the power to stop the PAP govt and Chee, in 2001, couldn't get his important message out to a wider audience as Internet penetration was limited at that time. The unequal distribution of wealth and the income gap reflects the unequal distribution of power in our society. How do we end up paying bus drivers half the amount they pay in Taiwan? It is all about power and I will tell a short story to illustrate this.

I was in Los Angeles, California in 2000 for a short trip. I was advised to rent a car to get around because Calfornia, I was told was told "every one drives" in Calfornia. It turned out that most but not all the people drive in Los Angeles - the city has a functioning public transport system which included a small subway system and buses. Given that the majority of people there drive, the public bus system was and still is relatively small and simple[LA Metro Local]. I found out there was direct bus near the place I was staying to the place where the event I was attending was held.  I wanted to try the bus out before the actual event so shortly after I got from the airport to my hotel by taxi, I stood at the bus stop waiting for the bus. I waited for half an hour and there was no bus - not a single bus not just the service I was waiting for. It was a real disappointment. I stopped a passerby and asked him what was going on. He told me that the bus drivers were on strike and there would be no buses for a few days.

I found out from the news papers that the bus drivers were on strike because the bus company wanted to hire part time drivers who were cheaper and there was disagreement over wages. It was not a routine strike but the biggest strike in 20 years

"Los Angeles has become one of America’s most union-friendly cities in recent years, and the month-long strike by the United Transportation Union in 2000 confirmed that fact. The MTA was trying to introduce more low-paid workers into the transit system’s workforce and subcontract a number of formerly public services to private operators, and employees balked. Jesse Jackson, Jr. came into town to negotiate a settlement, which was two-sided, allowing more low-paid drivers for the MTA but increasing wages for union employees. To compensate for their lost time, the transit agency gave commuters five days of free rides following the strike’s conclusion. Photo source.."
A Short History of Recent American Transit Strikes

The bus drivers together mechanics have a union of 4400 workers. The bus company was trying to save money by bringing part-timers who were willing to work for a lower pay. California had a fairly large number of immigrants from Mexico and many of them willing to drive a bus for less than half what an American bus driver was paid. The strike lasted for 32 days before a compromise was reached - wages of bus drivers would be adjusted up for inflation and a limited number of part-timers would be allowed. Today, a bus driver in Los Angeles gets a starting pay of rought US$40K and a senior bus driver working overtime can get up to US$60K. This income is sufficient to raise a family properly and have a decent standard of living. I'm sure some of you will ask who pays for this in at the end of the day?  Since the bus company is owned by the state, money comes from taxes...where does most of this tax come from? In this case, the large number of wealthy Hollywood corporations, technology companies, wealthy individuals etc who don't take the bus! Only poor people take the bus in LA. and these commuters formed a "bus riders union" [LA Riders Union] to make sure that the govt does not neglect the public transport system. During the strike, the LA Riders Union was firmly behind bus drivers even though commuters were badly inconvenienced by the strike because they saw the blue collar bus drivers as people in same working class as themselves. Some of you may argue that paying drivers a decent wage when there is cheap labor available is costly for the govt. But if cheap labor is used and these bus drivers are retrenched or have their wages depressed below the living wage, the govt will have to spend on welfare, medical aid, subsidised housing etc and money on the social problems that arises due to poverty - you still end up spending the money but getting inferior outcomes for the society.

This example above serves to illustrate not specifically the power of unions but the importance of power for workers to influence the govt. Such power can come from a democratic process or a free and independent media that allows issues to discuss from multiple perspectives.

With a good education system, you can train 60% of people  to tertiary eduction (poly + university):
Even with a high level of education, a large segment of your population can be substituted by cheaper labor from developing countries where there is large pool of workers willing to take lower wages -the countries are producing more graduates than there are jobs for them. Businesses will put pressure on the govt to give them access to this pool of cheap labor rather that move up the technology ladder or invest in technology to enhance productivity. Without sufficient power and influence, workers' interests will be ssubjugated to those of big businesses. In a country that is only partially democratic and the main stream media is controlled,  the media can be used to play up the benefits of such policies and keep the people ignorant of the deleterious effects until it is too late.While unions occasionally become too powerful and make unreasonable demands, independent unions safeguard the interests of workers, ensure fairness and prevent exploitation. In the absence of a union and other means of influence, workers become exploited. Take the example of cleaners in Singapore, it is not just low pay but unfair exploitative  contracts [Undercutting, bad contracts depress cleaners' pay] and this has gone on for years and nothing has been done about it.

In Singapore as independent unions disappeared, a power-elite system emerged to concentrate the power narrowly among a small group of elites to whom opportunities and along with it extremely high salaries are awarded. The network of businesses are inextricably linked to the govt, SAF and the civil service. High ranking SAF officers are parachuted to various GLCs, GIC or Temasek Holdings and the PAP recruits from the same network  - you just have to look at how many cabinet ministers are from the SAF and how many generals from the SAF move on to top positions in GLCs .This system has resulted in very unbalanced policy making that led extremely distorted wage structure - on the same tiny island where ministers get the highest salaries in the world, we have the lowest paid blue collar workers such as cleaners in the developed world. Professor Lim Chong Yah mentioned that our low wage workers are underpaid by 100% ....so how overpaid are our politicians? How excessive is executive compensation?

Shortly after I heard Chee Soon Juan's rally speech about how the foreign influx would depress Singaporean workers pay in 2001, he was sued, bankupted and jailed for demanding transparency on a loan the Singapore govt offered to Indonesia during the Asian crisis[Link]. In the following election in 2006, he was not allowed to give any more rally speeches.  The weakening and elimination of ideological alternatives, control of the mainstream media and putting a PAP man in charge of NTUC meant that the PAP govt can implement policies that are not possible in a fully democratic country. Today we see the extreme outcomes of these unbalanced policies.- workers who work honest full time jobs earning less what they need to live on and leaders who get paid millions for regurgitating old ideas and peddling failed solutions. Things are not going to improve for our werkers because they have little power to bring about outcomes that will make their lives better.




Wednesday, April 18, 2012

Circle Line breaks down and COE hits $92K....

I was on a Circle Line train when it broke down. My train which was very crowded  stopped at one of the stations and there was an announcement saying that the train was delayed. 20-30 minutes later we were told the Circle Line was down and everyone scrambled out. I took a bus (not the emergency one but normal service)  to a satellite town where I tried to get a cab at a taxi stand.  Waited more than half an hour before I was able to get one. The train failed and the effects cascaded into the taxi system because everyone would be trying to dial for a cab and the availability falls to zero- I tried calling Comfort-Delgro but the system wasn't able to allocate a taxi after 20 minutes.  Got to work about 1 hour 15 minutes late.

With a public transport that is so crowded and uncomfortable during rush hour,  there is little wonder why people want a car. The problem in Singapore is we have a quota system that guarantees the majority of people cannot own a car and have to use the public transport system.

The main problem with the COE system it allocates a scarce resource based on a person's ability to pay rather than his needs. A middle income parent who has to ferry his children to school and take his parents to hospital can be out-bidded by a multi-millionaires's son who uses the car for dates and clubbing. The disadvantage of such a system is it causes an ever widening gap of unfulfilled demand among those with the greatest need for a car. In Singapore, where the income gap is so wide, over time more and more COEs will just go the rich rather than people who need it.

If you look at our transport system as a whole, it looks like it is designed to maximise revenue for the govt (today's COE bidding total revenue collected is S$110M!) and profits for govt linked companies. All the parts work together to generate plenty of frustration, unhappiness and financial strain for the ordinary Singaporean. The thing is this system seems to be getting worse and adds to the many bits that makes life tougher in Singapore.

Sunday, April 15, 2012

Breaking out from the cycle of cheap labor and low productivity....Part 2

Professor Lim has responded to criticism of his "shock therapy" proposal[Link]:

"'Speaking of free markets, I hope Minister Lee Yi Shyan does not get the cattle market or the fish market mixed up with the labour market, which deals with human beings." - Professor Lim Chong Yah


For a population that is fairly literate in economics, I think people can appreciate the logic of Professor Lim's arguments and understand the risks involved. There are trade offs and uncertainty - we should not over simplify the the current situation and the severity of the problems we face with income inequality, rising poverty and low wages. Today, 400,000 Singaporean workers or 1 in 5 earn less than $1500 [Link] in a city that is the 9th most expensive in the world to live in[Link] surpassing New York, London, Frankfurt and Hong Kong.  Unlike the other cities, we have no rural or less expensive areas for the poor to escape the pain of poverty. Singapore has little in the way of safety nets and welfare to mitigate the effects of poverty and large income gap. If we want to avoid welfare spending, we have to get wages up to otherwise there will be severe economic pain among a large segment of Singaporeans. So far nobody denies there is a problem just how to best to fix it and whether it warrants "shock therapy".

The PAP govt which caused this massive problem by importing cheap labor to get fast GDP growth shows very little sense of urgency to fix it even as so many Singaporeans suffer the consequence of their bad policies - the rising anger against the PAP is not due to "poor engagement",  poor communication, or other euphemistic reasons cited by the PAP,  fundamental changes are needed to tackle this rising resentment and the PAP is still not on the right track.

Remember what we were told when the foreign influx grew from a trickle to a torrent? We were told the large influx will benefit Singaporeans creating jobs and higher incomes for households. Years later, we discovered that this is not true and a growing number of Singaporeans faced stagnant or falling wages and older workers faced structural unemployment. When the wages for low income workers started stagnate, the PAP govt told us that retraining is the key to fixing this and no major adjustment was need for the large influx of foreign labor. More than 10 years later, we there is little progress because low wage workers were simply retrained from one low paying job to another. You ever wonder why the trust between the PAP and the people is so badly eroded?

A few days ago, Minister Lim Swee Say who is also the NTUC chief reiterated the gradual approach of the PAP govt to drive up productivity and have wages follow[Link]. It is not clear how productivity can rise when enterprises still have access cheap foreign labor - what motivates them to invest and upgrade when they can just employ 3rd world labor? Suppose we put this concern aside and assume Minister Lim and other govt agencies succeed at driving productivity up. I want to show you this chart for the only other developed  country that has the same level of income inequality as Singapore:


For the last 20 years productivity in USA has been rising and real wages has remain stagnant. This is known as the wage-productivity gap. Where did all the money go when productivity of workers go up?  In a society where income inequality is very high, it goes to the top management as excessive compensation packages. During the Reagan era, the power of independent unions declined and along with it the power of ordinary workers to negotiate for better wages. The social and political factors that  causes changes in wages to correlate with improvement in productivity have over time disappeared from the American economy and these factors are even more absent here than they are in America, In Professor Lim's words....the labor market simply became the cattle market - the free market can take the cattle market anywhere without much repercussion to people and society but the same cannot be said for wages.  There is real pain and social consequences when you just let labor markets behave like the cattle market to be determined by free market forces. Lets not forget the primary purpose of an economy - it is not to maximize GDP growth or be a servant of the free market but achieve outcomes that will improve in the quality of life of ordinary citizens.

"From the business perspective, it's not just productivity increase that we need, we need the economy to do well so that revenue can go up. When revenue goes up, you can better afford higher pay for the lower-income. It's not just the one aspect of just increasing the low-income earner's salary, it's actually an overall aspect of whether the economy is doing well, whether you get the demand for your services and products, whether your revenue would increase, whether you can meet the bottom-line that you've set for yourself. " - Teo Ser Luck[Link]

What Teo Ser Luck said is disconnected from reality, pro-business and relegates the low wage problem further down the list of priorities for the PAP. He is telling us that raising productivity going is not sufficient, we should wait for the economy, revenues and bottom-lines to improve before we do something for low wage workers. Let me ask you what have the economy, business revenues, and business profitability been like the last 15 years? Our GDP growth has been great, business revenues have been expanding and businesses are so profitable that business profits as a % of GDP is at a record high but the wages workers at the bottom 20% have been stagnant or down. Yet Teo Ser Luck is telling us to "double down" on what has already failed to improve the lot of our workers. Where will our poor workers be if we go with what the PAP plans to do 10 years from now....? I shudder to think.

The PAP has a habit of going along a failed strategy even after everyone can see the deleterious effects on our society and people. We just have to go back to what they said about the foreign talent policy as recently as 1-2 years ago to keep prolonging the policy even as the negative effects become apparent to everyone else. When they can no longer deny the problem, they will perform a few tweaks and claim that the problem will be solved and all that is needed is time. But this low wage problem has been with us since the 90s. After denying there is a problem, they will admit it when it is no longer credible to deny it. Then they will make a few tweaks and proclaim that those tweaks sufficient to solve the problem. Those who have thought through the problem know that we are not heading towards a solution but a deepening of the problem- Professor Lim proposes shock therapy, Ho Kwon Ping suggests we "complete the wage revolution" by raising domestic service sector pay[Link] and Tommy Koh supports minimum wage[Link]. But the PAP will not move from its current trajectory because it is deeply entrenched its ideological box - they can't think out of it until the worms eat through wooden walls and show up on the inside - then they will claim nobody could have possibly foreseen the looming disaster ....and these people paid million dollar salaries will deny, delay, resist amd follow old ideas until they are broken beyond repair.

Saturday, April 14, 2012

Breaking out from the cycle of cheap labor and low productivity.

After Professor Lim proposed his shock therapy to push up wages of low income workers earning below $1500 and freeze the wages of those earning more that $15000, Minister Lim Swee Say & Lee Yi Shyan came out to make the standard argument against wage intervention:

"National Trades Union Congress (NTUC) secretary-general Lim Swee Say felt local economist Lim Chong Yah's suggestions for a wage restructuring was 'too risky".....

"However, labour chief Lim Swee Say said that if productivity does not lead to a corresponding increase, competitiveness would be lost which may cause some businesses to close down or re-locate out of Singapore.

This in turn would lead to a higher unemployment rate and structural unemployment."

When you run an economy, you have to make sure that businesses don't become too dependent on cheap labor and income inequality does not become too big otherwise you can end up in a situation where there are no good easy risk-free solutions for the problems you face. Professor Lim's proposed approach is risky - that's why he calls it "shock therapy". The only reason for shock therapy is that things cannot be maintain at the current state - societies with this high level of inequality do far worse that societies that have more equality[Link] and the longer you have this level of inequality the deeper your problems become and the harder it is to break out of the vicious cycle[Is Higher Income Inequality Associated with Lower Intergenerational Mobility].The PAP govt took a long time to recognize the problem and do something about it. It was only in 2011 that they saw the trend of falling productivity & low wages and came up with programmes to improve productivity. Lim Swee Say suggests that instead of doing "shock therapy" we try to improve productivity first then wages will improve. Remember the earlier approach of "skills upgrading" to improve the wages of low income earners - after more than a decade skills upgrading we find the wages of these workers either stagnant or falling because they were retrained to fill one low paying job after another.

To illustrate the various approaches clearly, lets look at a simple example. In some parts of India, the wages is so low, they human beings to do what is normally done by machines in developed countries.



Hard to believe but this is a human powered ferris wheel that uses cheap labor. The obvious way to improve productivity is to buy a motor and reduce the number of workers. However, the business man that owns this ferris wheel is not going to do it because he has access to cheap labor - why spend money on a motor when it is cheaper to use humans to do the job. No amount of productivity campaigns and urging by the govt can overcome the business logic of keep cost down by using the cheapest means to keep the wheel turning. The business man is not going to invest in a motor just because Lim Swee Say tells him to do so. There are only 2 ways to get productivity up. The first way is for govt to subsidize the purchase of motors but that doesn't guarantee the boss will pay his workers better after productivity goes up but he will certainly sack the workers he doesn't need. The 2nd way is to make labor expensive by setting a minimum wage. Once the cost of labor goes up, the businessman has no choice but to invest in a motor because he cannot pay all his workers and still make a profit. The workers who are now better paid have more money for consumption and that generates demand which will create employment for workers that were laid off.

When wages are pushed up, there is a risk that the businessman will choose to simply shut down his Ferris wheel and close shop however as long as there is demand for Ferris wheel rides and money to be made, he is likely to stay open for business. Before Malaysia decided to implement minimum wage, Malaysia businesses claimed that 3 million jobs will be lost and lobbied against minimum wage. This is essentially the same argument put up by the PAP govt against minimum wage and Prof Lim's shock therapy. It will be interesting to watch what happens in Malaysia once minimum wage is implemented. Hong Kong implemented minimum wage and saw no significant impact on employment[Businesses still hiring despite new minimum wages].

One of the particularly bad schemes implemented by the PAP that will cause our current problems to be entrenched is Workfare. On the surface it looks like money given to lowly paid workers to keep their heads above water. However, it is actually a subsidy for businesses using cheap labor - business don't pay workers enough for basic living and the govt steps in to make up the difference. Workfare creates no incentive for businesses to improve productivity because it encourages businesses to use cheap labor by subsidizing their wage bill. Workfare traps workers in menial jobs and perpetuates the current state of affairs because the PAP uses this scheme to justify not doing more to break out of the low wage and low productivity cycle.

If we want to break out of this vicious cycle, there is no choice now but to take some risk using wage intervention approaches. One way to do it is set a minimum wage and raise it every year until it reaches living wage level at the same time restricting the access to cheap foreign labor. The rate at which we do it depends on how much time we believe we have to solve this problem of income inequality. Professor Lim recommends a "shock" approach (50% increase in wages low income earners in 3 years) to snap us out of this vicious cycle because he sees Singapore nearly reaching a dangerous situation unless we do something. The PAP on the other hand has gone on a completely separate direction - they seem to think that they have all the time in the world to get this fixed favoring approaches that are so gradual they hardly moves us away from the status quo.

Wednesday, April 11, 2012

Obama on tax reform, social inequality and safety nets



President Obama speaks about a fairer economic system and pushes for tax reform. Obama makes economic equity one of the key issues of the coming US presidential election. He explains with great clarity why safety nets are needed, why prosperity has to be shared, why workers have to be paid better and how to expand the middle class. He cautions about the financialization of economy through financial deregulation and discusses the outcome of Bush tax cuts for the wealthiest Americans.

Lim Chong Yah : Singapore's Inequality approaching dangerous levels.

"One of the architects of an economic restructuring exercise that overhauled Singapore's wage system in the late 1970s said on Monday that the country now 'needs shock therapy to wake up its economy'.

Professor Lim Chong Yah pointed to growing income inequality, which he says is approaching dangerous levels, and the nation's overdependence on cheap foreign labour.",- Straits Times, 10 April 2011.

In case you don't know who Lim Chong Yah is, he is the author if the most widely used "A" level economic text book when I was a student. He is perhaps Singapore's most prominent economist and very much part of the establishment. The problems Singapore is facing are severe enough for Professor Lim to recommend "shock therapy". Readers of this blog are probably very familiar with the problems highlighted - I've writing about and tracking these problems since 2006. The PAP govt has repeatedly claimed that it is the changes it has made towards the creation of an "inclusive" society are significant and sufficient - we saw this line of thinking again in the recent budget debates. The changes the PAP govt has made are just tweaks to old policies and does little to address underlying problems which are quickly deepening and, in Professor Lim's words, getting dangerous. Professor Lim pointed to a GINI of 0.5 as the "danger level". We are just a shade off this level at 0.47. However, even if this number does not worsen, maintaining this level of inequality over time, we can expect the deleterious effects on our society to spread and deepen.

The "shock therapy" recommended by Professor Lim is to restructure wages - freeze the wages of high income earns and hike the wages of the low income workers (see article below). Wage intervention as suggested by Prof Lim is similar to setting minimum wages which has been done in Hong Kong & Malaysia. Basically, strategy is to get rid of cheap labor and force enterprises to push up productivity. Professor Lim's boldly suggested freezing the pay of top earners while you increase the wages of low income workers t to contain the overall wage bill.

Other interesting ideas that I've highlighted in the blog includes one by Yale economist Robert Schiller to automatically increase progressive tax rates as income inequality increases and use the taxes to mitigate the effects of income inequality through social spending.

In an article published in the Straits Times last year, newl MP Sim Ann outlines the PAP approach to the problem of inequality : Tackling Inequality : Charting our own path. The PAP has a boxed-in approach to solving this problem - they reject increasing direct taxes on the rich, they reject minimum wages and significant changes to current approach to welfare and social safety nets. A few days ago, DPM Tharman warned of Singapore "becoming Taiwan" if we close our doors to foreign labor - he linked the 'stagnant' nominal wages in Taiwan to its close door policy. Not only did he get his facts and logic wrong, Professor Lim points to PAP's policy to import foreign labor as one reason for low wages among a large segment of the work force and a major cause of our income inequality. We are heading towards a dangerous situation yet when a student asked DPM Tharman about the problems caused by PAP's policy to import foreign labor, DPM Tharman redirected him to look at the "problems" in Taiwan.

While some economists feel that Professor Lim's "shock therapy" may be impractical[Link], other similar approaches such as minimum wages has been implemented in every single developed country except Singapore. As the PAP dismisses various ideas due to ideological reasons or for their debatable effects on GDP growth, our income inequality problem stays unsolved and becomes entrenched and the negative effects, both social and economic, will begin to overwhelm the any theoretical disadvantage of various suggestions to lower the income gap or mitigate the effects of the large income gap,

One of the effects the PAP should bear in mind is the tendency of a highly unequal society to vote out the incumbent govt when it loses patience waiting for change. If the PAP believes its own power and support rests on the belief that ordinary Singaporeans are different.from those who occupied Wall Street, the disgruntled people in the Arab Spring and the protesters that have filled the streets all over the world due to inequality, they are perhaps deluded by their successful past. Ordinary Singaporeans will gravitate towards universal values and ideas of economic fairness. The goodwill created from our economic miracle that makes Singaporeans support and tolerate a govt that lies so far out in the ideological spectrum will disappear (if there's still any left).

The PAP has to change itself in order to make the changes that will take us forward. Otherwise, ordinary Singaporeans, will do what you expect ordinary people everywhere to do to bring about change and progress in their lives.




Tuesday, Apr 10, 2012
The Business Times
Local economist suggests second 
wage revolution


By Teh Shi Ning


SINGAPORE - To tackle rising income inequality and an excessive reliance on cheap foreign labour, one prominent local economist is proposing a three-year restructuring plan that includes a wage freeze for top income earners and sizeable pay hikes for the lowest paid.




This 'bold and iconoclastic' proposal seeks to complete the wage revolution of 1979 to 1981, says Professor Lim Chong Yah.

He helmed the National Wage Council (NWC) from 1972 to 2001 and as its founding chairman had a pivotal role in that first, radical three-year wage restructuring exercise.

Then, the NWC had recommended a 20 per cent across-the-board increase in wages a year, including higher contributions to Central Provident Fund accounts and to the Skills Development Fund, which grants companies training subsidies.

Speaking to an audience of about 50 at an Economic Society of Singapore public lecture yesterday, Prof Lim outlined another three-year solution to Singapore's 'two Achilles' heels' - the sharp rise in low-wage foreign workers and rising income inequality - while raising productivity.

This features a sizeable pay hike for the lowest-paid workers, regardless of nationality or age, earning less than $1,500 per month over three years.

He proposes a cumulative 15 per cent rise in the first year, another 15 per cent in the second, and 20 per cent in the third. This increase would be channelled, in equal parts, to the worker's take-home pay, his CPF Retirement Account, and the Skills Development Fund.

At the top end of the income ladder, Prof Lim proposes a three-year wage freeze for those earning $15,000 or more a month.

But he stresses, the intention is not to 'frighten the geese that lay the golden eggs' as there will be no pay cut, pay ceiling or super-taxes imposed.

As for the middle income, he proposes pay hikes ranging from a quarter to a third of that received by the lowest-income group, part of which will go into the CPF Retirement Account. The government should also match contributions to the Skills Development Fund to demonstrate its commitment to the restructuring effort.

Prof Lim envisions all operating details of this proposal being discussed and decided on by the tripartite NWC, as was the case in 1979, to 'forge consensus by the three tripartite social partners'.

He acknowledged readily that national economic restructuring is 'much more difficult' now than it was three decades ago, given the changed political, economic and socio-economic climate.

But he thinks that Singapore still has effective tripartism and a government and civil service with integrity and ability, so what is needed is 'national will' in the face of 'the problems of economic success'.

In response to questions from the floor, Prof Lim said that his proposed scheme is unlikely to have a significant negative impact on unemployment - now at record lows - and that high-quality foreign investment will continue to flow into Singapore in pursuit of strong fundamentals.

Asked about the pace he proposes, which seems swifter than the government's target of a more gradual 30 per cent rise in median incomes in the 10 years till 2020, Prof Lim said that some 'shock' is needed to 'check, halt and if possible reverse' the rise in income inequality. 


Tuesday, April 10, 2012

Minister Tharman should get his facts straight on Taiwan....Part 2

Here's the video showing what Tharman said about Taiwan.



He mentioned an East Asian Institute (EIA)survey. I can't find the survey mentioned by DPM Tharman. The list of publications by EAI is found here. I wanted to check this survey to see if it explicitly links the falling average nominal income in Taiwan to its tight policy on immigration and whether Tharman himself made this link. However, I realise I don't need to do this to debunk DPM Tharman.

"As a result, the nominal income of the average Taiwanese has flattened for more than a decade"
- Minister Tharman

Here is Taiwan's real GDP Growth[Source] since 2000:


Here's Taiwan's per capita GDP:

Taiwan has grown its GDP steadily for the last 10 years. The average per capita GDP (nominal and real) has also grown. The only possible reason why an "average Taiwanese" does not feel richer is the income gap is increasing or there is rising cost of living e.g. housing that does not show up in its inflation numbers. However, the Taiwanese are known for its "growth with equity" [Link] approach and maintained an income gap far lower than that of Singapore's. So what is Minister Tharman talking about? The wages of a large segment of the Singapore population has been stagnant for the past decade and many analysts have found that it is due to the large foreign influx[Stagnant wages, immigration fuel Singapore squeeze].

A country can enhance its competitiveness by keeping its door open to selected foreign talents to complement the skill set of its local workforce - few people will disagree with this. However, this is not what PAP has done with its immigration policy which resulted in a massive influx of foreigners into Singapore. Minister Tharman is wrong about the problem Taiwan faces and prescribes the wrong solution for them to justify PAP\s own flawed policy that has caused so much unhappiness among Singaporeans. 

Sunday, April 08, 2012

Minister Tharman should get his facts straight on Taiwan....

"Singapore risks becoming a 'Taiwan story' and will lose its competitive edge globally if it closes its doors to foreign talent, said Deputy Prime Minister Tharman Shanmugaratnam on Wednesday night.
He cited a recent survey on talent migration in Taiwan that shows the stark consequences on the wages of its people from pursuing a closed-door policy against foreigners.
At the same time, its best and brightest were leaving the island, particularly for China as well as the United States and other countries.

As a result, the nominal income of the average Taiwanese has flattened for more than a decade, according to the survey done by the East Asian Institute at the National University of Singapore (NUS)."
- Straits Times, "Draw lessons from 'Taiwan story"

Taiwan faces a brain drain for one simple reason - its graduates get an average pay of NT$24,000 per month[Link]. This is one third the pay in Singapore and one-quarter the pay in USA. The reason why their top graduates are leaving the country is because they can get better pay elsewhere. The reason why you're not applying for a job in Taiwan is because you can get a better pay in Singapore. If Taiwan swings open its doors fully like Singapore, they can attract workers from countries where the pay is lower - Philippines, India, Bangladesh These workers will further depress the already low wages there causing more talented Taiwanese to leave for greener pastures.

Using Taiwan to justify Singapore's large foreign influx is wrong and Minister Tharman better start getting his facts straight otherwise he loses more credibility. His earlier assertion that people earning $1000 can own a HDB flat has raised many eyebrows and fallen flat under close scrutiny.

For those in the electronics sector, hearing a Singapore minister say that Taiwan will lose its competitive edge globally sounds ridiculous. Why? Singapore has lost to Taiwan competitively in almost all areas in the electronics industry. Temasek owned Chartered Semi-con took in billions in taxpayers' and shareholders money but lost out to Taiwanese competitors like UMC and TSMC. Chartered was later sold off to a foreign company. Chartered Semi-conductor hired "foreign talents" massively at all levels -from the CEO all the down to production engineers while TSMC & UMC hired mostly Taiwanese except in a few selected posts. If Tharman's theory is true that we have become more competitive by importing foreign talent, how did we end up losing so badly in the head on competition in the semiconductor industry? Today, Taiwan holds its own against much larger countries in the electronic sector - many of their companies are truly world class - HTC, Acer, Asus, Via Technologies, Realtek etc. After importing so many "foreign talents" into the electronics sector to make us 'competitive' , where do we stand today vs Taiwan?

Tharman again cites nominal income as a measure of govt success. But we know that too many tricks can be played with this number. A country can raise GDP and nominal income by importing rich individuals to bump up the number without benefiting their own citizens[Link]. You can also trade-off income equality to get growth through deregulation and financialisation of your economy. One example is allowing wealth management sector to expand as a result of regulatory arbitrage or allowing banks to expand unsecured lending. Such moves will create a lot of wealth concentrated in a small segment of the populace with the rest of the people paying the price later [Link]. You can also expand your GDP by building casinos ...and the really silly thing to do is let the casinos make billions and allow them to hire non-locals because they can pay them lower salaries and dish out less benefits. Taiwan is known for its ability to maintain high economic growth yet keeping income inequality low[LInk] while Singapore has the higest income inequality among all developed countries.

There are many things that improve the lives of ordinary citizens that does not show up in nominal income. One example is the universal healthcare system in Taiwan. While every lower middle and lower income bread winner in Singapore still has to worry about healthcare and have night mares about uninsured aged parents, siblings or new born getting seriously ill, Taiwan has already implemented a universal healthcare system that covers everyone in the country since 1995:



After some testing times, Taiwan is now a vibrant democracy with free press, a multi-party system and where people have the right to assembly and hold peaceful protest. I was in Taiwan in 1990s and, as a Singaporean,  found the country politically backward. They were under emergency law (martial law) governed by a single dominant party, the media was state controlled and country was boxed in by the ideas of a dead dictator - the propaganda surrounding their dictator leaders found at the museum I found incredibly hilarious. Taiwan has made a lot of political progress since the 90s amd the political system they have today is completely different from what they had in the 80s and 90s. Today, the Taiwanese find our less democratic system amusing to say the least : Taiwan Current Affairs Programme on Singapore.

If there is anything to be learnt in the area of immigration, it is the lessons  Singapore has for Taiwan. Always put the interests of your own citizens on top of everything else. Don't over do it to the point that your country become dependent on foreign labor. Quality of life of your citizens comes first not GDP growth. Be very transparent and accountable to your people when you implement such policies. Be mindful of the negative impact of such policies in your cities and strains on your healthcare, housing and transport system. Never belittle your own people's capabilities to justify importing foreign talents. Be very clear about how the policies benefit people at all levels of society and never brush away the genuine concerns of ordinary citizens as xenophobia or small mindedness.

A good policy on immigration can create diversity, enhance competitiveness and improve the quality of life of your people. Simply opening the floodgates to get higher GDP growth is not a good policy...just look at what happened to ordinary Singaporeans and the growing divide caused by the PAP govt approach to immigration. The end result is overcrowding, rising income gap, and seething anger towards this govt policy.

Thursday, April 05, 2012

PM Lee worried about the growing divide....

"Prime Minister Lee Hsien Loong on Wednesday identified two worrying trends he sees in Singapore, warning that they stand in the way of a cohesive community.

One is a possible growing divide between Singaporeans and new arrivals, whether new citizens, permanent residents or foreign workers." - Straits Times, 5 April 2012[Link]

Having been to many countries, I believe Singaporeans are among the most tolerant people in the world when it comes to immigration. When immigration was at a reasonable level, Singaporeans readily accepted people from various countries in our schools and workplace. Singaporeans welcome diversity and we are after all children of immigrants who came here many years ago.

Our positive feeling towards immigration turned negative in recent years because the PAP govt expanded the influx to a ridiculous level perhaps the among highest rate per capita in the world and many Singaporeans felt directly the negative effects of what the PAP has been doing - public transport became overcrowded, home prices escalated, structural unemployment became severe and wages of a large segment of the Singaporean workforce depressed. When the PAP govt implemented its policy, they were not very transparent and open about it. We were told the foreigners were here to create jobs for us. We were told they are here only to do jobs that Singaporeans did not want or are unable to take up. The PAP govt also implemented extensive scholarship schemes for foreigners that are not available to Singaporeans at the same scale and the actual numbers came to light only after persistent questioning by opposition MPs in parliament. In short, the PAP did what it wanted to do to meet various objectives, but did not seek the acceptance of Singaporeans for these policies.

It is hard to pin-point the day and time when certain thresholds were crossed but the extremely high foreign influx reached a point where people became suspicious and angry with these policies. Singaporeans in general do not harbor animosity and bitterness towards foreign individuals. - they are here to seek a better life for themselves and their families....and many Singaporeans would do the same if they were in their shoes. However, certain ungraceful behavior and ugly events involving foreigners can become outlets for the anger Singaporeans feel towards PAP policy. There is plenty of anger right now just waiting for something to happen to be let out. We cannot misinterpret the vitriol on the Internet as animosity towards foreigners because the underlying source of unhappiness is govt policies.

I cannot think of another nation of people who would take such a large foreign influx with less resistance than Singaporeans - just look at what happened in Hong Kong where people took to the streets many times over the govt immigration policies. We are good people who have been pushed too far to the edge by bad policies.

If PM Lee is worried about the divide, he should look not at Singaporeans but at the policies his govt has pursued in the last 10 years and how they have gone about doing it.

Tuesday, April 03, 2012

Coping with shifting morality in our society...

While we are still on the topic of morality, lets expand it a little to see the bigger picture.

For an oldie like me, being made to witness PDA (public display of affection) on public buses and MRT can be a little uncomfortable. It is not that I think the behavior is absolutely wrong but coming from an era when teenagers holding hands can raise eyebrows, it just shows me how much things have changed in Singapore.  If such incidents are not enough to convince you,  there are the dramatic stories and scandals that have broken out this year that should convince you that something has fundamentally shifted in in our society's moral values.

If you look for reasons there are probably many factors that contributed to the current state of affairs. Westernization is often blamed but today in China, society is riddled with vice and corruption. Consumerism and materialism - the endless advertising on our media telling us that we should spend our way to happiness. The PAP govt didn't help the situation by building casinos, allowing too many abortions in the past for the purpose of controlling population and pursuing a course of development that seems to put economic growth above everything else.  Income inequality is sometimes considered immoral[Link].

Divorce rates have been rising steadily in Singapore. While the rising rates may be caused by other factors such as financial strain on families or other disagreements between husband and wife, infidelity probably has also contributed to the rise.  How are we going to cope with the consequences of declining moral values? Can we stop and reverse the tide? Minister of Education Heng has put "values education" as a priority for MOE[Link] is that going to work?

Many years ago, a brave and controversial NUS student union leader decided to give out condoms at a student event. His decision was greeted by opposition from various quarters. He argued that safe sex was necessary to prevent the negative consequences of immoral behavior e.g unwanted pregnancies, diseases etc while his critics argued that his decision sent the wrong message and would encourage bad behavior. At that time I couldn't decide which side was correct. The PAP has a very consistent and conservative approach to this. They discourage 'bad' behavior by making people live with the consequences for the behavior. Single mothers miss out on benefits given out to those who have children, AIDS sufferers do not get subsidized medicine.  One Nobel Prize winner was surprised when she visited Singapore because she found that those who contracted HIV have no access to subsidized medicine when even countries like Cambodia offer free treatment.[French expert says HIV infections in Singapore higher than France]. The PAP approach would be considered workable if it yielded good outcomes but it doesn't . For the past 10 years as the HIV infection rates has fallen in most countries including Malaysia but has been rising steadily in Singapore:
In a recent parliament sitting, MPs discussed the plight of divorced parents being forced by the courts to sell their flats and then facing a 30 month (2,5 years) debarment that prevented them from buying or renting a flat from HDB[Link]. While Minister Khaw is sympathetic to the plight of these people, he also said this:

'We must not unwittingly compromise on the promotion of marriage and mutual family support that we have long held " - Khaw Boon Wan.

By helping those who face housing issues due to divorce, he fears that 'promotion of marriage' will be compromised. I wonder how much sense that makes to you? By making divorce more painful by way of housing disbarment, more people will stay married and get married?  Couples whose marriage have fallen apart due to infidelity and other reasons will stay together just to keep their HDB flats? By putting these broken families through more strain are we not putting the children at risk? Khaw then went on to say he was willing to help a few genuine "special cases" as if the majority of divorce couples get a divorce so they can abuse the housing system! Look at the divorce chart again and the rising trend, if govt does not become enlightened fast, an underclass among those in broken families will grow.

If govt does not change its approach soon, we are going to lose the battle on 2 fronts. While morality continues to decline and we do too little to mitigate the negative effects declining morality, we will see an expansion of the problems in our society.