Tuesday, May 14, 2013

Sylvia Lim drops the bombshell on AIM issue!

When the AIM issue emerged a few months ago,  PAP's Dr. Teo explained that the move to have an open tender to sell the town council software was recommended by consultants. Several software companies collected the tender document but nobody responded so AIM wanting to help the town councils decided to bid for the contract.

"The TCs advertised the tender in the Straits Times on 30 June 2010. Five companies collected the tender documents. These were CSC Technologies Services Pte Ltd, Hutcabb Consulting Pte Ltd, NCS, NEC Asia Pte Ltd and Action Information Management Pte Ltd (“AIM”). 

I am aware that NCS considered bidding but in the end, decided not to do so as it was of the view that the IP rights to software developed in 2003 on soon to be replaced platforms were not valuable at all.

Another company withdrew after it checked and confirmed that it was required to ensure renewal of the NCS contract without an increase in rates. The company did not want to take on that obligation. The others may also have decided not to bid for similar reasons.In the end, only AIM submitted a bid on 20 July 2010." - Dr. Teo's statement[Link]

The Worker's Party has rejected MND findings that resident's interests have not been compromised

"On the tender, she suggested no software company here could fulfil it other than AIM, because it required all directors to have town council experience. She also said there was no reason given for the need for the one-month termination clause - and added that the MND report did not address this issue." - Report on WP's rejection of MND report[Link]

In her parliament speech yesterday, MP Sylvia Lim said:

"In this light, I cannot help but recall the Parliamentary debate in 1988 when the Town Council Bill was first presented for the Second Reading. At that debate, the then First Deputy Prime Minister Goh Chok Tong justified the introduction of Town Councils as providing political stabilisers to the political system. He said there was a need to protect the public by ensuring that political parties which aspired to be government should first prove that they could run a Town Council for a constituency. He said: “If a new party finds itself unexpectedly in government, it would be like an aspiring pilot taking over an SIA jumbo jet in mid-air before he has flown solo in a Cessna. This cannot be in the interest of passengers in the jumbo… TCs are the Cessnas of our political system”. He also highlighted that some PAP MPs had expressed a fear that opposition MPs could win “some seats, prove themselves” (able to run the Town Councils) and thereafter “fan out to other constituencies in subsequent elections” (Hansard, 28 June 1988)

Is this what this whole AIM episode is about – ensuring that the passengers in the Cessnas have bumpy rides or even crash land? Does the government even care about the passengers in the Cessnas, or are they simply collateral damage in a bigger political game.

........ In our view, the PAP TCs had unjustifiably risked a disruption to public services and that this should not be allowed to recur. I am relieved to read that the MND recognized the need to preserve continuity of public services as a paramount priority"

For a democracy to function properly, the choice of the people has to be respected. When they choose a new govt, power has to be handed over smoothly so that the people do not suffer disruption for exercising their vote. It takes at lot of arrogance for a group of leaders to believe that they are the only ones who can lead the nation. It takes some amount of  hubris and elitism for them to believe that they are the only ones with the right to leadership. It takes a lot of disregard for the rights and interests of the people to want to see them suffer when they no longer want you as their leader. After getting paid the highest salaries in the world, not planning for a smooth handover should the people express a desire to be led by another party based on a different ideology is just irresponsible. It is not just AIM but the entire civil service and SAF has to be independent from the PAP - it is not right and very dangerous for a political party to put its own power above the interests of the people....doing so undermines the stability and security of the country.

Monday, May 13, 2013

Foreign wealth widens inequality in Singapore - Report....

Foreign wealth widens inequality in Singapore - Asia-Pacific - Al Jazeera English

"The influx of money is making Singapore one of the richest cities in the world. But the low tax rate also means no social security net, given the plummeting wages among the poor as foreigners take up blue-collar jobs" - [Link]

Some time back statistics released show that the average household income of Singapore Indians has increased significantly:

"Indians overtook Chinese as the ethnic group earning the highest income. Last year Indian household earned a median income of $5370. This compares with $5100 for Chinese families and $3844 for Malay families"
- [Link]

As a Singaporean, I thought "wow, this is fantastic" for our fellow Singaporeans to have made so much progress. Later I found out how this "progress" was achieved.  Singapore opened its doors to wealthy Indians from India causing the average income of this ethnic group to go up. The "long time Indian Singaporean" did not make much progress in recent years and like all other Singaporeans suffered from the rising cost of living as Singapore became more crowded.

If we bring in rich people to the country, the rest of the population can benefit if the rich is properly taxed to provide a source of money for social spending or if they invest in businesses that create better paying jobs for Singaporeans.  In Singapore our tax rate is very low and we do not tax wealth but income. A person shifting his wealth to Singapore pays very little in taxes and we attract wealthy people with the wrong motivation -many are because they want to avoid high taxes back home. If they don't want to contribute to the society that made them rich, they are not here to benefit our society as a whole except a few private wealth managers and our already wealthy banks.

In the US, President Obama increased minimum wage[Link] several times, increased taxes for the rich[Link], gave more people access to college education. He has also gone after the banks and rich people who evaded taxes by shifting money off-shore[Link].

The Singapore govt is not only doing little  to address the inequality that is polarizing our society...our deregulated banking system, low taxes and citizenship schemes for the rich thwarts the efforts of other govts to fix this problem by allowing rich individuals to escape their responsibility back home. The money that has flowed here into property investments has made life difficult for the ordinary Singaporean by raising his cost of living and worsening the inequality problem in Singapore.

Sunday, May 12, 2013

Malaysians Overseas Protest : Different countries, Different reactions....

It is always interesting to step back and see what happens when similar events take place in Singapore and in other countries. How the authority reacts and what Singaporeans think of it. Malaysians around the world have reacted negatively to the election results and the rising use of racism among those in power to maintain their hold on the country. There is always hope for a country where the citizens are willing to overcome difficulties to bring about positive change

People in many other countries can identify with the basic human yearning for freedom, justice and democracy.

In Melbourne, the most livable city in the world, Australians express their solidarity with a group of young Malaysians in black protesting in Federation Square.

The same thing happened in Singapore and the reaction is somewhat different. I'm not talking about the police who first warned the protesters then later arrested 21 Malaysians for gathering at the Merlion Park  yesterday - the police had little choice, they had to enforce Singapore's law otherwise they will be accused of double standards. The police had to do what they did. 

Before we jump in and discuss this further, lets be clear about what the Malaysians did at Merlion Park. They gathered there at 5pm yesterday wearing black t-shirts, holding up a few signs and later sang the Malaysian anthem. There was no rowdy behavior, shouting or anything like that. Here is a picture of some of those involved in the protest.

The police had to arrest them because they have broken Singapore laws and Singaporeans have been arrested for lesser offenses of similar nature. I think the Malaysians who had been warned earlier expected to be arrested given the Singapore Police is known for its efficiency. These young people probably felt that it was worth doing even if they were arrested, sent to jail and expelled from Singapore.

Here's a sample of reaction from a number of netizens[Taken from Straits Times website] typical of the reaction from Singaporean netizens.

Most of Singaporeans' comments resemble one of the following... If they want to protest, please go back to Malaysia. We cannot allow this kind protests because it will destabilise Singapore. They should be taught a lesson. Lets not be soft to foreigners.

"The Malaysians protesting and breaking our laws should be thrown into jail and barred from entering Singapore immediately.

Singaporeans is not involved in your domestic problems Malaysians must learn to respect the law of each countries in which they do business, live, works or travel."
- Arami Chong, Straits Times Reader.

A small number Singaporeans did say that the authorities shouldn't be so harsh a group of people who gathered peacefully and caused no damage to public property.

Does allowing people to protest peacefully undermine the security here? How many of you would hesitate to go to Melbourne because the allow both citizens and foreigners to protest there? Thousands of Singaporeans send their children to Melbourne for their studies every year....and they are not worried protests are allowed there.

Few Singaporeans bother to ask what is the intention of those involved in the protest at Merlion Park. This is the first thing you have to do before you jump in to condemn and accuse them of anything. Their intention is not to challenge our laws or our authorities or to disrupt the peace in this country. They feel strongly that there is a need for change in their home country and like all young people around the world they want a better future for themselves and their fellow countrymen. The response of many Singaporeans is we should treat these people as criminals and apply the harshest punishment. We must not forget that positive change comes from people standing up for what they believe is right and those who want to preserve the old order will use laws to suppress change for the better. The laws used against this group of Malaysians can also be used readily against Singaporeans when the time for change comes ....we have to look beyond the our harsh laws designed to limit our freedom to think about what is morally right and what is morally wrong. What is right is always worth supporting no matter how repessive the environment.

Wednesday, May 08, 2013

Malaysia's elections holds many lessons...

Finally it is over and the results are out. The opposition won more than half the votes counted but did not get enough seats to form the govt. The opposition support is concentrated in Peninsular Malaysia where they won 53.3% of the vote vs 45.7% for BN.

While the ruling party in Malaysia is very different from the PAP, there are several common traits they share. One is the control of the traditional news media. I always pick up a copy of the English newspapers whenever I go to Malaysia  - there is plenty of coverage for govt programmes, the leaders and nothing about the opposition - if there is something, it is usually negative. The Malaysian opposition has been able to overcome the state controlled media using the Internet and social media for its campaign. 

"The mainstream media is completely controlled by the government and denied access to the opposition. Malaysia ranks 145 on Reporters Without Borders Press Freedom Index and has dropped in the ranking every year since 2003. During the campaign period countless hours of airtime and dozens of pages of newsprint are dedicated to promoting lies and misinformation about the opposition without providing any opportunity for rebuttal. There can be no real democracy with such a lopsided and biased media environment. Throughout the last five years Malaysian authorities have arrested bloggers under charges of sedition and treason." - [Link]

Singapore's mainstream media is ranked 149 compared with 146 for Malaysia's. 

Another issue in this election is the lack of independence of the Election Commission. This election, the Malaysian EC;s reputation is completely ruined. Opposition supporters who are now the majority of Malaysian voters are suspicious of the election results. 

"It's electoral fraud, the Election Commission's complicity in the crime, attempting to steal the elections from the people," - Anwar [Link]

There are many issues associated with the Malaysia election process - these include postal mail in votes, phantom voters, etc. In this election, there were accusations that foreigners were flown on chartered flights to closely fought seats to vote for the ruling party, vote buying, ballot stuffing, problems with indelible being washable. While it is not clear if these incidents were widespread, the social media reported many of these showing video evidence like this one below of foreign workers brought to polling centers.

"Based on the voter list gazetted in March 2013 the following has been identified:

- Postal voters who by definition are engaged in national service with a national origin from Pakistan, Bangladesh, or Indonesia
- 28,000 Philippinos and Indonesians designated as voters based in
Sabah but casting ballots in Kuala Lumpur and Selangor state
- The Malaysian Electoral Roll Analysis Project has identified countless examples of dubious registrations in the voter file including instances of 100s of registered voters residing in a single home, foreign nationals listed as registered voters, individuals registered doubly as regular and postal voters,

The Election Commission acknowledged many of these problems but failed to take adequate steps to resolve them." 
The Election Commission falls under the purview of the Prime Minister's Department and incidents of possible fraud gets linked quickly to the Malaysian Prime Minister completely eroding the trust of people in the system. The Election Commission should be completely independent and the members should not be elected by leaders of a political party so as to command public confidence. When elections become closely fought, the public can be extremely suspicious of various actions of the EC if it is not an independent body.

The drawing of boundaries of constituencies has a potent effect on the number of seats won by a party. In Peninsula Malaysia, the opposition won 53% of the votes but it lost many closely fought seats because the ruling party could examine previous voting patterns in sub-districts and adjust the boundaries according to get as many seats as possible and to deny proper representation for people who oppose them. These boundaries should be drawn objectively so there is equal weight for each vote.

Najib Razak now says he wants "reconciliation" . It is for Malaysians to decide whether they accept him as their leader after what happened in this election. The majority of Malaysians wanted real change and voted for it. They now feel rather "short-changed" after participating in an election process that left so many unanswered questions. I know a few Malaysians who went back home just to vote from faraway places such as Australia and England. 300,000 Malaysians working in Singapore rushed home last weekend to cast their votes. They knew the importance of this election and how it could have changed the course of the country.

Saturday, May 04, 2013

Malaysia's hotly contested elections....

In order to win the Malaysian elections, both the ruling party and opposition have resorted to highly populist manifestos to win the votes.

Here's a Malaysian opposition candidate promising the people free education all the way to university, cheap patrol, money for those over 60 and many other goodies.

Najib himself had already implemented free outpatient healthcare for the elderly, free health screening and welfare programs for the poor. To get re-elected, it was reported he had to 'copy' parts of the opposition manifesto so that he would not lose out in the 'goodies for votes' game.

All this highlight one often mentioned problem with democracy. In order to get elected, politicians make all sorts of promises that cost the country billions. Once they start handing out goodies, the country start to have budget deficits, borrow from international lenders and end up like Greece and Spain. This however is just one side of the story - that dire outcomes are linked to giving too much to the people is just one interpretation of the story...convenient interpretation for those who are against social safety nets. Spain's problems are caused by the govt bailing out banks after its property bubble not welfare. Greece's problem is messier - it ran a bloated govt sector and the govt cheated on the budget accounting with the help of Goldman Sachs.

So what is going to happen to Malaysia if the opposition wins and start its free education program. Will it go bust? According to the politician in the video,  under the steady hand of the opposition, the state of Penang tripled the reserves in 5 years by running the place more efficiently and getting rid of corruption....all of the opposition controlled states have healthy finances.

In Singapore, for some reason, Singaporeans think of free education as a bad idea. But free education has existed in many countries like Germany for a very long time. Without going through the maths, we have been led to believe that something given out free is just not sustainable and will strain the govt finances. The strange thing about Singapore is the govt happily provide free university education through scholarships to many foreigners but insists on reducing the subsidy for own citizens by hiking tuition fees every few years.

But lets go through the maths to see how much is needed to make university education completely free in Singapore. Every year about 30% of a cohort enter university - roughly 12,000 students. On average they pay something like $8K in tuition fees [Link]and each university course is 3-4 years. So making university education completely free will cost the govt roughly 12,000 x 8000 x 3,5 = $336M more in its budget. The total amount is about 2-3% of our defense budget or 0.6% of our total budget. To put things in perspective the 2012 increase in defense budget was by $504M [Link]to $12.24B - there is no urgency to increase our defense budget which is already far in excess of what is needed to defend Singapore but they chose to do it over something else for the citizens. What I'm getting at is the issue of free university education has little to do with financial prudence and more to do with ideology - they refuse to do it not because the money is not there but they prefer to do something else with the money.

The Malaysian stoy is far more complex and intriguing. Under the Najib administration, Malaysia has a debt to GDP of 52% - making it the most indebted nation in South East Asia. All these promises the opposition has made to the people on the surface appear to be populist and designed to win votes. However, there is another dimension to this. The spending is only possible if they can get rid of corruption and unlock the billions lost in govt contracts and crony capitalism. In other words, the promises made can only be fulfilled if the opposition runs a clean govt and stay away from practices that has hindered progress in Malaysia.

Here is Anwar explaining his vision with great clarity and charisma.

For Malaysians it a choice between maintaining the status quo which they are familiar with or taking a chance with a new govt. The power structure in the ruling party makes it hard to rid itself of corruption because corruption ad cronyism has become entrenched. Taking a chance with the PR coalition involve risking your future with an new govt without experience. The opposition has chalked up a decent track record in 5 states that they won in the 2008 elections and shown that they can get things done. For the Malaysia voter, the only way ahead and the only way to get real progress is to dismantle the existing power structure which is riddled with corruption ...but that cannot be done without taking some risk with a new govt....

Thursday, May 02, 2013

Info-graphics : Income Inequality in Singapore....

I haven't been writing for a while. I think it is the big overhang from the White Paper that incensed Singaporeans and intensified political discussion at all levels of our society. Singaporeans today are much more aware of the challenges in our society than any other point in the last few decades. While the govt tries to fix the problems we have with housing and transport, the real hard problem that our society face is that of inequality. The PAP seem to avoid all the hard decisions on taxes, minimum wage and healthcare - preferring to keep the status quo...but the middle ground is very much eroded.

The problem of severe inequality makes solutions for all other problems harder. Inequality in itself creates an unlevel playing field for Singaporeans and when a large segment find it so hard to overcome their  disadvantages they will stop supporting the system...no matter how good your transport system is or what you try to do in public housing.

We have never seen the kind of extremes we see in the wealth distribution today. It is the highest in the developed world (we sometimes share this dubious honour with the United States). A dominant govt like that PAP cannot say it is not due to its policies ....it is clearly an outcome of its policies. Policies that amplify inequalities by continuous pursuit of pro-business policies almost to the point of neglecting the plight of the working class. The PAP now alters its policies to limit foreign labor growth and increase the ratio of Singaporeans in the workplace. But this is a shift from an extreme position and there is only so much it can do because businesses have grown dependent on imported labor. Telling Singaporeans they are "doing something" is not going to satisfy the ordinary working citizen that is fast losing his patience because he senses the PAP govt is unable to make fundamental changes...and perhaps it can't because it has painted itself in the corner by going down the same path for far too long.

Watch the Malaysian election closely because it is going to tell us something. Politicians such as Najib knew he had to make changes when the citizens voted in large numbers for the opposition. He did go ahead to make numerous changes like eliminating the ISA, implementing minimum wages, providing free healthcare for the elderly and he did run the economy relatively well - decent growth and low unemployment. But what he couldn't do was to get rid of cronyism and corruption which Malaysians today simply cannot accept. It remains to be seen if he has done enough but my sources tell me they are heading towards further losses.

Leaders sometimes know that they need to change after they overcome their own denial but underestimate the rate and magnitude of change. I think leaders in Singapore have underestimated the effects of income inequality. From their Ivory Tower they can philosophized and think that people should just accept the extreme inequality as a consequence of their "meritocratic system". This is a mistake. It is an easy mistake to make when you experience the favorable outcomes of the system as an elite showered with opportunities and high wages - you justify your own success as the result of meritocracy and by that token see the failure of others as the result of their lack of ability and effort. But they forget that meritocracy does not exist in isolation - the inequality is amplified by policy choices of our leaders and not just dependent the talents and effort of individuals. Our relatively extreme inequality is simply the result of extreme policies adopted by the PAP govt....and the PAP govt has made no fundamental changes to move from its extreme.