Hey Lee Hsien Loong Dude, What’s Your Plan?

The Government announced some shockingly awful growth numbers for the second quarter of 2019. They showed the economy shrinking at a 3.4% quarterly seasonally-adjusted annualized rate from the first quarter and growing by just 0.1% year on year. It is now highly likely that we will be in a recession (defined as two quarters of negative growth) by the third quarter of this year.

Law Minister Shanmugam was quick to respond on his master’s behalf. I do not know what qualifications he has to talk about economics but it has long been a trend for lawyers to appropriate roles that should properly be filled by qualified economists. Trump appointed Jerome Powell, a lawyer, to be head of the Federal Reserve (and has spent much of the time since criticising him with some justification) and it looks highly likely that the venal Christine Lagarde (who refused to answer my open letter about Tharman’s constitutional breach when he made the IMF loan commitment without Parliamentary approval) is a shoo-in for the role of head of the European Central Bank, even though she has what amounts to a criminal record, like Tharman who has an actual criminal record. Whenever Shanmugam pops up I am reminded of a T-shirt my brother had captioned “Silver-Tongued Litigator” showing a man in a suit but with a lizard’s head.

Shanmugam’s response to the bad GDP numbers was the usual PAP drivel about the need for Singaporeans to turn to the PAP in times of economic trouble as they were the only ones who could be trusted “to steer the city state through economic uncertainties when they go to the ballot boxes

Does that make any kind of sense? Would you trust a fund manager who has lost you money to continue managing your money or would you take it away and give it to someone else to manage? Of course the PAP will tell you that it is only because of the genius of LKY and after him his son that Singapore is where it is today and that one quarter of bad performance is merely an aberration.

However, as I have frequently said, Singaporeans have allowed themselves, in the words of Nicholas Taleb, “to be fooled by randomness”. If one was to run a regression analysis of Singapore’s growth compared to the growth in world trade, I am confident you would find that 100% of Singapore’s growth since the 1960s can be “explained” by the growth in world trade.

After the Great Recession of 2008 the Holy Goh compared Singapore to a speedboat that suffered in choppy seas but was able to zoom ahead when there was clear water. To put it in economic jargon, Singapore’s GDP growth has an elasticity, or beta, of greater than 1 with respect to the growth in world trade with very little alpha. So like a long only fund manager when the market goes up the PAP and the Lee family congratulate themselves on their brilliance. They tell you they deserve to pay themselves whatever they like and not even tell you how much (in fact they make the PM’s wife’s remuneration a closely guarded state secret) but when the market goes down they blame losses on external circumstances beyond their control.

As I have long said on these pages, the PAP have a simple economic model which is cheap imported labour and no minimum wage coupled with low taxes to divert MNCs into artificially boosting GDP with little benefit to Singaporeans’ living standards. It all goes back to an article written by Arthur Lewis in the 1950s entitled “Economic Development with Unlimited Supplies of Labour”, one that Winsemius and Goh Keng Swee plagiarized in coming up with an economic development strategy for Singapore. Economists are unfortunately unable to conduct control experiments but I am sure Singapore would have grown just as fast given its strategic location without the PAP’s authoritarian rule or needless policies of austerity resulting in what should be huge reserves while denying the people a role in how they are spent. In an article on Brexit some months ago I showed that Singapore’s economic growth record had been no better than Ireland’s even though Ireland is a bit of backwater compared to Singapore (as demonstrated by its weak position if there is a no-deal Brexit).

GDP per capita

The PAP’s economic model required a “buyer of last resort” in the form of the US prepared to suck in imports and allow the rest of the world to accumulate claims on it indefinitely. Even if Trump is only a one-term President it is likely that any new Democratic administration will continue to pursue a much more economic nationalist line.

The PAP’s over-reliance on manufacturing is coming home to roost as manufacturing shrank at 6% at an annualized rate, almost the same as in the first quarter. The Government has long relied on construction to boost the GDP numbers but Singapore has long reached saturation point in the number of shopping malls and MRT stations. This quarter it shrank at a nearly 8% annualized rate reversing the expansion in the previous quarter which had helped to prevent a recession.

Singaporeans seriously need to question how the PAP are going to dig Singapore out of this hole of their own making. They are fond of taunting the Opposition by asking what their plans are to improve Singaporeans’ lives even though that is quite easy to answer. Let’s hope people will write in and ask the PM what his plan is now and not be fobbed off with the usual glib answers. He can start by revealing how much he has paid his wife over the last fifteen years. Perhaps she can offer to pay it back to help ordinary Singaporeans impacted by the coming recession.

 

Kenneth Jeyaretnam

* The author blogs at https://kenjeyaretnam.com/.

 

 

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19 Responses to “Hey Lee Hsien Loong Dude, What’s Your Plan?”

  • Hsiam Loong Loong:

    Do people notice that our hawker centres have been taking turns undergoing upgrading? I already saw a few being upgraded again despite having undergone upgrading only 2-3 years ago.

    Also the CCs too. Already there were 2 CCs in pm’s constituency being torn down and rebuilt.

    And not forgetting our roads. Every now and then, you see digging here, digging there. Patch up here, start digging there.

    Easy access to taxpayers monies eh? Tear down and rebuild. Build and then tear down. Dig and patch. Patch and dig again.

    Boosting GDP numbers this way any Tom, Dick or Harry also can do the job. Why so dumb need to vote for the pap and pay them so high for?

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  • Harder Truths:

    The goveernment’s ‘plan’ is simple – keep MNC’s in $G using whatever means necessary. The MNC’s create investment and profits are split between them and the government.

    Infrastructure, labour, housing facilities are all constructed for the benefit of these big corporations and local government bodies.

    As long as there are nearby (and not so nearby) countries of starving people numbering a few billion – $G can always import them to do the jobs at whatever cost they are willing to pay.

    Does anyone really think this government or their MNC backers will let elections or the needs of the local population stand in the way of what they want to continue?

    People here have not seen how bad things can get – once things get really really bad then citizens will find out the hard way what poverty in a communist country filled with third world gangsters is really like.

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  • vote OPPO:

    when market is good, and all ship rise on high tide, pap pays each other 24 months GDP growth bonus, citing pap talent.

    when market is bad, and all ship sink on low tide, pap continues to pay each other 24 months GDP growth bonus, citing market.

    one minute it is chicken (talent), then other minute is feather (market), when truth is nothing but pap lies for S$m ownself pay ownself enrichment ploy.

    We live in Aljunied. We have never voted pap. As long as we were able to vote, our votes go to OPPO. We live an honourable life, unlike lky clown the d**honourable son, in that we call a black pot black when it is black, and never called an INDIAN as malay. We voted out pap BS king george yeo and S$m gang. So much so 4G ong ye kung dared not step into Aljunied again.

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  • Bystander:

    Even if a garang guni man stand for an election in our ward, I would still vote for the guy, only he could experience our struggle for keeping up with the ever rising costs of living, and in the end giving up our middle class status and slip into the poor level.
    Singapore is only for the filthy rich who would snap up penthouses costing 70+ millions like buying some expensive toys.
    We have to struggle to give up a lot of small little luxuries, like eating out in humble food courts.
    Someone said Ho Ching may be collecting $100m p.a. salary plus bonuses.
    So Govt won’t dare to publicize it. Is this fake news or true news?
    Even Lee Hsien Yang is bringing this matter up.
    Am fuming with anger.

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  • As long happy:

    As long they are happy anything they want to say is their wish. We can only suck thumb and shut

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  • Congrats Pinky:

    Well Done Singapore. We are going down the drain. What are you waiting for ? Are you not shy to keep on having that million dollar salary ?

    Come on for fiack sake, its time to reduce all the high level salaries. KNNBCCB

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  • HDB flats depreciate to ZERO:

    US economy doing very well with record employment and record stock market performance. But Singapore is going into recession. Why? This proves PAP has lost its mojo. Time to get rid of it and bury it with LKY.

    VOTE FOR REGIME CHANGE. MOST IMPORTANT, TELL YOUR FAMILY MEMBERS AND FRIENDS TO DO THE SAME.

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  • incompetent clowns!:

    everything runs on legalized scams , disguised as schemes.
    only the elites gain..the rest will pay and pay till we die.
    no respite and its only going to get worse.
    so folks do the right thing-VTO!
    Using up citizens’money like theres no tomoro!
    %$#@&*!!!

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  • Servant:

    Now that Sir Dyson is here, we have the chance to serve another lord.

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  • I have said many times:

    LHL already got the most popular PM candidate Tharman to helm economy top post for years, now what magic can Heng turn around the economy?

    Over the years SG focus too much on import foreigners from third world (whose CVs are no screened) to drive economy growth. These FTs are mostly low quality and productivity. To make matter worse sg has to open the flood gate to them (deprive some singaporeans’ jobs) due to FTA/CECA otherwise the business licensees will be suspended.

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  • Rabble-rouser:

    There were never any ideas on how to generate enduring economic prosperity for the locals in the PAP’s cupboard [Political Agenda]. S’pore’s GDP Growth figures were easily malleable because the S’pore govt both directly controls & indirectly influences the S’pore Economy. Their Growth-at-all-cost policy were only short-term “peacock” displays of numerical superiority but “masks” the underlying Structural Rigidities (of Crony Capitalism, Low wages, Poor Spending income, High cost of living eco-system, etc); Weak Fundamentals (Business enterprises, Start-up eco-system, entrepreneurship – weak or non-existent) & a lot of Political Obsfucation for reality covered by fantasy.
    Those GDP numbers alone can’t tell a true picture of an economy on the wrong pathways nor a society which was already on the brink (madness, suicides, addiction or unprovoked aggression):
    EDUCATION
    Let’s start with Education which is the first building block. S’pore is already 2 decades inside the Knowledge Economy. STEM (SCIENCE, TECHNOLOGY, ENGINEERING, MATHEMATICS) are at the forefront of the current revolution for Coding, Machine-learning & programming, Artificial Intelligence, Voice, Biometric & Cognitive recognition mechanisms, Cyber-Physical Integration Et Al. Two things stand out in S’pore Educational eco-system; (1) broad-based curriculum vs a specialised future specific curriculum – Basically MOE didn’t educate nor trained enough students in computer science, coding & involving basic industrial application studies; (2) overwhelming focus still on Meritocracy Policy, academic test scores, Elitist cohort streaming & inculcating an Elitist Policy based on test scores over the mass education of an enlarged STEM core. MOE have failed Big-Time & lost over 20 years of momentum.
    BUSINESS ENTERPRISE/ENTREPRENEURSHIP
    S’pore’s Domestic Economy were not only stagnant but devoid of any Creativity & Innovations. We’re still stuck on menial mechanisms of low wages, foreign army of service workers & old concepts (Brick ‘N Mortar). When the govt focuses so hard on highlighting Street Food Hawker Culture & even encourages graduates to seek a hawker career, you know they are bankrupt! Any business studies student can tell you (1) hawker trade is too labour intensive; (2) not scalable to global platform; & (3) constrained by income & mindsets against overpaying for hawker food.
    SGX within a decade oversaw it’s bourse capitalisation halved whilst our regional neighbours grown exponentially.
    Unlike China, S’pore is still long way off from using cashless mechanism – having first recognised in 2017, now only implementing digital banks in 2019. The pace is…..[Cont'd]

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  • Rabble-rouser:

    - Cont’d -
    HIGH COST STRUCTURES
    Practically everything in S’pore were man-made, artificially constructed & lavishly maintained at great cost to the population & at great risk to the environment, to nature. Yes, we’re paying through our nose to showcase that S’pore is wealthy, a modern metropolis with skyscrapers & a clean, green environment to the world. BUT ALL THAT ARE FAKE, CONSTRUCTED AT GREAT COST USING OUR CPF!
    S’pore mobilised an army of Bangla workers every day to clean & sweep, maintain hygiene & trim, manicure every tree, bush & shrub – all paid from people’s contributions & from “blood, sweat & tears”.
    In truth, S’pore isn’t in synch with Nature! It is anti-nature in reality. A small geographical area whose footprint is horrendously overpopulated. A high carbon polluted eco-system with massive infrastructures & intensive high-rise buildings requiring high electricity outputs to run various services; & water concerns (requiring destination solutions) in the tropics where rainfalls are more than adequate.
    Truth be told that S’pore high cost structure is much like a High Maintenance Mistress with High Entitlement needs, High Expectations (Housing, branded handbags, Haute couture clothes from French & Italian fashion houses, etc). But Mistresses need an extremely wealthy man whereas S’pore rides on the backs of the masses’ “Blood, Sweat & Tears”.
    And 10 million population target is real! It boggles the mind as to how congested will S’pore be considering how congested it is now @ 5.5 million current population. Can we even get there when automation & robotics are replacing humans in the workforce.

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  • No Dafts or Dogs Allowed:

    This is a sure sign economy is facing a downturn. Have to keep these workers occupied or if sent back, no more levy incomes. Also after upgrading, can increase rents and road taxes.

    Also wonder why electricity tariffs go up when LPG price is dropping. Now it is the hot months, a lot of people are using air-cons. Good time to slaughter.

    Disclaimer: I cannot be held responsible for the opinions above, as apparently one of my dogs has learned how to type.

    Hsiam Loong Loong:
    Do people notice that our hawker centres have been taking turns undergoing upgrading? I already saw a few being upgraded again despite having undergone upgrading only 2-3 years ago.

    Also the CCs too. Already there were 2 CCs in pm’s constituency being torn down and rebuilt.

    And not forgetting our roads. Every now and then, you see digging here, digging there. Patch up here, start digging there.

    Easy access to taxpayers monies eh? Tear down and rebuild. Build and then tear down. Dig and patch. Patch and dig again.

    Boosting GDP numbers this way any Tom, Dick or Harry also can do the job. Why so dumb need to vote for the pap and pay them so high for?

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  • Humoring unnatural aristocrats:

    Some specialist hospitals report that the organs of heartless politicians are in strong demand by heart transplant patients – because they’ve hardly been used…

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  • Singaporean Kong Come.:

    Also the CCs too. Already there were 2 CCs in pm’s constituency being torn down and rebuilt.
    And not forgetting our roads. Every now and then, you see digging here, digging there. Patch up here, start digging there. PIE toward Changi Airport, along Eunos up to Bedok,the road has wear off n corroded till now, only good in collecting more ERP. don’t B bother to mend the road. What’s wrong collecting more money from the people?

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  • I LOVE Recession!:

    Ever since 13 years ago since the last major world financial recession, the 10-Year-cycle seems to have vanished.

    Has someone stopped playing the game?
    Now it’s back?

    I miss these recessions.

    It’s great for Singaporeans to wake up. To be forced to question their garbrament.
    To have to really worry about their rice bowls and face the onslaught of the 10million population immigration and the super expensive health care and overpriced, Depreciation-destined HDB public housing price.

    I just love it ! Recessions bring out the worst performance of the country.

    It reveals the truth.

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  • Middle Finger Monkey:

    @ Kenneth Jeyaretnam

    “Would you trust a fund manager who has lost you money to continue managing your money or would you take it away and give it to someone else to manage?”

    The so-called “fund manager” in charge of Temasek Holdings has been losing billions, not once, but again & again. You are too kind to imply she only lost for 1 period of time.

    The debacle in TH’s investment in Bayer is the latest of the fiasco.

    @ Rabble-rouser

    This little red-dot has been called SINKaPOOR since the 2006 GE. Pity sinkies, including many so-called oppos with supposed “alternatives” like smaller class etc, failed to acknowledge their incompetence.

    The SDP’s so-called “alternatives” do not address the FUNDAMENTAL/ROOT CAUSE of the problems/failures of the PAP policies. Let’s take the issues & problems of the MRT system. Could ANY of the soc-called SDP’s “alternatives” had prevented the MRT breaking down?

    Sad to say Lim Thean’s party has so far not stated how, for eg, full accountability and transparency of GIC of the management of our CPF $, would improve the returns

    Dr Tan Cheng Bock’s party so far has been pretty quiet; hopefully his party can voice out better views about steps to at least ameliorate the policy failures.

    As for the WP, it is just self-serving and a wayang oppo.

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  • Middle Finger Monkey:

    @ Kenneth Jeyaretnam

    By the way, Dilhan Pillay is the new Chairman of Temasek International; he is also a lawyer…………….and Temasek’s investment in Bharti Airtel is a loser…..so much so that GIC has to be roped in to subscribe for the rights share, so that Singtel’s (effective) shareholding thro GIC is not diminished.
    For GIC to put $ into Bharti when it is being downgraded to below investment grade just show up the worrying problems over Temasek. (P/s: Temasek sold its shares in Bharti to Singtel at a loss in 2016, but SingTel is majority owned by TH)

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  • Rabble-rouser:

    We’re into a new paradigm where many people have never been before. Anyone with an Economic & Financial sense can “smell” the stench of death looming over the horizon! Because bankruptcy, sudden death & massive impoverished masses are just around the corner.
    US, EU & Japan were all ensnarl in a govt policy trap which forces Central Banks to “engineer” interest rates from low to zero, then onto negative rates. But this in turn destroys critical elements of the Global economy in Banking (eg.Deutsche Bank), pension funds obligations, “Pooled” insurance funds, Medical insurance, investment & mutual funds eco-system whom all works on a higher positive yield basis, never with negative interest rates. This is a ticking time bomb of immense consequences.
    Also, this artificially low borrowing cost eco-system encourage masses to assume huge debt as being fashionable & smart while putting capital accumulation, thrift & savings habits as being old-fashioned & silly.
    The tremendous difficulty for Global Central Banks to revert back to normal interest rates set by the market is a dangerous new precedent. They are “locked” into reducing interest rates at a time when there were no more headroom to expand monetary liquidity (Central Banks Balance sheet liabilities too exhausted) nor fresh funds coming in (Global trade wars reduce money velocity, tariffs are an import & consumption tax, etc). Frankly, if you can comprehend this situation, it is beyond any small state’s politicians capability to influence & guide through this economic mess made by the big players! It is out of our hands (& PAP, too)!

    KJ: Shanmugam’s response to the bad GDP numbers was the usual PAP drivel about the need for Singaporeans to turn to the PAP in times of economic trouble as they were the only ones who could be trusted “to steer the city state through economic uncertainties when they go to the ballot boxes“

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