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Lee Hsien Loong Is Telling Porkie Pies If He Pretends RCEP Is a Big Deal Without the US

On November 15, Lee Hsien Loong and Chan Chun Sing signed the Regional Comprehensive Economic Partnership (RCEP). For those who might not be aware what this is, the RCEP links the ten ASEAN countries (Singapore, Malaysia, Brunei, Indonesia, Thailand, Philippines, Vietnam, Cambodia, Laos and Myanmar) with Japan, China, Australia, New Zealand and South Korea. Since China, Japan and South Korea are the second and third largest economies in the world ranked by nominal GDP, they dwarf the ASEAN bloc, the biggest of whose members, Indonesia, only ranks sixteenth.

Originally Singapore was part of the Trans Pacific Partnership  (TPP), which grouped many of the same nations, excluding Indonesia and many of the ASEAN countries, but also included the US, Canada, Mexico, Chile and Peru. After it was negotiated during Obama’s two terms and signed in 2016 as the crowning achievement of his administration’s trade policy, Trump abandoned it as one of his first acts on taking office.

China’s economy is already 70% of the size of the US in nominal terms, and has overtaken it in PPP terms (though I’m not really sure what that means since differing prices of non-traded goods and services between countries may reflect different quality and may not be comparable). However it is no substitute for the US. Since the end of WW2, the US has functioned as the importer of last resort and provider of liquidity to the world. It has been willing to tolerate growing current account deficits fuelling the rapid rise in global trade. After the US ended dollar convertibility into gold in 1971 the rest of the world has effectively agreed to accept the US dollar as a fiat currency and accumulate growing claims on the US which are ultimately uncashable. While the US has reaped huge seigniorage advantages from becoming accepted as the world’s central banker, globalisation of the supply chain has effectively meant writing off its own manufacturing industry.

This intensified after the US mistakenly allowed China to join the WTO, which is estimated to have cost the US some 5 million manufacturing jobs. While this lowered costs for consumers, it should have been accompanied by redistribution of the gains from trade to the losers, through more expansive fiscal and monetary policy and by more effective taxation of the winners and support measures for the losers.

I have frequently drawn the link in my blog between the growth in world trade and Singapore’s economic growth and thus, indirectly, the Lees’ grip on Singapore by allowing them to falsely claim credit as the architect of Singapore’s economic success. Goh Chok Tong’s attempt at a witty aphorism, when he said “The rooster goes around boasting that its crowing causes the sun to rise” about the Opposition, applies far more aptly to the PAP and to Singapore’s Trinity of rulers, Father, Son and Holy Goh.

China has no interest in bankrolling the rest of the world to prosperity like the US did in the past, though that changed under Trump and Biden will be wary of moving too far from US-centric policies.  In fact the mindset of the Chinese leadership, like Singapore, Japan and South Korea (also Germany under Merkel) is solidly mercantilist and characterised by the belief that imports and domestic consumption is bad, investment is good and that a country’s virility is measured solely by the size of its current account surplus). China is only interested in imports as a source of inputs for its manufacturing machine or agricultural goods when its domestic production fails. While it still runs a significant trade deficit with South Korea (which is an important source of intermediate manufactured inputs going into Chinese end products, China’s objective has always been to substitute manufactured imports with domestic production and to bring its supply chains within its borders as much as possible.

Singapore, despite having only about 10% of the population of South Korea, runs a current account surplus of almost the same size. Our domestic consumption is only about 35% of GDP. Being in a group with much bigger countries with the same objectives of running a zero-sum trade policy and the same flawed economic model is not going to provide a kick-start to economic growth. Even the think tanks like the Peterson Institute with the most simplistic and biased models of the benefits of free trade (which start out by assuming full employment at all times) estimate the gains will go mostly to Japan and South Korea and that their gain will be less than 1% of GDP by 2030.

While Singapore runs a trade deficit with the US because of purchases of US military equipment, passenger aircraft and food, it runs an enormous surplus with the rest of the world which is enabled by the US deficit. The RCEP is basically an irrelevance and will not help our current economic problems. Chan Chun Sing and Lee Hsien Loong should wipe the stupid grins off their faces. They should not fool Singaporeans. The pandemic may be largely over by next year with the rollout of mass vaccination programmes but global and US trade is going to take a lot longer to recover. Singapore’s rulers need to give up their misplaced fixation on export-led growth and austerity for our people and start focusing on boosting domestic consumption instead. The reason they do not want to do so is because larger surpluses boost our stock of foreign assets managed by our two unnecessary sovereign wealth funds and indirectly Ho Ching’s earnings. It also gives Lee Hsien Loong and the PAP more state resources to control Singaporeans. The sooner we end this misplaced mercantilist mindset, the sooner we will be better off.

 

 

Kenneth Jeyaretnam

* The author blogs at https://kenjeyaretnam.com/
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12 Responses to “Lee Hsien Loong Is Telling Porkie Pies If He Pretends RCEP Is a Big Deal Without the US”

  • TUMASIK Patriot:

    Can’t blame them, Ken, the SPIN must go on and Idiots are easily CONvinced

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  • Better life please:

    We should aim for better life for most of our people ,especially the bottom 20%.
    In that area ,we have failed.
    What is the point of success when most of the wealth is not distributed more widely and the poor quality of life for many of our Seniors here?

    It is a national shame that someone can die and rot in a home for nearly 2 years without anyone bother to take any action. It reflect the kind of Society we have become…we are no longer our brother keeper.

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  • opposition dude:

    Goondu has already shown that his years in politics amounted to NOTHING. He was under the tutelage of not 1 but TWO former PMs but he was sleeping when understudying.

    His most recent political mistake to date which cost him rather dearly is his kan cheong opportunistic rush to hold the election early. He clearly was going by theory only. Just like studying for an exam the political textbook says that in a crisis voters will have a flight to safety approach and blindly vote for PAP en masse. So he was thinking he would easily match his 2015 result if not better it.

    Another mistake highlighted in the papers was his insistence of the president being malay. Voters saw this as him misusing power for his own gain. Another was the public sparring with his siblings over his parents’ house. Pofma and its liberal usuage is yet another political mistake.

    But worry not because with the 3G still in charge their thinking and ways of doing things won’t change. Expect more of the things you hate and expect their vote share to plummet when the next election comes around.

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  • Pap signatory means nothing:

    Pap signature means nothing if the Charter or Internnational agreement acts against PAP interests. Past example include persnal n press freedom but classical n will remain fresh in the minds of most Dsingporeans is the destruction of a young teenager’s life with his family n his future, ie Poor Amos. PAP hopes that no Singaporeans is awared of what thry hfave cobsigned n carried out outright violating the Charter. Even adter reminders from various Singaporeans, they steadfastly ignored until the relevant UN representative is alerted n officially contact made by the UN before the violation is stopped but not reversed to give what they have abused.

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  • To whom it should concern.....:

    The Pennsylvania Senate Majority Policy Committee held a public hearing at Gettysburg on Nov.26th to discuss the U.S. 2020 election issues and irregularities (video below).

    https://youtu.be/vfBD0JpeKEw

    * Listen in from time 49:20 …. why is Singapore being mentioned along with those countries using the nefarious Dominion/Smartmatic computerized voting system?

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  • xoxo:

    This govt is only concerned with their own interests than the COMMON GOOD of all sgs especially the weaker among us.
    The so-called schemes for the poor and needy are rather CURSORY than meaningful.

    What is needed is A SOLID OPPO TO BRING ABOUT REAL CHANGE OF GOVERNANCE AIMED AT TAKING BETTER CARE OF OUR OWN PEOPLE.

    TAKING CARE OF OUR OWN CITIZENS FIRST does not mean we are xenophobic.
    It is the right thing to do.
    Slogans like ONE SG OR SG UNITED ONLY SOUND NICE BUT ARE EMPTY NOISES IN REALITY.

    I hope SDP N PSP can be represented in parliament and work together for the common good of sgs and the Oppo.

    As it is,there is too much wayang and parliament is like a comedy.

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  • A piece of paper:

    It is a piece of paper that looks like ASEAN free trade agreement. Seems similar in context and content. I thought SG is already in cooperation and integration with many regional and international economies. Interesting.

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  • Soccerbetting2:

    Reported on the TISG website :Quote -”PM Lee to participate in two libel trials on the same day
    The trials, separately, are against Terry Xu And Leong Sze Hian…

    AUTHOR

    Obbana Rajah
    DATE

    November 28, 2020…

    Prime Minister Lee Hsien Loong is set to appear in two libel trials on Monday (Nov 30).

    The trials, separately, are against Terry Xu And Leong Sze Hian.

    In a Facebook post on Friday (Nov 27), Lim Tean, the lawyer representing both Mr Leong and Mr Xu wrote: “All of you know that in early October this year, the trial of the libel proceedings which Lee Hsien Loong instituted against Leong Sze Hian took place”.

    He added that the two sets of lawyers have gone through two rounds of written submissions. On Monday (Nov 30) at 2.30 pm, the lawyers will once more appear in open court before Justice Aedit Abdullah to make their final oral arguments….

    He added that subsequently, the judge will deliberate and hand down a written judgment.

    The oral arguments will take place in Court 4B in the Supreme Court Building, Mr Lim wrote.

    “That same morning, in the same courtroom 4B, the other libel trial between Lee Hsien Loong and Terry Xu begins before Justice Audrey Lim. I am also representing Terry Xu in that trial”, he added.

    Mr Lim noted that on Monday morning, he will begin cross-examination of PM Lee.

    PM Lee against Leong Sze Hian

    Mr Leong is being sued over a public Facebook post he had shared on his page on Nov 7, 2018, containing a link to an article by The Coverage, a Malaysian news site.
    The article alleged that former Malaysian Prime Minister Najib Razak signed “secret deals” with Mr Lee in exchange for assistance from Singapore banks in laundering money from 1MDB, the embattled sovereign wealth fund.

    Two days after Mr Leong shared the article, he said that he was told by the Infocomm Media Development Authority (IMDA) to take down his post with the article within 6 hours, to which he complied. However, on Nov 12, he received a Letter of Demand from Mr Davinder Singh of Drew and Napier LLC, alleging that he had defamed Mr Lee and demanding a public apology as well as compensation for damages.

    He wrote on his Facebook page, “the Letter of Demand also stated that I had posted TheCoverage.my article maliciously and to damage his client. I reject all these allegations categorically”.

    Mr Leong also said a Writ of Summons and other court papers were posted on his front gate on Dec 4, 2018. He included photos of his gate, as well as the documents, in his Facebook post, which ended with “I turned 65 on 23rd of November and belong to the so-called “Merdeka” generation. I have fought for fundamental human rights in Singapore for the better part of my adult life in the last 2 decades or so, and the freedom of speech is one of the most fundamental of these human rights”…..”Unquote

    Response : What will the con people court award? Obvious who win ? Lim Tean get his millions dollar lawyer fees is the biggest winner .

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  • #06-195 Ren Char:

    Thanks to the 61%, all these FT schemes and FTAs will carry on . Question is what do we do to counter this? Complain no use.

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  • Singaporeans R Free Riders:

    Many american people and the rest of other world leaders dislike Donald Trump.

    They even go the extreme extent of ridiculing and embarassing him.

    Yet, these anti-Trumps in the world are largely his copycats.

    When

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  • Hong the son of a Gan:

    What does Hsien mean?

    GD Star Rating
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  • Singaporeans R Free Riders:

    Many american people and the rest of other world leaders dislike president Donald Trump.

    They even go to the extreme extent of ridiculing and embarassing him.

    Yet, these anti-Trumps in the world are largely his copycats.

    When Donald Trump took office and signed his very first document in the Oval Office, he made it his hallmark displaying his signed document full page right in front for all the press to see as witnesses for good measure.

    Since then, I notice his very practice of making this gesture is copied by almost every world leaders till today, including Singapore ( see CCS displaying document in picture ).

    GE2024.

    WP.Guarantee.Win.Again.More GRCs.

    $WP$ Tua Kee;

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    Mati-lah $PAP$;

    $PAP$ Slut$ Slut$ Slut$

    Professional, Motivated, Innovative Singaporeans must be Rewarded, Treasured, Admired.

    Workers must accept well comensurated salary to weed out kachang puteh and cheapskate businesses going which can only afford to pay beggar wages.

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