TR EMERITUS

The Government is right to open up the economy gradually as there are expected to be further asymptomatic Covid-19 cases in the community. But a gradual opening will be at a tremendous cost to the economy, employees and business owners. What's more, even after the economy gradually opens up, there will still be asymptomatic cases in the community. American economist Paul Romer has recommended conducting massive testing to instil confidence among the public about going to work or shopping. The Chinese city of Wuhan, the original epicentre of the disease, succeeded in testing its entire population of 11 million people in 10 days through pooled testing. Singapore can do the same and test the entire population. At appropriate intervals, the testing can be repeated. This is not a foolproof plan, but may provide the confidence to open up the economy faster and ultimately cost less. It may also be safer than a slow reopening.   SY Choo      Read More →

As expected, employers are pleading their cases to continue using foreign migrant workers. The reasons they cite are the usual scare tactics: loss of competitiveness if we do away with cheaper migrant workers, can’t find locals who want to do these dirty and dangerous jobs, longer completion time of projects, etc. All these reasons cited are true, even obvious, but that is not the point. The point is that a continued reliance on cheap migrant workers is a dis-incentive to find better ways of using local labour. In other words, it takes away the push to increase the productivity of the worker, a local, if the addiction to cheap migrant worker is weaned off. What the employers are advocating is kick the can down the road. They know full well an over reliance on migrant workers is fool hardy as this pandemic has shown, but the next pandemic is years down the road and god knows what they would be doing then; the important thing is complete the current project, make sure we are still in business and profits continue to come in. The employers point of view is totally understandable, so too the need to take the long term view of eventually weaning the addiction on cheap migrant workers and raise worker productivity. The onus is on the government to enforce a viable middle path that eventually wean the country of the addiction. It has to set a timeframe to gradually reduce the ratio of migrant workers to local workers to eventually zero migrant workers or an acceptable level, be it 5 years or 10 years, and stick to it. The inevitable loss of competitiveness will come, so too the downgrading of our economic prospects by rating agencies and capital flight, but stick to our guns, we must, otherwise it’s a waste of effort and sacrifice, as happened in the Eighties. If any country can pull this off, it is Singapore, not because we are any more resilient or united than other people, which we will never know until shit hits the fan, but because we have a huge reserve to help us make the transition, otherwise, what’s the reserve for? Bailout inefficient companies again when the next pandemic hit?   Foong Swee Fong      Read More →

The current geopolitical scene today is dominated by two elephants, namely the USA and China. The USA remains the world’s largest economy and the American military remains the only military force on the planet that can fight two wars in the world at any given time. The other elephant is China, which in the last four decades has grown its economy to being able to challenge that of the USA (even American policy makers admit that it’s a question of when China becomes the larger economy) and with growing prosperity, its invested in its military, so much so that American military planners don’t take assume that they’ll automatically win any potential war with China. Unfortunately for the rest of the world, both elephants have character flaw. China, under President Xi has become especially mean, nasty and secretive. Whatever growing rights that China’s citizens enjoyed under his predecessors have since vanished. In the handling of the Covid-19 outbreak, scientist in China who tried to warn the world ended up vanishing, which was something that didn’t happen during the SARS outbreak of 2003. Mr. Xi has used anti-corruption drives to consolidate power to such a point that he has decided that he’ll do away with the tradition of leaders handing over power after a decade. While the USA under Trump isn’t nasty, it become something of an incompetent buffoon, which has become particularly noticeable in its handling of Covid-19. America, which used to be a donor nation in any disaster has needed to get mask from elsewhere and the world has been transfixed by images of American doctors begging for basic protective equipment. As this happens, you get daily scenes of the President bragging about the great job he’s doing. Even before the outbreak of Covid-19, the Trump Administration was unashamedly transactional in its foreign policy and its high staff turnover suggested that it could barely get its act together. So, what can the rest of the world do? How do you choose between a nasty elephant and an unpredictable and stupid one? I’ve previously argued that small nations need to work more closely together, as in the case of the European Union. There’s another solution, which my favourite litigator reminded me of in a recent article that he shared on Linkedin. The answer is to remember that while the elephants are by far and away the most dominant animals in the jungle of geopolitics, there are other large animals who can help small insects. For my favourite litigator, the two animals are the United Kingdom (the dominant global power before the USA) and Japan (the dominant power in Asia, before China). You could say that if the USA and China are elephants, the UK and Japan are hippos. Hippos may not be as domineering as elephants but they have the potential to offer the world. Britain may not have the firepower of the USA; the British armed forces have been an invaluable ally in America’s conflicts. The British Armed forces are considered to be amongst the world’s most professional and experienced, so much so that I remember one of my favourite Englishmen reminding a group of Singaporeans that American Navy Seals go to the UK for training by the SAS and SBS. British Armed forces have defended British citizens in troubled spots and have shown themselves more than capable of defending their interest. The economy of the UK isn’t something to be sniffed at either. London remains New York’s only competitor as the world’s main financial centre, even with the loss of unfettered access to Europe through Brexit. The UK remains the sixth largest economy in the world with a nominal Gross Domestic Product (“GDP”) of US$2.83 trillion and a Purchasing Power Parity (“PPP”) of US$10.4 trillion. It’s not the largest economy or largest market but it is still in the top ten places of markets to be. The United Kingdom has serval key strengths which cannot be rivalled. It is the home of the English language; the language used in global commerce and has strengths in soft power exports like music and sport (90 percent of Manchester United Fans have never been to Old Trafford). The UK has the Oxbridge Universities, which are consistently in the top ten of the world’s best and British Universities have trained many global leaders. The Commonwealth of Nations, which was formed from the empire provides the UK with relationships to a quarter of the known world. Furthermore the “Common Law” Jurisdiction allows British Entrepreneurs to operate in a wide variety of familiar legal jurisdictions, a fact that my favourite liquidator is banking on. Britain is in many ways incredibly flexible and friendly for entrepreneurs. In Asia, the forgotten player is Japan, which is the world’s third largest economy with a nominal GDP of US$5.1 trillion. While this is dwarfed by the US$14.1 trillion of China, the average Japanese remains wealthier and Japan has advantages in high technology manufacturing. Japan is in many ways a very futuristic society that has embraced technology in ways that no one else has done, as this video from Drew Binsky explains. Japan may lack the sheer mass that China has, it has one crucial advantage, stronger soft power. While Japan has yet to atone for many of its crimes in the Second World War (which is a source of tension with its neighbours), it is perceived as a more benign force that China. Everyone in the ASEAN region worries about China swallowing their territory in the South China seas. There are no corresponding fears about Japan. Furthermore, the most obvious friendship in Japan’s favour is India, the only country that competes with China for sheer mass. India is what you’d call the proverbial third elephant that never quite lives up to its potential because of its schizoid politics. Like Japan, India has a rivalry with China and as Bloomberg Columnist Andy Mukherjee said many years ago, Japan’s most obvious bet is to build India up. Japan has the money and technology but does not have the size to compete, whereas India has size but remains poorer and more backwards than China. Hence, Japanese-Indian cooperation seems like the most obvious course to follow and the warm relationship between Prime Minister Narendra Modi and Shinzo Abe can only speed up this process. Both Japan and the UK are in many ways, “sunset” powers that once occupied top spot and are now forced to find their global relevance by playing second fiddle to the American elephant. However, the fact remains that both the UK and Japan are countries that play a role on the global stage. The British in particular had to build their global empire by learning how to operate as small units cooperating, have certain skill sets that the rest of us can learn from. Working with elephants is important, even if one of them is stupid and the other one is nasty. However, they aren’t the only animals in the proverbial jungle and working with other large animals can also be a way of securing ones future.   Tang Li *Although I’ve been based mainly in Singapore for nearly two decades, I’ve had the privilege of being able meet people who have crossed borders and cultures. I’ve befriended ministers and ambassadors and worked on projects involving a former head of state. Yet, at the same time, I’ve had the privilege of befriending migrant labourers and former convicts. All of them have a story to tell. All of them add to the fabric of life. I hope to express the stories that inspire us to create life as it should be.      Read More →