TR EMERITUS

OPINION There is a lot of hype in the media lately about "productivity" which reflects a subtle shift in the PAP's labor policies. What makes the change unusual is that the PAP leaders have been harping on the need for Singapore to continue importing foreign workers during the last few years. As late as January this year, PAP's octogenarian leader Lee Kuan Yew said in an interview with the National Geographic magazine that it is a "good thing" that Singapore welcomes so many Chinese immigrants as they are more "hard-driving" and "hard-striving" than locals. Senior Minister Goh Chok Tong added that the number of foreign workers may increase in the next few years though the rate of inflow may slow down. DPM Teo Chee Hean said yesterday that Singapore has made "good progress" in the past in its productivity drive which is why "we have been able to move our economy forward and have good jobs for many Singaporeans." What "progress" is DPM Teo talking about when Singapore's productivity had hardly grown during the past decade? According to a press release from the Reform Party: "In manufacturing alone our productivity grew by an average of 0.7% p.a. over the period 2000-08 whereas South Korea, Taiwan, Sweden and the US managed 7.4%, 5.2%, 4.8% and 4.6% respectively over the same period. Out of a group of 17 economies we were second from bottom." A recent Wall Street Journal editorial revealed that Singapore's low labor productivity is a direct result of the easy availability of cheap foreign labor. Companies have few incentives to invest in innovation and research to boost productivity as they can easily cut labor cost by employing foreign workers. While in other developed countries, safeguards are put in place to protect the interests of local workers, Singaporeans are expected by the PAP to compete directly with the foreigners who are definitely cheaper than them, but not necessarily faster or better. As noted in the graph below, Singapore's labor productivity took a plunge from 2004 onwards when the inflow of foreigners started to pick up: [Source: Kojakbt, 3in1kopitiam forum moderator] This coincided with the beginning of Prime Minister Lee Hsien Loong's tenure when he announced his ambitious plan to increase Singapore's population to 6.5 million people by 2030 via immigration. Without warning, the floodgates were opened to allow foreigners into the country indiscriminately. Whereas in the past, the foreigners given a permit to work in Singapore were either highly qualified or filled positions shunned by Singaporeans, they are now competing directly with them for limited jobs. The foreign levy for foreign workers is so low that it hardly deters employers from hiring foreigners. The quota or dependency ration placed on the number of foreigners a company can employ is easily circumvented by getting earlier arrivals to take up PRs. As citizens and PRs are both lumped together under the same category of "residents", a company can theoretically employ 100 per cent foreigners without a single citizen so long the quota of PRs is met. Now all of sudden, Prime Minister Lee Hsien Loong wants to raise Singapore's productivity rate from 0.7 per cent to 3 per cent per annum - how is this target possible when our productivity has been falling consecutively for the past three years no thanks to the influx of foreign workers? It is highly unlikely that Singapore can boost its productivity and growth rates which have been popped up artificially by cheap foreign  labor. Prominent economist Paul Krugman described Singapore as a "Paper Tiger" way back in the 1990s in his landmark article - "The Myth of Asia's miracle" Krugman wrote that Singapore's productivity and growth were achieved through a "mobilization of resources that would have done Stalin proud". but as they are based largely on one-time changes in behavior, they are unlikely to be repeated: "Over the past generation the percentage of people employed has almost doubled; it cannot double again. A half-educated work force has been replaced by one in which the bulk of workers has high school diplomas; it is unlikely that a generation from now most Singaporeans will have Ph.D’s. And an investment share of 40 percent is amazingly high by any standard; a share of 7O percent would be ridiculous. So one can immediately conclude that Singapore is unlikely to achieve future growth rates comparable to those of the past." In the same manner, the room for Singapore's continued growth in the next few decades is limited unless there is a giant leapt in labor productivity and innovation. As the economies of China, India and other Asia countries become more advanced, it will be more difficult to lure their citizens over to Singapore. For example, Malaysians and Filipinos workers are getting more expensive now and Singapore employers have to switch to Chinese, Indian and Burmese workers to keep the labor costs low. Unfortunately, given Singapore's export-oriented economy and its over-dependence on foreign direct investments, it will not be easy for the Singapore to wean off its chronic addiction to foreign labor. The investments made in R&D are unlikely to bear fruits without a major revamp in Singapore's political economy which is dominated by state-linked companies thereby stifling the emergence and growth of a vibrant SME sector. In a recent speech made at the Civil Service College, prominent MIT political economist Professor Huang Yasheng urged Singapore to “rethink” its state management model which has “milked this system for all it is worth.” “The private sector is the best way to grow the economy. It has the most productive, most innovative and entrepreneurial culture. The state-owned enterprise system doesn’t give you that….You are already hitting the wall. Retaining this strategy could mean sacrificing future growth that is possible only through a bigger, more dynamic private sector,” he said. He also opined that Singapore should expand its private sector in order to compete with China and India: “Maybe a better way is for the government to fund more basic research and then allow universities, private equity firms, venture capital firms and rich individuals to take care of the rest. That is because even when the state sector is well managed, it is not as innovative as the private sector, he says. From a technological development point of view, you need a bigger private sector to compete, to come up with new products, processes and technologies, to better compete with India and China.” Without liberalizing both the economy and political landscape to allow for freedom of speech and independent thinking to thrive, it is foolhardly to expect the PAP's one-dimensional and unimaginative approach to boost productivity to work. It is time the PAP realizes that it is part of the problem itself and that it is becoming a stumbling block in Singapore's future development.  Read More →

By Josephine Ma from South China Morning Post Premier Wen Jiabao said 2010 would be the most complex year yet this century for the mainland economy, and pledged to prevent inflation and rein in skyrocketing property prices, in an online chat yesterday with internet users. He also addressed concerns over trade frictions with the US, and called for efforts to ease tensions. Wen's internet question-and-answer session came in the run-up to the annual session of the National People's Congress, where he will deliver the annual government work report. Xinhua said some 65,000 questions on subjects ranging from home prices to the homework burden for students, flooded into the central government's website and that of the news agency, the joint organisers of the session. The questions Wen answered were apparently picked to cover the major topics in his government report. "If last year was the most difficult for China's economy in the new century, this one is the most complicated," Wen said. He was determined to bring property prices under control during his tenure as premier, he said, but he admitted the government may not be able to "rein in this wild horse" this year despite a series of measures. Wen is expected to step down in 2013. He said the government would focus on building more affordable housing for low-income groups and rein in property prices through land, financial and tax policies. Soaring property prices have become a major source of grievance for the public, especially the growing urban population. Xinhua said home prices rose by 9.5 per cent in January from a year earlier. Wen reiterated the government would adopt an "appropriately loose monetary policy" to ensure stable economic development. Agricultural production would be boosted to ensure food supplies. He identified corruption and inflation as major threats. Read rest of article on SCMP  Read More →

游润恬 from Lianhe Zaobao, 28 February 2010 徐顺全，一个因官司不断而令大家似乎熟悉又很陌生的政治人物，其言行举止往往引来诸多议论。新加坡民主党昨晚庆祝成立30周年，他加入这个反对党从政也已18年，人们脑海中至今还在问他当年到底有没有逼走一手创立民主党的波东巴西区 (Potong Pasir) 议员詹时中？本报记者日前趁30年党庆，邀他作访谈，希望他能对读者的诸多疑问作出答复。 民主党成立30年，巅峰时刻是什么时候？最低潮的时刻又是什么时候？ 徐顺全博士（48岁）的答复似乎会让人们大感意外。他说现在是它的巅峰时刻。 “我相信民主党还没有达到真正的顶峰，不过到目前为止，现阶段必然是最光辉的。” 他表示民主党过去五年吸引了许多新人，党员的整体素质也比从前高了。这些新人不但可提供新的政治视角，还懂得善用新媒体进行宣传，使民主党可以做很多以前做不成的事。 五年前没有资源 办25周年晚宴 比方说早在五年前，他就想举行民主党25周年晚宴，却因缺乏资源，只好打消念头。今天，民主党不但能在乌节路的凯煌酒店办30周年晚宴，还能出版第一本纪念特刊，80页全彩色印刷。 他认为最重要的是全体中央执行委员的团结。 “对他们来说，集体奋斗的目标，凌驾于个人理想之上。” 民主党在1991年大选时，一举把当时的秘书长詹时中（波东巴西区）、主席林孝谆（前武吉甘柏区）和蒋才正（义顺中区）三名候选人送入国会。自从詹时中在1996年离开后，民主党在国会里再也没有代表。照理说，上世纪90年代在詹时中领导下的民主党，应该已达到巅峰，徐顺全却认为那是最低潮的时刻。 “我加入民主党不到几个星期，就已感觉到党内领导人之间强烈的紧张关系。当时的民主党不是一个党，它从来就不是一支有共同理念的团队，只不过是一群同床异梦的人凑在一起。出现状况时，大家各有主张，要往不同的方向走，结果是树倒猢狲散。” 詹时中在1992年一手把当时在新加坡国立大学担任心理学讲师的徐顺全带进民主党，参加马林百列集选区补选。当时的总理吴作栋为了把现任副总理张志贤引进国会，而让马林百列集选区的议员集体辞职，以举行这次补选。 徐顺全竞选失败，隔年因呈报德士车资不实等遭国大开除。詹时中原本支持他，后来却动议中委会谴责他。党内其他中委不赞成詹时中的做法，民主党于是陷入分裂。詹时中跟着辞去秘书长职务。 Read rest of article on Lianhe Zaobao  Read More →