TR EMERITUS

The Malaysian Insider, 22 October 2009 An end may be in sight in the MCA crisis with the recent intervention of Prime Minister Datuk Seri Najib Razak. The Malaysian Insider understands that Najib met Datuk Seri Ong Tee Keat and Datuk Seri Dr Chua Soi Lek yesterday to thrash out a solution for the deadlock in MCA. The result was an agreement between the two men to bury their differences. It is understood that the two rivals had been in communication since last week’s party central committee meeting where Ong refused to quit as MCA president. Yesterday the two men were asked to meet the PM. Najib, who is also Barisan Nasional (BN) chairman, was unhappy that the coalition’s second biggest party was in disarray. He told the two men that BN needed a strong and stable MCA if it was to take advantage of any weakness in Pakatan Rakyat (PR) to regain non-Malay votes lost in Election 2008. Another EGM and fresh elections will just make it worse, the PM told the two men. Under the truce between the two men, Ong and Dr Chua agreed to find ways to stabilise the party, with the two of them at the helm, without bringing the party to the brink. It was agreed that Dr Chua’s supporters would be appointed to key positions in the party’s state and national leadership to reflect the deputy president’s relative support. However, the two men may find it hard to convince their respective supporters and the public that they can hold a truce. They will also find a way to deal with the position of Datuk Seri Liow Tiong Lai. He was appointed the MCA’s new No. 2 last week by a central committee that also asked for Ong’s resignation. A number of other senior party leaders have also made strong remarks and hurled accusations at both Ong and Dr Chua. Any public show of affection or unity would likely be farcical and draw even more scorn for the BN party, which only has by some estimates less than 30 per cent backing from Chinese voters. The current MCA crisis had started soon after party elections last October. Ong won the presidency convincingly but against the odds Dr Chua won the No. 2 job after he was forced to resign from his Cabinet position and party posts earlier in the year because of secretly filmed footage of him having sex with his mistress was leaked. The party president had an uneasy relationship with Dr Chua and set out to isolate him. Dr Chua was not given any prominent appointments and was not even made state chairman in Johor. Things came to a head when Ong decided to push for Dr Chua to be sacked from the party. His excuse was that the sex recording had tarnished the party. The presidential council agreed to sack Dr Chua. Later, following a surge of public discontent, the central committee reduced it to a suspension of Dr Chua’s membership. Supporters of Dr Chua then pushed for an EGM. At the Oct 10 EGM, Ong lost a confidence vote while Dr Chua had his membership reinstated. The results suggested there was a move by a third force to remove both men and benefit Liow. Ong then went back on his word and refused to resign, pointing out that the party constitution requires at least a two-thirds majority of delegates at an EGM to force his resignation. Dr Chua is using the same requirement in an application to the Registrar of Societies to be reinstated as deputy president. Dr Chua has told the Registrar that since his membership had been restored, it was status quo and that meant he was still the deputy president. If the Registrar agrees, that means Liow’s appointment will be voided. And if Ong keeps his word there will be wholesale changes in the party to reflect Dr Chua’s support. - The Malaysian Insider  Read More →

OPINION Is Singapore's widening income gap really an inevitable consequence of globalization as claimed by MM Lee Kuan Yew? Save for a blip in 2008, Singapore's income gap, as measured by the Gini Coefficient, has seen a steady rise from 2000 to 2007. It has the second highest Gini Coefficient among developed countries after Hong Kong, whose results are skewed by a higher number of billionaires and millionaires. As early as 2008 last year, two researchers - Mukul Asher from Lee Kuan Yew School of Public Policy and Amanrendu Nandy from the National University of Singapore co-authored a paper which argues that Singapore's widening income gap "reflects conscious policy choices arising from a Darwinist vision of society, and the need of socio-political control…and therefore cannot be attributed to globalization phenomenon.” Being an open economy heavily dependent on external trade, it is impossible for Singapore to be buffered from the effects of globalization. Though globalization is inevitable, one of its consequences - namely a widening income gap, can be manageable especially with the fiscal surpluses generated by Singapore's high saving rates year after year. While the minimum wage was often quoted as a panacea to help the lower income group, the Temasek Review finds itself in agreement with MM Lee here that it may do more harm than good. Employers can easily circumvent wage guidelines imposed from above by hiring less and coercing existing workers to work for longer hours to maintain their profit margin. Demanding a minimum wage for blue collar workers may put them at a disadvantage as businesses become disinclined to employ thereby limiting the availability of jobs in the labor market. MM Lee is right in the sense that it is far more important to create jobs for Singaporeans, but it doesn't mean that they should be subjected to the complete mercy of free market forces. Under a laissez-faire economic system like Singapore, we will naturally expect businesses to increase their profits by either cutting costs of wages or increase productivity. In the last decade or so, the Singapore government has actively encouraged and promoted immigration from certain countries like China and India to make up for the shortfall in manpower to keep the economy competitive. The easily availability of cheap, foreign labor will surely depress the wages of not only the lower income group, but even the middle class as well. For example, the starting pay of Singapore engineers has not increased by much over the years due to the influx of Chinese and Indian engineers who can do the same job at a much lower pay. At the same time, the influx of foreigners also contribute to inflation, especially that of public housing. It was revealed by real estate agency ERA lately that 40 per cent of buyers of resale flats are PRs. The combination of declining or stagnant wages as well as rising cost of living is the main contributory factor to Singapore's widening income gap since the rich has the ability to cope with inflation much better than the poor. The key to ameliorate the unwanted impact of globalization on Singapore's lower income group will be to provide generous state benefits and welfare to them which is not tantamount to converting Singapore to a welfare state. Years of state propaganda has led to Singaporeans to regard "welfare" as a dirty word. The government often resorts to fear-mongering that the provision of welfare to citizens will lead to a clutch mentality leading to higher taxes and lower productivity as seen in western countries. The landmark paper by Mukul and Amanrendu argued that Singapore "has the fiscal, institutional, and organizational capacities for a modern multi-tier social security system instead of the current inadequate and inequitable arrangements which require individuals and their families to bear disproportionate risks in financing retirement, healthcare and short-term income support." Indeed, Singapore has one of the highest saving rates in the world and generates fiscal surpluses year after year. It can do much more to help the lower income group instead of leaving them in the lurch to cope with globalization on their own. Singapore's vaunted meritocracy is supposed to provide a level playing field for all. However, it is an undeniable fact that children of well-off families tend to perform better in school and therefore are given access to more opportunities in life. With parents slogging hard day in and out to eke a living, they will have little time to spend with their children, let alone supervise and educate them. Singapore should invest more in the younger children which will give better returns over time instead of splurging its reserves on risky overseas investments offering few tangible benefits to Singaporeans. It is a shame that while Temasek and GIC can both afford to lose billions of dollars in less than a year, there are children who are unable to attend school due to financial constraints. The Temasek Review proposes the following measures to help narrow the income gap between the rich and the poor by allocating more resources to assist the lowest 20 per cent income group: 1. Instead of applying a minimum wage across the board, the government should allow the market to determine wages and top up the difference to reach the minimum household expenditure, a measure of absolute poverty. The minimum sum can be re-computed from time to time to take into account factors like inflation and interest rates. For example, if a worker earns only $1,000 a month and the minimum household expenditure required is $1,300, the government can contribute an additional $300 in cash to the worker's bank account. This will enable Singapore workers to compete on an equal footing with foreign workers. For workers who are supporting their parents, an additional $200 to $400 can be given for each parent to ensure that they are well taken care of. 2. HDB can build more low-cost public housing for rental instead of sale. Right now, only households with a monthly income of $1,500 and below qualify for rental flats. The limit can be increased to $3,000 while keeping the current rates. In this way, households will have more dispensable income to spend on their children. 3. Provide free education for children till from primary school till junior college which will help to keep them in school for as long as possible to improve their chances of progressing to tertiary education or employment prospects should they decide to enter the workforce. The above measures should be able to complement existing government schemes such as workfare as well as utility and S&C rebates which the government can well afford to implement without raising income tax. After all, GST was raised to 7 per cent in 2006 supposedly to help the poor, but so far we have not seen needy Singaporeans receiving additional help from the government other than a token $40 increase to a monthly allowance of $330 for those on public aid. It was revealed by an editorial on Wall Street Journal lately that GIC may have lost up to S$100 billion dollars in the last two years. If only a small percentage of this amount is channeled towards providing more welfare benefits for the poor, our income gap will not be so great. The PAP's election slogan for the 2006 general elections is "staying together and moving ahead." We cannot move ahead as a nation if an increasing portion of the population is being left behind. Neither can we stay together as one nation when the richer is getting richer while the poor continues to stare into the abyss of poverty. GDP growth measures only the economic output of the nation and provides little or no information on the quality of life of its people. A country is not a company whose main purpose to maximize profits for its shareholders. A government should care for all segments of the population especially the weak and vulnerable instead of catering only to the rich and well-connected elite. Though creating jobs is important, it is equally if not more important to ensure that each job pays well to allow Singaporeans to survive in their own land of birth. It makes little sense to keep Singaporeans gainfully employed when their salaries are insufficient for them to feed themselves, pay for their children education or support their aged parents. A government which does not care and love its people will not win respect or allegiance from them. We will become a nation without a soul, a playground for the rich and a hotel for foreigners to make a quick buck. Perhaps it is more appropriate for the ministers to peg their salaries to the Gini coefficient instead of GDP figures since the latter tend to benefit the upper income group more. Only then will the government adopt a more proactive approach to narrow the income gap which is not an "inevitable" consequence of globalization as according to MM Lee. Related articles: >> Researcher from LKY School debunked MM Lee's claims that widening income gap is inevitable >> MM Lee: Never mind the Gini coefficient!  Read More →

From our Correspondent A NUS student, Calvin Ng, has written to the Straits Times Forum expressing his disappointment at the recently concluded Kent Ridge Ministerial Forum with Minister Mentor Lee Kuan Yew! He wrote: "I was rather disappointed that questions directed at Mr Lee by the students were pre-selected and 'politically correct'. This was despite the forum's project director calling for 'active participation from the audience' in his opening address." It is not revealed whether the setting was requested by MM Lee himself or arranged by the forum's organizers. MM Lee was an excellent and much feared orator during his days as Singapore's Prime Minister. He should not be overwhelmed by a few difficult questions from the students. Besides, Singapore undergraduates have become so de-politicized over the years that it will unlikely that they will dare embarrass the strongman with similar questions which he encountered in Russia when he was asked point-blank on whether he appointed his son to become Singapore's third prime minister. As Calvin has rightly pointed out, a forum must involve active and spontaneous interaction between the audience and the speakers. It defeats the purpose to have pre-selected questions prepared beforehand for the speakers even before they begin their speeches! The Kent Ridge ministerial forum is an utter disgrace to the NUS community! How can the government expect NUS to become a world-class university when it don't even trust its students to ask questions? It is little wonder that foreign universities like Warwick had declined Singapore's invitation to set up campuses here due to concerns about freedom of speech. What's so special about MM Lee that he must be shielded from certain sensitive and controversial questions? He is only a former prime minister of Singapore! The way the forum is conducted is making a mockery out of our students and leaders! If MM Lee is afraid to face questions from the crowd, then he should not speak at the forum in the first place.  Read More →