TR EMERITUS

By Damon Yeo, Business Correspondent Singapore has moved two spots to number three in the recently published  World Economic Forum (WEF) report on world competitiveness. Without any additional information and details, yes, Singapore deserves a round of applause. After all, it does mean that the Singapore economy is “able to produce higher levels of income for their citizens”, according to the strict definitions as set by the researchers. However, in this information age, when withholding information is as sinful as erroneous information, so let us look deeper into what this research is actually trying to tell us. Behind the fancy wordings and the technical jargon, this study is a cold and hard measure of how profitable it is for a corporation to do business in a particular country, with respect to other countries in the world. It ranks 133 countries according to 12 “pillars” of competitiveness, which are sub-divided into a total of 90 different components. (read more here) The scores for each component are then  collated and weighted according to each country’s level of economic development to give the overall ranking table. It will be notesworthy to highlight that this study specifically looks at things from a business / profitability perspective and does not account for any other effects. For example, one of the components seeks to measure the cost businesses incurred to counter the threat of terrorism (Singapore ranked 79th), giving higher rankings to countries that actually spend less in this aspect and thus masking the obvious non-monetary benefits of a country being more ready in counter-terrorism than others. The below will provide a drilldown into some of the measuring components of the study and what they actually mean for average Singaporeans. A previous article had already highlighted judicial independence as a particular weakness (read article here), so it will not be touched on again here. Surprisingly, Singapore did particularly poorly in the Macroeconomic Stability pillar (35th overall). While we are ranked 10th in national savings rates, our inflation (51sT), interest rate spread (57th) and government debt (126th) ratio ranks unfavourably globally. In layman terms, Singaporeans are saving a lot of money, but everything is becoming more expensive, the banks are ripping us off and our government has been funding its expenditure with high gross debts. Inflation will be re-visited later, but let us note that in Singapore, the average difference between typical lending and deposit rates from banks is 5.0%. This indicates that the government had allowed banking institutions to keep lending rates at exorbitant levels while allowing them to keep saving interest rates low. At 57th, we are ranked near Ethiopia, Tunisia and Morocco, countries which do not have a developed and competitive banking sector (hence the few players have monopolistic powers). The last point raises eyebrows but it is interesting to bear in mind that Japan is ranked bottom in this component (gross debt = 196.3% of GDP) and Timor-Leste is top (0.0%). This is likely to indicate the method our government is funding its expenditure – net debt may have been a better indicator here than gross debt. Singaporeans have usually assumed that the country has one of the best health and primary education services in the world. This study revealed that we are 13th in the world in this aspect, sandwiched between France and Sweden in the rankings. Singapore ranked very favourably in infant mortality (3rd) and life expectancy (7th), re-affirming that our healthcare system is world-class (a big thank-you to our healthcare workers!). What is interesting to point out here, is that while the Singapore government had spent meagrely on Primary education (109th), we have produced the 3rd best in terms of quality. For that I salute our lowly paid primary school teachers, who according to this study have worked way too hard and deserve a massive pay rise. Another interesting area I am exploring here is the Labour market efficiency pillar, as I believe this is an area which has an inverse relationship between labour welfare and business profitability. If a business pays poorly in a country and the workers work long hours, it is good for the business but bad for the workers’ welfare. Singapore is ranked number one globally for this component. The study states that hiring and firing of workers in Singapore is the most flexibly determined by employers in the world, yet our labour-employer relations are the most cordial. This highlights a sad way of life for the average Singaporean worker – despite being at mercy of employers all of the time, he/she needs to be maintain that ambient relationship with management. For many who had worked in Singapore all their lives, this is probably a fact of life, but isn’t it interesting to note that this situation is actually the worst in the world (but best for businesses, of course)? With the economic crisis in the backdrop, it is also worthy to note that on the average, the firing costs (which can be interpreted as the value of redundancy packages) for businesses in Singapore is about four weeks’ worth of wages (6th lowest in the world). Another part of this study asked respondents to select five most problematic factors for doing business in a particular country. For Singapore, businesses were least concerned about government instability (re-affirming our belief that the PAP will never be toppled) and crime (Thank You Mr Policeman!). The most problematic factor, according to more than one-fifth of these respondents, is inflation. For 2008, inflation in Singapore was 6.5%. This can be considered somewhat high for a developed economy like ours, considering that most major Western European economies have inflation below 5%. Instead of coming up with measures to tackle inflation, our ministers had continued to fuel the asset bubble. (read more here) The pressure is on the government to keep inflation down in the coming years, or Singapore risks losing her number three spot next year. To sum it all up, this is what this study had told us about the average Singaporean worker – despite having to worry constantly about job security, you have worked hard to make Singapore world-class. In return, you are paid poorly compared to your counterparts and struggle to get onto the property ladder as everything gets more expensive, house prices rise and banks rip you off with high interest rates. Other articles by Damon Yeo: >> DBS and a series of ‘unfortunate events’ >> Sale of Chartered - An Anatomy About the Author: Damon is a proud graduate of Nanyang Technological University in 2004 with a degree in Accountancy. He is currently working in the finance department of a UK Bank. He is also a regular contributor at redsports.sg.  Read More →

From our Correspondent Even before Singanews was officially launched, it has been attracting whispers and gossips around Singapore's internet chatrooms about its real agenda. Singanews is supposed to be Singapore's latest online news portal to offer alternative viewpoints with an emphasis on "mainstream family values". It is owned by Singa Communications set up by ex Straits Times journalist Matthew Yap. The company already has about $90,000 in seed funding. At the popular Sammyboy forum, netizens were quick to see through its veil of deception. Wrote Scroobal: "They still don't get it. All they have to so is state that they are christian site but will attempt to be neutral and fair. Embarrasing when checks show that 40% of the investment company that the joker is from is owned by the same church that tried the first deception." Added Sneering Tree: "This bunch of sanctimonious deceitful people should be put into their places. It's one thing to come out in the open to say that they are going to champion thier own biblical "values", it is another thing to downplay their religious leanings and pretend to speak for a majority that was already uncomfortable with their shady manoveurs (see AWARE incident). As far as I know, there is no organized group claiming to speak for "secularist values", ditto, Buddhist, Islamic values etc. They are the most organized and most intent on reshaping public and political spheres and yet they have the cheek to claim victimhood in their fight against a imaginary enemy. There's nothing wrong with having an agenda but to pretend not to have one- that's the problem. The other problem is to pretend to speak for the majority when you are only speaking for yourselves." MarrickG managed to find out more about the religions of Singanews journalists: "These are what I managed to find about some of the reporters...see any links? PN Balji - Oh..he is a Hindu? He was the one that interviewed Josie Lau on the AWARE. He is pro-Thio throughout the whole saga. That is why someone commented any he was so diplomatic during the interview.http://akikonomu.blogspot.com/2009/0...ty-primer.html http://temasekreview.com/?p=8033 Jeffrey Tsang - He is also a writer for The Saviour Times which is a magazine by COOS. The same church where Thio Su-Mein is in. http://www.coos.org.sg/saviourtimes/...2005JulSep.pdf (See page 6) Samuel Wong - Not sure if this is the same Samuel Wong but if it is, he is from the Pastor from Cornerstone Church in charge of Mandarin Affairs. http://www.facebook.com/people/Samuel-Wong/529597383" Over at hardwarezone, forumers are equally sceptical about the real agenda of Singanews. Said Thio Li Ban: "With COOS behind the scene, Thio Su-Mein should also be one of the hidden hands within. This is why the group is not willing to disclose details of their fundings. Even if they do, the name list of donors could be altered." Puffywawa wondered if Singanews is another disguise: "I really do not understand why they cannot live their own life happily but must make everybody else difficult. Just say your piece and that's it. Why must repeat and repeat the same thing again and again? Now coming up with a news portal to disguise what they want to say." jaderman7 added: "If they choose to participate in the public sphere, they should come out and plainly state they are a religious interest group and that will be that. All the obfuscation and clarifying that there is no Christian agenda is like michael jackson saying that he is not white. When their links are uncovered one by one, they will just look foolish." Artemov felt it's another re-run of the Aware fiasco: "It is as if they have not learn from the Aware fiasco. All these (not very subtle) subterfuge are not going to fool anyone in this age of the Internet. For all her intelligence and education, she seems blinded by her beliefs." It appears that Singanews will have a hard time winning over their detractors and critics. Given the public backlash they received the last round from the steeplejacking of Aware, Singaporeans will be in a less forgiving mood this time. There's nothing wrong in harboring a (religious) agenda, but what Singaporeans expect and demand is the basic honesty and decency to be open and upfront with it rather than to use the cloak of "mainstream values" to mask one's real intentions. References: 1. Sammyboy Forum 2. Hardwarezone Forum  Read More →

From our Correspondent HDB Deputy CEO Mr Yap Chin Beng had a busy time of late trying to answer a flurry of questions from Singaporeans regarding affordability of HDB flats in the Straits Times Forum. For a second time in less than a week, Mr Yap is forced to pen another letter to allay public concerns about the rising prices of HDB flats. His answer is the same as before: HDB flats remain affordable to the masses. (read article here) In his second letter, Mr Yap answered the questions posed by writers point-blank in letters published on 5 September, one of which is a reply to a Mr Loo who ask about the percentage of income a single Singaporean earning $2,500 a month pay for a three-room resale flat at the quoted price of $200,000. Mr Yap replied that "with an $11,000 subsidy, an eligible single earning $2,500 a month would need 29 per cent of his income for the loan. He can pay $575 from his monthly CPF contribution, with the remaining $146 in cash." This 29 percent is perilously close to the HDB benchmark of 30% for assessing housing affordability. If we factor in the bank interest rates and annual inflation, it would have exceeded 30% not to mention the fact the prices of resale 3 room flats are now approaching $300,000 especially those in the prime estates of Bishan and Toa Payoh. Again, Mr Yap failed to answer the key question whether the single paying $575 monthly from his CPF for the mortage loan will have enough savings left at the end of the day for his retirement needs. Mr Yap also said that HDB cannot ban COV or provide loans for it, as people should be free to decide what their flat or intended purchase is worth to them, and not be forced to buy and sell at fixed prices while financing for COVs is more likely to fuel the escalation of prices and worsen the situation. Lastly, Mr Yap sought to remind Singaporeans that the PAP government has "enabled about 80 per cent of the population to own their homes - the highest home ownership rate in the world." Whether Singaporeans really own their HDB flats remain debatable especially when they are 99-year leasehold projects subjected to a host of restrictions imposed by HDB such as a minimal 5 year residency period before they can be sold. Furthermore, it doesn't make sense for Singaporeans to slog their entire lives to pay for the roof over their heads only to realize that they do not have enough savings left in old age for retirement. Singapore has no social safety net to speak of which explains why many elderly have to take up menial jobs like cleaners, toilet keepers and used cardboard collectors to support themselves.  Read More →