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Slower Economic growth = Lower starting pay for Singaporeans?

May 30, 2011 1 comment

I saw this post on TR where our new Minister of National Development stated:

Speaking during a youth forum held at Woodlands Community Club yesterday, Mr Khaw was asked by some in the audience about the large numbers of foreigners in Singapore to which he replied:

“We thought (taking foreigners in) was important to bring wages to people’s pockets, so that we can grow as fast as we can… (and) catch up with other countries. But now, we get the message that ‘we don’t want so much growth, that we are prepared to accept slower growth’”

“It actually affects the youth immediately, because when you slow down growth, it means that job opportunities also come down (and) starting pay also comes down”.

I did not verify this statement but I think it’s mostly accurate. But does slower economic growth = lower starting pay? I think this is a ridiculous statement. In labor economics, pay rate is determined by (what else?) labor supply and demand. Of course, as mentioned in one of my earlier posts, there are also other factors that come into play. For an open economy, an influx of cheaper labor force is known to force down pay rates as labor supply increased (and these cheaper labor force is willing to take on a lower pay rate than locals). Having a slower economic GROWTH, as long as it is still growing, does not mean lower starting pay. Having economic growth also means inflationary pressure. So even if real wage does not increase, nominal wage increase is very likely. Going by this logic, if the government opens the flood gates to allow in similarly skilled foreign workers that could easily substitute local fresh graduates, discounting the fact that there are laws in place to prevent blatant hiring of foreigners, it is still possible to see lower starting pay for Singaporeans despite higher economic growth fueled by all that extra foreign professionals.

If you are trained in a highly niche area and in high demand, such as doctors, your starting pay will not go down. But if you are displaced by technology or cheaper labor force, that is a different story. Price has this special characteristic of being sticky. When is the last time you see things actually becoming cheaper as the economy grows? Decreasing wages in a growing economy is counter-intuitive and it is not possible. Why would a worker be willing to accept lower wages and bonus if the company is earning more in an expansionary economy?

I view such statements with much discontent as it was cunningly delivered in a threatening tone. Mr Khaw is basically threatening: Support pro-foreigner policy or be prepared to suffer in your take home pay. When, when, when, when, when will the PAP ever really understand that money is not everything and the REAL REASONS for demanding slower influx of foreigners by Singaporeans?

Categories: PAP candidates

Drive towards Satellite ERP system: Might as well solve the root of the problem

May 25, 2011 Leave a comment

It is not new news about a satellite ERP system in Singapore. The main reason for having a satellite ERP system is it save cost for the government since setting up one gantry cost about S$1 million. Moreover, it allows real time tracking and charging of fees that is fully flexible. The tax department must be salivating with delight at such convenience in charging people more moolas and attempt to solve the increasingly crowded roads.

Then you think again. In order to implement this new system, all the current ERP gantries should be demolished instead of being left there as white elephants. Waste of money, isn’t it? Considering how many millions have been spent on the ERP system already.  How will the new system offer better benefits? The government could jolly well consult the public and explain how they derive their cost and benefit analysis. In case you wish to know how this policy came about, it’s suggested by some team in LTA and were presented to a couple of Perm Secs in a big table in the Treasury Building. Some Q&A thrown around and tadah, it’s back to more refining before being implemented.

The question I want to pose is: Will this solve the problem? Having such fees, while admittedly does the job in forcing demand to fall, is in my opinion, an unfair one. People who drive to work in the city are penalized, simply because their office is there. By charging a fee, you

  1. Force some drivers to divert to other probably longer distance roads, which is entirely not economical. Not only do these drivers have to avoid peak hour, such as going to work much earlier (and work more hours?? or rot at the office till official starting time/ knock off time?), they waste more gasoline and pump out more carbon dioxide into the air while driving a longer distance.
  2. Force some drivers to take public transport instead. This sounds like the dream solution. But not when the public transportation system is also under strain. Just ask anyone taking a train and bus in peak hours. Ask how many trains and bus they have to miss and how uncomfortable it is squeezing under the dreamy hot sun. Moreover, given how expensive cars are in Singapore, why would you waste your car away in the car park? Possessing a car provides convenience and to some, prestige. So you see, there is much push and pull factors in owning a car and not taking public transport. Public transport converts are rare in my opinion as demand remains high. Why else are our COEs so damn expensive?
  3. Driving a car becomes a luxury, an activity that only the well off can afford. A simple thing like driving becomes one of the dividing force behind the stratification of society.
  4. And the worse is when people get used to the cost and internalize them. Disposable income drops. Spending drops. Quality of life drops. What doesn’t drop is the desire to own a car. Tell an American that you are paying S$135,000 on a Toyota Camry and they’ll say you’re nuts.

Imposing penalty to force divert traffic is anything but a permanent solution. What is the real reason, the real culprit behind all that demand to certain parts of Singapore? What else? POPULATION!!! Once again, the arrow points towards the influx of foreigners. You want more companies, more workers in land scarce and low birth rate Singapore in order to push GDP. Something has to give. Comfort has to be traded off in public transport. Cost of driving and transportation will inevitably rise in tandem with rising demand. It cannot be helped. There is bound to be trade offs.

A longer view solution would be to build more economic clusters in other parts of the country. We see industrial and economic activity concentrated on far ends of the island like the Jurong Industrial Park and Changi Business Park, and to a smaller extent, the Tampines region where some companies have offices there. Will it probably be helpful if economic zones can be set up in other parts  other than the city and the far ends of the island to divert traffic? Or create an alternative shopping and entertainment belt. Singaporeans go to one and only one place for shopping and other urban leisure. How many times is it not Orchard road? Ultimately, it’s simply about numbers. What is the optimal number of people the country can hold? No matter what you do, if population continues to increase at the current rate, whatever solutions proposed will not work and will only degrade the quality of life.

Will the government stop being so myopic and look closer at the root reasons for problems, instead of simply looking for solutions to solve the issues at hand? It’s like trying to bring down a magical monster with multiple tentacles that could regenerate. You may upgrade your sword to swing at the monster and cut down the tentacles but the monster will always be there.

Change within PAP needs change in PAP personnel mindset

May 24, 2011 1 comment

I couldn’t help but take a jab at Ms Irene Ng from Tampines GRC. I guess it’s widely spread throughout TOC and Facebook but still:

Self-praise once again

When will the PAP elites ever got to recognize the fact that the citizens are not stupid and can easily see through such sour grapes expression on, of all places, Facebook which spreads like fire. Every sentence of that statement is insinuating something. This is not an observation as what she claimed. This is an expression of an opinion. She mentioned ‘If that had happened in a PAP branch, imagine the flak…’, which is a hypothetical statement. In which way is this an ‘observation’? There is also no ‘plain fact’ about citizens calling it a flak for a PAP branch that supposedly conduct the MPS late. Obviously, her statement is one of defensive and flawed, hoping the words ‘observation based on plain facts’ will pacify any emotional outburst. And obviously, she failed.

Either Ms Irene Ng failed her English after trying to communicate with residents in  their dialects or it’s simply a sinister way of painting a bad picture on the opposition party while dwelling in self-praise with ‘not having any rest (come on, you are paid $15,000 for this part time job. Give me that money and I’ll do it for you?)….not complaining…serve quietly (Gez,why the heck do you write this post then?)’. I’m not surprised at all how netizens blasted her baseless statement.

It has come to my attention that the ruling party loves to use to words ‘plain facts’ to justify whatever their doings are perfectly rational and logical. For those who are unable to verify these ‘plain facts’, the words created a distortion of truth. Take for example the recent announcement by the Department of Statistics that inflation rate is set to increase at a slower pace (a punny 0.5% slower) than last quarter.

Dear Singaporeans, please do not be taken in by these ‘official figures’ or ‘plain facts’ or whatever you wish to call it. As someone who is trained in statistics and econometrics and had dealings with DoS, I know the dangers of abusing statistical techniques and figures. DoS is famed (internally) to select the most politically favoring numbers to show their citizens. After my experience with them, I have little trust in their statistical figures (although admittedly the figures are not fabricated to the extend it is considered cheating the citizens). Do you know that the most favorable and ‘elegant’ number on GDP growth published is selected from a number of models? Yes, I am telling you this ‘hard truth’ that even ‘plain facts’ are not so plain after all. I am not defaming DoS. I am simply, in truth PAP fashion, stating an ‘observation based on plain facts.’

Can you imagine if every PAP MP is having the exact same mentality?? It shudders me….

Categories: PAP candidates

Change must not be cosmetic

May 23, 2011 Leave a comment

I was, and still am pretty amazed at the recent changes announced in the cabinet including reviewing of the highly controversial ministerial pay. In true kiasu-isium fashion, we have the PAP so anxious to retain their supremacy in politics that nothing is sacrosanct. Maybe it is now a good time to ask for the figures on our reserves. I wonder whether this secretive figure of our reserve that even ex-President Ong Teng Chiong failed to get from PAP will be finally released.

The ruling party seems determined to stem all complaints about them after the last GE, so as to not give opposition parties any excuses or ‘firepower’ in the next general election. I only hope that all these changes amount to something tangible, rather than pushing ministers on merry-go-round. Even if things don’t change for the better, the PAP can always say that they have listened to the electorate and made significant changes.

While Mr Mah, Mr Raymond Lim and Mr Wong Kang Seng finally took responsibility for the failure of their policies, we need to scrutinize further. The biggest reason housing and transportation policies failed for the last 5 years is due to limited supply while demand is increasing. The only reason has to be a faster and larger population growth. It doesn’t take a genius to figure out that if the number of Singaporeans are not increasing as fast (due to low birth rate), the sole contributing factor to overall population growth has to be the lax policy on foreigners into the country. The immigrations and checkpoint authority (ICA) and the Population Planning unit, in particular the Ministry of Manpower (MOM) is the sole guardian of the influx of foreigners. I can boldly say that the dismiss of Mr Mah, Mr Raymond Lim and Mr Wong is partially attributed to ex-Manpower Minister Lim Swee Say. Therefore we see 2 real changes that the ruling party should exercise:

  1. Better coordination between ministries and statutory boards: Allowing a spike in foreigners into Singapore without careful consideration of the impact and stress the additional population has on housing and transportation demands exacerbates the problems we are now facing. While MOM can easily allow in foreigners in an instant, it takes years to build up housing and transportation facilities. Having experience within the civil service, it is an open secret that there is much distrust across and within ministries and stat boards. As in any large organization, the bureaucracy and red tape one encounters as a civil servant is so frustrating sometimes I am not surprise many left the service after a few years.
  2. Face the real problem of having too many foreigners into the country: This is one of the main grouse in the last GE. While we have heard many changes taking place, nothing much is mentioned on the need to control foreigner population. It is obvious the open-door policy is still operational and will continue to be so (since the PM said that there will not be a major shift in economic policy direction). GDP still remains King and I am not optimistic the PAP will be doing any thing real soon. I will be impress if they actually reveal more on the figures of foreigners allowed in various schemes (EP, PR etc) and how ‘talents’ are identified before they are allowed into Singapore.

As more policy changes are revealed, I will continue to write my thoughts on them. Please pardon the lower post counts in time to come as on-going concerns about politics subsided after the GE.

Categories: PAP candidates

Radical shuffle of Cabinet

May 19, 2011 Leave a comment

I have been pretty quiet on this issue as I have been giving this reshuffle some thoughts. The dismiss of Mah Bow Tan, Wong Kang Seng, and Raymond Lim seems a move to pacify public anger at best. At least this gives voters less excuses to be angry about the government for the next GE. However, changing people without a change in policy would only be cosmetic change. There is much to see whether the ruling party will justify their promise to change with actions.

What I am worried about is the set up of the new cabinet. For a conservative party like the PAP, it is a surprise to see new MPs taking up ministerial position. Heng Swee Keat, former MAS chief got a sudden promotion to a full minister of Education and ex-major general Chan Chun Sing jumped from a ex-general to Acting minister of MCYS. And in a move that suggest the lack of talent within PAP, we see Finance Minister Tharman taking on additional portfolios of Ministry of Manpower, Deputy Prime Minister and chairman of MAS! In addition to this impressive portfolio, Mr Tharman was selected as the candidate to lead the IMF (although he has to reject in order to stay in the government). I don’t know about you but I think that is simply too much power for one person. I don’t like the idea that one person is going to affect so much of the countries’ economic and labor policy no matter how capable one is.

Then we have Minister Ng taking over the Ministry of Defense. In my opinion, it makes sense for Minister Ng, who is a doctor, to head the ministry of health. But for a doctor to head a ministry of defense? I’m skeptical how this will turn out. How much does a doctor knows about military defense. Why is this portfolio taken away from Minister Teo who is an ex-general?

This reshuffle seems to be created at the very last minute with no thorough thought process, with PM Lee grabbing any one available to form his new cabinet and take over the much hated MBT, WKS and RL in addition to the resignation of MM Lee and SM Goh. And lastly, in truly PAP fashion, we see another new position created out of thin air – Emeritus Senior Minister for Goh Chok Tong. What the heck is a ESM? Emeritus is an academic title for God’s sake. It is truly laughable, the efforts PAP put in to honor their old guards and retain their influence within the political circle. Change you say? I am skeptical about it.

Categories: PAP candidates

Xenophobia?: It is a reaction to the distortion of social fabric

May 17, 2011 3 comments

It is to my attention that my previous post may be referred to as xenophobic and inciting anti-foreigners sentiments. What I would like to say is, all these anti-foreigners sentiments is a reaction when one feels that the social fabric of the society was being distorted and threatened. It is a reaction to a lax open door policy that had created waves of changes in the country I love. Who dares to say that the social fabric of Singapore is not being distorted at this very moment? Even my colleagues from other countries who have only been in Singapore for 2-3 years could feel the rising presence of other nationalities.

But will my objection, as a reaction, to the open-door policy makes me anti-foreigners? Of course not! I have many friends and colleagues from various countries and I still love them dearly. The important point to note is to differentiate between a reaction to a policy and reaction to foreigners. People demonize the word ‘xenophobia’. It is a very dirty word in this globalized world. It implies narrow-mindedness and low tolerance. While I don’t think I am narrow-minded, I am not sure if I am so open and tolerant of an overwhelmingly increasing foreign population in my own country.

It is easy to be self righteous. Such as it is always politically correct to say one is blind to nationality. The litmus test would be if you are to save your own national man or the foreigner if you can only save one in a disaster. For those who are quick to answer that you don’t care about nationals, I leave it to you to decide if that is truly what you meant. I shall be truthful in my blog. That I will always be bias towards my own nationality. And I don’t see anything wrong with it.

In any case, I think Singaporeans are a very tolerant bunch of people. We have always welcome foreigners and it is only when we reached our limits, with an astonishing 1/3 of our current population being formed by foreigners do we feel the pinch and start to voice out our displeasure. Can anyone even name me any nation (in case anyone is tempted to name me cities) in this planet with more than 30% foreigners in the country? If anyone is to say that it is xenophobic to tolerate a foreign population of more than 35%, then yes, please call me a xenophobic.

Other nations are not so tolerant and forgiving. Take Finland for instance. According to an article on Straits Times dated 17th May 2011, ‘Whiter EU? Angry Birds soar as Nokia goes sour.’, immigrants making up 2.5% of the Finnish population is already giving rise to anti-foreigners sentiments. I quote:”The True Finns (a right wing movement) call them (immigrants) “parasites on taxpayers’ money.”. Of course, there are other factors such as downturn of the Finnish economy and rising unemployment rate that contributed to heightened xenophobia. This scenario is hardly rare as other EU countries such as France and Germany is struggling against a tide of immigrants from other poorer parts of the EU. With the formation of the EU, control of immigrants became impossible. Italy, while facing a problematic economy, faces a sea of illegal immigrants from Africa, made worse as these illegal immigrants needs to cross Italy in order to go to other parts of Europe.

We see that anti-foreigners sentiment is not new and will continue to permeate the society in this ever globalizing world. But the key word is: control. We need to control the inflow of foreigners in order to enhance the economy of the country and yet strike a balance to maintain the social fabric of the nation. The widespread complaints of FT not being real talents is also a call out to the Immigration Department to be more discerning in filtering out people who are truly capable. I am differentiating FT to be in white collar (PMET) jobs, and not foreign workers who work in jobs Singaporeans typically shun. While there are rare exceptions, like what I had mentioned in my previous post, my own bias experience with foreign school mates and colleagues does not convince me that these so called foreign talents are indeed talents.

Foreigners: When the number gets too many

May 15, 2011 1 comment

Let’s take a look at a few voices from foreigners who are in Singapore or wants to come to work in Singapore:

From the Straits Times Letter Forum dated 13th May 2011:

 May 13, 2011

From feeling of home to an unwelcome presence in days

I HAVE been a Singapore permanent resident for eight years. My wife and I were married here, and my son who was born here speaks English with a Singaporean accent.

When his time comes, he will serve national service, like other Singapore-born teenagers.

We were so proud when we got tickets for the National Day Parade last year.

When we return to Singapore from our holidays, it is like returning home. Singapore has been a home for me and my family.

But nine days of the Singapore opposition party rallies have dissipated this feeling. I have been made to feel like a complete foreigner who should be deported immediately.

Suddenly, I feel an atmosphere of loathing towards my family and me although it may not be real.

The opposition seems to have targeted residents like me systematically and I feel like a scapegoat.

Juniarto Samsudin

From LinkedIn Singapore Careers:

How foreigners view post-GE sentiments on them

How foreigners think having an MBA (from some unknown uni) is king and they should rightfully be given a job in our country. Foreigners = overwhelming India Indians

Finding ways to bypass the loopholes of the flawed immigration policy

Foreigners overselling their capabilities: How does 2.5 yrs of HR experience equate to 'extensive'?

Circumventing the GE - the only time when the plight of too many foreigners are made known

Willingness to relocate becoz Singapore offers higher pay and better standard of living

And just when Singaporeans think they are treating foreigners too well....the foreigners are demanding even better treatment!

This idiotic India Indian cries out 'Crisis' for expats. Why the heck should the Singapore government be doing something for foreigners?? Such is the warp mentality when you welcome them too much!

From the website: http://www.transitioning.org/2010/03/12/are-the-singaporean-worker-a-born-loser-in-his-own-country/

How do you integrate foreigners when there's simply too many?? When the numbers get large, they congregate and don't bother to assimilate into local cultures.

Suddenly, Singaporeans became ingrates in their own country while all these foreigners who came in to reap the fruits of our nation building becomes national hero.

All the above examples show one thing. Singapore is a good place for foreigners. Especially those from developing countries such as China and India. The reasons are simply higher pay, better quality of living and pro-business. All these, made possible by years and years of nation building and sweat of Singaporeans, makes Singapore a very good place to work and live in. How many citizens from advanced economies such as Americans or Britons do you see migrating to Singapore? Not much.

Having being too open to foreigners have induced the ‘I am King’ mentality among many foreigners. I shall boldly refer to India Indians, China Chinese, Malaysians, Indonesians and Filipinos as the five major groups that constitute the majority of foreigners coming into Singapore, not only working in lowly paid jobs such as construction or manufacturing but also in PMET positions (sought by Singaporeans) most notably in IT, Banking and Finance. While Malaysians and Indonesians have similar culture with Singapore, the reverse is true for the other 3 groups mentioned. It is true that foreigners had contributed to Singapore, but they too have benefited a lot from the country’s infrastructure and economic policy. Or else, why would they have come?

I think it’s time the Singapore government sit up and take note of the prevalent mentality among foreigners that it is their right to work in Singapore, and really scrutinize on whether they are talents worthy enough to be admitted to my country.