something i stumbled across on the net ... just to share with you ...
~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Since 1996 Singapore's authorities have accelerated deregulation in the financial and telecommunications sectors. Data from the US Department of Commerce on returns to US companies show that, compared with the Asian average, Singapore no longer provides the superior rate of return it once did. Once a premium economy charging premium prices, it is now a less-than-premium economy - but is still charging premium prices.
Although Lee Hsien Loong has stated his determination to create a more flexible wage structure, some analysts feel that such wage-centered strategies may not suffice in reinventing the Singapore economy. At best, such measures will merely be perfunctory, because Singaporean wages to begin with have not deviated from market levels. What matters more are land, regulatory and transportation costs, which the Singaporean government exercises considerable control over.
According to Manu Bhaskaran, the head of Washington-based advisory firm Centennial Research, "Singapore's competitiveness problem is cumulatively due to distortions in land prices [and its effects on wages and rentals], high transportation costs resulting from the government's forceful anti-congestion policies [which drive up the cost of distribution and logistics] and high regulatory costs."
Indeed, the prices of major inputs - land, labor and capital - in Singapore are substantially influenced by the government. This is because the government, through its Housing Development Authority, owns most of the land, effectively becoming the monopoly supplier.
The incremental supply of labor is controlled by the government through its grip on foreign-worker inflows. Singapore's financial capital is also heavily influenced by government, as the biggest players are all government-linked companies with ties that extend to the Lee family. Lee Hsien Loong's wife, Madam Ho Ching, for instance, is the chairperson of Temasek Holdings, Singapore's state-owned investment company, and his brother Lee Hsien Yang is the chief executive officer of Singapore Telecommunications Ltd (SingTel). Lee Kuan Yew has also remained a key board member of various government-linked companies.
Hence, without adequate measures to retrench the role of the state, the economy under Lee Hsien Loong will restructure in the manner it always has, with companies laying off workers, cutting wages, squeezing subcontractors' margins and forcing landlords to cut rentals.
Aside from producing deflationary headwinds in Singapore's economy, such moves are bound to make Lee Hsien Loong appear even more aloof and indifferent to the welfare of the average Singaporean - a reputation he has been battling hard to disprove.
Meanwhile, some of the challenges facing Singapore are growing due to Malaysia's and other neighboring countries' plans to lower their operation costs. These competitive challenges will encourage further policy reforms to pare down the cost of operation in Singapore.
But even then, to be truly effective Lee Hsien Loong has to reconsider the role of government in the economy, manifested most profoundly in the form of powerful government-linked companies such as Temasek, Sembawang and SingTel.
Without a bold and conceptual rethink of the island state's economic and social policies, Lee Hsien Loong will likely govern Singapore with the same substance and essence of what his legendary father has bequeathed. When that occurs, charges of dynastic succession may well be too strong to rebuke.