Singapore must avoid the mistakes of France
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FRANCE goes to the polls tomorrow to choose between the beautiful and socialist Segolene Royal ('We need a just order'), and the hawkish and conservative Nicholas Sarkozy ('We need justice and order'), as its next president.
The choice is a stark one. Ms Royal is all for more state spending, a higher minimum wage, higher state pensions, and keeping the 35-hour work week introduced by socialist prime minister Lionel Jospin in 2000.
Her policies seem everything workers could wish for, except that to pay for them the state will inevitably have to raise taxes - and thereby undermine job creation.
Mr Sarkozy, who made headlines in 2005 for calling rioters 'scum', is the opposite. He thinks the 35-hour work week is the worst mistake France ever made. He believes in lower taxes (the top personal income tax rate is still 40 per cent, after being slashed last year from close to 50 per cent). He wants to reform pensions. And he promises to break the destructive hold unions have.
'Mr Sarkozy is the only candidate who seems to have understood the urgency of reform and to have the abrasiveness to stand a chance of carrying it out,' says The Economist magazine.
Whether or not French voters eventually give him that chance, the French case provides fascinating insights for Singapore.
You could say that France is the archetypal 'ordinary' country implicit in Minister Mentor Lee Kuan Yew's recent remark, when he said 'the biggest mistake any Singaporean can make is to believe Singapore is an ordinary country and can behave like an ordinary country...'
Mr Lee did not spell out what he meant by 'an ordinary country', but because he was speaking in defence of Singapore's approach to governance - tough-headed and going against popular opinion when it is deemed in the best interest of the nation - he clearly meant one which allows public opinion to override the public interest when formulating and implementing policies.
France, unlike Singapore, has natural resources aplenty. It is the second biggest country in continental Europe, and is blessed with rich agricultural lands. It is the sixth largest economy in the world, and at one time the seventh richest in per capita GDP.
In recent years however, the growth rate has stagnated at 2 per cent. Unemployment is close to 10 per cent. Unhappy unemployed youths were the chief cause of riots that broke out in Paris suburbs two years.
What has gone wrong in this country that gave the world the famous social theorist Alexis de Tocqueville, the TGV high-speed trains, and numerous consumer delights like French wines and foie gras?
The answer is simple: the traditional French resistance. This time, to globalisation. France, after all, is home to Jose Bove, the farmer who led demonstrations against McDonald's a few years ago. (He was jailed, but released in time to be one of the 12 contenders in the first round of the current presidential election. Four other contenders were Marxists and Trotskyites.)
The French resistance to globalisation is institutionalised in strong trade unions - that have been decreed by law, no less, to bargain on behalf of fully 95 per cent of workers in France.
The World Economic Forum's Global Competitiveness Report puts France in bottom place out of 125 countries surveyed, in the category of 'cooperation in labour-employer relations'. France, it says, has the most confrontational workplace environment in the world.
'The class conflict view of things is very traditional in France,' says economist Fabien Postel-Vinay in a BBC report. 'Trade unions have been given a lot of bargaining power and they push this idea that there is a conflict of interest between employers and employees.'
The result? Confrontational unions, coupled with the 35-hour work week, mean employers are reluctant to hire new, permanent staff. Young workers bear the brunt of employer selectivity - 22 per cent of the under-25s are unable to get a job.
In addition, even as European governments from Ireland to Macedonia rush to change their laws and regulations to woo foreign investors, France has stalled. Corporate tax remains at over 30 per cent. There is also the highly unpopular wealth tax, a tax on the value of assets like homes and shares.
French businessmen and professionals (including some 16,000 scientists), unhappy with the situation at home, have voted with their feet. According to one estimate, two million out of the total of 63 million live abroad, especially in next-door Britain which has managed to get out of its own economic funk. (See 'The Europeans who will not go home' by Anne Applebaum, in Review)
Where usually people move from poorer to richer countries, France is one of the exceptions - a rich country grappling with a brain drain. If France's next set of leaders fail to adopt the right policies, it may not even remain rich for much longer. Already its per capita GDP has slid from seventh to 17th place internationally.
French business leaders have warned of more of France's best and brightest leaving the country if the socialist Segolene Royal is elected as the next president.
The irony about France is that while it has a strong bureaucracy - like Singapore - it does not have the political leadership to craft and guide policies in the right direction. What is lacking is not knowledge, but nerve, the nerve to act. Singapore's leadership has plenty of the latter.
Like Singapore, the state controls key assets such as power, public transport and the defence industries. But unlike Singapore, they are not subject to efficiency and productivity benchmarks, far less 'managed competition' of the Singapore kind. As one commentator notes, 'there is a huge chunk of state-owned enterprises that go through the motions without being particularly successful in the market'.
Like Singapore, there is a strong emphasis on social equity, with state spending on public health and welfare. Unlike Singapore, that spending has not been well targeted. French public finances are coming under strain from the pension system and rising health-care costs. Singapore runs budget surpluses most years, even as it subsidises health care, education and care for the destitute.
Singapore has much to learn from France in many areas, such as technology, culture and military affairs. In economic management, the malaise that is afflicting the sick man of Europe also holds lessons for Singapore, whoever wins the election tomorrow.
(STraits Times, 5 May) -
France's public hospitals are first-rate. Free nursery schooling has helped to boost birth rates to among the highest in Europe. French dirigisme, a tradition of state intervention reaching back to Louis XIV's finance minister, Jean-Baptiste Colbert, has delivered not just fast trains but nuclear energy and a municipal soccer pitch in every commune.
Yet in seeking to do too much, and to protect people too fully, the system has undermined risk-taking, put a brake on economic growth and imposed unsustainable costs for the long run. In each of the past five years, GDP growth in France has been below the OECD average. Today, while Germany's economy has taken off again, France's has stalled: in the fourth quarter of 2006, on a year-on-year basis, GDP grew more slowly in France than in any other European Union country except Portugal.
There are many reasons for this underperformance. They include—beneath the gloss of its top-notch global companies—a fragile industrial middle. But the single biggest problem is that not enough people work, and when they do, they do not spend enough time on the job. France's 35-hour work week is one of the shortest in the world; the employment rate for the over-55s one of the lowest; and unemployment has not dipped below 8% for 25 years. Over-protected jobs prompt employers to recruit temporary staff, thereby entrenching the very insecurity that protected job contracts are meant to prevent. Can it be coincidence that the world's biggest temping firm, Adecco, is French?
The upshot is indeed relative decline. Over the past 25 years, in terms of GDP per person, the French have slipped from seventh place in the world to 17th. Salaries have stagnated in real terms. Public debt incurred to prop up the system has grown faster than in any other EU-15 country, and now amounts to 66% of GDP.
http://www.economist.com/displayStory.cfm?story_id=9005194 -
Singapore is the best country in the world compared to USA, France, Germany, UK, Denmark, Finland, Sweden, Switzerland, Norway, Japan, Belgium, Luxembourg, etc
Long live the Singapore empire!!!
Hahaha.....
Delusional!!!!
When PM Lee met President Bush and gave him advice about the war in Iraq, Bush should just follow our PM's advice, afterall our PM makes 3 times his salary, based on wages, our PM should be 3 times more abled than President Bush. I think if PM Lee runs for presidency in the US, he should be able to win a landslide victory and provide a solution to the Iraq war. -
What is so extraordinary about our leaders? Have they upgraded or restructured the economy to one which can survive on its own steam without such heavy reliance on foreigners and foreign investments that when there is a slow down in world economy, we will be the first to suffer and the longest to recover as seen in the last three recessions.
Our leaders have already admitted many times that Singapore cannot depend on foreign investments because such foreign firms will blow with the wind and when it is good wind they could flock here to invest and when the wind blow the other direction, they would pack off and go.
Yet we do not see any major change to these past reliance on foreigners and foreign investments.
Where are their economic restructuring plans announced over the past three recessions. Is any of our ministers who are the so-called talents deserving million-dollar salaries in charge and taking responsibility for such failure in the restructuring of the economy to value-adding technology-based economy talked about for years?
At least the Koreans are successful in selling their technology products from hand phones to LCD/plasma TVs or cars which are household names.
What have our highly paid ministers done in comparison with Korea, Switzerland, Denmark or Finland whom MM Lee described as ordinary or mediocre countries?
Instead all we are seeing are their arrogance with a lot of hypocrisy like choosing selectively to compare where weaknesses of others where it suits their arguments to do so just like the way they are selectively comparing their ministers with a few lottery winner CEOs in the private sector in order to pay themselves more salaries. There is simply no substance in MM Lee's argument that Singapore is an extraordinary country with extraordinary leadership.
Upon close scrutiny it will no doubt be found that his leaders consists only of taxing to the highest and making all the profits possible from citizens to accumulate surpluses and claim success at the expense of the citizens and the domestic economy.
Interview the citizens and it will no doubt be found that although they cannot do anything due to political GRCs which prevent them from voting, most of them are suffering from high costs of living with dropping wages and outstanding mortgages which they are struggling to cope for the rest of their lives. Many have been unable to retire or pay for their basic and medical expenses not to mention retirements.
Now many countries are capable of offering greater incentives to attract foreign investments more than Singapore so what solutions have our leaders.
All we could see are the same policies of attracting foreign investments with tax and other incentives.
What about grooming our own technologies and motivate every worker to apply knowledge and excel in globalization. -
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The first post is an article written by Straits Times?
Self praise is no praise. -
AnotherVoice wrote:
Like what Deng Xiao Peng said, why only white cat or white cat as long as it can catch mice.
Singapore is unique mah - every time our old farts say Singapore is unique.
Therefore, why cannot outsource?
Sure can outsource. See how many ministars are ex-Malaysians?
Why not get ex-Indonesians, ex-Americans, ex-British, ex-Switzerland,
ex-Finland, etc.?
This is new concept mah.
You old fart always cannot change one.
You old fart cannot think out of the box already.
Greedy old farts, only think of themselves how can think of people and
country? One big bluff!
Since we do not have ministers who are of the entrepreneurship or ability to restructure the economy to value-adding and technology-based model like what small countries like Finland or Denmark have done, why not invite their past Ministers to serve in our cabinet. We are sure they do not mind being paid lower salaries than our ministers and their talents can be easily retained.
If we can outsource ministers' jobs to greater cosmopolitan talents like those who have proven themselves as mentioned in the foregoing and still save more than 1/2 of our current S$46 million ministers' salaries (not to mention their lifelong pensions) why not we just do it.
Talented people from outside can be placed on probation to pass loyalty and commitment tests we can easily set up so there will be no problem in getting them especially those who have succeeded in restructuring their economy like the Finland and Korea.
All the talks about our lack of talents will be instantly solved if they don't make themselves an exclusive club where club members of their own connections. -
Lai CF wrote:
This is known as selective comparison - examples will be given to compare ministers' salaries with the few lucky lottery winning CEOs in the private sector when ministers are trying to pay themselves higher salaries.
47WYL18RW wrote:
head of creative structural engineering dept in charge of third extension of airport.
n he is albert song.
lol.
Hey..I cna't find anything on ALbert SOng?
Which think-tank fed yout hat?...lol..
BTW..highest paid Civil Servant is about HK$160,000 pm?
ANd plenty of UNEMPLOYED HONG KONGERS waiting fro thsi Airport Extension proejct.........CRAZZZZZZZZZZZZZY to employ SIngpaoreans in HK,,,,,,,,lol
When it comes to the workers's complaints about their dropping wages due to poor economic restructuring or SIA pilots' claims for similar benchmarking, examples will not be given to show other airline pilots are paid higher than our SIA pilots.
This is the meaning of power - use it to benefit oneself. -
Well, in this case, I must say that I agree (for once) with MM Lee that we cannot simply compare ourselves with other countries, such as France, in this case. France is a lovely country, to be sure, as I have visited it twice and enjoyed myself very much on both occasions, but there is no denying that politically, economically and socially it does have quite a few problems. France, I feel, is a country that is fettered by its revolutionary history, which is one reason for its inability to embrace globalisation and move with the times. What she needs, perhaps, is a Margaret Thatcher, to shake the country up and pull it, by sheer force of political will, into the globalised world.
Singapore, on the other hand, has quite a different history and a very different set of circumstances. I don't think we are in any danger at the moment or in the discernible future of falling into France's state of affairs. -
Metaphorical wrote:
Actually like the benchmarking of ministers' salaries to few lottery winning lucky CEOs in the private sector, it all got started as an issue when government wants to get more pays by selective comparison.
You seow har? If give korea & finland people be our pm & ministers, then all the sg real ministers & Lhl do what? They the one kena elected by citizens! Sg got no gov talent meh? must be other countrys colony! Seow!
There is now no need for proper argument with this kind of comparison as it is about use of power. So what is wrong if SIA pilots also want this kind of benchmarking. In fact their benchmarking is more reasonable being industry to industry or apple-to-apple and not trying to ask for a first-prize winning ticket in the big sweep.
When government says it wants to improve the economy or globalise it must outsource local jobs to foreigners. Actually citizens find that many foreigners are not talents but come in to learn or under-study local's talents on the jobs to replace them with a few dollar cheaper.
So if we have this kind of outsourcing going on to replace citizens, government actually is telling citizens they can outsource ministers' jobs as it will mean great saving of at least $23 million of public taxpayers' monies while getting more competitive and talented ministers with good track records in turning around economy.
What is wrong with this kind of outsourcing? Many countries have employed foreign mentors who are more action-oriented who will solve problems rather than talking about all the talents without improving lives of ordinary citizens.
It is not small amount to save the $23 million per year over-paid miniters' salaries as to citizens' knowledge many Finland's good ministers are willing to be paid less than half of what our ministers pay themselves against people's strong objections.
These foreign talented foreign talents will help our citizens to improve their lives so why not? A white cat can catch mice so can a blank cat. -
Whatever happen to the pink dollars in France? Its not great enough to boost the GDP?
