Singapore "Bigger than PAP" - shouldn't it be ?
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This article is too good to be true, and could not decide to correct my post in the thread "Singaporeans being wrack by local Newspapers" , or to continue in the thread "First SARS case in three months" to back my post concerning the arrogance and stagnation setting into the present Singapore Political System.
One important statement in the Q & A that should be corrected is that should the future of Singapore be part of LKY's legacy and only for him to decide; does Singaporeans have no say about the future of Singapore ?
Why such deferrence given to LKY ?
S'pore 'bigger than PAP'
Time to get off the autopilot, says a former civil servant
By Susan Long
SINCE Mr Ngiam Tong Dow retired from the civil service in 1999, affairs of state have weighed heavily on his mind. The highly respected former Permanent Secretary worries about Singapore's long-term survival and the kind of society the next generation will inherit.
At 66, the HDB Corp chairman insists he is 'no radical', just a concerned Singaporean with three grandchildren, who wonders 'whether there will be a Singapore for them in 50 years' time'. In Tea with Think, a weekly interview series, he gives a candid appraisal of the civil service, and his prognosis of what the lack of an alternative political leadership means for Singapore. The interview will be continued next week.
Q. With all this pessimism surrounding Singapore's prospects today, what's your personal prognosis? Will Singapore survive Senior Minister Lee Kuan Yew?
A. Unequivocally yes, Singapore will survive SM Lee but provided he leaves the right legacy.
What sort of legacy he wants to leave is for him to say, but I, a blooming upstart, dare to suggest to him that we should open up politically and allow talent to be spread throughout our society so that an alternative leadership can emerge.
So far, the People's Action Party's tactic is to put all the scholars into the civil service because it believes the way to retain political power forever is to have a monopoly on talent. But in my view, that's a very short term view.
It is the law of nature that all things must atrophy. Unless SM allows serious political challenges to emerge from the alternative elite out there, the incumbent elite will just coast along.
At the first sign of a grassroots revolt, they will probably collapse just like the incumbent Progressive Party to the left-wing PAP onslaught in the late 1950s.
I think our leaders have to accept that Singapore is larger than the PAP.
Q. What would be a useful first step in opening up?
A. For Singapore to survive, we should release half our talent - our President and Overseas Merit scholars - to the private sector.
When ten scholars come home, five should turn to the right and join the public sector or the civil service; the other five should turn to the left and join the private sector.
These scholars should serve their bond to Singapore - not to the Government - by working in or for Singapore overseas. As matters stand, those who wish to strike out have to break their bonds, pay a financial penalty and worse, be condemned as quitters.
But it takes a certain temperament and mindset to be a civil servant. The former head of the civil service, Sim Kee Boon, once said that joining the administrative service is like entering a royal priesthood. Not all of us have the temperament to be priests.
However upright a person is, the mandarin will in time begin to live a gilded life in a gilded cage.
As a Permanent Secretary, I never had to worry whether I could pay my staff their wages. It was all provided for in the Budget.
As chairman of DBS Bank, I worried about wages only 20 per cent of the time.
I now face my greatest business challenge as chairman of HDB Corp, a new start-up spun off from HDB. I spend 90 per cent of my time worrying whether I have enough to pay my staff at the end of the month.
It's a mental switch.
Q. What is your biggest worry about the civil service?
A. The greatest danger is we are flying on auto-pilot. What was once a great policy, we just carry on with more of the same, until reality intervenes.
Take our industrial policy. At the beginning, it was the right thing for us to attract multinationals to Singapore.
For some years now, I've been trying to tell everybody: 'Look, for God's sake, grow our own timber.' If we really want knowledge to be rooted in Singaporeans and based in Singapore, we have to support our SMEs. I'm not a supporter of SMEs just for the sake of more SMEs but we must grow our own roots. Creative Technology's Sim Wong Hoo is one and Hyflux's Olivia Lum is another but that's too few.
We have been flying on auto-pilot for too long. The MNCs have contributed a lot to Singapore but they are totally unsentimental people. The moment you're uncompetitive, they just relocate.
Q. Why has this come about?
A. I suspect we have started to believe our own propaganda.
There is also a particular brand of Singapore elite arrogance creeping in . Some civil servants behave like they have a mandate from the emperor. We think we are little Lee Kuan Yews.
SM Lee has earned his spurs, with his fine intellect and international standing. But even Lee Kuan Yew sometimes doesn't behave like Lee Kuan Yew.
There is also a trend of intellectualisation for its own sake, which loses a sense of the pragmatic concerns of the larger world.
The Chinese, for example, keep good archives of the Imperial examinations which used to be held at the Temple of Heaven.
At the beginning, the scholars were tested on very practical subjects, such as how to control floods in their province. But over time, they were examined on the Confucian Analects and Chinese poetry composition.
Hence, they became emasculated by the system, a worrying fate which could befall Singapore.
Q. But aren't you an exception to the norm of the gilded mandarin with zero bottomline consciousness?
A. That's because I started out with Economic Development Board in the 1959. Investment promotion then was all about hard foot slogging and personal persuasion, which teaches you to be very humble and patient.
I learnt to be a supplicant and a professional beggar, instead of a dispenser of favours. These days, most civil servants start out administering the law. If I had my way, every administrative officer would start his or her career in the EDB.
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Hard foot slogging
1959: First class honours in economics from University of Malaya.
1959: Joined Administrative Service. Postings to the former Ministry of Commerce and Industry, Finance Ministry, and the Economic Development Board.
1964: Topped his Master's in Public Administration programme at Harvard University.
1970: Became the youngest-ever Permanent Secretary at age 33 at the Ministry of Communications. Subsequent postings as Perm Sec in the Ministries of Finance, Trade & Industry, National Development, and the Prime Minister's Office.
1990: Appointed chairman of Development Bank Of Singapore. Later also of the Central Provident Fund Board and HDB.
1999: Retired from the civil service as Permanent Secretary (Finance), a post he held for 13 years.
2003: Named chairman of HDB Corp. Currently also a director of Yeo Hiap Seng Limited, United Overseas Bank and Singapore Press Holdings.
http://straitstimes.asia1.com.sg/think/story/0,4386,211928,00.html? -
A wonderfully honest and personal opinion, coming from a Civil Servant who dares to speak his mind, for the sake of "Singapore After LKY" - extracted from the Sunday Times:
http://straitstimes.asia1.com.sg/think/story/0,4386,213149,00.html?
Stop dancing to the tune of the gorilla
Part Two of the much-talked-about interview with ex-civil servant Ngiam Tong Dow
By Susan Long
Q. YOUR idea of creating an alternate elite is not new. What do you think of the oft-mooted suggestion of achieving that splitting ranks within the People's Action Party?
A. Quite honestly, if you ask me, Team A-and-Team B is a synthetic and infantile idea.
If you want to challenge the Government, it must be spontaneous. You have to allow some of your best and brightest to remain outside your reach and let them grow spontaneously.
How do you know their leadership will not be as good as yours? But if you monopolise all the talent, there will never be an alternative leadership. And alternatives are good for Singapore.
Q. In your calculation, what are the odds of this alternative replacing the incumbent?
A. Of course there's a political risk. Some of these chaps may turn out to be your real opposition, but that is the risk the PAP has to take if it really wants Singapore to endure.
A model we should work towards is the French model of the elite administration.
The very brightest of France all go to university or college. Some emerge Socialists, others Conservative, some work in industries, some work in government. Yet, at the end of the day, when the chips are down, they are all Frenchmen.
No member of the French elite will ever think of betraying his country, never.
That is the sort of Singapore elite we want. It doesn't mean that all of us must belong to the PAP. That is very important.
Q. What do bad times mean for the PAP, which has based its legitimacy on providing the economic goods and asset enhancement? Is its social compact with the people in need of an update?
A. Oh yes. And my advice is: Go back to Senior Minister Lee Kuan Yew's old credo, where nobody owes us a living.
After I had just taken over as the Housing Board's chairman in 2000, an astute academic asked me: 'Tong Dow, what's your greatest problem at HDB?'
Then he diagnosed it himself: 'Initially, you gave peanuts to monkeys so they would dance to your tune. Now you've given them so much by way of peanuts that the monkey has become a gorilla and you have to dance to its tune. That's your greatest problem.'
Our people have become over-fed and today's economic realities mean we have to put them on a crash diet. We cannot starve them because there will be a political explosion.
So the art of government today is to wean everyone off the dispensable items. We should just concentrate on helping the poorest 5 to 10 per cent of the population, instead of handing out a general largesse. Forget about asset enhancement, Singapore shares and utility rebates. You're dancing to the tune of the gorilla.
I don't understand the urgency of raising the Goods and Services Tax. Why tax the lower-income, then return it to them in an aid package? It demeans human dignity and creates a growing supplicant class who habitually hold out their palms.
Despite the fact that we say we are not a welfare state, we act like one of the most 'welfarish' states in the world. We should appeal instead to people's sense of pride and self-reliance.
I think political courage is needed here. And my instinct is that the Singaporean will respect you for that.
Q. So what should this new compact consist of?
A. It should go back to what was originally promised: 'That you shall be given the best education, whether it be academic or vocational, according to your maximum potential.'
And there will be no judgment whether an engineer is better than a doctor or a chef.
My late mother was a great woman. Although illiterate, she single-handedly brought up four boys and a girl. She used to say in Hainanese: 'If you have one talent which you excel in, you will never starve.'
I think the best legacy to leave is education and equal opportunity for all.
When the Hainanese community came to Singapore, they were the latest arrivals and the smallest in number. So they had no choice but to become humble houseboys, waiters and cooks. But they always wanted their sons to have a better life than themselves.
The great thing about Singapore was that we could get an education, which gave us mobility, despite coming from the poorest families.
Today, the Hainanese, as a dialect group, form proportionately the highest number of professionals in Singapore.
Q. You say focus on education. What is top of your wishlist for re-making Singapore's education system?
A. Each year, the PSLE creams off all the top boys and girls and dispatches them to only two schools, Raffles Institution and Raffles Girls' School.
However good these schools are, the problem is you are educating your elite in only two institutions, with only two sets of mentors, and casting them in more or less the same mould.
It worries me that Singapore is only about 'one brand' because you never know what challenges lie ahead and where they will come from. I think we should spread out our best and brightest to at least a dozen schools.
Q. You advocate a more inclusive mindset all around?
A. Yes, intellectually, everyone has to accept that the country of Singapore is larger than the PAP.
But even larger than the country of Singapore, which is limited by size and population, is the nation of Singapore, which includes a diaspora.
My view is that we should have a more inclusive approach to nation-building. We have started the Majulah Connection, an international network where every Singaporean - whether he is a citizen or not, so long as he feels for Singapore - is included as part of our diaspora.
Similarly, we should include foreigners who have worked and thrived here as friends of Singapore. That's the only way to survive. Otherwise, its just four million people on a little red dot of 600 sq km. If you exclude people, you become smaller and smaller, and in the end, you'll disappear.
Q. What is the kind of Singapore you hope your grandchildren will inherit?
A. Let's look at Sparta and Athens, two city states in Greek history.
Singapore is like Sparta, where the top students are taken away from their parents as children and educated. Cohort by cohort, they each select their own leadership, ultimately electing their own Philosopher King. When I first read Plato's Republic, I was totally dazzled by the great logic of this organisational model where the best selects the best.
But when I reached the end of the book, it dawned on me that though the starting point was meritocracy, the end result was dictatorship and elitism.
In the end, that was how Sparta crumbled.
Yet, Athens, a city of philosophers known for its different schools of thought, survived. What does this tell us about out-of-bounds markers?
So SM Lee has to think very hard what legacy he wants to leave for Singapore and the type of society he wants to leave behind.
Is it to be a Sparta, a well- organised martial society, but in the end, [color=blue]very brittle; or an untidy Athens which survived because of its diversity of thinking ?[/color]
Personally, I believe that Singaporeans are not so kuai (Hokkien for obedient) as to become a Sparta. This is our saving grace.
As a young senior citizen, I very much hope that Singapore will survive for a long time, but as an Athens. It is more interesting and worth living and dying for. -
Interesting opinion extracted from a contributor to the Sintercom that confirms the observations made in the articles in this thread:
http://forums.delphiforums.com/sintercom/messages?msg=1728.1
Economics, Jobs and Money -
Why David Lim was sacked as Minister
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From: CHOWLEEBYE Sep-9 10:58 pm
To: ALL (1 of
1705.1
I heard this from a businessman who's lived in Shanghai, and here's his story.
Back in the late 80s or early 90s, the mayor of Shanghai came to Singapore with a proposal. There was a swampy ground next to his city that could be developed with the help of a foreign partner. The mayor liked Singapore very much and wanted Singapore to be a key player in this project and he made us a deal - just let us know what are the terms and we'll do anything to make it work. It was a done deal. All we had to do was to agree.
Now the mayor was sent to a gahmen agency where he met a young and high-flying bureaucrat gahmen scholar. This scholar was full of theories and had a very high IQ but had no experience in doing business. Not only that, he didn't have a good opinion of the mayor who looked like a suaku and didn't even have an MBA like most of these high-flyers.
This scholar/bureaucrat told the Shanghai mayor that his plan would never work and that Singapore would not be interested in working with Shanghai. Thus rebuffed, the mayor went back to China and redoubled his efforts to make his dream a reality.
Fast forward to today. What happened since then? Singapore, under the visionary guidance of this bureaucrat, had second thoughts, and then stole this idea, BUT went on to strike a deal with Suzhou to build an industrial park. They probably thought - well, heck care about Shanghai, let's work with Shanghai's competitor, Suzhou.
We all know what a debacle Suzhou turned out to be. Meanwhile, the mayor of Shanghai built a new city, and called it Pudong where it is now a shining jewel rising out of the swamp. Pudong is the engine of growth powering Shanghai's economic resurgence.
This mayor went on to become the Prime Minister of China. His name - Zhu Rong Ji.
The gahmen scholar who thought he had all the answers and tried to be a smart alec - he ended up directing the Suzhou project and later almost became a Minister - his name is David Lim.
So - now you know why he was sacked and then given a golden parachute to land on a sinking cargo ship, as CEO of NOL.
But so what? Well, think about this. Suzhou was a nightmare that cost Singapore billions of dollars directly and much more in business lost through missed opportunities. If not for this stupid mistake, Singapore might have partnered with Shanghai, shared in the economic success of Pudong and then proceed to enjoy a warm relationship with the Chinese leadership.
You think you got a bad deal by paying these jokers millions of dollars a year? It's much worse than that. Honest mistakes like Suzhou/Pudong cost us BILLIONS of dollars then and continues to cost us BILLIONS today and going forward. That's what you get when you have scholars/generals etc. as politicians - people with zero business experience. No wonder we are in the shithouse today. -
wow... wat a story....interesting...any truth to it????
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wow
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This Sunday Times article drew a review from a Malaysian Newspaper, The Star, and contained some interesting Malaysian perspective to this surprisingly outspoken piece from a Singaporean Civil Servant :
Spread the talent, leaders urged
Star, Malaysia
October 5, 2003
Insight Down South with by SEAH CHIANG NEE
IN an outspoken interview, one of the most accomplished civil servants has called on Mr Lee Kuan Yew to allow serious political challenges to emerge in Singapore.
Ngiam Tong Dow, 66, who retired from the bureaucracy in 1999, is among a few permanent secretaries who had helped Lee shape todayÂ’s Singapore.
“We should open up politically and allow talent to be spread throughout our society so that an alternative leadership can emerge,” Ngiam said when asked by Sunday Times to comment on Singapore’s long-term survival.
It depended, he added, on Lee leaving behind the right legacy.
Ngiam is among the few top bureaucrats who had grown up and bonded well with MalaysiaÂ’s first generation of senior civil servants in the early days of the break-up, despite tense bilateral ties. Others include JYM Pillai, Sim Kee Boon, Howe Yoon Chong and Philip Yeo.
Ngiam elaborated: “So far, the People's Action Party's tactic is to put all the scholars into the civil service because it believes the way to retain political power forever is to have a monopoly on talent. To me, that's a very short-term view.”
Currently chairman of HDB Corp, Ngiam said all things by nature must atrophy.
“Unless SM (Senior Minister) Lee allows serious political challenges to emerge from the alternative elite out there, the incumbent elite will just coast along.
“At the first sign of a grassroots revolt, they will probably collapse just like the incumbent Progressive Party to the left-wing PAP onslaught in the late 1950s.
“I think our leaders have to accept that Singapore is larger than the PAP.”
The first step is to release half the government scholars to the private sector.
“When 10 scholars come home, five should turn to the right and join the public sector or the civil service; the other five should turn to the left and join the private sector.”
These scholars, he told the Sunday Times, should serve their bond to Singapore – not the Government – by working here or for Singapore overseas.
Asked what was his biggest worry about the civil service, Ngiam replied: “The greatest danger is we are flying on auto-pilot. What was once a great policy, we just carry on with more of the same, until reality intervenes.”
Ngiam had spent 44 years in the civil service, and was SingaporeÂ’s youngest permanent secretary at the age of 33 in 1970.
"We have been flying on auto-pilot for too long. The MNCs have contributed a lot to Singapore but they are totally unsentimental. The moment you're uncompetitive, they just relocate.
“Take our industrial policy. At the beginning, it was right for us to attract multinationals to Singapore.”
His forthright comments came as a surprise to most Singaporeans, young and old, who generally regard civil servants as quiet doers rather than public articulators.
Ngiam had shown his brilliance to people who worked with him. In public, he had always maintained a low profile.
That he has spoken out in this manner points to several things.
Firstly, he is perturbed enough by what is happening in Singapore, especially in the civil service, to speak out.
Secondly, it confirms a freer political atmosphere in which the authorities encourage people to speak out, even critically, as long as it is in SingaporeÂ’s interests.
A third point is his frank reference to Lee Kuan Yew as still the overriding authority in Singapore. All his suggestions are addressed to Lee, not Prime Minister Goh Chok Tong.
It set off some discussions in Internet chat-sites, with some people wondering whether the government will take action against him.
Asked why Singapore had been on auto-pilot for so long, Ngiam replied: “I suspect we have started to believe our own propaganda.”
He reserved some of his harshest criticisms for the civil service.
“There is also a particular brand of Singapore elite arrogance creeping in. Some civil servants behave like they have a mandate from the emperor. We think we are little Kuan Yews.
“SM Lee has earned his spurs with his fine intellect and international standing. But even Kuan Yew sometimes doesn't behave like Kuan Yew.”
Asked why he was different, Ngiam said it was probably because he had started in the Economic Development Board (which promotes investment) in 1959. It was all about hard foot-slogging work and personal persuasion which taught one to be very humble and patient.
“I learnt to be a supplicant and a professional beggar, instead of a dispenser of favours.
“These days, most civil servants start out administering the law. If I had my way, every administrative officer would start his or her career in the EDB.”
NgiamÂ’s allegations on the scholarship system, elitism in government and intellectual arrogance reflect what some critics have privately said.
But being an insider with access to the policy-making process, Ngiam is the first to have articulated his thoughts clearly. As a lifelong civil servant, he is not allowed by law to join the ruling PeopleÂ’s Action Party.
His most telling suggestion is for Lee to leave behind a “free politics” legacy by allowing talent to be spread throughout Singapore so that an alternative leadership can emerge.
Singapore is in the midst of a “remaking” exercise that will include restructuring its economy and loosening its political and social environment.
For a whole generation, thousands of parents have been pushing their children towards scoring AÂ’s in their exams to win prestigious government scholarships.
This virtually guarantees them a top-level, high-paying bureaucratic job. The road is long and arduous. Some parents dedicate their lives to help their children achieve it.
I know of someone whose son, who is in lower primary, is in the gifted programme. The father, who holds a master's degree in mathematics, takes leave to help his son prepare for exams.
Asked why, he said he wanted his boy to gain a top political or civil service post through the scholarship trail.
It is a route many take but few succeed. Once there, there is no fear of being retrenched, unlike thousands of other mortals when profits plunge.
o Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com (e-mail: cnseah2000@ littlespeck.com )
http://www.singapore-window.org/sw03/031005st.htm -
The Senior Civil Servant speak his mind again, with cuttingly honest observation of events in Singapore from an insider viewpoint:
Ex-top civil servant speaks up on policy 'misses'
Some of them: population, immigration, tax schemes
By Susan Long
RETIRED top civil servant Ngiam Tong Dow is known to speak his mind these days. And true to forthright form yesterday, he made a wide-ranging speech at the Economic Society of Singapore's luncheon discussion series, on the misses in public policy-making in Singapore over the past four decades.
In his speech, which was delivered at the OCBC Executive Club's premises, he raised critical questions about Singapore's population policies, the Singapore dollar peg, the Central Provident Fund rate, the Goods and Services Tax, taxation, SingTel shares and the optimum population size.
The chairman of HDB Corp started out by highlighting the Ministry of Health and the then Family Planning Board's failure 'to think out of the box' and continuing to 'fly on the policy auto-pilot' of Singapore's Stop At Two campaign, even as the birth rates started falling and it became apparent that Singapore lacked the critical mass to be an industrial nation in the 1970s.
He also spoke up on a range of other misses, such as the landed Permanent Resident Scheme for Hong Kongers, which allowed all Hong Kong families - except those with criminal records - to obtain PR status on arrival at Changi Airport just before 1997.
'Even then, Hong Kongers thumbed their noses at us,' he said.
'The few who did accept PR in Singapore promptly bought an HDB flat on the resale market, which they were allowed to let out because they did not stay to work in Singapore.
'When property prices rose, they gave up their PR and sold their flats for a capital gain.'
He expressed concern over the fragile public finance structure here, which he likened to a 'top spinning'. Unlike most countries, he said, the public finance structure here is an 'inverted pyramid' where the ablest 10 per cent, who pay the bulk of the taxes, support the other 90 per cent.
So long as the economy grows steadily at 8 per cent, he predicted the social compact will prevail. Otherwise, 'social fissures' will appear.
He also wondered about the runaway exuberance of land and transport policies, as well as Housing Board upgrading and other 'populist schemes', such as the Economic Restructuring Shares.
Before Mr Ngiam, now 66, retired from the civil service in 1999, he was a highly respected permanent secretary who served in many ministries, including the Prime Minister's Office and the ministries of finance, trade and industry, and communications.
Last September, in a candid interview with The Sunday Times, he created a stir when he lamented the arrogance of the civil service and the lack of alternative political leadership here.
http://straitstimes.asia1.com.sg/singapore/story/0,4386,230313,00.html?
the public finance structure here is an 'inverted pyramid'
Funny that the Straits Times DID NOT clarify if this 'public finance structure' is referring to our CPF system, that is exactly an 'inverted pyramid' - with the present bulk of older workers CPF funds continually being dependent on younger workers entering the working population; and the younger population is coming from a population size that is shrinking at an alarming rate.
See his September 2003 interviews in the two posts above. -
Following the publication - of the retired Senior Civil Servant - in the Straits Times dated 16 January 2004, the Straits Times conducted interviews from members of the public concerning their reaction the issues raised by Mr Ngiam:-
You're wrong on some things
He may not be a famous businessman or politician, but HDB Corporation chairman Ngiam Tong Dow was the talk of the town yesterday. In a hard-hitting speech to the Economics Society of Singapore on Thursday, the career civil servant questioned the assumptions behind key government policies. LAUREL TEO, AUDREY TAN and BRYAN LEE find out what people think of his wide-ranging remarks.
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LAND POLICY
Recent Government land valuations are too high because the Chief Valuer uses the concept of opportunity cost to price land, with Raffles Place as the benchmark. As a result, Singapore has become less competitive and PSA, for example, has priced itself out of the market for transshipment.
Reactions: Land cost critical
THE Government prices land according to Raffles Place prices? That is probably exaggerated, say the four analysts interviewed.
But they agree that land cost was a critical reason for Singapore's loss of cost-competitiveness.
That is because land valuations of government-built housing and factories ultimately act as a floor for prices of privately-owned land.
If land prices are high, property prices and rents will also be high since land cost can be as much as 80 per cent of the cost of a development. This raises overheads for businesses and other service providers, like hospitals, which pass these on to consumers.
'The high cost of land feeds its way insidiously into all other costs. Wages are high due to the high cost of living,' says one economist.
The solution to the problem?
Reset all land prices to their 'natural' levels and do away with government-subsidised property, says DBS Bank's senior regional economist Sailesh Jha. Let market forces do the pricing instead.
But this would hurt many property owners, who could lose up to half the value of their assets.
So the analysts suggest that the Government use its reserves to soften the blow, or wait until the economy is in better shape before doing what is needed.
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THE SING DOLLAR
Singapore should peg its currency to the US dollar - just as Malaysia, China and Hong Kong have done - instead of a weighted basket of currencies. After all, nearly all international trading is denominated in US dollars.
Reactions: No US$ peg, please
WHILE it's true that exporters will benefit from the convenience of having a fixed exchange rate, most economists disagree with Mr Ngiam about pegging the Sing dollar to the greenback.
Why? Because Singapore would effectively be giving up its ability to use monetary policy as a tool.
Take Hong Kong, for example. While other Asian currencies fell after the 1997 financial crisis, Hong Kong's currency strengthened together with the US dollar, say economists. As a result, Hong Kong became more uncompetitive compared to its neighbours, and it slumped into five years of deflation as asset prices crashed.
Mr Lian Chia Liang, an economist at JP Morgan, adds that the prevailing trend is for countries to move from fixed to floating exchange rates, not vice versa. 'Since 1996, 19 emerging market countries have moved towards more flexible exchange rates, while only four - Bulgaria, Ecuador, Venezuela and Malaysia - have moved the other way,' he said.
Economists add that Singapore's current exchange rate regime has served it well. Since the Sing dollar's value is tied to a basket of currencies, the exchange rate reflects the diversity of Singapore's trading partners. It does not fluctuate wildly and is also allowed to trade only within a narrow band determined by the Monetary Authority of Singapore.
Mr Nizam Idris, an economist at IDEAglobal, says: 'Singapore's current monetary policy has a combination of both keeping currency volatility to a minimum and yet allowing adjustment.'
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HDB'S ROLE
The Government should perhaps have closed down the Housing Board after providing 80 per cent of Singaporeans with their first home. Yet it provided incentives for HDB owners to upgrade to larger homes and the HDB went into overdrive, building far too many flats. The HDB's attempt to focus on upgrading was also misplaced, because the increase in resale value of an upgraded flat is now lower than the cost of upgrading.
Reactions: HDB is passe
BOTH economists that The Straits Times spoke to agree with Mr Ngiam, saying the HDB had a crucial role to play in the early days, but it has since outgrown its use. So it should not have continued its building spree in the 1990s.
Looking ahead, DBS Bank's senior regional economist Sailesh Jha sees no way out but for the HDB to be privatised. 'There is no need for it to be run by the Government. We should allow the market to play a bigger role in determining prices,' he says.
Centennial Group's head of economic research Manu Bhaskaran has an even more radical suggestion. 'The HDB should shut down as it has done its job. It could just concentrate on renting flats to poor people,' he suggests.
But others disagree with the veteran civil servant. MP Teo Ho Pin (Holland-Bukit Panjang GRC) thinks Mr Ngiam's comments on the HDB's upgrading programmes, for example, may have missed the mark. Asset enhancement aside, upgrading had been conceptualised with an equally important social objective in mind, says the chairman of the Government Parliamentary Committee for National Development and Environment.
'The intention was to keep the community intact. The upgrading would spruce up the older and more run-down estates, so that residents would not move away and scatter to the newer ones.'
As for HDB's flat-building frenzy, this was partly the result of the liberalisation of the HDB resale market in the late 1980s, Mr Teo adds. 'In hindsight, of course you can say this and that. But at that point, the Government had to meet the needs of the people.'
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CPF RATES
The Government was right to slash Central Provident Fund contribution rates down to 30 per cent in 1986. But its failure to keep the rates there made Singapore workers less competitive. Instead of allowing CPF contribution rates to range from 30 to 36 per cent, the Government should now fix the rates permanently at 30 per cent.
Reactions: No magic number yet
YES, Singapore should probably have left its CPF rates at 30 per cent post-1986, say analysts.
The subsequent hikes in employers' contribution rates 'magnified the whole problem of our costs being high', says IDEAglobal economist Nizam Idris. He is also a strong supporter of keeping the CPF rates at a fixed level instead of adjusting them with the fluctuations of the economy.
Mr Manu Bhaskaran, partner and head of economic research at Centennial Group, says Mr Ngiam's point is valid. 'It's better to have certainty than uncertainty. That's a lesson we can learn for the future.' However, other economists like OCBC Bank's Suan Teck Kin note that there are also disadvantages to sticking to a fixed rate. 'If it's going to be so fixed, then you cannot respond to changes in the economy. Your hands are tied. For example, 40 per cent used to be a comfortable rate. But when the situation called for it, the Government was able to reduce it.'
Yet Mr Nizam has a counter to this point. 'Adjusting the rates in reaction to changes is a very inefficient counter-cyclical tool, because you tend to be always behind the curve,' he says.
All three, however, agree that it might be too hasty to conclude that 30 per cent is the magic number for CPF rates. They point out that the Finance Ministry is still conducting a study on what should be the optimum contribution rate for CPF. Says Mr Bhaskaran: 'First we need to work out the amounts needed to meet the most important objectives of CPF - meet retirement, medical and housing needs.'
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TRANSPORT
When it comes to public transport, the Government is on the wrong track. Let buses and the rail operators compete freely, instead of trying to regulate fares and micro-managing any overlap of bus and rail routes.
Reactions : A call for real competition
THREE transport analysts that The Straits Times spoke to all see Mr Ngiam's comments as a call for real competition. This comes after last year's controversy over transport competition, which erupted when SBS Transit, which began operating the North-East Line in June, started changing or removing bus routes.
Mr Vincent Ng, an analyst with Standard & Poor's Asian equity research agency, says: 'A consumer may seem to have a lot of choice when he can decide whether to take the bus, MRT or taxi from where he lives. But if all three are owned by the same company... it's virtually a monopoly.' And prices can thus be manipulated.
Therefore, it is much better to have, as Mr Ngiam suggested, different companies running different transport modes, say analysts. Competition would ensure that fares are competitive, so they need not be subject to regulation.
But MP Chay Wai Chuen, who chairs the Government Parliamentary Committee on Transport, says Singapore is too small to have bus and rail operators duplicating services.
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TAXES AND GST
The Government made several tax errors. It should have cut income taxes during a boom, not the recent recession. Then, it decided to increase the Goods and Services Tax to make up for the loss of revenue, but failed to do this because it also gave GST rebates. What the Government should have done was to cut its own expenditure.
Reactions: Look at the long-term benefits
TWO analysts that The Straits Times spoke to agree that the timing of the income tax cuts and the GST increase may have been slightly off. But the changes are needed for the long term.
Mr Joseph Tan, an economist at Standard Chartered Bank, says: 'The income tax cut was... to counter also a structural problem. Companies were moving operations to other countries.' The cuts sent an important signal that Singapore will have one of the most competitive tax regimes in the region.
The GST increase should also be taken in the broader context.
Singapore's ageing population means it needs to rely less on income taxes for its revenues, or it will face budget deficits year after year.
Singapore's tax revenues also depend heavily on a narrow segment of the top earners, something Mr Ngiam himself pointed out. Mr Nizam Idris, an economist at IDEAglobal, says: 'The Government needs to broaden the tax base so there is a good long-term reason to increase GST.'
The analysts agree that the GST hikes will further slow consumption at a time when the economy is still weak.
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HE'S SEEN ISSUES FROM A RARE PERSPECTIVE
'Mr Ngiam has contributed extraordinarily to Singapore's economic development and has seen things from a perspective very few people have, so we should give due respect to his views. Our economy is now at a turning point and his speech was a useful contribution to the economic debate in Singapore.'
- Mr Manu Bhaskaran, partner and head of economic research at the Centennial Group
THINGS ARE NOT ALWAYS SO CLEAR-CUT
'Mr Ngiam's speech is quite hard-hitting, very frank. But some of the Government's objectives then were not purely economic. And if you are going to balance economics and politics, sometimes politics will win out. It's not so clear-cut.'
- Mr Suan Teck Kin, OCBC Bank economist, on how the economic 'misses' could have been political 'hits'
GOOD OVERALL ECONOMIC PICTURE
'It was a good overall picture of the Singapore economy. Mr Ngiam highlighted quite a few key themes and issues, such as property prices and the exchange rate, though there are other pressing areas such as the development of SMEs, improving productivity and innovation.'
- Dr Sailesh Jha, DBS Bank's senior regional economist, who reckons that Singapore should focus on getting its small and medium enterprises (SMEs) to drive economic growth, as with Switzerland, instead of focusing only on cutting costs -
Mr Ngiam Tong Dow speaks again
It was another blast from the past at the JTC Alumni dialogue last night as the retired permanent secretary spoke of the unintended consequences of land pricing policy and the intellectual paucity behind gleaming buildings.
MOST civil servants hide behind the instruction manuals (IMs) as an excuse for not having to think. If you do not decide or exercise your discretion, then you are not thinking. You have to think even when you say 'No'. Otherwise, you are just flying on auto-pilot.
A 'No' decision should stand up to public scrutiny as much as a 'Yes' answer. The Auditor-General should check for acts of omission as much as he scrutinises acts of commission.
Let me illustrate this with an example from my estate officer days at the Economic Development Board (EDB). We had built some shops at the Light Industries section near the flats to provide shopping and other amenities. In accordance with the IMs, we put out the shops for public tender. As to be expected, the banks made the highest bids for space.
There was one shop left when an old barber approached us to say that he couldn't compete with the banks, as cutting hair was not a high-margin business. He offered us $400 a month. In the late 60s, it was not a sum to be sniffed at.
So I took the case to EDB chairman Hon Sui Sen and suggested that we allocate the shop to the barber as hair-cutting was an essential trade.
He agreed, but stipulated that the lease was to be for only three years. The barber should not expect to be subsidised forever. In any case, his business would grow with Jurong and the lease could be renewed, at higher rentals.
SHARING FORTUNES
MR HON was permanent secretary (PS) and commissioner of land before he was appointed PS (Economic Development) and chairman of EDB. He introduced the Torrens system of land registration to Singapore. In charging for land at Jurong, he practised what I would later learn from the Japanese as a policy of 'sharing prosperity, sharing misery'.
Under this policy, EDB did not charge the full premium for land on 30-year leases. Instead, we charged rental at 6 per cent of annual value per sq ft. This could be revised once every five years subject to a cap of 50 per cent. The lease of 30 years would be extended for another 30 years if EDB/ JTC was satisfied that the lessee was making good economic use of the land.
In this way, manufacturers need not tie up too much capital on land. Instead, they could invest in machinery and equipment. In other words, those who wished to speculate on land were not welcome. Speculation was a zero sum game.
UNINTENDED RESULT
JTC and HDB were instructed by the Ministry of Finance (MOF) in the mid-80s to return all undeveloped land to the Land Office. The financial impact on JTC and HDB was different. While both were made to pay current market rates to repurchase the land for development, HDB enjoyed a bottom-line subsidy.
In effect, whatever the Land Office charged for land, HDB received a subsidy to offset it. It was a bookkeeping exercise.
When JTC paid current market rates to repurchase its own land, it had no choice but to charge as much as the lessees could bear. Is it any wonder then that industrial and other land costs shot up?
Besides the direct impact on JTC and HDB finances, a more serious long-term structural effect on the economy is that we are subsidising consumption (housing) and penalising production (industry).
It is not a healthy road to take. Mr Hon's policy of sharing prosperity and misery is no longer feasible as JTC does not own any land stock any more.
THE ESPLANADE
MOST MOFs treat the Ministry of Information, Communications and the Arts (Mita) as Cinderella. Like Oliver Twist, it stands last in the queue for budgetary funding. The mindset is such that schools and hospitals always have priority over concert halls and theatres. So it was with Mita and its predecessor, the Ministry of Culture.
Which was the situation until BG George Yeo was appointed the minister for Mita. BG Yeo is a Cambridge-trained engineer. But he can weave magic with words. He has effervescent energy and is truly a renaissance man, a rarity in Singapore where we know the price of everything and the value of nothing.
So I told the minister that at long last, MOF is prepared to look at Mita's budget requests without prejudice, but on their own intrinsic merit. This change of mindset did not prepare MOF for the bombshell budget request which soon arrived on our desk. It was a request to build the Esplanade theatres and concert halls for $600 million.
We were shell-shocked. The highest ever request before then from Mita was for $50 million to reconstruct and refurbish the Victoria concert halls, which was approved because our minister, Dr Goh Keng Swee, placed his considerable power of persuasion behind the proposal.
MOF soon recovered its composure. As finance scrutineers, our habit is to start with scrutinising the small print before admiring the big picture. We discovered that the operating cost of the performing theatres and concert halls would amount to $50 million a year. Mr Jaspal Singh, my deputy secretary, made a quick back-of-the-envelope calculation and concluded that the Esplanade had to sell every seat every night of the year at $300 a seat just to break even on operating costs. When we put this uncomfortable fact to Mita, there was only silence, no arguments, no remonstration.
We thought that was the end of the matter. How wrong we were. Little did we know that the intrepid BG Yeo had appealed to PM, who decided that the Totalisator Board would finance the capital expenditure outside the budget below the line.
Strictly speaking, the board is only the agent for MOF and its revenue was to be credited to Finance at the end of the financial year. But as the Esplanade is to be financed out of future revenue streams, MOF has no jurisdiction over how it is to be spent, as it has not yet been received. MOF was defeated by this ingenious procedural innovation.
But personally speaking, I am glad Mita won, for without the board financing, we would not have the Esplanade Theatres on the Bay, shimmering in the noon day sun, and glowing on full moon nights.
MONUMENTS
IN OUR poor, early, austere days, MOF invariably turned down the then Ministry of Community Development's (MCD) requests to build public swimming pools. Dr Goh considered it more cost-effective to give a schoolboy 50 cents as bus fare to go to the beach to swim. We had calculated it would cost $2 a swim if we had to build the pools and maintain them. This is an example of what Dr Goh considers a robust approach to budgeting.
So I very much hope the Esplanade will sell enough tickets a year to pay its operating cost. I hope the day will never come that we give every Singaporean $150 to attend concerts when visiting the great cultural cities of London, New York, Beijing.
This is not a tongue-in-cheek proposal. It is an exercise in the cold logic of Dr Goh's robust approach to budgeting. More likely, we will suspend spending on culture when times are hard. -
ON BEIJING
I HAD the privilege of visiting Beijing on several occasions. The most memorable visit was the first in 1979, before the opening up of China. There were few cars. As our motorcade went through the vastness of Tiananmen, my mind flashed back to centuries of Chinese history when envoys made the same journey to the imperial palace to pay tribute to the emperor. The vastness of the square alone would have awed them of the power and reach of China.
The imperial palace was the seat of imperial power. But to me, it is not the architectural icon of Beijing. To me, the architectural essence of Beijing is the beautiful, perfectly proportioned Temple of Heaven. The temple served as the imperial examination hall. Imperial examinations were presided over by the emperor himself. Based on the results, the emperor personally selected the ruling elite for the empire. He also offered the hand of his princess in marriage to the chuang-yuan, the top imperial scholar of the year.
The Temple of Heaven is built entirely of timber, without a nail being used. It is the product of a soaring imagination and the work of countless loving, skilled hands. But it must have cost a fraction of what it cost to build the imperial palaces. So, monuments do not need to cost a bomb.
In our years of budgetary abundance, we have often mistaken form for substance. Without being specific, our institutions of higher learning, including polytechnics and research laboratories, and even community clubs, headquarters of ministries and statutory boards, have been built to heights of elegance more than what their functions require.
GLASS PALACES
AS I drive by these gleaming glass palaces, I often wonder whether the learning, teaching and research match the grandeur of the buildings. Dr Melanie Ng Chew, who wrote The Pillars Of Fullerton, described the old Fullerton building as dark and dim. Its saving grace was that there were some bright minds working in it.
It is not just the capital cost. Maintenance is higher. A robust measure MOF can immediately impose is to charge real, not notional, rentals to be paid out of operating budgets. As operating budgets include wage costs, my hunch is that there will be an immediate reduction in space required. And ministries may even volunteer to move out to cheaper quarters.
When you read Japanese economic history, you will discover that after World War II, when Japan rebuilt its economy and industry, they spent whatever precious capital they had on machinery and equipment, and purchase of technology. They spent as little as they could on buildings, which were old, but functional.
China is going through this early Japanese phase of industrialisation. Is it any wonder then that China, and soon India, can manufacture goods and provide services cheaper than anybody else in the world? As Senior Minister Lee Kuan Yew has urged, Singapore has to reduce costs across the whole spectrum to compete, even the cost of education and government.
SM Lee once remarked that on his visits to various countries, he found an inverse correlation between the grandeur of the country's Parliament House and its per capita GDP.
In plain English, the grander the building, the poorer the people.
I would like to add that the grander the building, the lower the quality of democracy practised. As our new Parliament House, though elegant, is of modest dimensions, Singapore is unlikely to suffer from one or both fates.
Nevertheless, the public sector should forever be vigilant of the cost of providing public services and not be seduced by monuments, concrete or intellectual.
http://straitstimes.asia1.com.sg/commentary/story/0,4386,237510,00.html? -
Originally posted by Atobe:
er....... does this mean u agree or disagree with him??
[b]ON BEIJING
I HAD the privilege of visiting Beijing on several occasions. The most memorable visit was the first in 1979, before the opening up of China. There were few cars. As our motorcade went through the vastness of Tiananmen, my mind flashed back to centuries of Chinese history when envoys made the same journey to the imperial palace to pay tribute to the emperor. The vastness of the square alone would have awed them of the power and reach of China.
The imperial palace was the seat of imperial power. But to me, it is not the architectural icon of Beijing. To me, the architectural essence of Beijing is the beautiful, perfectly proportioned Temple of Heaven. The temple served as the imperial examination hall. Imperial examinations were presided over by the emperor himself. Based on the results, the emperor personally selected the ruling elite for the empire. He also offered the hand of his princess in marriage to the chuang-yuan, the top imperial scholar of the year.
The Temple of Heaven is built entirely of timber, without a nail being used. It is the product of a soaring imagination and the work of countless loving, skilled hands. But it must have cost a fraction of what it cost to build the imperial palaces. So, monuments do not need to cost a bomb.
In our years of budgetary abundance, we have often mistaken form for substance. Without being specific, our institutions of higher learning, including polytechnics and research laboratories, and even community clubs, headquarters of ministries and statutory boards, have been built to heights of elegance more than what their functions require.
GLASS PALACES
AS I drive by these gleaming glass palaces, I often wonder whether the learning, teaching and research match the grandeur of the buildings. Dr Melanie Ng Chew, who wrote The Pillars Of Fullerton, described the old Fullerton building as dark and dim. Its saving grace was that there were some bright minds working in it.
It is not just the capital cost. Maintenance is higher. A robust measure MOF can immediately impose is to charge real, not notional, rentals to be paid out of operating budgets. As operating budgets include wage costs, my hunch is that there will be an immediate reduction in space required. And ministries may even volunteer to move out to cheaper quarters.
When you read Japanese economic history, you will discover that after World War II, when Japan rebuilt its economy and industry, they spent whatever precious capital they had on machinery and equipment, and purchase of technology. They spent as little as they could on buildings, which were old, but functional.
China is going through this early Japanese phase of industrialisation. Is it any wonder then that China, and soon India, can manufacture goods and provide services cheaper than anybody else in the world? As Senior Minister Lee Kuan Yew has urged, Singapore has to reduce costs across the whole spectrum to compete, even the cost of education and government.
SM Lee once remarked that on his visits to various countries, he found an inverse correlation between the grandeur of the country's Parliament House and its per capita GDP.
In plain English, the grander the building, the poorer the people.
I would like to add that the grander the building, the lower the quality of democracy practised. As our new Parliament House, though elegant, is of modest dimensions, Singapore is unlikely to suffer from one or both fates.
Nevertheless, the public sector should forever be vigilant of the cost of providing public services and not be seduced by monuments, concrete or intellectual.
http://straitstimes.asia1.com.sg/commentary/story/0,4386,237510,00.html?
[/b]
-
Originally posted by oldbreadstinks:
er....... does this mean u agree or disagree with him??
[quote]Originally posted by Atobe:
I would like to add that the grander the building, the lower the quality of democracy practised. As our new Parliament House, though elegant, is of modest dimensions, Singapore is unlikely to suffer from one or both fates.
Nevertheless, the public sector should forever be vigilant of the cost of providing public services and not be seduced by monuments, concrete or intellectual. [/quote]
Most of the points, that were written by the venerably retired Senior Civil Servant Ngiam Tong Dow, had accurately defined the issues that exist in Singapore today.
It has to be true, as he has been in the inside track of the Civil Service, and rubbed shoulders with the various Ministers in Cabinet; and will have the First Hand Experience of what is happening.
However, he was too polite in his ending remarks, and had somewhat toned down his criticism with regards to our NEW Parliament House.
If he had lived by his views, and extending his remarks concerning the inefficient and unnecessary tearing down of functional buildings, then it was a waste of public funds in moving out of the Previous Parliament House, when it had served the country so well since Self-Rule during the Colonial days in the 1950s.
Can I agree with his last ending statement that there is democracy simply because the NEW Parliament House is not so grand, and was relatively modest ?
Is there any levels of modest Democracy being practised at all in Singapore ? -
The answer to the question in the topic is very obvious.
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Is the answer so 'obvious' ?Originally posted by PRP:The answer to the question in the topic is very obvious.
Your statement does not seem to be so obvious with a reply.
It seem that it will depend very much on which side of the fence you happen to be at.