Singapore must achieve more with less – By NGIAM TONG DOW

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IN THE aftermath of GE 2011, a new buzzword entered our political vocabulary. Political reporters wrote about the ‘new normal’ of Singapore politics. Being an ‘old normal’, I wondered what was new.

From third world to first: Like any other country in the world, Singapore now competes in a global economy. In such an economy, importing cheap foreign labour is no longer a viable strategy. It is a dead end.

That was until I spoke to NUS undergraduates at a ‘tea chat’ as a guest of the Master of Cinnamon College, one of seven new colleges forming part of NUS’s new University Town. I wanted to understand the mindset of the younger generation compared with the old mindset of my generation.

Except for the few activists of the University Socialist Club, my contemporaries at university were politically passive but not naive. In the political environment we were then in, we thought it prudent to keep our thoughts to ourselves.

In contrast, NUS undergraduates today are more articulate. They have courage of their own convictions, expressing their views vigorously at tutorials or the cafeteria.

Prime Minister Lee Hsien Loong has to deal with an electorate that is vastly different from the old normal of his father’s generation. The command politics of his father no longer works. While Mr Lee Kuan Yew appealed to emotions, PM has now to appeal to reason.

In my synopsis, I posed the question: Though Singapore has held seven general elections, can Singapore be considered a democratic state?

Let me state what we are not. We are not a theocratic state like the Vatican or present day Iran. We are definitely not ideological states like North Korea, Cuba or China.

The western concept of democracy is government of the people, by the people, for the people. China’s emperors had to gain the consent of the people to earn the mandate of heaven to rule. In my view, the core purpose of government is to raise the livelihood of the people.

The People’s Action Party (PAP) has won every one of the seven general elections since independence in 1965. The PAP won the mandate to govern because it delivered jobs and housing. Singapore is almost a model state attracting some of the ablest people in the world to work here. Would they also live here and raise their families?

There are two competing strands in our body politic. The first strand is meritocracy. It is modelled on the Chinese imperial scholar system where the best minds compete in nationwide examinations presided over by the emperor himself. The Singapore President Scholar is akin to the Chinese Imperial Scholar. Both systems aim at identifying the best talent to serve the country.

The second strand relates to the system of selecting leaders. It is modelled on Plato’s Republic. In the Republic, peers select their own leaders until the philosopher king emerges. As the first among equals, he is accountable to no one but himself.

Over time, peer selection breeds a leadership that becomes complacent. Though our state is rooted in meritocracy, we must beware of the dead hand of peer selection. Elitism creeps in imperceptibly.

The recommendation by the ministerial salaries review committee to peg ministerial salaries to the median income of the top 1,000 income earners reflects an elitist mindset which is troubling. If the primary purpose of government is to raise the livelihood of the people, a better statistical measure of livelihood would be the median income of all workers, not just the top 1,000 income earners or the MX9 salary scale of the Civil Service.

Curiously, both the government and the Workers Party accept that ministerial salaries be pegged to high income earners rather than the median of the work force, which is $3,070 a month as at June 2011.

The term first world is the vocabulary applied to wealthy European countries in the early 20th Century. In the early 1900s, Argentina was considered a first world country. Dr (Henry) Kissinger praised Singapore for moving from third to first world. Singaporeans may agree with the first but not the second half of his compliment.

Singaporeans of my generation remember vividly the slums, joblessness, dirt and disease of the 1950s. Through dint of hard work and discipline, we moved rapidly from a labour to a skill-intensive economy. By the early 1970s, we achieved full employment with an unemployment rate of 3 per cent.

The great challenge for us today is that we have reached the limits of our skill-based model of growth. Nothing stands still. The BRIC countries (Brazil, Russia, India and China) are rapidly catching up on the United States, Japan and Europe in the automotive industry. China and Japan are embarking on the design and manufacture of commercial aircraft. But it will take considerably more time to succeed in the production of jet engines, landing gears and constant speed drives – key components of an aircraft.

Singapore has to move from a skill to a knowledge-based economy. The products and services of such an economy are characterised by high technological content. To position ourselves for such an economy, Singapore devotes the greater part of our national budget to education and training.

When I was in school in the 1950s, only three out my O level class of 40 went on to university. Today, 30 per cent of a primary school cohort enrol in tertiary education. Raising our average educational level from primary to post-secondary should make a world of difference for our international competitiveness.

So I observe with some dismay that the manufacturing share of our GDP dropped from a high of 30 per cent in the 1980s to 20 per cent currently. We need to ask ourselves why our concentration on engineering and science-based education is not yielding dividends in productivity and innovation.

Instead, the employment share of low-wage, low-skilled personal services is rising. Are we overeducating our children? This is a heretical thought contrary to all my basic EDB instincts. In EDB, our article of faith is that the higher the education level, the more rewarding will our jobs become. Our total factor productivity should be rising not stagnating.

In my view, productivity and real wages of the bottom 20 per cent of our work force have not risen because our labour policies allow employers easy access to low wage foreign labour. In national accounting, low wage foreign labour may not be as low-cost as employers believe. If we add the cost of housing, transportation, health and other social services which employers have to provide for their foreign work force, they may be better off training and equipping their Singaporean employees to raise their productivity. Rising productivity enables workers to be paid more. Inflation sets in only when wages are raised without any increase in productivity.

Productivity can only be raised when CEOs leave their comfort zones and take direct charge of the production process. They have to be hands on, not resorting to outsourcing. Productivity should be the key KPI (key performance indicator) for the award of bonuses to CEOs and management.

At the national level, PM is the CEO. Bonuses for the Cabinet should be pegged to increases in the median income of the work force, rather than the GDP.

Like any other country in the world, Singapore now competes in a global economy. In such an economy, importing cheap foreign labour is no longer a viable strategy. It is a dead end.

The 2012 budget is politically adroit, replete with spending proposals which basically are income transfers from the taxpayer to the poorly paid, the disadvantaged and the aged. Income transfers are palliatives, temporary reliefs to abate rising social discontent. They do not help to raise productivity. The real challenge is to grow the economy by raising total factor productivity.

It is not easy. A Japanese scholar pointed out in an article in Japan Echo that the optimum rate of productivity increase achieved by his country averaged 4 per cent annually. We need to remember that the Japanese are one of the most diligent people in the world. Singapore is already straining at the seams with a current resident population of five million. We are embarking on a crash programme to build more MRT lines, hospitals, HDB flats, schools and universities to accommodate the sudden surge in population.

The economic assumption is that we can increase our GDP if we can accommodate more people. In my view, even doubling our population to 10 million people will not make things better. More likely, a larger population can only make matters worse.

We have to grow through raising productivity, not higher headcount. We need to be smart enough to produce more with less. Our higher education levels and superior infrastructure enable us to compete in knowledge-based industries and services. We transformed ourselves in the 1970s from a labour to a skill-intensive economy.

There is one reality our younger generation has to face. In a global economy, you will be competing not only with friends and classmates but with the best and brightest of your generation in India, China, Brazil, Russia and Eastern Europe.

University graduates in China and India are willing to work for a tenth of what our young engineers and scientists expect. If we fail to raise our total factor productivity, Singapore would just be an also-ran in the race to be a knowledge-based economy.

When Sir Stamford Raffles founded Singapore in 1819, his town planner demarcated the town into several ethnic enclaves. Kampong Glam (Malays/Arabs), Chinatown (Hokkiens, Cantonese, Teochews), Little India (Tamils), and Tanglin (Europeans).
Empress Place on the left bank at the mouth of Singapore River was the administrative and civic centre. The British governor presided from the Istana. The Istana where our President and Prime Minister have their offices is the seat of government.

Each racial group was free to conduct their own trades, practice their own religions, set up their own schools, and largely married within their own race and ethnic group.

The colonial government provided the overarching framework of law and order and schooling in the English medium. Being a British colony, the language of administration was English. Access to English medium schools was open to all races. English became the lingua franca acceptable to all the races as none has any in-built advantage over the other.

From 1819 to 1959 when Singapore was granted self-government, our different races lived lives of passive co-existence. Even then, Singaporeans witnessed at first hand the madness of three racial riots in the 1950s-60s. Learning from bitter experience, our government established the inter-religious council and enacted legislation to protect minority rights.

Income gaps
In 2012, what will be the threat to social stability? In a society that is racially diverse and practising different faiths, it is matter of pride for me as a Singaporean that we have learnt to treat our neighbours as our friends. Future social unrest will arise not from racial or religious differences but from the growing class divide caused by widening income gaps. The top 1,000 earn million-dollar annual salaries while the rest a monthly median income of US$3,070. The gap is untenable.

Paradoxically, this income divide is seeded in our deep belief in meritocracy. In the past, equal opportunities in education have provided the social mobility to enable the bright boy from a poor family to make good. The playing field was level for all students.

The spread of private tuition has changed the educational playing field. During my school days, only the academically weak students of rich parents take remedial tuition. Taking private tuition was not a badge of honour. Today, any parent who can afford the fees will send their children not for remedial but enhancement classes to give their children a head-start over their classmates.

Though there will still be the exceptional individual who triumphs against all odds, more and more of our state scholars will come from upper, middle income families with professional parents. There is no easy answer to the problem of an uneven playing field in our schools. In itself, private tuition is unalloyed free enterprise which society should encourage, not frown upon.

The challenge is to level up, not to level down. One suggestion I have is to make classes for academically weaker children smaller. The student-teacher ratio should be more favourable than in brighter classes so that the teacher can give more personal attention to each student, which is what private tuition is all about.

The elitist among us will invariably ask the question whether this is the right allocation of teaching resources. This was the very question I asked of my late EDB colleague Ong Wee Hock who requested more funds to expand our industrial training centres. The ITCs are the precursor of our ITEs. I had to eat my own words later when our ITC trainees with barely O levels went on to start their own factories producing parts and components for MNCs.

It is hard to find the university graduate who becomes a successful entrepreneur. The prevailing reward system drives our graduates to become bureaucrats/managers both in government and business. White collar jobs pay better than blue collar jobs.

In the early 1970s when we achieved full employment, some of us in the EDB began to ask the question about the critical size of populations. We did some desktop research and found that there were several industrialised European countries with population size of around 5-6 million. These were Israel, Norway, Sweden and Finland. Our town planners went to work and concluded that Singapore with a land area of 670 square kilometres can comfortably accommodate a population of 5-6 million.

Flying on auto-pilot, we allowed in one million foreigners in the last decade. As we arrive at our numerical target of five million, Singaporeans find themselves squeezed on crowded MRT trains and buses. Low wage foreign workers replaced older Singaporean workers in menial jobs.

As our births fell below replacement levels, we resorted to immigration as an instrument to top up the babies that young Singaporean couples are not having. There are also elements of political re-engineering. Submerged in our immigration policies is the belief that to maintain racial harmony, we need to keep the current population balance constant.

I have come to the conclusion that we have been peering at the wrong end of the population telescope. Since the 1970s when job hopping became a bottleneck, computer technology has made many manual operations in production obsolete.

The key is to produce more with less manpower. The window to raise total factor productivity through application of knowledge and training is fast closing with the opening up of India, China and Indonesia. Singapore has lost two decades relying on low-wage, low-skilled foreign labour to drive economic growth.

Our managers and administrators are among the best paid in the world. They will have to get off their high horse and personally lead the drive for higher productivity. Outsourcing is a bad word in my vocabulary. Companies and government ministries should figure out how to train their staff and redesign jobs and processes to achieve more with less.

Grants should not be given to management (consultants) to do a job they are already paid to do. Instead, interest free loans should be given to enterprises with clear roadmaps to re-equip and raise the productivity of their workers.

I am against job credits in any form because they are simply wage subsidies which do not raise productivity in any way. My personal observation is that job credits simply add to the bottom line for payment of bonuses to management who do not have to lift a finger to raise the productivity of their enterprises.
We failed to bite the bullet in the 1980s to restructure our economy. There may be no second chance the next time around.

The writer is a former permanent secretary who has served in several ministries and statutory boards, as well as corporate boards. This is the edited text of a speech delivered at an SICC luncheon talk yesterday. (19/3/12)

This article is reproduced from here.

Another excellent article written by Ngiam Tong Dow.

Interview with Ngiam Tong Dow.

Vivian Balakrishnan vs Ngiam Tong Dow.

My comment
Gintai_昇泰Mar 20, 2012 02:39 AM
A brilliant helicopter view of the slew of problems besieging our country as a result of cheap foreign labour influx! The easy short cut option to grow our GDP inflicting untold misery and hardships on the indigenous citizens. Look at those advanced countries such as Korea. The Koreans don’t use cheap foreign labour in their building construction industry. They use local highly paid craftsmen. The bureacracts in our govt only keen to make tons of money from the foreign workers’ levy. Local workers do not give them the much needed levy! That is the mentality of those top civil servants!

Thks for the excellent article.

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About Gintai_昇泰

I'm a Singaporean Chinese living in the Eastern part of Singapore. I tweet on current affairs & inspirational quotes. I blog on issues or events if they interest me. I also share interesting jokes, stories or anecdotes and observations on my blog. Thanks for visiting.
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18 Responses to Singapore must achieve more with less – By NGIAM TONG DOW

  1. Mike Loh says:

    Too little too late. Ngiam Tong Dow and his brothers have all enjoyed and benefitted from the largesse of the establishment he now criticizes. In fact the elitist Ngiam brothers were themselves part of the establishment and now Tong Dow is biting the hand that fed them? It is well and good to do Monday morning quarterbacking and hindsight is always 2020. So you made all your money and in your sunset years you sit in your rocking chair and take pot shots? Where was Mr Ngiam when he was needed most? Why was he silent when he should be solutioning? He was one of those bureaucrats and civil servants you ranted against, Gintai. He kept quiet and didn’t do a shit when things weren’t going right. And now he exhorts and expounds. Sorry Gintai, I don’t think much of Ngiam and his ilk. Remember Hitler gave great speeches too.

  2. unbrandedbreadnbutter says:

    Koreans could use skilled craftsmen because there are skilled craftsmen in Korea. Does Spore has any? Our skilled craftsmen are from Malaysia! LOL. Mentality of top civil servant? Maybe. But what about mentality of parents? Pursue that university degree to death and damn good at memorizing essays? For what? Whenever I meet young people I always tell them if you’re not top few of your class, better pick up a skill (like cooking, carpentry etc) that you enjoy and you will do well in life, earn decent $ and be even happier than another usual business graduate. And all these years society has been looking down on ITE students and skilled workers preferring a pencil pusher in an aircon office.

    But I have to agree that Ngiam has got various things right like our elite and tuition culture. And he is def more readable than Donald Low. LOL. Maybe he didn’t leave civil service on a very good note or he buay song some pple so he come out now. Haha.

    • http://www.facebook.com/notes/donald-lows-fc/what-went-wrong/209993849034597

      Lol! Agreed that Ngiam is a better read than Donald Low. I think you got a point there. Too much emphasis on scholars and looking down manual blue collar jobs. It’s becuz of one great man’s vision of the country run by scholars or talent they say. Is it ? We have so many scholars and talent proven thru perfect As in schools. What do we see? Nvr short of retards making stupid stmts and gaffes one after another. Scholars organizing a big scale event with budget overshot by 3 times and still remain defiant in the face of public outcry. What abt that shortie paying millions to consultants and decided that we call “Marina Bay” as Marina Bay! Really langgar.

      What we need is just pure old fashion common sense which those elites seem lacking. That’s why we are in such a mess! Blind Greed – based on profits and obssessive reserves hoarding – is another prob they refuse to acknowledge. If u don’t admit there is a prob with you how are we to help you get rid of the prob?

      No wonder one PRC recently says that his son will have better chances to be the PM in Sg than in China. 3.3 million citizens vs 1,000,000,000! It makes perfect sense. Can u not concur with that statement?

  3. Yes Dr Mike its “too little too late!” But don’t you think it’s better late than never? I’ve read that there are 4 brothers and a sister in their family. Father came from Hainan island. One of the pioneers in the building of Sg from scratch. He shld be in his 70s.

    Being in sunset years mode, Ngiam could have just enjoyed his pension and graze on the field. Instead he chooses to take “pot shots” from his rocking chair. Why not?

    If being part of the establishment esp civil service, he was not permitted to criticize the govt of the day. That’s clearly spelt in the IM.

    The cat can be black or white but if it catches mouse we take note. I may add that if that cat is an arsehole, ingrate, retard or whatever but if it still catches mouse then we shld really wake up.

    RB ever mentioned that if we are in our sunset years or that we are able to see the finishing line, there is actually nothing to lose by speaking our mind. Sue me bankrupt or put me to jail for speaking my feelings and concerns for my country? Just becuz I don’t agree with you, I’m branded as divisive or subversive or terrorist? Come on. This is not ancient China in the days of the divine emperor.

    I will read from anywhere and everywhere. If it makes sense I take note. If its rubbish I just move on. There is simply too much to look and stare – Ofline or Online. The rest is merely like they say “polemics!”

    Thank you Dr Mike for reading my rant. Pls cont’d with your invaluable comment.

  4. dotseng says:

    I can fully understand why the author and others see this as a common sense solution to weaning ourselves from the opium of cheap labor: Singapore has to move from a skill to a knowledge-based economy. Seems even common sense, right? But WHERE should we go (knowledge based economy) is not the issue – the question is HOW do we make the transition?
    Bear in mind, Singapore is not like America. We do not have multinations of the ilk like Boeing Aeroplane group, Pfizer, United Foods, Apple or for that matter firms that even have global footprint to even begin migrating up the value chain towards a knowledged-based economy.
    Japan and Korea and to a limited sense both China, India and Taiwan do – as they all without a single exception have large and mature manufacturing bases, even Hong Kong has this by proxy as they can rely on China as industrial hinterland – that is why these countries are able to migrate painlessly without depending on cheap labor to drive their economic growth – the Chinese are already moving their moribund industries to world class standards. If you look at the trains manufactured in China these days, it is better than what the Alstom and TGV regularly comes up with – China has even decided to go into commercial jet production. As for their rolling stock and drive trains for the train industry, they are already collaborating with Kawasaki Heavy Industries to jointly develop the world fastest commuter train. The question again gentlemen is why is it so difficult for us to do the same?
    If I had to point to only ONE reason why those countries were able to make the technological transition upwards it was because they ALL had a very broad based enteprenuerial or merchant class. Infact, the proposition that the Singapore government has remained bovine in failing to jump start a knowledge based economy misleads terribly. As A*Star headed by Philip Yeo was actually supposed to spearhead this innitiative. But since I am commenting in Gintai’s blog, let us just say in the language of the diplomat, it was a catastrophic success. If we are to ask WHY? It is because governments are lousy at business, that is the nature of the beast. And a derivative of their argument goes back to what I underscored above. To drive ANY industrial innitiative, it needs to be driven NOT by governments, but by a broad based enteprenuerial and merchant class – Taiwan, Hong Kong and recently China and India have been able to leverage on this emerging class to power their stellar industrial growth – if you examine the chronology of industrial growth in Taiwan, it was driven predominantly by the same impetus: young engineers who once worked in the US decided to retun home to start businesses in niche markets, as they saw opportunities in US firms outsourcing their manufacturing processes to Asia. In the case of Hong Kong, the rise of China would not have been possible, if there was no such thing as a broad based enterprenuerial class. The recent sale of Tang dynasty vase in Sotheby’s to a mainland Chinese is a pointed remainder that personal wealth is starkest over there as more and more people begin to grow comfortable with the whole idea of doing business. The same can be said abt Japan and Korea, one has the cheabol the other the zaibatsu – both are institutionalized mercantile guilds that are entrenched into Japanese and Korean culture.
    But what does Singapore have? We have temasek or GIC or temasek or GIC again – that is to say our preferred method of wealth creation is not directed to making stuff in the way rolled steeled is turned into a car bonnet to be supplied to an automobile firm. What we do instead is invest in corrupt banks that deal with the Nazi’s and in firms that don’t seem to produce anything whatsoever. All they really do is shuffle paper from A to B. And that is a big problem, as when wealth is concerntrated in activities that is ONLY at the pheriphery of real manufacturing e.g banking, logistics and warehousing, container handling etc. Then it is very difficult to develop the right muscles to climb up the value added ladder.
    The main problem is there is NOT enough people who go into business for themselves in Singapore. But if you compare this to Hong Kong, everyone even a kid wants to be Li Kah Shin. In Japan, everyone wants to be the next Akio Morita. In Taiwan, every engineer dreams of building another Acer. In Korea every kid wants to be a desk warrior and work for a chaebol and build another Hyundai or Samsung. But in Singapore, everyone wants to be LKY and land a scholarship and get a free gravy ride for life, no one ever sees the wisdom of winging it on their own – that is why it is virtually impossible for us to be a knowledge based economy.
    And what is the solution? Well, let us say this is not the right quorum to discuss this, as my intention in writing this long reply is not to come across as a smarty pants, but to highlight why I don’t disagree that we need to wean ourselves off cheap labor ONLY, it is not as easy as just clamping down on cheap labor and that will magically force firms to move up the value chain – do that and many firms will go under (I am not kidding, they will go bankrupt and through no fault of their own either) and more people will be jobless. I don’t think it is too difficult of us to all agree before we can even begin to contemplate cutting the down the influx of labor. Do we even have an alternative? Do we even have a plan B, a fall back plan?
    That is a question for every reader to answer himself – I give you the facts, you decide.
    It gives me little pleasure to say this, but the prospects look dire.
    Darkness 2012

    • Dear Darkness 2012,
      You do me great honour by taking your precious time to read and offer invaluable comment here. I really love reading and tapping your reservoir of wisdom. You shld expand more on these ideas or points made here on your blog. I look forward to reading them.

      Basically, it’s our failure to nurture a class of entrepreneur mercantile class of indigenous citizens to take on the global market. Instead like I mentioned earlier due to one great man’s vision of creating and entrenching a scholar class of elites to govern at the expense of creating REAL ECONOMIC goods and services. They may not be well versed in generating real goods and services but they are not stupid. Remember they are scholars with proven academic track records in schools. Yes they use that talent to invent brilliant ideas at the expense of the citizens whom nurture them in the first place. Think COEs, ERPs, CPF znd HDB manipulations with the bottom line of squeezing more and more from the citizens to keep growing our reserves to more than $500 billion for a country of less than 3.3 or 3.5 million citizens! We are the 3rd richest country. Is that really so?

      I’m not proud of this accolade if I see many many not handful of old senior folks collecting plates and picking cardboards on the roadsides!

      Our economy is nearly or almost controlled by Temasek’s stable of GLCs and GICs, orgy of stat boards and the business motivated trade union NTUC. Every corner you go in Sg there is bound to be their shit. U leave ur house or flat, you will step onto any shit that belongs to one of them.

      For more than 5o yrs, the shit gets bigger and overwhelming until it virtually chokes the economy without any home grown big boys in the likes of Samsung, Apple, Windows or Sony etc. None. Did the govt give a helping hand to Creative?

      Since we do not have those big boys – players in the international market then how to grow the GDP and the sustaining economic growth rates? Build the casinos. Next mass import cheap labor from 3rd world to artificially boost up GDP resulting in subsequent havoc in terms of social infrastructure. U see when you sell the people the idea of continuous economic growth etc you need to keep doing that or you lose power. To maintain their power at all costs they resorted to cheap labour to push up the figures. They didn’t figure out the repercussions.

      Yes u are correct to say that we are the only country in the world to aspire for scholarship and just work for the government with huge pay package and an iron bowl – so why take the road less travel? No incentive at all. How to change this mindset?

      You suggest cut off cheap labour supply. The last budget they cut nominally at 5 or 10% only. Do you think they can free themselves of this opium addiction? Not only that, they are also addicted like a helpless drug addict to more reserve buildup, more easy cash milking like telling the old folks to sell their flat to studio flat and locking up the proceeds, more levies from the hundreds of thousands of foreign workers etc

      The scholar elites need not worry the daily bread n butter issues faced by the man on the street. They extract every single cent from the people using all kinds of means and then they paper shuffle about buying into bankrupt banks and financial institutions with a 50 yrs long term investment returns. In the meantime they reap tons of cash bonuses themselves. My fren a struggling shopkeeper says that the govt “owns” a group of brilliant scholars doing nothing but checking your profits and bottom line. If u don’t pay or pay lesser taxes or nvr contribute medisave etc they will haunt you. In business sometimes the credit flow is a little disrupted but those bureacrates don’t care about your problem. Pay up by this deadline or go to court. Everything is court case if u miss the deadline.

      Can they change? Can a hardcore drug addict change? We know the Drug Rehabilitation Centre is built for drug addicts. Maybe we need to send them there for its own good and for our good too.

      • youngfranco says:

        Gintai, I agreed with you about GLC and GIC and Temasek before. However, Ive had a critical rethink about it during the recent spotlight of soreign wealth funds around the world. And I am now convinced, there is strategic merit for their existence.

        For instance, if Temasek (or any govt owned/lined company) didn’t own parts of it like SMRT, Singtel, Changi, SIA, HDB, PUB so on, would we be comfortable if another country owns these? Or a foreign private company? Or a foreign hedge fund? Would we be happy to let foreigners control the policies, make the money and remit profits back to their countries? I’ve concluded that it would NOT be acceptable for me.

        Many of these projects are so large, and require long a period of time to break even, that its difficult for private Singapore investors to afford. And yet these services are critical the nation. Of course, Temasek then IPO them on SGX, but Temasek, with significant shareholding, still retain influence on the board of these companies with national importance.

        SO lets, assume for a minute, we dissolve Temasek, which will immediately meet your satisfaction. Who will then control all these Singapore companies? Saudi Arabia? MF Global? News Corporation? Samsung?

        Call me a romantic,.. I would like them to remain uniquely Singaporean companies. (FYI, Raffles Hotel has lost its Singapore significance since it is now owned by a run of the mill american hotel company. Shame.)

  5. patriot says:

    When we have so many soldier boys in the Cabinet and Employed Business Professionals running all the State Enterprises, where does the people stand?

    State Run Giants such as NTUC Income, Comfort, Cartels given monopoly of goods and services, Powerful Companies buying over food courts, wet markets etc and licences restricted to public transport operators, how is the average citizen to start anything from scratch? How are they to kick start their entrepreneurial spirits?

    Each time the State invested in oversea venture, how did the investment benefit Singaporeans? Are the local businesses invited to tender for contracts for supplies of material and manpower there? Much of the investment involved only putting monies into the Foreign Companies! Mostly paper businesses, so to say. Nothing of value-add to the locals here.

    The Paper Chase in Singapore has gone awry for many years, all because of the (wrong)direction taken by our political leaders and the BLIND following by the daft Sinkies. Such that today we have plentiful of highly paper-qualified so called intelligent people who are hardly better than highly programmed precision machines. They are very good at following instructions with little or no initiative and flexibility, most are no better than cyborgs.

    Me believes that all the policies implemented in all these years after Independence is done with the sole purpose for the Regime to hold onto power perpetually. A good GDP is meant to show the people how well the Rulers performed though the people at large did not get to benefit much in anyway from the ‘good’ figures cited. And the more SICKENING effect of the GDP had been that it
    was used to justify PAY INCREASES AND MORE BONUSES FOR THE RULERS AND CIVIL SERVANTS.

    patriot

  6. youngfranco says:

    Every decision comes with consequences – good and bad. We sit here and debate the virtues of past decisions, we fail to realize that there is no Magic 8 Ball to see the future. And sometimes, the importance of some attributes, which caused us to make certain decisions in the past, diminshes with time and relevance.

    We also do ourselves a disservice if we compare ourselves with other countries or cities with hundreds, if not thousands of years, of experience. And i find it disturbing that we are systematically depreciating our own self-worth.

    Every country or city has their own specific advantages – some of them are natural, some of it self-created. Honestly, Singapore didnt get much of the former, but we have had to create quite a number of the latter in our very very short history. Perhaps, latching to importing cheap labour wasnt the most efficient from hindsight, but I’m sure other solutions would have risks as well.

    Sure mistakes were made. And mistakes will continue. But the two biggest mistake we must make is to 1) pretend other countries solutions is better than ours. Why? Because there are country-specific variables and we must find what is right for us. 2) Berating ourselves or each other for having failed or performed less than expected. I have seen much of this in the past decade.

    I recently came across stats from MOM, that as late as 2001 we had over 60% of the working resident population in Singapore with atmost a secondary degree. There were quite a few with only a primary school education. This seems shocking 10 years later, since it appears one cant really get a decent job without at least a diploma these days! Fortunately, in 2011, the same segment have dwindled to over 20%. Coupled with the fact that the younger generation now are even better equipped to get into and finish tertiary school education. What a relief it is and what a difference a decade makes!

    Unlike Darker 2012, I think the future is brighter than ever for Singaporeans through the impact of higher education. Hopefully it will allow us to productively drive productivity in the workplace to achieve greater performance with less. We are evolving as a young nation. Moving forward and upward, we will need self-confidence, courage and cash. Its clear that we have at least achieved one component. Now lets see if we work on the other two without wasting our effort at each other’s throats…its simply not productive.

  7. scroolbarrer emeritus says:

    YoungFranco. You have missed the point here. He brought up an issue that no one, not even those who get millions every year can answer that is,

    “Singapore has to move from a skill to a knowledge-based economy. Seems even common sense, right? But WHERE should we go (knowledge based economy) is not the issue – the question is HOW do we make the transition?”

    Now I am not a mind reader. However da man did highlight Temasek Holdings and GIC specifically. He even poked Philip Yeo’s whales and guppies pipe dream to transform sg into a biotech hub. And Gintai and most people know that Temasek is everywhere, they have their grubby hands into everything, buses, trains, hotels etc and they are killing our opportunities to develop a merchant class. What you are trying to do here is appeal to our love of country by issuing out platitudes that just make us all feel good. But you still have not answered the question. How are we going to make the transition to a knowledge based economy. Education is only one small component, it is only part of the solution. Besides what is the big deal about foreigners coming into Singapore, Raffles hotel has been sold to foreigners, the IR belongs to Sands. So what is the sudden big deal of keeping it all in the hands of singaporeans. besides we all know it is never in the hands of singaporeans, but only a select few singaporeans who all seem to come from only one family. And even if you are right, then why is GIC so opaque about their transactions? So what is the point of keeping it in the hands of Singaporeans, if no one even knows what is happening. If it is really in the hands of Singaporean businessmen, then I don’t mind. The problem is it is in the hands of only elite singaporeans.

    I hope the foreigners come in and buy it all up, they can’t do worse than what they are doing now. I have learnt many things from this blog, black cat or white, what does it matter providing it can catch rats.

    • youngfranco says:

      We are already in the knowledge-based economy. Its a matter of percentages and overtime, it will increase. Of course, a knowledge based economy will require people with intellect and intelligience. We are growing them as we speak. And I have confidence, Singapore 20 years from now will be more dynamic than 20 years ago. It takes time, until then we can borrow foreign expertise to get asymetrical learning – another way to move rapidly into the knowledge-based economy. We are making the transition! There are different strategies at play – Education, FDI, Grants, Productivity, R&D, Art and Design focus…There will be mistakes along the way. But we learn, and correct them along the way. That’s part of evolving. Just cause we stay the course doesnt mean we arent moving. but we dont get there in a snap of the finger or by fostering hate.

      I cant really understand why any Singaporean would be willing to sell national assets to foreigners. Unlike other large countries, we have precious few assets and they have national security concerns! Plus financially, I’d rather the profits stay in this country rather than being remitted to another country. Why any Singaporean would want otherwise is uncomprehensible. And this is a mindset problem: Singaporeans would rather trust foreigners over our own. Does that mean you’d be okay if Bank of China bought over all of Temasek and GIC holdings? Hmm?

      Or, if you say, we’d prefer to sell it to westerners because they would be better, then I’d suggest you throw the yoke of colonialism off your back, because you’re still under their influence. And you’ve forgotten their uniterrupted history of raping and pillaging of other nations.

      And why should GIC and Temasek be publically transparent? Why would we want the whole world including Malaysia, Indonesia, and financiers like Soros see what we have in the bank? So that they can manipulate it? Really? There are limits to PUBLIC transparency. We elected a President be popular vote, he can review it. The majority of Singaporeans have entrusted him to do the job. This happens in all democratic nations, not just in Singapore.

      I may not be every educated as the rest of the emeritus crew or the contributors in this blog, but I do know that we must have courage to trust our own people and the confidence to move forward together. Sadly, I fear this is our Achilles’ heel; all other problems pale by comparision.

      • Gentlemen,
        Thank you for your time and contributions. Now busy at work! So much OT working round the clock! Will reply and rebut your points! Need to craft my thoughts to persuade your good self to my points of view! Pls be patient! Cheers to that!

  8. dotseng says:

    Boys & girls,

    Do you all see, how is it whenever, we ask of them to be a little bit more forthright and transparent. They always seem to roll out the bogeyman of national security to roadblock us. Hey I got news for you. No one gives two hoots about destabilizing us economically, judging from the way Temasek and GIC regularly pick losers. If any country wants to use that information to secure their economic interest, they will probably end up creating an economic basket case along with Absurdistan – so you are not talking sense here. Besides buying an equity stake into a firm does not automatically mean relinquishing control. Do see the Israeli’s buying up shares of Iran nuclear power? Hey, I got news for you, you don’t have to buy into a firm to conduct espionage. All you need is a signed executive order and you are good to play agent Johnny English – what you are trying to do here is throw out smoke and mirrors to mislead intelligent folk out there, and they are not going to take this sitting down youngfranco, as no one likes their intelligence to be taken for granted.

    My point is this, in a society where no one sees the wisdom of aspiring to run their own business and enterprise – what is the point of having the best scholar administrators? It is like a market where there are only tax collectors at every corner, but hardly any merchants selling their wares to a curious public – when that happens – there is no yin and yang. For there to be balance, there must be a healthy mix of merchants and bureaucrats – in this way, one can feed off the other – this is known as a symbiotic relationship. 

    Take for example, the seemingly curious relationship between a whale and the barnacles that live on the whale’s skin. While the whale feeds, it faces difficulties as surrounding life forms affects its vision. But since the barnacles get food by eating these lifeforms – this serves the purpose of the whale very well, so barnacle and whale have a ‘win-win’ relationship. There is perfect balance. 

    If you look at highly successful countries e.g population against number of patents and Nobel Prize Laureates. You will notice ONE thing that they all share, THE BEST ALWAYS ASPIRE TO CUT THEIR TEETH IN THE PRIVATE SECTOR FIRST, once they have excelled there – then and only do they join public service. Wonder no more why they are so EFFECTIVE. They talk without having to issue “out of context” or “corrections” all the time. They are very well rounded people as they have seen the world. This is precisely why Chen Show Mao is such enigmatic figure. He has cut his teeth against the best in the world. He is not a “kampung hero,” a frog in a well, who still thinks that everyone who holds a different opinion from him is a Nigerian scammed. My point is people with the DIVERSE experiences bring with them a wealth of experiential knowledge gathered from the best in the world. This is WHERE, we should begin, but in Singapore, we have it backwards. Think abt it, if you have NEVER ever found yourself exiled in the discomfort zone or had to deal with diversity before – then how is possible to be a good administrator even? Can someone please tell me, how it is possible for something to come from nothing? If a scholar is just a kampong hero in some GLC how is he going to develop the breadth of knowledge to deal with emerging challenges of our times? How can he even begin to comprehend the needs of businessmen? Or for that matter how to grow an enterprise like Singapore Inc. THINK!

    There you have it the problem in the palm of your hands -trust me when I tell you, we have absolutely NO HOPE whatsoever to move towards a knowledge based economy if we don’t even know how to allocate resources wisely. I am sorry to be direct. Please, I do not mean any disrespect.

    I hope you find your Dao YoungFranco as you are lost somewhere in your own argument.
     
    Darkness 2012

      

    • youngfranco says:

      Maybe I have less corporate leadership experience than you, or maybe I haven’t been a leader of a company ranked top ten in Singapore long enough compared to you. Or maybe the new company that I am starting up may not be a fortune 500 like yours. But I still won’t address the others in a condescendingly as “boys and girls”. So whatever meandering “Johnny English” to “barnacle” message you were trying to express has completely lost it moral high ground. You clearly find yourself intellectually superior to the rest of us. And maybe you feel that way because of the numerous noble peace prizes and the hundreds of patents you have rec’d – unbeknownst to us.
      However, I’d like to add some facts and some opinions to your pseudo-argument premised on fabricated “truths” designed to show boat your superior intellectual flatulence.
      1) Fact: 52% of the listed companies on the SGX are family run businesses. Young people all along Bugis, online start-ups, flea markets and design shops are all experimenting with entrepreneurships. How this possible, if, as you, boldly professed, “in (Singapore) society where no one sees the wisdom of aspiring to run their own business and enterprise”. The facts, qualitatively and quantitatively, contradict your personal bias. So stop making things up.

      http://www.channelnewsasia.com/stories/singaporebusinessnews/view/1190194/1/.html

      2) Fact: Most, if not all, MPs are very successful businessmen with their own businesses or in corporations before or during their role in politics. Take a Tony Tan for instance, or my MP who is the COO of Singapore’s 3rd largest supermarket. Are they all fools who haven’t cut their teeth in the private sector? What? Are you the only one? Again, stop making up convenient “facts”.
      I really hope Chen Show Mao doesn’t associate with someone who fabricates “facts” just to win an argument. I have respect for him, and your endorsement of him is a tragedy.

      3) FACT: YES! There are other forms of espionage. But does that mean we should make it easy for others to see what we have in our accounts? Should we provide them with our PIN number? Should we reveal things such as possible war scenarios with neighbouring countries, or our intelligence activities around the world, if any? Are you naïve to think there are NO limits to transparency? Are you telling me all of those “successful” countries you cited have NO classified documents in their government? Were you born last night?
      But like I mentioned before, they do need to be transparent, BUT not to the public. There are elected officials in our own government whose job it is to oversee these issues. They have been elected and they represent us. In our country it is called the President! This is how a democracy functions in the real world IN ANY hemisphere.
      4) Another fact: People who write history and change the world, don’t go around whinging and whining: “NO HOPE”. Plus your pathetic attempt at a solution “er…allocate resource wisely”?…it is as insightful and useful as a poly student’s case analysis. It lacks specificity, timeliness, scale, and alternates, negative and positive consequences. This alone is evidence that you lack any experience in leadership or dealing with crisis and issues.

      I am sure self-defeatists will blindly retreat into darkness with you as you pontificate you imaginary facts. I prefer to walk in the light with the majority of Singaporeans. My opinions on who, what, why, how and when to a improve Singapore can be read in this thread. So I won’t elaborate here.

  9. dotseng says:

    Youngfranco,

    Who are you speaking to? You sound as if you;re giving a speech in the padang to the whole of Singapore. I like your ending like fireworks. But I hate to burst your bubble youngfranco, as the internet has left this thread for another story, don’t be surprised, it’s like that, she can’t help herself for having the attention span of a housefly, she’s like a bumble bee always chasing after honey. Tomorrow I have to harvest my crop, by mid day, I’ll have exactly an hour to reply. And after you have read my reasons as to why you have erred in your arguments, it will hit you like a diamond bullet and you will understnad completely and realize absolutely why all your points are at best flawed. And with this realization youngfranco you will begin to respect me. It is always like this in the very beginning, I promise to be gentle and slow.

    Remember, there is only two of us here. The rest are illusions and ego traps. Before you can understand, you must not see me as your enemy and relax and your mind will be open to possibility of persuasion. Now I need to hop into my jeep and wake up my trees.

    There is only two of us here, to ease your understanding, you can dispense with your affectations and pomp, there is no one to impress further, only yourself perhaps – to wonder as to how you have managed to get it all so wrong.

    Darkness 2012

  10. Gentlemen,
    Thank you so much for the lengthy contributions made here. I appreciate you taking time to read and contribute to this robost discussion. Ultimately we are all Singaporeans trying to analyse and discuss the current woes besetting our country based on the above article. We see things from diff angles and perspectives. For eg myself and patriot see things from the man on the street angle.

    Before I go any further, let me premise my comment with this quote..

    “I disapprove of what you say, but I will defend to the death your right to say it.”
    Voltaire

    I feel that Singapore is a unique country ( some say city state ) with a resident population of slightly more than 5 million ( citizens less than 3.5 million ) on a piece of 700 sq km. For more than 50 yrs, there is ONLY ONE dominant party.

    The policies set up in the early formative years by the PAP are beginning to show. Along the way, it is tweeted to suit the environment and its self preservation interest. For eg the URA armed with the Land Acquisition Act is so powerful that it transformed the entire city landscape and achieved miracle progress which is not bad.

    The fact is that we are never a free wheeling society.. Every thing from cradle to grave is controlled. Strictly controlled by the state. Whether to have 2 babies in the early yrs to more babies now, how you live, spend, play everything is controlled by the state. No other country behaves like our govt. That led to an orderlyl society. Good for those MNCs in the early days where is no strike here. People just go to work and go home without any political discourse which is frown on until recently.

    When the PAP had 100% control of the parliament in the late 1960s and later on with two or so opp MPs, more changes took place. For eg in no other country in the world where elitism based on education is blatently promoted. They say its the only way to move up the social status class from poor to rich. Practically all scholars are absorbed into the govt and GLCs. That led to the everyone wants to be a little “LKY” mentality and didnt want to aspire to be the next Bill Gates, Samsung or Sony etc

    In the meantime, the govt throughout its years in power, made full use of our CPF monies to grow more and more GLCs thru Temasek or GIC in overseas ventures. You see money doesnt fall from the sky. It needs to be raised or taken from somewhere. As our economy grows by leaps and bounds, our compulsory CPF (promised to us when we retire but now it seems that its locked away forever paying out only pittance after 65 yrs) gets bigger and bigger. That money is used to create so called “wealth” in the likes of many GLCs which eventually spread and control almost everything in the economy from real estate, food industry, arms industry, transport industry and even entertainment – you name it and they have it. The NTUC so called tripartiate relationship concentrates on growing their empire in super market, insurance, pawn shops, funeral services, resorts etc etc

    When you have batch and batch of scholars coming out, the govt need to ensure that they are well employed. So it either in the govt service or one of those GLCs esp if they retire from govt they need to be rewarded with a comfortable jobs. HOw else do you think MPs are persuaded to enter politics and then chuck one corner in the name of self renewal if no perks or rewards are given to them? they will surely revolt right.

    Darkness 2012 is correct to say that if you always in the comform zone of high pay and lacking in challenges from the hard cruel distant world, how could you be an excellent administrator with breath and understand in the like of MP Chen SM who has seen much of the real world out there? How many of them in govt are like him? Paper generals who did not see action in real battleground will never understand the sweat, tears and blood of ground troops fighting a real war out there in the wilderness where death is instant and any moment! They live from day to day and survival is always on their mind. Do our scholars or admin elites have that sense of wretchedness and desperateness? Can it be duplicated and studied in school?

    Back to the uniqeness of our country. The economy is nearly dominated by GLCs, NTUCs, Stat Boards etc yet we do not have great enterprises such as Samsung or Sony where they are players in the international global market.

    In our case, the govt controls those business enterprises as mentioned above. “The same can be said abt Japan and Korea, one has the cheabol the other the zaibatsu – both are institutionalized mercantile guilds that are entrenched into Japanese and Korean culture.” Whereas in Korea or Japan, whoever running for President or politcial office will have to get discreet endoresement of those huge powerful cheabol or business empire. They are throwing the money for their political campaign. Even in the US, big corporations took sides to endorse their candidates of choice. Money politics is clear. The govt of the day is beholden to those huge business empire in the country.

    In our case, it is the other way round. The govt of the day controls those business enterprises. The govt can change and fire any CEO it deems unfit or not appropriate. That is the difference. The drawback of such a situation where the govt’s power is entrenched thru its tentacles spreading to every nook and corner of the country’s economy will never never produce or throw up the likes of Apple, Microsoft etc.. Those scholar elite adminstrators are not natural breed of entrepreneaurs. It is as simple as that. Its there for all to see. I merely point out the facts.

    The next question is how to grow the GDP? You see Finland is about the same size as us. With only two out of many worldclass enterprises ie Nokia and AngryBirds ( Yes the game on hps), they rake in tons of money to their state coffers unlike us resorting to locking up citizens’ life savings with all kinds of excuses and pretexes using the laws to justisfy them in order to draw on cheap funds for expansion and business. When they venture overseas competing against the Chinese they to burrow Darkness 2012’s diplomatic phrase “catastrophic success”. Think Suzhou where the Chinese built another similar one beside to compete cheaply. We gave up and sold it to them eventually. .With that lesson in mind, those scholars then tried paper shuffling by buying into near bankrupt banks and finanacial institutions like UBS, RBS, Citibank with “50 yrs” long term view! RBS is already bought over by NZ bank.

    scroolbarrer emeritus is sharp to point out what Darkness 2012 trying to highlight by asking “the question is HOW do we make the transition?” When the whole society is caught in this mad paper chase knowing that a lucrative GLC or MP’s job with 64 directorships attached, do you think there is any incentive to venture and invent a world class global enterprise? Why should I take the raod less travel with I got 10 distinctions and the govt immediately offers me a president scholar with my career path well planned ahead for the rest of my working life?

    That in a nutshell is the root of the ills and mess we are in as a result of social engineering and excessive controls by the state gone awry! It will take yrs and a visionary like Deng Xiaping in China to tell his country the way we going is wrong, we need to turn back and change tack if we were to survivie in this extremely treacherous unforgiving world like what Ngiam says in his article, “there may be no chance” the next time round. The Chinese and the Indians are fast catching up carving spheres of influence in new markets such as Africa and Eastern Europe. We may be late if they still live in their ivory towers shuffling papers about!

    There is much to say and expand. Basically the points or ideas are there for all to read and delve deeper. Its happening around us. We are living in this scenario so its no big deal to understand if only we open our eyes and see thru all the propaganda to come to our own logical sensible conclusion.

  11. dotseng says:

    [This entire thread has been archived by the Chronicler of the Brotherhood / reference: 0098306293 AM / transmission has been relayed to the deep space heavy cruiser KDD General Santos and the research vessel KDD Eng Neo - please note this will be broadcasted in the Strangelands via SLF 1 to 16 - The Brotherhood Press 2012]

    Lets dive in Youngfranco, as I only have one hour. Youngfranco, you mentioned as a matter of fact, 52% of the listed companies on the SGX are family run businesses. You also mentioned, most, if not all, MPs are very successful businessmen with their own businesses or in corporations before or during their role in politics. You specifically mentioned Tony Tan and your MP who is the COO of Singapore’s 3rd largest supermarket. You went on to ask of me, whether I consider them all fools who haven’t cut their teeth in the private sector?
    No I do not consider them fools, only as our Northern cousins will say, “tak boleh pakai lah” i.e no bloody use. Before you can even understand why people like Tony Tan and your MP along with 90% of MP’s bring absolutely zero to the whole idea of building a knowledge based economy – what you should ask yourself is does every trade and enterprise lend itself to creating a knowledge based economy? A common misconception harbored by many is to fuse the idea of a knowledge based economy with well manage enterprises – but this definition misleads, as enterprises such as hoteling, property development, spaing, nail polishing, casinoing, banking, port services, doctoring, trading, retialing and even supermarkets rarely ever lend themselves as suitable raw material to building a knowledge based economy. The reason is because many of these trades and industries have reached the end of their product life cycle. They are all (without a single exception) in states of maturity and any improvements can really only add negligible benefits to the whole idea of revivifying and sustaining a knowledge based economy. You can’t for example automate the hospitality and service industry such as casinoing, hoteling or supermarketing – you can certainly streamline your supply chain along with networks with technology in the form of better software, but since the core competencies in these trades and industries are easily replicated, it is impossible to build on them to carve competitive advantage globally. And even if you could, it may not be a good idea to do so – this may sound counterintuitive, but take the case of banking for example. Now ask yourself Youngfranco why did the sub-prime crisis happen? Many point to run away greed and avarice – that is nonsense, the anatomy for disaster can be traced all the way back to innovation and creativity, specifically financial instruments which are so innovative and ahead of their time that no one really understood what they were dealing with – and if you want to go to a deeper level you can even finger mathematics as the smoking gun, a branch of arithmetic that I am only too familiar with known as linear programming that deals specifically with maximizing resources and opportunities through heuristics. This Youngfranco was how the entire banking industry in the Western hemisphere found itself juggling live hand grenades, as traders became so innovative and creative in swapping debts that they were using maths in ways and means which really departed from the whole idea of financial probity. Today if you look at many of the measures instituted to prevent the repeat of the sub-prime crisis, it is designed to prevent banks from ever dabbling with the black arts of math. To put it another way banks these days are not allowed by regulators to be innovative or creative any longer. So this is a good illustration of how NOT every trade and industry lends itself to the whole idea of building a knowledge economy.
    Neither am I completely convinced that ONLY high tech enterprises which regularly involve cutting edge innovation can necessary add value to the whole idea of creating a knowledge economy. Nothing can be further from the truth – as it is not necessary to be high tech in the A*Star sense (this is why I strongly criticized Philip Yeo for his Byzantine “whale and guppy” great leap forward that ended up as a swan dive) – the only thing that is required is the ability to grow the business in such a way where it is possible for the firm to go up the value added chain systematically so as to acquire an array of skills that will allow it improve it’s knowledge quotient over a given period of time – let me give you an example Youngfranco to illustrate my point, during the early 70’s Hong Kong was a center for plastic toy manufacturing. Now most people these days will probably say that manufacturing cheap and nasty toys is hardly an enterprise one usually associates with a knowledge based economy – but appearances can be deceptive Youngfranco – as even simple plastic injection moldings skillsets can be upgraded very much like strings of code that is regularly used to write programs. And this was what the Hong Kongers did when China began experimenting with capitalism in Guangdong Province, situated immediately north of Hong Kong. The area became China’s first—and one of the most successful—Special Economic Zones. The question that you need to ask is how was it possible that a ramshackle motley crew of plastic flower and plastic Christmas tree cottage manufacturers manage to make that leap to make China into a knowledge based economy? The reason is because unlike running a hotel, bank, spa or supermarket, even these simple low tech industries have tremendous scope for improvisation and experimentation – for example, there is very little difference between a plastic moulding machine that makes a water pistol and let’s say a carbon fiber fairing that is used in a rocket, plane, train or car – these technologies can be upgraded fairly easily with the right incentives. And that was what happened in these special economic zones in Shenzen. Western manufacturers in the early 80’s began transplanting their manufacturing operations to take advantage of cheap Chinese labor. To compliment this initiative, it was necessary to create a network of vendors to supply parts and componentry to these greenfield sites – many of these Hong Kong plastic flower cottage industries began to upgrade to higher capacity plastic injection machines – they migrated from small hundred ton machines to 700 tons and their support industries such as tool making followed suit – they moved away from machining by eye and luck to computer aided design using laser cuts CNC machining – in less than 10 years, these plastic flower cottage industries had become value added partners to these multinationals – today, when we look at firms like Foxon, what we frequently fail to realize is these firms were derivatives of those first prototypal manufacturers. And they have reached such a high state of proficiency in their manufacturing processes that they can even synthesize today new products which they can monetize and commoditize. Wonder no more why the whole of Africa is addicted to the narcotic of cheap Chinese electric kettles, washing machines, tractors and four wheel drives that come with lousy instruction manuals – this Youngfranco is how a cottage run industry can be transformed into a juggernaut firm like General Electric. Today when we look at firms like Haier, Chery, Baidu etc – these are all highly evolved knowledge based firms that have all developed from the creche of once cheap and nasty sweat shop manufacturing outfits. Many mistakenly claim Singapore could not have replicated these successes today, as our home markets are comparatively small when compared to China, that we don’t have access to a hinterland like Hong Kong, but I don’t buy that idea – as many small countries without critical mass in consumption population mass have been able to success, Sweden is an excellent example, small, but in terms of population and number of industrial patents it’s a spitfire.
    Unfortunately many of the enterprises that seem to be doing well in Singapore don’t fall into the Creative technologies genre, in truth we don’t have enough of those companies or cannot seem to retain them for some inexplicable reason – so we have what I can only refer to as the kampung hero type firms e.g banking, hoteling, supermarketing, warehousing, port services, retailing, hawkering, bread making etc – the problem is these firms do not lend themselves to build a knowledge based economy in the same manner as even manufacturers of plastic flowers who are able to build critical skills sets– this may seem odd, but as I mentioned, two reasons continue to militate against them, first all their business processes have reached the peak of their maturity and secondly they are human skilled dependant i.e very few of their processes can be either automated or even augmented with technological retrofits and upgrades – even my own business, plantations is a dead end. As I am located up stream, since I grow the palm kernels, there is really not much scope for innovation to contribute gainfully towards the whole idea of a knowledge based economy – but if I owned an oil mill i.e a palm oil processing facility, that is a different ball game entirely – I can improve my refining technology specifically to the needs of a very specific clientele, not everyone uses palm oil for just cooking – there are thousands of products ranging from cosmetics, material science and food additives that are palm oil related. So now my next goal is get me an oil refining plant, as that will really allow me to insert myself in the gulfstream of other behemoths who are constantly in search for innovative ways to use palm oil to enhance appearances, taste or just giving their products an extra zing. But let’s be crystal clear, plantations is a dead end as far as using it to build a knowledge economy – one can certainly be rich and even employ a whole village, but in what way does this add value to the idea of a knowledge based economy?
    It cannot and that is the long and short of it.
    The second point you raised was the need to mindful of sensitive information falling into the wrong hands forms. You mentioned, we should not reveal things such as possible war scenarios to our neighbors, or our intelligence activities around the world, if any? I agree with you, there is a need to be “seng mok” as the Cantonese would say, “to be streetwise.” But you must understand the Singapore armed forces has already gone beyond interdicting, it now even has first pre-emptive strike capabilities – so don’t talk about our armed forces as if it’s some lightweight, it is NOT, it has all the compendium of warcraft and much more – but when is enough, enough – let me ask you a question: if you have the capability to destroy your enemy 10 times over, then what further advantage can be had to aspire to destroy him by a further factor of 20 or 30 times over? That is overkill. You already have excess reserves to do the job – to put it another way, to invest more would be travesty of reason as it is a criminal waste of resources – at this level, defense is no longer defense any longer, it has morphed into a classical Richardson arms race. When a state goes beyond this point by exceeding the ability to strike and disable its opponents, then what invariably happens is warcraft ceases to be warcraft, instead it becomes the very means of asserting imperial power regionally or globally viz-a-viz through the art of politics and power, specifically by leveraging on the whole idea of balance of power and brinkmanship – this is warcraft in it’s most subtle form, it is nothing short of the capability to influence outcomes and events without ever having the need to engage in conventional war. But why am I so critical of this approach? Simple, it’s a very expensive enterprise as what you are buying into is a gold standard weapons system – some military scholars have even argued such a strategy cannot be sustained for a prolonged period as it’s bound to have a debilitating and crippling effect on the economic well being of a nation – even both Von Clausewitz and Metternich both cautioned against this method of transforming warcraft into an instrument of shaping regional and world geo-politics. The Soviets adopted this strategy in earnest during the cold war, it bankrupted them. The North Koreans are doing the same, and its corrosive effects can be registered today in their abysmal economic trek record – my point is we shouldn’t be so security minded that we lose sight of the emerging challenges that we face, defense is important, but it is not so paramount as to subvert all else and deny us the right to explore other fields of possibility of wealth creation that may just be as effective as shaping regional geo-politics through the power of trade and commerce – in my view, it is stupid to beggar ourselves by being fixated on defense, as what this will do in the long run is constrict the flow of money to other areas of our economy which may then allow us to build a merchant class. Another thing that militates against our ability to scale the knowledge economy is how many of our GLC’s are currently run and by who, but that is really another story. Back to the point again.
    Youngfranco, you mentioned “they (our gahmen) do need to be transparent, BUT not to the public. There are elected officials in our own government whose job it is to oversee these issues. They have been elected and they represent us. In our country it is called the President! This is how a democracy functions in the real world IN ANY hemisphere..” You know what Youngfranco, I agree completely with you. But where theory fails to past with relief into the realm of practice is when the branches of the executive, legislature and judiciary as so blurred that they are not clearly delineated in Singapore – I don’t doubt your theoretical model may work in most European countries and even the US, but in Singapore the idea of separation of powers has always been suspect – as the influence of the ruling party political hegemony is so pervasive that it permeates every sector of life – even kids who go to nurseries are implanted with the PAP lightning image, what about the police, are they independent or are they merely appendages of the ruling oligarchy? What about the fourth estate, the press, are they free or could they be simply the apparatus of mass assimilation that is sanctioned by the state for the purposes of nation building? What we see here Youngfranco is a rubbishing of every single point that you raised concerning the integrity of checks and balances to ensure that government does not overstep their boundaries – you mentioned, the President is the custodian who is supposed to ensure governments are always on the level – but tell me Youngfranco how successful was Ong Teng Cheong when we wanted to audit our reserves? What was the retort of the executive arm of government – did they not mention that it will take 45 man years to complete an audit? So again how does your gold standard of transparency bear out with these so called elected officials – perhaps what you fail to factor into this whole idea of fashioning utopia is the idea that even the best conceived plans will fail to rein in a government that has already grown so big that they believe they can do anything and everything. And that is a big problem Youngfranco.
    Chew on this Youngfranco. And next time when we met again, remember me, my name is Darkness. Darkness of the Brotherhood.
    Do you understand why it is so difficult for us to build a knowledge based economy with this government? The question remains Youngfranco, what do we do now?
    Alas, your hour is up and I have to return back to my beloved trees.
    Darkness 2012

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