TR EMERITUS

Written by Our Correspondent With the number of foreign workers increasing in Singapore, MPs are hearing more complaints from unhappy residents about some of their unsavory habits. The Straits Times quoted PAP MP Madam Halimah Yacob as saying that she "regularly hears complaints from residents, unnerved by foreign workers congregating in their estates, each time she goes on block visits." Common complaints include drinking together at HDB void decks, urinating there or leaving their litter behind. Such scenes are becoming ubiquitous in the HDB heartlands. "Because it's a big number of them and they are all males, the women residents tend to feel a bit intimidated when they come home late," said Madam Halimah in an interview with Straits Times. To cope with security concerns arising from the congregation of foreign workers, a Ministerial Steering Committee (MSC) set up last year to deal with the issue. Auxiliary police officers (APOs) and security officers are deployed at more foreign workers' haunts to ensure that they do not disturb the peace in the area. Due to the ruling party's liberal immigration policies, foreigners now make up 36 per cent of Singapore's population, up from 14 per cent in 1990. Of the remaining 64 per cent who are citizens, an increasing number are born overseas. The Straits Times tried to deflect public anger against the ruling party's misguided policies to these blue-collar foreign workers: "While such workers are vital in Singapore's construction, manufacturing and now service industries, their growing numbers have caused unhappiness among some Singaporeans." Though Singaporeans are uncomfortable with foreign workers loitering in their neighborhoods, their main beef is against those foreign workers on employment and S passes who are competing directly with them for jobs. Not only do they take up jobs which otherwise belong to Singaporeans, they also depress their wages and increase the cost of living, especially that of public housing. The state media should stop obfuscating the crux of the matter to protect its political master by portraying Singaporeans as xenophobic and start addressing their genuine concerns.  Read More →

OPINION There is a lot of hype in the media lately about "productivity" which reflects a subtle shift in the PAP's labor policies. What makes the change unusual is that the PAP leaders have been harping on the need for Singapore to continue importing foreign workers during the last few years. As late as January this year, PAP's octogenarian leader Lee Kuan Yew said in an interview with the National Geographic magazine that it is a "good thing" that Singapore welcomes so many Chinese immigrants as they are more "hard-driving" and "hard-striving" than locals. Senior Minister Goh Chok Tong added that the number of foreign workers may increase in the next few years though the rate of inflow may slow down. DPM Teo Chee Hean said yesterday that Singapore has made "good progress" in the past in its productivity drive which is why "we have been able to move our economy forward and have good jobs for many Singaporeans." What "progress" is DPM Teo talking about when Singapore's productivity had hardly grown during the past decade? According to a press release from the Reform Party: "In manufacturing alone our productivity grew by an average of 0.7% p.a. over the period 2000-08 whereas South Korea, Taiwan, Sweden and the US managed 7.4%, 5.2%, 4.8% and 4.6% respectively over the same period. Out of a group of 17 economies we were second from bottom." A recent Wall Street Journal editorial revealed that Singapore's low labor productivity is a direct result of the easy availability of cheap foreign labor. Companies have few incentives to invest in innovation and research to boost productivity as they can easily cut labor cost by employing foreign workers. While in other developed countries, safeguards are put in place to protect the interests of local workers, Singaporeans are expected by the PAP to compete directly with the foreigners who are definitely cheaper than them, but not necessarily faster or better. As noted in the graph below, Singapore's labor productivity took a plunge from 2004 onwards when the inflow of foreigners started to pick up: [Source: Kojakbt, 3in1kopitiam forum moderator] This coincided with the beginning of Prime Minister Lee Hsien Loong's tenure when he announced his ambitious plan to increase Singapore's population to 6.5 million people by 2030 via immigration. Without warning, the floodgates were opened to allow foreigners into the country indiscriminately. Whereas in the past, the foreigners given a permit to work in Singapore were either highly qualified or filled positions shunned by Singaporeans, they are now competing directly with them for limited jobs. The foreign levy for foreign workers is so low that it hardly deters employers from hiring foreigners. The quota or dependency ration placed on the number of foreigners a company can employ is easily circumvented by getting earlier arrivals to take up PRs. As citizens and PRs are both lumped together under the same category of "residents", a company can theoretically employ 100 per cent foreigners without a single citizen so long the quota of PRs is met. Now all of sudden, Prime Minister Lee Hsien Loong wants to raise Singapore's productivity rate from 0.7 per cent to 3 per cent per annum - how is this target possible when our productivity has been falling consecutively for the past three years no thanks to the influx of foreign workers? It is highly unlikely that Singapore can boost its productivity and growth rates which have been popped up artificially by cheap foreign  labor. Prominent economist Paul Krugman described Singapore as a "Paper Tiger" way back in the 1990s in his landmark article - "The Myth of Asia's miracle" Krugman wrote that Singapore's productivity and growth were achieved through a "mobilization of resources that would have done Stalin proud". but as they are based largely on one-time changes in behavior, they are unlikely to be repeated: "Over the past generation the percentage of people employed has almost doubled; it cannot double again. A half-educated work force has been replaced by one in which the bulk of workers has high school diplomas; it is unlikely that a generation from now most Singaporeans will have Ph.D’s. And an investment share of 40 percent is amazingly high by any standard; a share of 7O percent would be ridiculous. So one can immediately conclude that Singapore is unlikely to achieve future growth rates comparable to those of the past." In the same manner, the room for Singapore's continued growth in the next few decades is limited unless there is a giant leapt in labor productivity and innovation. As the economies of China, India and other Asia countries become more advanced, it will be more difficult to lure their citizens over to Singapore. For example, Malaysians and Filipinos workers are getting more expensive now and Singapore employers have to switch to Chinese, Indian and Burmese workers to keep the labor costs low. Unfortunately, given Singapore's export-oriented economy and its over-dependence on foreign direct investments, it will not be easy for the Singapore to wean off its chronic addiction to foreign labor. The investments made in R&D are unlikely to bear fruits without a major revamp in Singapore's political economy which is dominated by state-linked companies thereby stifling the emergence and growth of a vibrant SME sector. In a recent speech made at the Civil Service College, prominent MIT political economist Professor Huang Yasheng urged Singapore to “rethink” its state management model which has “milked this system for all it is worth.” “The private sector is the best way to grow the economy. It has the most productive, most innovative and entrepreneurial culture. The state-owned enterprise system doesn’t give you that….You are already hitting the wall. Retaining this strategy could mean sacrificing future growth that is possible only through a bigger, more dynamic private sector,” he said. He also opined that Singapore should expand its private sector in order to compete with China and India: “Maybe a better way is for the government to fund more basic research and then allow universities, private equity firms, venture capital firms and rich individuals to take care of the rest. That is because even when the state sector is well managed, it is not as innovative as the private sector, he says. From a technological development point of view, you need a bigger private sector to compete, to come up with new products, processes and technologies, to better compete with India and China.” Without liberalizing both the economy and political landscape to allow for freedom of speech and independent thinking to thrive, it is foolhardly to expect the PAP's one-dimensional and unimaginative approach to boost productivity to work. It is time the PAP realizes that it is part of the problem itself and that it is becoming a stumbling block in Singapore's future development.  Read More →

By Josephine Ma from South China Morning Post Premier Wen Jiabao said 2010 would be the most complex year yet this century for the mainland economy, and pledged to prevent inflation and rein in skyrocketing property prices, in an online chat yesterday with internet users. He also addressed concerns over trade frictions with the US, and called for efforts to ease tensions. Wen's internet question-and-answer session came in the run-up to the annual session of the National People's Congress, where he will deliver the annual government work report. Xinhua said some 65,000 questions on subjects ranging from home prices to the homework burden for students, flooded into the central government's website and that of the news agency, the joint organisers of the session. The questions Wen answered were apparently picked to cover the major topics in his government report. "If last year was the most difficult for China's economy in the new century, this one is the most complicated," Wen said. He was determined to bring property prices under control during his tenure as premier, he said, but he admitted the government may not be able to "rein in this wild horse" this year despite a series of measures. Wen is expected to step down in 2013. He said the government would focus on building more affordable housing for low-income groups and rein in property prices through land, financial and tax policies. Soaring property prices have become a major source of grievance for the public, especially the growing urban population. Xinhua said home prices rose by 9.5 per cent in January from a year earlier. Wen reiterated the government would adopt an "appropriately loose monetary policy" to ensure stable economic development. Agricultural production would be boosted to ensure food supplies. He identified corruption and inflation as major threats. Read rest of article on SCMP  Read More →