TR EMERITUS

Click to enlarge Do you think it's unreasonable, to the estimated 65,000 Singaporeans who are currently unemployed, and the hundreds of thousands more who are under-employed? Why is it that Singaporeans have difficulty securing high paying jobs, especially in MNCs, when foreigners come in so easily? In the 90s, most of the top jobs are helmed by Singaporeans. Things start to change in the 2000s due to the poorly executed FT policy of PAP under Lee Hsien Loong! And the policy is associated with the 6.9M population has created a series of other problems from high housing prices to MRT breakdowns to An increase in the number of crimes committed by foreigners. Even LKY himself believed that the ideal population for Singapore is 5 to 5.5 million! PAP knows this - that's why now they suddenly talk about the "Singaporean core". I do not recall such term being mentioned in the past. We must regain our country, our dignity and our future!   Prabu Ramachandran      Read More →

Many employees are puzzled why their bosses insist that they return to work in the office and not continue the work from home (WFH). They see many advantages of WFH: a) It saves traveling time to and from the workplace b) The employees are highly motivated and are more productive. c) The work can be monitored based on results for employees who work from home. They wonder why their bosses are so small minded and need to monitor them in the workplace. Do they not trust their employees? Why is there lack of trust? Maybe, the blame should go to the human resource managers. Maybe, they are the small minded people. My opinion is that the bosses are not stupid. If WFH is more productive, they will gladly adopt it. In reality, the bosses find that WFH leads to less productive employees. There will be exceptions among the employees. Some will be more productive when they work from home. But the majority are likely to be less productive. There will also be exceptions among the bosses. Some will embrace WFH. But the majority will want their employees to report to the office. A few employees will be fortunate to find jobs that allow them to work from home. But the majority will not be that fortunate. WFH will be the exception after the covid pandemic is over.   Tan Kin Lian      Read More →

In 1994, Nobel laureate for Economics, Paul Krugman, published a provocative article, “The Myth of Asia’s Miracle”. He noted that the Singapore economy was no different from the Soviet economy of the 50s and 60s. The Soviet economy expanded very fast for a long period but then growth eventually slowed to a trickle as it was unsustainable. Although economists did not predict it, the Soviet Union eventually disintegrated. The comparison implies that Singapore’s growth is merely a case of perspiration rather than inspiration and just like the Soviet Union’s, would run out sooner or later. This riled the PAP leadership especially LKY, who took to bashing Krugman whenever he had the opportunity, but began constantly talking about productivity. Back in the 50s and early 60s, the Soviet Union’s growth was phenomenal, at roughly three times that of the US. At that rate, the Soviet economy could outstrip that of the US by the 70s. There was a real concern that a “collectivist authoritarian state” was better at achieving growth than free-market democracies. This was made more worrying when the Soviets launched the Sputnik and were leading in the space race. Khrushchev even pounded his shoe on the U.N. podium and declared: ”We will bury you!”, which was an economic rather than a military boast. However, upon careful study of the Soviet economy the only thing surprising about it was there was nothing surprising. All the growth could be accounted for by the labour and capital that were mobilized. There was no hint of superior productivity. The Soviet Union was very good at mobilizing resources, period. Sooner or later, diminishing returns will set in and the growth would peter off. True enough, growth eventually slowed down considerably and the Soviet Union disintegrated. According to economists, advanced developed economies are able to sustain growth because of technological advancement which results in improvements in productivity rather than just increasing of inputs of labour and capital. In the Singapore experience, according to Krugman, the increase in growth is due to the increase of labour and capital only. Almost none of it is due to an increase in productivity. Sooner or later, growth would taper off as the labour force cannot keep growing year after year and diminishing returns on capital would set in. Krugman isn’t the only economist who has this view. Back in 1984, a Harvard graduate student, Yang Tsao, did a study on Singapore’s growth and similarly concluded that it was mainly due to increase in inputs, but not many people took note of it. About eight years later, a very promising growth economist, Alwyn Young, wrote an article “A Tale of Two Cities” in which he compared the productivity of Hong Kong and Singapore. He found that Singapore poured in much more workers and especially capital, into its economy and yet their growth rates were not very dis-similar. He too concluded that the growth of the Singapore economy was due to increasing input rather than productivity. In other words, Hong Kong achieved roughy the same results with much less increase in resources. Not surprisingly, Singapore loyalists shot back at its critics. Two years after Krugman’s article, Dr Goh Keng Swee, no less, and Dr Linda Low, Associate Professor of Economics at NUS, published an academic paper, “Beyond ‘Miracles’ and Total Factor Productivity: The Singapore Experience”, to debunk Krugman. They noted that during the initial years after Independence there were similarities to the Soviet model of the 50s and 60s as the focus then was to mobilize resources rather than improving productivity. However, after the late 70s, Singapore began its industrial revolution and transited from low-value industries to high-value and high-tech industries, the workforce became more educated, more emphasis was accorded to training, R&D and technological advancement, and productivity improved. Indeed from 1986 to 1994, productivity increased 2.6 percent and this increase in productivity alone accounted for 30 percent of the GDP growth in that eight years. In their conclusion, they noted that Singapore appears to have reached a matured growth stage and according to the New Growth Theory, should be “poised for increased returns to scale and accelerated growth” and envisions joining the ranks of first-league industrial developed countries. As for the comparison with Hong Kong, they noted that it is not appropriate. Crucially, Singapore is a State while Hong Kong is a city and therefore a chunk of the former’s capital expenditure goes towards not only economic but social objectives as well. As such, it is not fair to compare the productivity of their respective capital. So, who is right? In 2010, LKY ruefully lamented: ”We’ve grown in the last five years by just importing labour”. Indeed, not only cheap foreign workers, but foreign PMETs, new PRs and new citizens. We have also grown by just pouring more capital into the economy. Since Dr Goh and Dr Low wrote their paper, the downtown skyline of Singapore has been transformed, Sentosa has become an exclusive residence for the rich and a gambling haven, the North-East, Circle and Downtown MRT lines have been added, with each subsequent line being more expensive to build, the KPE has been dug and runs beneath the newly built Marina Barrage, the artificial behemoth of a garden, Gardens by the Bay has been erected, Terminal 3 and 4 have been commissioned and in the meanwhile, construction is in progress for Terminal 5, the mega mall called Jewel has opened to much fanfare in 2019 but has since become a white elephant (hopefully, post-Covid19, the crowd will return), Keppel Port has been de-commissioned and is shifting to the new mega port at Tuas, the list goes on. And yet, growth in the last two decades has not been high, perhaps just about justify the massive input of labour and capital as well as new foreign and local private investments. Is there any hint of superior productivity? Someone once remarked: “What’s wrong with growth with more inputs?” The country may be richer but there are cost, not least of which is over-crowding, social friction, rise in the cost of living and increasing inequality. Even an increasing accumulation of capital will eventually face diminishing returns. Given our small geographical size, continual increase in inputs for growth cannot last very long. Growth eventually has to be borne by increasing productivity. So, I believe Krugman and company is right. The PAP has created a Singaporean workforce that has not become any more creative, entrepreneurial or motivated, but rather, is narrow-minded, lacks initiative but good at following instructions, and on the side, looking out for rent-seeking opportunities. You can’t fault the Singaporean because he is shaped by the environment, which the PAP has created with its policies; he is merely adapting to it.   Foong Swee Fong      Read More →