My Thoughts Regarding The Recent Riot

I think that the recent riot in the Little India area is yet another piece of evidence that the government is losing its ability to manage the basics of the country effectively.  Happening not long after the spate of vandalism acts against various government websites, I feel that the effects of years of neglecting the basics has now become more visible, and are likely to get worse.

Looking at the government's reaction to the riot, I think that it is still not able to fully appreciate the severity of the crisis that we are in.  By stressing that it was an isolated incident, I feel that the Cabinet is still unwilling to take a fundamental reappraisal of its economic strategy, and will continue to pursue a fairly aggressive immigration policy in the pursuit of further economic growth.

To me, the riot ought to be a very loud and clear wake-up call that we need to re-look at how the country is being run.  Unfortunately, I think the lesson will be lost and that there may have to be more serious issues erupting to the surface before both the people and the government become fully aware of the depths of the crisis that we are in.

China Escalates War Talk

The war rhetoric continues

Special Report: China's military hawks take the offensive

Heavier dosage for the home audience:

Something Wrong with Our Economic Strategy?

Based on the standard model of economic development that is taught in economics courses, we know that as a country develops, it moves away from labour-intensive industries and tend to rely on increasing capital intensity and productivity improvements to boost economic growth.

While the government has been exhorting us the lumpen proletariat to improve our productivity, it has nonetheless in the last 15-20 years been preaching the need to import foreign labour in order to maintain our economic growth.  As a result, productivity growth has been anemic while Singaporeans wonder about the nature of our collective identity and have to cope with stresses to our social and physical infrastructure.

Many of us feel that after this period of so-called growth, we are now worse off than before.  This brings to mind a passage from written by Bill Gross, the PIMCO bond king:

Almost a century ago, Keynes alerted the economic community to a “new disease,” what he called “technological unemployment” where jobs couldn’t be replaced as fast as they were being destroyed by automation. Recently, Erik Brynjolfsson and Andrew McAfee at MIT have affirmed that workers are losing the race against the machine. Accountants, machinists, medical technicians, even software writers that write the software for “machines” are being displaced without upscaled replacement jobs. Retrain, rehire into higher paying and value‐added jobs? That may be the political myth of the modern era. There aren’t enough of those jobs. A structurally higher unemployment rate of 7% or more is the feared “whisper” number in Fed circles. Technology may be leading to slower, not faster economic growth despite its productive benefits.

We can see that a properly developed economy should have a structural reduction in the need for manpower.  On the other hand, given our recent experience, the government is telling us that Singapore needs to keep importing people to sustain our economy.  What these 2 things tell me is that we are probably pursuing an incorrect strategy for economic development.  Instead of moving up the technological and productivity scale, we are relying on a low-tech, labour-intensive service sector to continue to power our economic growth.

What this means is that we are moving in the wrong direction as far as economic development is concerned, i.e. towards a more 3rd world structure.  Is it then any surprise that we see an increase in income and wealth inequality, stagnant wages and asset bubbles?

Our Instant Noodle Culture

In the online chatter about Feng Tian Wei's Olympic medal, the usual argument that Singapore does not have a culture conducive to sports has again surfaced.  The usual suspects have again been trotted out to be 'shot': our education system which only cares for academic success, MINDEF/National Service, parents who value monetary success etc.

To me, this country's lack of success in sports is a symptom of a more deeply-entrenched problem: the desire to achieve success in the shortest possible time.

This not only explains the sports issue, but also why we have failed to achieve anything significant internationally in areas such as science and technology.  Look at how many Singaporeans are in graduate programmes in these areas in our local universities?

And is it any wonder that the preferred careers these days all involve finance and banking? Or that we have become a service-based economy, since making things at the international level is too difficult? Or that our students finish school barely literate in their Mother Tongues and can barely string a proper sentence together in standard English?

This culture is also shown in our governmental policies, which often seek to take the easy path to economic growth, avoiding painful choices that will harm powerful vested interests.  And it is likely to get worse, as increasing political competition from opposition parties will force the PAP government to adopt populist measures to appease an electorate that is generally ignorant and adolescent in its demands.

This kind of mentality will surely be harmful to the country's development in the long-run.  And I think the long-run has arrived.

Asia Decoupling

We are getting more and more news about China slowing down. India is also slowing down as we can tell from the easing monetary policy actions. Japan is in full QE mode as far as I can tell. While I have not followed the news about the rest of Asia, it is likely that the story is the same.

Many have blamed this slowdown on the problems Olin Europe. There is some truth in that claim. Be that as it may, it does mean that the much hoped for decoupling of Asia from the developed world has yet to happen.

Here in Singapore, there is still talk of pay hikes. It seems like there is still complacency about how things can turn bad.

For me, I prefer to be safe than sorry. On full defensive mode now.

PRC Nationalism Hitting Singapore

News reports about the tragic Bugis traffic accident has started to surface on many online PRC news sites since yesterday.  All of them emphasised a patently false point: That anti-PRC sentiments were running high amongst Singaporeans.  Even Hong Kong's Apple Daily got into the act.  Of course, I shall not belabour the point that those from a country that takes almost 0% immigrants have no right to lecture us on xenophobia.

To me, this is part of the current social mood in the PRC today, and in no small part is due to its rulers trying to distract its people from internal issues.  The altercations with the Philippines is another sign of this.  And I expect that the PRC will start a war in the region within the next few years, despite its protests of being a peaceful nation.

Singaporeans need to be aware of this mood, and should start looking at the PRC in a more nuanced manner, rather than just a 'rising power'.  We need to be aware that there will be people amongst us who only read such rubbish PRC online news media and are influenced by them.

Be prepared.

Europe = Big Mess

So we have the French electing a man who has never had a real job in his life, and who has promised to spend much more public funds which does not exist to create government jobs.

We also have Greeks voting for parties that some have characterised as being extreme.

The Italian military is now being deployed to protect economic assets due to increased attacks from disgruntled citizens.

How long more will Spain's young people tolerate 50%+ unemployment?

Here in Singapore, people are still bidding up COE and property prices as if nothing's happening out there in the world.

How I wish there were derivatives for me to short the 2 aforementioned set of prices!