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?

SMRT Strike - Populist Politics

Long before the SMRT strike, I started noticing Singapore-based PRC citizens on Sina Weibo commenting and mocking our political scene as moving increasingly towards populism (民粹主义), especially when the government introduced measures that they believed harmed their ability to exploit Singapore's liberal immigration policies.

Now that all the major opposition parties have stated their positions on the strike, we can see that the PRC immigrants and migrant workers have correctly read our political situation and that the strike instigators have managed to manipulate Singaporean public opinion to side with them to a large extent.

The fact that the WP, NSP and SDP leaderships have all failed to distinguish between the need to uphold the rule of law and the perceived unequal treatment of the PRC drivers but have conflated the two to undermine regard for our laws shows this trend towards greater populism.

Can we trust any of the major political parties to support unpopular policies if they prove necessary, especially in the next decade of disturbances and crisis?

SMRT strike - NSP's shameless political opportunism

The National Solidarity Party issued a statement on Nov 28 regarding the illegal strike.  While paying lip service to the rule of law, much of the statement appeared to be an attempt to throw stones at SMRT management and to try to justify the actions taken by the errant bus drivers.

Painting the issue as a 'breakdown in our labour relations' shows the narrowness of the thinking of the NSP leadership in trying to blame the PAP establishment for the problem (a usual opposition tactic, I might add). As I was advised by a Singaporean who is an experienced China hand, the issue was in large part due to cultural differences between Singapore's style of running things and the mindset of the PRC workers.  Would that really qualify as a 'breakdown in our labour relations'?  While I can understand the need for Singapore companies to adapt to foreign practices when operating overseas, the case of the Singapore management bending backwards on a core principle like the freedom to set wages locally is much weaker.  Why should a local company operating within Singapore adopt the standard PRC practice of '同工同酬‘, especially since there are valid HR reasons for paying Malaysian workers more?

Besides this, there is also evidence to suggest that the PRC drivers did not attempt to engage SMRT management regarding their issues, as can be see from a news report carried by Yahoo! Singapore:

One Malaysian bus driver who spoke to Yahoo! Singapore was visibly annoyed at Monday's strike, saying the move to do so was "irresponsible and uncalled for".

"First of all, they should have approached the management first to discuss things," he said. "Going on strike is illegal and we all understand that."

So, was there really a 'breakdown in our labour relations'?

The more disturbing thing about the NSP statement is that by citing allegations by poor pay and living conditions, the party appears to be trying to use 'moral' arguments to justify the breaking of the law.  Aside from the fact that this is factually incorrect, since the unhappiness was about alleged unequal treatment relative to Malaysian drivers, the NSP has failed to realise that such arguments open up a can of worms, since 'moral' grounds are ill-defined and everyone can then argue that they have valid reasons for breaking the law.  Where do we then draw the line so that we can unequivocally condemn those who break the law?

Of course, I'd expect that the NSP cite the first paragraph of its statement to show that it respects the rule of law. But as far as I am concerned, its statement on the matter shows the typical politician's 'gift' of talking out of both sides of one's mouth.

And if I may add, the NSP seems to be a shadow of its old self since the departure of Goh Meng Seng.

Double Standards Regarding Religious Sensitivities

Google has decided to block Singapore IPs from using Youtube to view a film that Muslims deem to be offensive to their religion.  This is well and good, since it is arguably consistent with Singapore laws on religious harmony.

At the same time, I noticed that no liberal Singaporeans has complained of Google's move as being a fetter on the freedom of speech.  In stark contrast, when Christians complained to the government about The Da Vinci Code being blasphemous and offensive to them, the same liberals were quick to condemn the complaints as attempts to restrict freedom of speech.  So, prima facie, it would appear that these people think that the religious sensitivities of Christians do not deserve to be respected.

A standard argument put forth was that The Da Vinci Code was not really offensive, and that Christians who complained were too sensitive and ought not feel offended.  But that's a silly argument, since sensitivities are subjective, and depends on the feelings of those who are at the receiving end of the 'treatment'.  Those not at the receiving end have no valid grounds to judge whether anything is offensive or otherwise.  After all, it can easily be argued that white European skin-heads would not consider the film about Islam to be offensive and that Muslims have been too sensitive and ought not feel offended as well.

I hope you see my point, which is that if we want to promote free speech, the same standards should apply to all, or if we are in favour of curtailing free speech with an eye towards respecting religious sensitivities, such curtailment should also be applied consistently.

On that National Conversation

Since the PM's National Day Rally speech, the country has been abuzz with talk about the national conversation. We got all sorts of voices clamouring for attention, and as expected, complaints from certain opposition parties about being excluded.

While I expect many issues to be discussed, I suspect that what I consider the really important issues facing the country will be left undisturbed.  Based on the noises so far, all the talk about an inclusive society and so forth centres around the issue of social welfare, with many Singaporeans asking for assistance and handouts of one form or another from the government.  While these issues are important, they are secondary, in my view.

What I think ought to be discussed, but won't will include things like the fundamental vulnerabilities facing the country, like the lack of food and energy security, as well as geopolitical issues like the South China Sea disputes.  To me, given the current and expected future global environment of the next 10-20 years, there will be a lot of external forces that will serious rock Singapore's 'boat', whether we like it or not.  The best thing to do is to have everyone understand these issues and prepare for them.  Unfortunately, the exercise will likely turn out to be like a squabble over who gets to eat more of the buffet while the ship is heading into stormy seas.

I am of the view that we need desperately to address the fundamental issues, as they will affect how Singaporeans see our own future prospects, and in turn, our willingness not to commit collective suicide by refusing to reproduce ourselves.

More on these in a future post.

Urban Farming in SG?

It looks like the idea of urban farming could be going mainstream here in Singapore, if the above story from the Friday edition of TODAY is anything to go by.