Tuesday, July 07, 2009

MPs, NCMPs & NMPs - The need for a credible voice? Or a perpetuation of the current 'incredible' voices?

Q1. If all opposition were branded as 'incredible' why are there now more pushes for internal opposing voices?

A1. A realization that group think is very dangerous? Or to further protect the rice bowls of some by pandering to 'populist' demands for more opposition? Or is the ruling party and hence government of the day trying to look good in some international forum where a KPI such as 'level of political representation' is considered?

Q2. If the ruling party, the PAP, were so good and right all the time and is constantly and perpetually infused with 'talent' why the need to even consider NMPs, much less an increased number of NCMPs to 'oppose' (or 'provide a different voice' if we were to put it in a more politically correct by wordy way) the house?

A2. Refer to A1.

Q3. If NMPs and NCMPs are deemed a 'requirement' for whatever reason known only to the ruling party who has graciously decided to accomodate more 'opposition' instead of 'fixing' them why is there such a disparity in their allowances? About 15k a month for MPs and under 2k a month for NMPs and NCMPs?

A3. Refer to A1.

If elected to Parliament I would propose an adjustment of all MPs, NMPs, NCMPs allowances to be the AVERAGE (not MEDIAN - see article from years ago about reading BS statistics in this blog) Singaporean salary in accordance with the census tool (GHSS - General Household Survey) since we so thoroughly believe in the use and application of statistics. Therefore I propose that any political representative be paid not one cent more then what an AVERAGE Singaporean earns. This should provide all political representatives to TRULY consider the average Singaporeans welfare. Not just workfare ........... which is being abused to an extent that is unspeakable ........ my tax money ....... OMG ...........

Q4. If we are proclaimed to be a democracy and have insituted laws to effect appropriate representation by races as in the GRC system then why do virtually all MPs live in private / landed property while 85% to 90% of Singaporeans live in HDB flats? Should there not be representation by economic status as well then? How can a multi-million dollar minister possibly emphatise with those living in HDB flats when they live in landed seclusion sometimes with private swimming pools? Do they ever use the public pool? Is this a fair representation especially when they got voted in then voted themselves a renumeration easily 30 to 50 times or more then that of an average Singaporean?

A4. Your guess is as good as mine.

Q5. If higher 'salaries' or allowances serve as a deterrent against corruption .... why do we often read of lowly paid public servants who are investigated and nailed by CPIB? Should these officers then not also be granted multi-million dollar salaries to remove the temptation of corruption?

A5. Refer to A4?

Q6. If then one of the stars on the Singapore flag represents EQUALITY ..... why is it that the public service, in terms of 'allowances' and the like promote such DISPARITY?

A6. Refer to A4.

Q7. If Singapore is so proudly proclaimed to be a multi-religions and multi-racial society .... why then are there so many constant reminders that drive home the message of religious and racial disparity in the media? And how in the world did we, as an example of great religious and racial integration to the rest of the world - generate such a fiasco with dressing codes that are apparently religiously driven during the recent Asian Youth Games? Does this mean we are WRONGLY represented in Parliament? Is therefore, the current system a viable and valid system of representation?

A7. Racial tensions today, in my opinion, are actually generated and perpetuated from the top in the old Roman war strategy of 'divide and conquer.' I don't feel any racial tension as a Singaporean - this must mean that Parliament is not truly representative - or that the figureheads are spouting nonsense.

Recent exposed events have also demonstrated that religion is a more dangerous political animal then race will ever be though little is done on this front be it just in words or deed.

Q8. Are we then a truly secular state? Especially given the predominant religious strains in Singapore decry the use and ownership of 'money' as a 'sin' or do not at all focus on money (2). So which is what?

A8. When you find out please let me know.

Q9. If the welfare state is a a series of vulgar words that are 'punishable' by public shaming and political denigration of the highest order .... then why does [Quote] Mr Tharman said there are limits to what can be achieved by countries through fiscal and monetary policies. Fiscal policy has already resulted in a substantial build-up of debt around the world while most of Asia is on a US Federal Reserve-inspired monetary policy, he said.

... (elipses here represent abrigding, not sound biting as our broadcasters are wont to do when so properly incentivised)

He urged regional governments to work on microeconomic and social reforms to increase long-term consumption growth, such as developing social security and health insurance policies that would free Asian consumers to spend more and save less.

China is 'very serious' about these sort of reforms, he noted, pointing out that the country is planning to have a medical clinic in every village by 2012 and national health insurance by 2020.

'The macro story worked well for a year but is both unsustainable and undesirable if continued year after year,' he said. 'The real reforms in social security... that story is real, but it takes time.' [End Quote]??

A9. Is social welfare then not really a dirty set of words? Or are we again 'uniquely Singapore' I'd call a spade a spade and not any other thing - this way all citizens are aware of what is truly going on and can all bootstrap ourselves upwards and onwards instead of relying on half-truths and unspoken truths that may be politically correct but absolutely dumbifying.

Nine is a good number to stop at. Now let's wait a few weeks to months to see the official response to this posting. Just read the papers and watch TV a bit ..... I think many of these questions will be addressed shortly when Parliament is due to re-open and over the National Day period.

Bangun lah! Singapura! Maju lah! Singapura!

HR Nonsense? Examination Nonsense? - The Trouble with Performance Reviews

No one likes to give them or get them. But you can conduct performance reviews that actually assess performance. Here's how

By Jeffrey Pfeffer

Some years ago a human resources manager at a Silicon Valley computer company offered managers free tickets to San Francisco Giants games if they completed their subordinates' performance reviews on time. When David Russo headed up human resources for software maker SAS Institute, he earned employee cheers for a bonfire celebration that burned appraisal forms and ended annual reviews.

These two examples reflect a broader reality: Managers don't like giving appraisals, and employees don't like getting them. Perhaps they're not liked because both parties suspect what the evidence has proved for decades: Traditional performance appraisals don't work. But as my colleague and fellow Stanford professor Bob Sutton and I pointed out in our book, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, belief and conventional wisdom often trump the facts. And when it comes to performance evaluations, companies ranging from HR consulting firms to providers of software that automate the process have a big stake in their continued use.

The most basic problem is that performance appraisals often don't accurately assess performance. More than two decades ago research done by professor David Schoorman showed that whether or not the supervisor had hired or inherited her employees was a better predictor of evaluation results than actual job performance. Employees hired by people doing the reviews got higher scores because of the greater psychological commitment managers have to the people they put themselves on the line to hire. That there is rater bias in performance reviews is consistent with the evidence showing gender and race effects on reviews. Similarity is an important basis of interpersonal attraction, and so people who are "different" get lower ratings, other things being equal.

Involve More People
When work is difficult to assess objectively, performance reviews mostly reflect how well employees can ingratiate themselves with the boss. One straightforward recommendation is to reduce managerial discretion in doing ratings. Make criteria more explicit and objective and have more people involved in the ratings process, so that one person's perceptions and biases don't matter so much.

A second issue is that reviews occur too infrequently to provide meaningful feedback. In return for getting rid of the appraisal form, Russo told SAS managers to provide more regular, ongoing feedback through frequent conversations with their people. Once-a-year reviews suffer from short-term memory loss: Managers remember more recent events and forget things that happened longer ago. If you are serious about feedback and helping people improve, do it all the time.

Next problem: Those receiving the reviews invariably believe they are above average—and defensively resist being told that they aren't. This "above average" effect has been widely replicated in numerous studies considering everything from sense of humor to appearance. "Forced rankings" require half of the people be rated below average. And that poses a threat to employees' self-esteem. As a result, people discount the ratings, making performance appraisals unlikely to improve performance.

Forget Colleague Comparisons
A fourth hurdle to productive reviews is the peer comparisons often required. Ranking someone against their colleagues creates competition and, consequently, a reluctance to offer help or collaborate—a big problem when so much of the way we work is interdependent. As lots of research in educational settings shows, the best assessments compare people with their own past performance. The assessments ask whether people are getting better or worse, not forcing comparisons with others that can cause people to give up (because they can't hope to exceed their peers) or to coast (because they know they don't need to improve given the competition). The lesson? If you're going to do performance assessments, at least don't force comparisons among people on some curve.

Possibly the biggest issue, however, is that performance appraisals focus managers' attention on precisely the wrong thing: individual people. As W. Edwards Deming, the father of the quality movement, taught a long time ago, company performance often results more from variations in systems than from the individuals doing the work. One of the reasons Toyota Motor (TM) has been so successful for decades—even as leaders have come and gone and the automobile market has changed—is that the fundamentals of the Toyota management system, which emphasizes quality, continuous improvement, and standardized tasks, provide the advantage. By focusing on the presumed deficiencies or strengths of people, individual performance reviews divert attention from the important task of eliminating the systemic causes, such as inferior technology, behind poor performance.

Even as companies and employees complain about performance appraisals, they do them because "everyone else is," and because they believe in the importance of individuals in boosting company performance. It is time for management to focus more on facts and evidence and less on benchmarking and unexamined conventional wisdom.

Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University. He is the author or co-author of thirteen books. Pfeffer's latest book, tentatively entitled Power: An Organizational Survival Guide will be published in early 2010 by HarperCollins. Pfeffer currently serves on the board of directors of the for-profit company Audible Magic as well as nonprofits Quantum Leap Healthcare and The San Francisco Playhouse.

Courtesy of Businessweek - probably read by our illustrious leaders and misinterpreted or plainly ignored by the bureaucrats.

Thursday, May 28, 2009

Of Logic and Politics .... or the lack thereof ...

Logic is hard to appeal to at a differing level given the virtual impossibility of the majority of Singaporeans to even have an opportunity to enter our hallowed (some say hollowed) halls of higher education.

The writer below, in response to recent Parliamentary fubars, lists out in laymen terms how logic should work.

But we of course understand that politics and propaganda work hand in hand with a relatively 'lower' educated mass of voters don't we? The question then begs: should the conduct of politics even bother to pay heed to logic?

Your guess is as good as mine.


During parliamentary debate recently, Workers Party Chief Low Thia Khiang argued that a stronger opposition presence would serve as a check against graft and corruption by the ruling party.

He was quickly rebuffed by MP Indranee Rajah (Tanjong Pagar GRC) who eagerly labelled Low Thia Khiang’s argument as not only ’simplistic’ but also ‘incorrect’.

Ms. Rajah’s counter is that if one follows Low’s argument, “the logical outcome is that every other country with an opposition should be squeaky clean and Singapore should be the most corrupt country in the world.”

Or is it?

How sound is Ms. Rajah’s “logic”?

An average student taking an elementary logic class can prove that Ms. Rajah’s argument is not only invalid, but also incorrect. (Even simplistic?)

Let us see how this is done.

Firstly, let’s examine Low Thia Khiang’s argument.

1. If there’s a great opposition presence in the parliament, then the ruling party would be less corrupt.
2. There is a great opposition presence in the parliament.
3. Therefore the ruling party would be less corrupt.

Expressing it in simple logic form:

1. If P, then Q.
2. P.
3. Therefore Q.

Ms. Rajah asserts that if we follow Low’s line of argument, two situations will develop. One — that Singapore should be the most corrupt country in the world. Two — that every other country with an opposition should be squeaky clean.

She calls it a “logical outcome”, but anyone can prove that her argument is logically invalid. Most certainly, this does not follow as a “logical outcome” from Low Thia Khiang’s argument.

Let’s examine her first claim, that Singapore should be the most corrupt country in the world.

1. If there is a great opposition presence in parliament, then the ruling party would be less corrupt.
2. There is not a great opposition presence in the parliament.
3. Therefore, the ruling party would be more corrupt.

Expressing it again in simple logic form:

1. If P, then Q.
2. Not P.
3. Therefore Not Q.

What Ms. Rajah has done here is to commit the simplest of logical fallacies, that of Denying the Antecedent. What this means is that the argument is invalid, and the conclusion (3) is not accepted even if the premise (1-2) is true.

Let us examine another similar argument that has committed the same logical fallacy.

1. If Mr. Tan is a Singapore citizen, then he is a human being.
2. Mr. Tan is not a Singapore citizen.
3. Therefore he is not a human being.

which shares the same logical body as Ms. Rajah’s argument:

1. If P, then Q.
2. Not P.
3. Therefore Not Q.

Verdict? Ms. Rajah’s first counter-argument is logically invalid, and incorrect.

Low Thia Khiang’s argument does not lead to the first “logical outcome” Ms. Rajah has proposed.

Let us go on next to prove that Ms. Rajah’s second-counter argument is also logically flawed.

Her second counter-argument is that, if one is to follow Low’s reasoning, that every other country with an opposition will be squeaky clean.

However, Low Thia Khiang’s argument that a great opposition presence leads to a less corrupt government should be seen as a necessary rather than sufficient condition.

Ms. Rajah’s second-counter argument that all countries that have a opposition will be less corrupt attributes sufficiency to Low Thia Khiang’s argument, when it is not clear that Low intended it to be that way.

Another nerdy way to say, Ms. Rajah, you’re wrong.

Does it logically follow if one argues: if there is a great opposition presence in parliament, then the ruling party would be less corrupt, that all countries with a great opposition presence would be less corrupt?

Ms. Rajah’s second counter-argument has yet committed another simplistic logical fallacy: Affirming the Consequence.

Reframing Low’s argument once again:

1. If the ruling party is squeaky clean, then there should be a great opposition presence in parliament. (Low’s argument)
2. The ruling party is squeaky clean.
3. There is a great opposition presence in parliament.

1. If P, then Q.
2. P.
3. Therefore Q.

Ms. Rajah’s argument:

1. If the ruling party is squeaky clean, then there should be a great opposition presence in parliament.
2. There is a great opposition presence in parliament.
3. The ruling party is squeaky clean.

1. If P, then Q.
2. Q.
3. Therefore P.

Another similar argument to show why Ms. Rajah’s logic is invalid:

Low’s argument
1. If you are pregnant, then you are female.
2. You are pregnant.
3. Therefore you are female.

Ms. Rajah argues that the logical outcome of this would be:
1. If you are pregnant, then you are female.
2. You are female.
3. Therefore you are pregnant.

Verdict: Ms. Rajah’s second-counter argument of the ‘logical outcomes’ that would follow if we were to adopt Low’s reasoning is invalid.

Indeed, under critical circumspection. Ms. Rajah’s attempt to rebut Low Thia Khiang by suggesting ‘logical outcomes’ that would follow if we adopt his reasoning fails miserably. An average student in an elementary logic class can show as we have did that the ‘logical outcomes’ that Ms. Rajah has proposed DO NOT follow from Low Thia Khiang’s arguments.

Perhaps the greatest irony here is that her ‘logical outcomes’ would fall under the very same labels she attaches to Low’s argument?

Posted by: geodome83 at Thu May 28 21:33:55 SGT 2009 - End Quote.

Monday, March 30, 2009

Ideas to help Sentosa's Marine Life Park Team circumvent the Whale Shark Exhibit winning bid submissions please .......

Letter from Marine Life Park
Corporate Social Responsibility
Add To: (no named receipients)

Dear all,

Thank you for the interest that you have expressed towards our Marine Life Park. Although the feedback we have received till now is not always positive, it shows how concerned everyone is towards the success of the Marine Life Park and its ability to balance the need to educate the public on marine conservation while at the same time not doing anything to harm the marine environment.

We hope you can spare a few minutes for our side of the story. As an organization that is committed to inspire the conservation of the ocean through education, we fully understand your concerns with regards to the feasibility of whale sharks in captivity. That is why we have been, and still are - to this date - considering alternatives for our overall Marine Life Park design plans, while simultaneously peer reviewing our animal collection and exhibits content.

While we go about our work, we also want to highlight that the whale shark exhibit at the Marine Life Park was submitted as part of the winning bid in an international competition for the Integrated Resort on Sentosa in late 2006. As such, the organization is bound to deliver the integrity of the bid, and any proposed replacement for the whale sharks must be defensible in that it must be viable and be as broad, if not compelling, in its appeal to bring in visitors to Singapore - the reason Singapore decided to have the integrated resorts.

We had put out a press statement specifying that plans for the Marine Life Park are still being finalized and options are being explored. Two things are being done right now: consolidating the education and conservation studies of what aquariums have done for potential collection species, and assessing how the Marine Life Park and its conservation and research programs might contribute further to the scientific knowledge of the species.

We do not take these undertakings lightly and as such, we need time to investigate all available options to provide Singapore with a world-class Marine Life Park. The process of replacing promised attractions in a winning bid is neither simple nor unilateral. Papers, presentations, permits and many rounds of fine-tuning and debate are required. We welcome ideas at csr@rwsentosa.com.

We apologise for not being able to reply singularly to everyone. Do visit our website http://www.rwsentosa.com/en_marinelifepark.html to know us better. There, you can also read about our conservation efforts in both the marine and environmental fields. The Marine Life Park is committed to engage all persons who share our goal: the conservation of the oceans and it inhabitants. Our commitment has not changed.

Yours sincerely,
The Marine Life Park team

Sunday, March 01, 2009

Diving Season Opens for the Malaysian East Coast

Another great diving year starting!

On average the local (Singaporean) scuba diving community has seen 1 fatality per annum going back some 8 years that I have been involved.

I hope 2009 goes by without any.

Some of the main reasons I have seen for these accidents and incidents are:

1. The dive professional is distracted. Personally or otherwise. Which should not be the case.

2. The customer knows best and does what he/she wants. Diver is distracted. Which should also not be the case though I've had my share of funky divers.

3. Cheap is good!!!! Forcing operators to cut corners at times to pander to the 'market.' RWYS.

4. Environmental conditions. The risk is assessed by both Instructor AND Students (this is taught to you during your theory lessons before you hit the open sea) and students have a right to request for a change in dive sites. A balancing factor here is that exposure to different conditions 'trains' the student divers to be congnizant of differences and may be a good opportunity to learn how to handle themselves in those conditions.

For the newbs going into the sport here is some truly FREE advice. By PADI (Professional Association of Diving Instructors) standards :

Ratios: 1 instructor to 8 adult students for Open, Advanced, Rescue, most Specialties and Dive Master courses. Ratios drop dramatically with age of student falling below 16 and 12 respectively to 4 and 2 students to 1 instructor.

Standards: For Open Water (where virtually all fatalities occur) the Instructor must be present in the water with you for at least the first 4 open sea dives which includes many of the skills you should have practiced in the pool or some confined body of water. There are 20 skills you need to master. Not 6 or 7 as some schools / resorts claim. The Dive Master (lower level then Instructor) may lead the underwater tour portions of Dives 2, 3 and 4 but under supervision of the Instructor:

"Certified and new/renewed PADI Divemasters who are in Active status are authorized to:

1. Independently guide Open Water Diver/Scuba Diver students on the tour portion of Open Water Diver course Training Dives 2 through 4, at a ratio of two student divers per certified divemaster.

2. Accompany Open Water Diver/ Scuba Diver students under the indirect supervision of a PADI Instructor:

a. during surface swims to and from the entry/exit point.
b. during the navigational exercises.
c. with the group, either on the surface or underwater, while the instructor conducts a skill, such as an ascent, with an individual student diver or buddy team.

3. Conduct any subsequent dives for Discover Scuba Diving participants, at a ratio of 2:1, if
insured, after the participants have satisfactorily completed the first dive under the supervision
of a PADI Instructor.

4. Conduct the PADI Discover Local Diving experience, (provided the divemaster meets insurance requirements).

5. Conduct the PADI Discover Snorkeling program, (provided the divemaster meets insurance

6. Conduct the PADI Scuba Review program for certified Open Water Divers, divers with higher certifications. or for PADI Scuba Divers who want only to refresh their skills (provided the divemaster meets insurance requirements).

7. Accompany student divers during training dives for the PADI Adventures in Diving program, Specialty Diver courses, or the Rescue Diver course.

8. Generally supervise both training and nontraining-related activities by assisting divers and student divers in the planning, organizing and direction of dives.

9. Assist a Teaching status PADI Instructor in the open water training of divers. The allowable
student diver-to-instructor ratio increases by four additional student divers for each certified, renewed PADI Divemaster for all PADI programs and courses, unless stated otherwise by that
course/program’s standards.

For the PADI Open Water Diver/Scuba Diver course, the allowable student diver-to-instructor
ratio increases by two additional student divers for each certified, renewed PADI Divemaster, to a maximum of 12 student divers to one instructor.

10. Assist a Teaching status PADI Instructor in the confined water training of divers. Use of
certified, renewed PADI Divemasters increases the allowable student diver-to-instructor
ratio in confined water by four additional student divers per divemaster for all courses,
unless stated otherwise by that course/program’s standards. [End Quote]"

For new divers, buddying is especially important. Responsibly buddying on all dives anywhere in the world acts as an insurance policy in most cases. Collective stupidity excluded.

Fortunately or unfortunately, regulation by Singaporean or even Malaysian authorities are sorely lacking. Not that they would matter for the 4 reasons given far above.

For a sport such as scuba diving - the real value add is in the thorough teaching and application of knowledge and skills learnt. Not the price. Your life depends on it.

And if you do not like PADI there are other schools such as NAUI, SSI, IANTD, SDI (NKOTB) and some half a dozen other certifying agencies. Check on the syllabus offered by each agency. An email or two should get you the information you require prior to signing up for a course anywhere in the world.

The shop/operator where you made your enquiries should be able to tell you which type of certification they offer. If they can't you should just turn around and walk out because it is like asking a car salesman what make of car it is and he/she replies: 'I don't know.'

Don't ask me, even though I teach, as I would like to retain impartiality in standards. Ask the certifying agencies listed above or google it.

Learn well because once you are certified you are permitted to dive without a divemaster or instructor pretty much anywhere in the world.

All that said. Accidents still occur. Hence the word 'accident.'

Statistically though, which is cold comfort once something bad occurs, you stand a higher chance getting maimed crossing the road or flying or driving or eating something which your body disagrees with. To put things in perspective, accounting for the road deaths in Singapore, I'd have to dive for some 300 years before something happens to me.

Welcome to the underwater world!! Dive safe.

Money flowing out of Singapore if it were handed to the consumers?

Going by the date sequence of these headlines ........ I'd say money was flowing out anyway whether or not it was given out as cash - which it is. At least our neighbours are profitting from Singov's pro-business policies.

Feb 28, 2009
Courts prepare for 'recession crimes'
Feb 28, 2009
Tour bargains snapped up : Huge crowds look for bargains; Thousands visit Natas fair as the thirst for travel remains strong

Feb 28, 2009
$125m prop for infocomm sector to save 10,000 jobs

March 1, 2009
Total of $343 million given to 271,000 workers a month earlier than planned

I could have been nasty and played the media soundbite game by not placing the dates of the articles to make the headlines read in an order even more disastrous ..... looking ..... ??

Wednesday, February 11, 2009

Did Obama just describe how some Singaporeans feel?

"I know how frustrating it is for taxpayers when they're looking and they're saying, 'let me get this straight -- you've got a guy who's making 20 million a year who ran his bank into the ground, and now we've got to come in and clean up the mess?'" - US President ELECT Barrack Obama.


Monday, January 26, 2009

Thesis Survey - Your assistance much appreciated

Dear friends and readers,

I am currently completing my Master's of Business in Logistics & Supply Chain Management with Curtin University of Technology, Perth, Australia.

To complement the thesis I am performing some empirical research taking the form of a survey.

Most people who have worked 5 years or more qualify. Any sort of improvement work performed or business process re-engineering experience would be preferable.

Thank you for your support and do pass the link onto your friends who may be able to help out.

It is a very short survey and should take no more then 5 minutes of your time.

Take survey here

Passing the link to friends: http://www.surveymonkey.com/s.aspx?sm=AaFALWMdnNIfUxLclQ_2bPVg_3d_3d

Monday, January 19, 2009

Contractual age down to 18? Breaking open the reserves?

Now Singaporeans can legally engage in businesses from the age of 18 and run the risk of runaway success or otherwise as luck, prudence and other factors may so allow.

But 18 to 21 year olds still remain unable to vote and choose a government they may want to have.

Makes sense?

The former arguments so vehemently raised by so many quarters on how 21 year olds can barely think for themselves since most of them are not yet out of school is now rescinded?

I'm 18, I can engage in legal undertakings for commercial purposes, which if successful will ultimately result in corporate taxes to support the government and its various expenditures but I cannot choose the government who will be spending MY money? hmmm .... uniquely Singapore?

* * * * *

Its now officially a rainy day and the government has proposed to break out the piggy bank. Really? What if there is a rainier day ahead? Where does financial prudence end and political necessity begin? Elections coming? Digress package? Or Foie Gras package?

Your guess is as good as mine ........ GST at 10% once the recession is considered over or a 100% increase in ERP rates since there has been 'no increases' in the last 3 years .... to 'replenish' the reserves?

Keep watching the headlines .... the dots have to connect sometime ..... as they inevitably do.

Sunday, January 18, 2009

My recommendation to AIMS

When we reach this comfortable level of discourse and are not potentially sued till our undies are gone ..... perhaps there is yet a political future .... for the people, of the people and by the people ...

Friday, January 16, 2009

Interim Posting on World & Singapore Economics

Is Singapore ahead of or trailing the curve in this New World Economic Order?

WEF (World Economic Forum): shaping the post-crisis world

The global financial crisis will dominate discussions at the World Economic Forum’s 39th Annual Meeting later this month.

Taking place in Davos, Switzerland, the meeting will be attended by some 2,500 people, including leaders from business, politics, religion and non-governmental organizations (NGOs). They will be joined by more than 40 heads of state and government.

"The meeting will focus on managing the current crisis and shaping the entire post-crisis agenda, from economic reform to climate change," says Jim. "This is an important time for the world's business leaders to come together with the world's political leaders and leaders of NGOs to have in-depth discussions about serious issues that require global solutions."

Interviewed by the World Economic Forum this week, Jim set out his thoughts on this year's meeting and the challenges facing the global economy. Here is a snapshot of Jim's views on some of the pressing issues facing the world today:

The outlook for the global economy:

"Overall I am cautiously optimistic about the future of the economy. I think the right steps have been taken in the short-term to deal with the capital issues and the financial crisis. Having said that it will take a long time for trust to be rebuilt. Trust is lost very quickly and it will only rebuild over time."

Avoiding a greater backlash to market capitalism:

"I think it is really important that we get more values-based leadership in business today. When you think about things we’ve experienced, both greed and excess have been at the center of some of it – both on the part of institutions and on the part of investors who were seeking greater yield."

The future shape of financial governance:

"I think there is going to be some element of re-regulation of the markets. I think it is important that this will be done properly and thoughtfully and thoroughly. But at the same time I think it is important that this re-regulation not be so stringent as to squeeze out innovation."

Visit this WEF site for more information.

Friday, January 09, 2009

Uniquely Singapore - The Real Deal?

Intentially written BEFORE the budget is announced and discussed .....

As debate rages on about economic stimulus packages in this once-a-century occurence (in the words of the Toyota CEO) the government seems to be falling head over heels to appease the business sector.

A business friendly budget in the form of rebates and or subsidies for businesses to apparently keep jobs is the most vocal special interest group at this point in time. Let us re-visit the premises and scenarios for helping out businesses as opposed to giving cash (in kind or form) to the end consumer.

Following an earlier blog post - Uniquely Singapore Economic Theorizing posted on December 2 which brought up the 'cash-in-consumer-hand' viewpoint - Today actually carried a rebuttal of sorts by mass/free-casting the government standpoint that cash in the hands of consumers would ultimately flow out of the country. Therefore any economic stimulus meant to increase domestic demand would have net neglible or perhaps even negative impact as alluded to by the Today series of articles in early December. Hence the stronger argument for 'giving the cash to businesses' since this would in effect create or at least retain jobs for Singaporeans. A multi-faceted impact on policy this will be as Yoda might be wont to say.

Let's look at the official assumption. Cash is given to businesses ostensibly to keep jobs alive and perhaps keep jobs in Singapore but will this be the case with our current policy on foreign labour? Not that I have anything against foreign labour but if the premise of handing out a 'lifeline' to businesses is to retain jobs and this bill is footed by Singaporeans then by all counts Singaporeans should be allowed to get the first bite of this pie no?

Before we proceed let's do this PAP style by demolishing the opposition ad nauseum ad infinitum. An old and somewhat obnoxious argument that foreign talent creates jobs can now be safely put to rest when the argument turns to keeping local SMEs alive in these perilious times. Unless I am told that foreign talents, too, are running SMEs and thus making decision on job
creation or retention .... and what a day that would be ....

On Businesses

SMEs, as I am told are counting for quite a hefty chunk of employment in Singapore. Let's say 30% to play it down and keep it low. If help in the form of cash or finance in its various derivatives are granted to SMEs (or for that matter business entity local or otherwise) the taxpayers foot the bill regardless of affliation. A noble national gesture at retaining jobs and a poiltically high scoring motive that appears to cut across employers and employees alike. But what do SMEs do to generate revenue ultimately? Do they export or do they depend on the local market for revenue and thus profits?

The export driven approach: simply put, for now and the very near foreseeable future all exports are down. Result: SMEs close down and jobs are lost despite taxpayer monies being thrown at them?

The local consumption approach: If SMEs account for 30% of employment in Singapore and the civil sevice accounts for another, say, 30% of employment (leaving some 40% for MNCs and others including entrepreneurs) then there might be a chance for survival and prosperity since potentially greater then half the working population might be a market. The only hiccup here is that of course the cash is not in the hands of the consumers to begin with given wage freezes, hiring freezes and a bitterly cold environment for employees current and immediate future. With no cash in hand, combined with a credit crunch due to current bank credit policies there is a highly dampened local environment on which growth may be premised. Possible and likely a slow death for the SMEs relative to their export driven counterparts. The higher the proportion of employment by SMEs in this argument the slower the death since Sales and Marketing often predicts a rosy picture of market potential - which will probably not materialise due to the overall dampening of credit facilities.

MNCs are a different kettle of fish. Harder to fry they may be but they can still get well cooked in these times. CSR is likely to take a back seat - as we have seen from a precipitious drop in corporate donations according to massaganda reports - and both strategic and tactical decisions will come from HQ usually some half way around the world. Many MNCs are attempting to consolidate their cash positions and short to medium term cash outlays given the present circumstances of banks suddenly withdrawing credit lines and unilaterally skydiving credit ratings. Jobs will be lost here in any event over and above cash flowing out of Singapore. The balance of trade, though never really ever balanced, will skew even further and is likely to have a deletrious effect on monetary policy to the overall detriment of the consumer in Singapore. That translates into even higher costs of living since Singapore imports the entire QWERTY keyboard with auxilliary buttons.

Both SMEs and MNCs face similar issues in the dramatic tightening of credit lines in their various forms of LCs, ODs etc. Even firms, small and large, that have never been in bad debt have had their credit lines withdrawn. Goods are sitting in warehouses and docks around the world. Ships are sailing empty. Are government mandated release of credit facilities the way to go? The government has been trying to hasten this process by qualifying some percentage of loans as 'redeemable-from-us-if-bad' in an effort to locally turn around a crisis which began in galactic proportions from the other side of the world and premised upon neo-classical free market capitalistic theories and their derivatives. Possible? Yes, but the chance of success is a few atoms away from zero.

Another argument raised is for subsidies on business cost such as rent and utilities - in an attempt to keep jobs. Discussions held reveal that if subsidies were granted to business entities it would artificially keep some of the key root causes of these problems to begin with alive and well - ignobly. Diving in: subsidies are given to tennants of commercially held properties. This equates to establishing a price floor on real estate in our 'free market economy.' A no-no since we are not the US or the EU with vast tracts of potentially usable land remote as they may be. SMEs continue struggling with the more fundamental problems of low consumption while property owners make a continued and continuous killing on the back of the taxpayer. This argument is extendable to 'industrial sectors' that are further back in the overall supply chain. A clear distortion of the market with a net negative impact since real estate does not generate jobs on its own as an asset.

If businesses fold, they fold due to the lack of ability to attract revenues. By subsidising what appears to be close to the heart we will perpetuate the inflationary mythical reality of property prices never falling. Far more efficient, though messy, for some businesses to close out to a point where rental returns force real estate firms into liquidation, assets are sold at fire-sale prices and the cycle renews itself. If we still believe in this form of free market capitalism then the market should allocate resources throughout the entire extended and affliated supply chain, not policies and certainly not governments in this particular case where businesses are concerned.

These arguments so far centre only on the assumption that business STAY in Singapore. That businesses will move out to a lower cost centre in form or substance is a given since the business of business is to make profits. What this portends is that if subsidies are given to businesses to sustain the overall flawed assumptions on operations and profitability through the entire value chain then this current crisis will repeate itself in the future.

There are many more implications cutting across more policy sectors but let's move on, as those in power like to say.

On Employees & The Consumer

If cash is granted to the consumer the same arguments above apply. The saving grace in this argument is that consumers then decide where to put their money AND the consumers get to live another day. Business exist to 'serve' customers. Without customers business as an entity and activity is moot.

At least in this case, consumer cash in hand, the market is less distorted in accordance with prevailing and popular though flawed economic principles. Consumers ultimately will decide if SMEs are worth keeping alive (money stays somewhat in Singapore) or the real estate companies (as an example) dishing out stratospheric rent rates thus increasing both business cost and the cost of living.

Best of all, the PEOPLE start to realize that their decisions make an impact on the nation and ultimately themselves. A swifter kick in the posterior then all the mandatory 'national education' classes, Kindness and Courtesy Movements as forms of nation building put together!

AND PEOPLE will begin to truly realize how inflationary economics works. We can then decide as a PEOPLE if we want to continue in this fashion.

Our Reserves

Any discussion on hard times and subsidies of any form will draw out the inevitable call to utilise our relatively gargantuan reserves. I do not disagree but this is not the time to make this call.

Our reserves are invested (or divested if positioned cheekily) look absolutely fabulous on paper. The book values are great, some even spectacular. Wait for the FY 2009 Q2 or Q3 results to determine the real value if some of our investments are realized. We may not have enough cardiac specialists in Singapore and around the region then.

This is not a time for pointing out blunders which are 'costing' Singaporeans (will I ever see that money anyway?) an arm and a leg. It is a time for full transparency so that national decision making can be facilitated.

Since the pseudo democratic movement has started in MOE with schools and how many sessions each should have etc let's simply carry the movement on and into the MOF area.

.... to be continued ...