The issues of the day – high unemployment, aging population, asset inflation have become global problems inflicting on governments everywhere. US’s unemployment rate stayed stubbornly high at close to 10% and with their financial crisis taking a toll on everyday living, US is unlikely to crawl out of its doldrums in the near future without having to devalue its own currency to banana republic status.
Japan, previously the world second largest economy after US, with all its engineering prowess, and diligence has a standstill economy with flat growth.
China, after displacing Japan as the second largest economy, also exhibit the same vulnerabilities – aging population, asset inflation beyond real affordability. In China, land right is not the same as in most democracies – the land does not belong to anyone and but owner has the right to use. Its property lease are usually 60-70 years and even with such short lease, prices in the main cities of Beijing and Shanghai or even cities in Qingdao, Shangdong or even the Southern city of Hainan, property prices shot beyond our mid range housing in Singapore based on cost per square feet. In terms of earning power of their average citizen, the disparities are too great to imagine.
I look everywhere in Asia, Europe and even in US, such are the pathetic state of affair and in Singapore, with our growth outstripping many other economies, we must admit that our working class Singaporeans are somewhat left steps behind and income levels have seen very modest improvements, if at all. Workfare must be featured more prominently in any budget allocation as a mean to bring up the buying power parity of our working class Singaporeans. On their own, they are suffering silently and this much the Government must recognize. The allocation for Workfare does not put much cash on the table for the recipients and the Government should look into how discretionary allocation should be made to these families so that they will not have problems buying food and staple for the families, putting their children to school and having sufficient for transport and medical care.
Though, the Government has strongly rejected any notion of minimum wage since they do not add to any productivity gains but in fact may raise the cost of employers. We have seen examples – where minimum wage distorts hiring patterns and creates new employment contracts – interim, short term arrangement because employers are afraid of any long term employment with minimum wage that will not be easily rescinded without options of pull back in poorer times. This is a sensitive labor matter but it must be looked upon seriously as it affects all working class Singaporeans. If implementation of minimum wage is not doable, what can the Government do to level up? Enhance Workfare with entitlements for so long as any working class Singaporeans continue to work or want to work.
There are many issues bothering everyone – from transport to education to housing and these are matters that affect us one way or another. The Government must show that it cares and not deny any citizen or Singaporean, our right to better living, even if we are better off than others elsewhere in the world and for our aspirations to be met in our own Singapore way.
Sunday, January 9, 2011
Friday, January 7, 2011
A Home for Everyone - Affordably
The prices for HDB, seemed skewed due to prices distortion owing to increased demand from new PRs and citizens. There should be a strong correlation in terms of price movement and the number of PRs approved in the year 2008/2009. There is a record of over 50,000 approved PRs in 2008. The HDB prices has stubbornly stayed high despite the economic doldrums in 2008 to early 2009. PR, of course, are entitled to buy HDB but now, they are constrained to buy them from open market and in open market, as we all know, prices will tend to be bidded upwards when supply is stagnating and at best relatively flat growth.
This probably explains in large part, the spike in HDB prices and COV since they are able to up the ante with COV premium to secure the HDB compared to Singaporeans who may have to rely on their existing balance on their Ordinary Account to help pay down any downpayment. The COV part is the part that affect many Singaporeans. The COV part is tightly correlated to the underlying valuation provided for the HDB and this valuation will determine the differential between the ask price by seller and the COV premium the buyer will pay. Hence, if the valuation of HDB is unilaterally determined by the authority with no range bound flexibility and the bank will loan on the valuation indicated, then it is likely that every HDB purchase, with the inherent lower valuation, will end up with a COV component for every purchase transaction. Unlike for private property purchase, banks will usually loan on valuation supported by valuing companies and for so long as the bank is willing to support the application, loan is extended. This point to a glaring point in the valuation approach of private property and HDB and the loan extension approach by banks to private property and HDB.
The valuation approach to assessing value of the HDB should be re-looked at to ascertain why there is always a gap in the asking price and the valued asset and that for HDB, every transaction has to contain a COV component. Most Singaporeans are priced out of their HDB in the re-sale market because they cannot afford to pay the premium.
Singaporeans should be able to afford to buy a HDB as a primary accommodation and that this property should be owner-occupied. The aspiration of another group of Singaporeans, much better off, should be met in another way and not allowing HDB units to be treated as a commodity for normal market transactions of buying and selling since such acts will likely cause prices to move in tandem to market forces – usually upwards. HDB units should be left for Singaporeans and PRs and curbs should be put to deterred speculation on the HDB units and to discourage Singaporeans who own private property to own HDB and to rent out. It is quite apparent that even with the current HDB prices, the rental income earn a better yield than private property.
Hence, the authority should look into how valuation of HDB’s prices should realistically be assessed and determined and thereby seeing the relevance of COV as a component in HDB purchase. Second, the authority should look at how Singapore with private property should treat their HDB as stock can only be limited by the land we have to build more. If the resale market constitute a segment of Singaporeans who will own their HDB, and not owner occupied and at the same time owing a private property or various property investments, how can the authority remove HDB as a trade-able commodity in the investment mix.
HDB’s primary role should be to ensure every Singaporean is entitled to the HDB house and every consideration should be given to make sure that aspiration is met.
This probably explains in large part, the spike in HDB prices and COV since they are able to up the ante with COV premium to secure the HDB compared to Singaporeans who may have to rely on their existing balance on their Ordinary Account to help pay down any downpayment. The COV part is the part that affect many Singaporeans. The COV part is tightly correlated to the underlying valuation provided for the HDB and this valuation will determine the differential between the ask price by seller and the COV premium the buyer will pay. Hence, if the valuation of HDB is unilaterally determined by the authority with no range bound flexibility and the bank will loan on the valuation indicated, then it is likely that every HDB purchase, with the inherent lower valuation, will end up with a COV component for every purchase transaction. Unlike for private property purchase, banks will usually loan on valuation supported by valuing companies and for so long as the bank is willing to support the application, loan is extended. This point to a glaring point in the valuation approach of private property and HDB and the loan extension approach by banks to private property and HDB.
The valuation approach to assessing value of the HDB should be re-looked at to ascertain why there is always a gap in the asking price and the valued asset and that for HDB, every transaction has to contain a COV component. Most Singaporeans are priced out of their HDB in the re-sale market because they cannot afford to pay the premium.
Singaporeans should be able to afford to buy a HDB as a primary accommodation and that this property should be owner-occupied. The aspiration of another group of Singaporeans, much better off, should be met in another way and not allowing HDB units to be treated as a commodity for normal market transactions of buying and selling since such acts will likely cause prices to move in tandem to market forces – usually upwards. HDB units should be left for Singaporeans and PRs and curbs should be put to deterred speculation on the HDB units and to discourage Singaporeans who own private property to own HDB and to rent out. It is quite apparent that even with the current HDB prices, the rental income earn a better yield than private property.
Hence, the authority should look into how valuation of HDB’s prices should realistically be assessed and determined and thereby seeing the relevance of COV as a component in HDB purchase. Second, the authority should look at how Singapore with private property should treat their HDB as stock can only be limited by the land we have to build more. If the resale market constitute a segment of Singaporeans who will own their HDB, and not owner occupied and at the same time owing a private property or various property investments, how can the authority remove HDB as a trade-able commodity in the investment mix.
HDB’s primary role should be to ensure every Singaporean is entitled to the HDB house and every consideration should be given to make sure that aspiration is met.
Saturday, May 29, 2010
Expanded Economic Space for Singapore
Playing up the anxiety of a small nation beset on all sides in a turbulent global environment, it is natural that Singapore should start to look nearer for balanced growth instead of looking afar to BRIC countries (Brazil, Russia, India and China). For the same reason that MM Lee Kuan Yew was insistent for a merger and unity in the early 60s of the two territories which will provide a common market and economic hinterland, Malaysia is still Singapore’s best bet. Malaysia is Singapore’s largest trading partner in 2009 with total trade amounting to S$86.1 billion, up from S$111.5 billion in 2008.
Indonesia, under the leadership of President Susilo Bambang Yudhoyono provided a decade of political and economic stability long wanting in this resource-rich Indonesian archipelago which has been an important trade region for Singapore. Indonesia is Singapore’s 4th largest trading partner in 2009 with total trade amounting to S$58.5 billion, up from S$75.1 billion in 2008
Whichever nearby economic space- Malaysia or Indonesia, Singapore must firmly anchor new roots into the supply chains of every global products it wants to deliver- pharmaceutical, petrol chemicals, semiconductors, biomedical products, etc- and to enlarge and to extend its supply chains across its nearest borders and to operate with neighbours in nexuses. We should build little Singapore and get Singapore’s enterprises as a pack to be able to work the entire supply chain reliably, from sourcing components to fabrication and sharing of R&D expertise. The enterprises must get together to support each other and even co-invest to go for the larger projects and reap bigger returns.
The vagaries of international markets means that whether Singapore goes near or far in its economic space expansion, risks still prevail and in this time, it is best for Singapore to amalgamate strengths nearer shores to capture a defining stakes in these crucial emerging markets of Malaysia and Indonesia.
Indonesia, under the leadership of President Susilo Bambang Yudhoyono provided a decade of political and economic stability long wanting in this resource-rich Indonesian archipelago which has been an important trade region for Singapore. Indonesia is Singapore’s 4th largest trading partner in 2009 with total trade amounting to S$58.5 billion, up from S$75.1 billion in 2008
Whichever nearby economic space- Malaysia or Indonesia, Singapore must firmly anchor new roots into the supply chains of every global products it wants to deliver- pharmaceutical, petrol chemicals, semiconductors, biomedical products, etc- and to enlarge and to extend its supply chains across its nearest borders and to operate with neighbours in nexuses. We should build little Singapore and get Singapore’s enterprises as a pack to be able to work the entire supply chain reliably, from sourcing components to fabrication and sharing of R&D expertise. The enterprises must get together to support each other and even co-invest to go for the larger projects and reap bigger returns.
The vagaries of international markets means that whether Singapore goes near or far in its economic space expansion, risks still prevail and in this time, it is best for Singapore to amalgamate strengths nearer shores to capture a defining stakes in these crucial emerging markets of Malaysia and Indonesia.
Tributes to Dr Goh Keng Swee
Dr Goh is an icon of the pioneering leaders whose far-sightedness and fortitude, whose ideas and ideals are stamped on scores of laws, economic policies and reflected in the millions of lives in Singapore. Without the dare of the lion-hearted Dr Goh, without his deliberate construction of a mythological legitimacy of Singapore- to engender multi-racialism, multiculturalism which he genuinely believe alongside the league of lions like MM Lee Kuan Yew, Dr Toh Chin Chye, Mr Rajaratnam , Singapore’s magic may be illusory.
Even in the grimmest of times in Singapore, the league of lions believed Singapore could really make it. We did and we owed our success today to them.
Even in the grimmest of times in Singapore, the league of lions believed Singapore could really make it. We did and we owed our success today to them.
What are your favourite teams at the 2010 FIFA World Cup finals in Africa, and which one is likely to be crowned world champion come July 11? Why?
Its football’s greatest tournament, unrivalled in glamour, prestige and universal appeal and indeed this World Cup marks a unique spot in the tract of history – it is the first time that FIFA World Cup is hosted by an African nation.
France is a hot bet by bookmakers to win in Group A and the bookmakers offer the odds of 2.05 for a French victory. In any stacked odds, France is still likely to be the outright winner of the 2010 World Cup. France rallied around Zinedine Zidane to reach the World Cup final in Germany and the lightning rod for this tournament for France is Thierry Henry. They have a lethal team asset in the form of strikers Nicolas Anelka and Karim Benzema. With Henry, their offensive is as formidable as unstoppable.
Basing on the number of countries that could reign as World Cup champions in 2010, France is the best to compete for the crown as world’s best. With their high technical skills as well as expectations and considering this is their fourth straight tournament, the round of 16 seems to be a minimum exit point. In FIFA, anything is possible and certainly anything is possible if the French can hold up and make it to the knockout round. In any case, the French is unlikely to be at the periphery of the World’s greats at this football extravaganza this summer.
France is a hot bet by bookmakers to win in Group A and the bookmakers offer the odds of 2.05 for a French victory. In any stacked odds, France is still likely to be the outright winner of the 2010 World Cup. France rallied around Zinedine Zidane to reach the World Cup final in Germany and the lightning rod for this tournament for France is Thierry Henry. They have a lethal team asset in the form of strikers Nicolas Anelka and Karim Benzema. With Henry, their offensive is as formidable as unstoppable.
Basing on the number of countries that could reign as World Cup champions in 2010, France is the best to compete for the crown as world’s best. With their high technical skills as well as expectations and considering this is their fourth straight tournament, the round of 16 seems to be a minimum exit point. In FIFA, anything is possible and certainly anything is possible if the French can hold up and make it to the knockout round. In any case, the French is unlikely to be at the periphery of the World’s greats at this football extravaganza this summer.
CPF's Restoration
The CPF’s restoration is an eventual and expected move and from a human resource perspective, it is a necessary adjustment since the restoration is one of the few ways to compensate the workers who have contributed to the revival and growth of the economy. Human capital, as a major part of the factors of production must be incentivized when the economy turns good.
Any hikes in cost necessarily will mean a hit in the bottom line for companies but this restoration should not be looked upon as increasing costs. It was lowered in phases owing to economic situations. Since 1999, in response to the economic downturn caused by the Asian economic crisis, the employer contribution rate was lowered to 10 percent. When the economy showed signs of picking up in 2000, this rate was increased by 6 percentage points to 16 percent in 2001. However, it was lowered again to 13 percent in 2003. The current 14.5% contribution by employers and the subsequent move upwards should therefore not be seen as a hit on the bottom line. The workers have shared risks and pains of wage cut and restraints and even retrenchments.
What is perceptibly lost with the increase in CPF on the left side of equation is compensated by the slew of incentives on the right side of the economic growth equation- $5.5 billion for productivity investments and assistance to companies. An allocation of $2.5 billion over the next five years to build a “first-class” continuing education and training system for adults will mean that companies can tap these fiscal stimuli to help transform their companies to achieve higher productivity with better human capital resources. With these fiscal stimuli and budget, maximum production and productivity can be achieved. Such restructuring based on productivity gains and sharpening competencies in the human capital is very much work in progress but we hope a dumb-bell shaped mode will surface soon and that will take Singapore to another level of sustainable long term growth.
Any hikes in cost necessarily will mean a hit in the bottom line for companies but this restoration should not be looked upon as increasing costs. It was lowered in phases owing to economic situations. Since 1999, in response to the economic downturn caused by the Asian economic crisis, the employer contribution rate was lowered to 10 percent. When the economy showed signs of picking up in 2000, this rate was increased by 6 percentage points to 16 percent in 2001. However, it was lowered again to 13 percent in 2003. The current 14.5% contribution by employers and the subsequent move upwards should therefore not be seen as a hit on the bottom line. The workers have shared risks and pains of wage cut and restraints and even retrenchments.
What is perceptibly lost with the increase in CPF on the left side of equation is compensated by the slew of incentives on the right side of the economic growth equation- $5.5 billion for productivity investments and assistance to companies. An allocation of $2.5 billion over the next five years to build a “first-class” continuing education and training system for adults will mean that companies can tap these fiscal stimuli to help transform their companies to achieve higher productivity with better human capital resources. With these fiscal stimuli and budget, maximum production and productivity can be achieved. Such restructuring based on productivity gains and sharpening competencies in the human capital is very much work in progress but we hope a dumb-bell shaped mode will surface soon and that will take Singapore to another level of sustainable long term growth.
Is there merit in making a workplace more father-friendly? What can be done?
Any forms of raising the floor on work-life balance, be it father-friendly or mother-friendly arrangements, they must be aligned with business imperatives. It is a myth that such arrangements may compromise work performance. On the contrary, motivated staff’s performance far outweighs any provisions or deemed losses made to the work-life balance. Everything about such workplace friendly practices comes down to people. When we are in business, we cannot escape the human elements at work – human care, human commitment if not properly provided will result in human frustrations and human despairs. Businesses must also serve the needs of its own people so that any improved working conditions can be linked to higher level of economic productivity and employment performance.
Father-friendly needs are not as demanding as mother-friendly needs. Fathering situations are less complicated than mothering situations. It is therefore not about giving more days off for fathering activities but providing flexibility to fathers to bring their children to doctors where such verifiable visits can be counted as compassionate off-day or providing flexible turning- in-and-out timing for work since some fathers need to send and to pick children to and from school.
For so long as providing the father-friendly supports in the workplace does not impact competitiveness but at the same time, it can raise morale and motivation, such movement must be encouraged. The one rock-solid gift we can give our sons and daughters is our unconditional love and support and the company can also give that rock-solid support to father and mother friendly arrangements.
Father-friendly needs are not as demanding as mother-friendly needs. Fathering situations are less complicated than mothering situations. It is therefore not about giving more days off for fathering activities but providing flexibility to fathers to bring their children to doctors where such verifiable visits can be counted as compassionate off-day or providing flexible turning- in-and-out timing for work since some fathers need to send and to pick children to and from school.
For so long as providing the father-friendly supports in the workplace does not impact competitiveness but at the same time, it can raise morale and motivation, such movement must be encouraged. The one rock-solid gift we can give our sons and daughters is our unconditional love and support and the company can also give that rock-solid support to father and mother friendly arrangements.
Is now the right time to begin restoring employers' CPF contribution rates? How quickly can this rate be raised and by how much?
As the economy strengthens, inevitably wage pressure will head up and the issue of CPF restoration will become increasing pressing. CPF is many things to Singaporeans – Ordinary Account (OA) means compulsory savings, monthly housing repayments, tertiary education repayments, funds for selective investments, etc. Special Account (SA) is available for withdrawal as a monthly life annuity from age 65 under the CPF Life scheme, and the Medisave Account (MA) can be utilised for medical expenses and Eldershield insurance premiums.
Any increase will be good news for the workers and naturally the employers will feel the burden of increase wage load. In times like today with short boom-bust cycles, it is hard to use CPF as a blunt tool to moderate wage loading for employers. In economic downturn, all factors of production costs would be moderated downwards and human cost will take a direct impact leading to wage freeze, cut or worst retrenchment. Increasing CPF by 1-1.5% technically has nominal impact on total wage loading on the employers since the quantitative increase is marginal. In my opinion, in an economic crisis, when government imposes a reduction in CPF contribution for employer, the reduction is more notional and symbolic and demands a certain risk and pain sharing by workers. If the government is to subject the CPF to move in tandem to the rhythm of the boom-and-bust cycles which are becoming increasing short, it will become clumsy flipping and flopping. Only the workers suffer as they need the CPF for their house, medical insurance and payment for their annuity.
The government should consider a complete one-off restoration and thereafter leaving the CPF fixed. Making multiple-step adjustments is like many tiny pricks. One swift prick is better than many irritable tiny pricks for employers. The government can use other monetary and fiscal policies to help employers cope with wage loading in poorer times like providing taxation reliefs for wage components. They can even calibrate increased taxation reliefs for older workers. This will spur the employers to re-look at the factor of production costing and to tweak other variables in the equation other than manpower costs.
CPF should be immediately restored.
Any increase will be good news for the workers and naturally the employers will feel the burden of increase wage load. In times like today with short boom-bust cycles, it is hard to use CPF as a blunt tool to moderate wage loading for employers. In economic downturn, all factors of production costs would be moderated downwards and human cost will take a direct impact leading to wage freeze, cut or worst retrenchment. Increasing CPF by 1-1.5% technically has nominal impact on total wage loading on the employers since the quantitative increase is marginal. In my opinion, in an economic crisis, when government imposes a reduction in CPF contribution for employer, the reduction is more notional and symbolic and demands a certain risk and pain sharing by workers. If the government is to subject the CPF to move in tandem to the rhythm of the boom-and-bust cycles which are becoming increasing short, it will become clumsy flipping and flopping. Only the workers suffer as they need the CPF for their house, medical insurance and payment for their annuity.
The government should consider a complete one-off restoration and thereafter leaving the CPF fixed. Making multiple-step adjustments is like many tiny pricks. One swift prick is better than many irritable tiny pricks for employers. The government can use other monetary and fiscal policies to help employers cope with wage loading in poorer times like providing taxation reliefs for wage components. They can even calibrate increased taxation reliefs for older workers. This will spur the employers to re-look at the factor of production costing and to tweak other variables in the equation other than manpower costs.
CPF should be immediately restored.
COE Pricing for Cars
The rise in COEs and vehicle prices is a result of a volatility skewed and opportunistic pricing due to the reduction of the COEs issued monthly. This pricing scourge is not an anomaly with any need to call for action.
The COE pricing band widens because the government is controlling the car population and COEs. With the free float pricing mechanism for COEs, the prices will tend to settle northward with a limited COE quota. The broad implications using pricing as a tool to control congestion will only lead to higher prices and a resultant smoother traffic flow.
Personally, I do not anticipate a straight line escalation of prices or expect wild fluctuations or rapid appreciation of the COEs. There is a secondary used car market to meet the demand of car owners. There should not be any campaign against the current free float pricing policies. Let the market decides the prices as it will settle at a level where price meets aspirations to own a new car.
The COE pricing band widens because the government is controlling the car population and COEs. With the free float pricing mechanism for COEs, the prices will tend to settle northward with a limited COE quota. The broad implications using pricing as a tool to control congestion will only lead to higher prices and a resultant smoother traffic flow.
Personally, I do not anticipate a straight line escalation of prices or expect wild fluctuations or rapid appreciation of the COEs. There is a secondary used car market to meet the demand of car owners. There should not be any campaign against the current free float pricing policies. Let the market decides the prices as it will settle at a level where price meets aspirations to own a new car.
Directors' Roles & Responsibilities
Multiple directorships must necessarily impact proper corporate governance, firm monitoring and performance. Too many directorships must necessarily lower directorial effectiveness as directors are constrained by personal time availability and effectiveness on each board they serve.
Sitting in too many boardrooms upsets the corporate governance policing work and oversight duties. If the director receives a compensation, does the “busyness” of the director affect board performance? Will the busy director be more acquiesce and capitulate to the wishes of dominant chairmen or chief executives? What are the characteristics of directors who are valuable in the market for board seats? How do the capital markets perceive the appointment of well-connected but inevitably busy directors? Do all appointed directors serve stockholders’ interests and carry with them the burden of corporate governance oversight and independence? All these considerations are fine balancing acts and there is no magical optimal number for any director to undertake. It is really how the directors exercise discretion, independence and personal commitment to each board that really matters. At the end, it is when the directors are called to rise to the occasion at exceptional times that their true colors are shown – whether the directors can discharge their duties with professional care and due diligence and to defend their independent decisions.
In any way, directors should not have their hands in too many pies as multiple directorships are thought to have an inverse relationship to director quality.
Sitting in too many boardrooms upsets the corporate governance policing work and oversight duties. If the director receives a compensation, does the “busyness” of the director affect board performance? Will the busy director be more acquiesce and capitulate to the wishes of dominant chairmen or chief executives? What are the characteristics of directors who are valuable in the market for board seats? How do the capital markets perceive the appointment of well-connected but inevitably busy directors? Do all appointed directors serve stockholders’ interests and carry with them the burden of corporate governance oversight and independence? All these considerations are fine balancing acts and there is no magical optimal number for any director to undertake. It is really how the directors exercise discretion, independence and personal commitment to each board that really matters. At the end, it is when the directors are called to rise to the occasion at exceptional times that their true colors are shown – whether the directors can discharge their duties with professional care and due diligence and to defend their independent decisions.
In any way, directors should not have their hands in too many pies as multiple directorships are thought to have an inverse relationship to director quality.
Property's Resurgence- Reactions and Comments
The macroeconomic effect of the bubbles can be widespread and detrimental if not managed and intervened appropriately. There is no such thing as a good bubble – it is simply a temporal euphoria that can cause an uplift of market sentiments but if prolonged, the bubble can lead to irrational exuberance.
With cooling measures put in place by MND, the prices of properties are persistently testing new highs. The pervasive low interest rate regime has a great effect on buyers’ inclination. Property as an asset class become desirable as it is a good hedge and has good capital gain potential. Hot money from around Asia, Middle East and Europe looking for a safe investment can bet on the property market. The government’s intervention approach should be to curb excessive speculation where the velocity of price increase is slowed down- but does not limit where buyers’ investment direction. Since human nature are both imitative and inventive, it can be detrimental to the whole property market when prices crash. This will affect genuine buyers for owners’ occupied properties and government’s intervention is needed to ensure that genuine buyers are not sidelined to a point where prices are artificially high and out of reach to them. This will be a fundamental error in policy and property investments are not perpetual money machines – where prices move upward in straight line
Now everyone seems to suffer from what I call pro forma disease- that is taking the sharp rise in prices and projecting them endlessly into the future. So when your hairdressers and men in coffee shops start starting about investing in property, it is the start of the pro forma disease and can lead to irrational euphoria and that, in a very certain way, will lead to a painful collapse of prices. A certain intervention is needed by the government to manage the velocity of price shifts through interest rate and taxes so that bubbles do not blow up to cause asset deflations and a home over their head.
No bubble is good bubble.
With cooling measures put in place by MND, the prices of properties are persistently testing new highs. The pervasive low interest rate regime has a great effect on buyers’ inclination. Property as an asset class become desirable as it is a good hedge and has good capital gain potential. Hot money from around Asia, Middle East and Europe looking for a safe investment can bet on the property market. The government’s intervention approach should be to curb excessive speculation where the velocity of price increase is slowed down- but does not limit where buyers’ investment direction. Since human nature are both imitative and inventive, it can be detrimental to the whole property market when prices crash. This will affect genuine buyers for owners’ occupied properties and government’s intervention is needed to ensure that genuine buyers are not sidelined to a point where prices are artificially high and out of reach to them. This will be a fundamental error in policy and property investments are not perpetual money machines – where prices move upward in straight line
Now everyone seems to suffer from what I call pro forma disease- that is taking the sharp rise in prices and projecting them endlessly into the future. So when your hairdressers and men in coffee shops start starting about investing in property, it is the start of the pro forma disease and can lead to irrational euphoria and that, in a very certain way, will lead to a painful collapse of prices. A certain intervention is needed by the government to manage the velocity of price shifts through interest rate and taxes so that bubbles do not blow up to cause asset deflations and a home over their head.
No bubble is good bubble.
Do the latest initiatives in IE Singapore's new five-year plan cover the ground adequately? What more can be done?
The winning formula is really to cast the net wider to capture opportunities at a deeper level of the blue ocean and be a key player in the emerging Asian market story and a participant in the BRIC economies. Singapore needs access to world market. IE Singapore will be the bridge and connector of the dots.
Building convenient access to markets and infrastructures of major cities and free zones are like joining all the dots to form a sustainable economic framework for Singapore. Integrated ports, free trade and logistics zones, industrial parks and townships development should be the way Singapore participates in the growth stories of these regions. These are our strengths- housing, transport and system building. Relying on exporting through manufacturing cannot be our long term strategy anymore since we have neither the manpower nor cheap resources to produce competitively.
IE Singapore should not only lead Singapore companies to inner second or third tier cities of China, India or Vietnam but focus on specific areas of development – environmental engineering, housing and city development, water projects, transport and in areas where we have distinct advantages.
Building convenient access to markets and infrastructures of major cities and free zones are like joining all the dots to form a sustainable economic framework for Singapore. Integrated ports, free trade and logistics zones, industrial parks and townships development should be the way Singapore participates in the growth stories of these regions. These are our strengths- housing, transport and system building. Relying on exporting through manufacturing cannot be our long term strategy anymore since we have neither the manpower nor cheap resources to produce competitively.
IE Singapore should not only lead Singapore companies to inner second or third tier cities of China, India or Vietnam but focus on specific areas of development – environmental engineering, housing and city development, water projects, transport and in areas where we have distinct advantages.
Who on the Forbes Rich List (can be more than one) do you admire most? Why?
These billionaire tycoons pounced on opportunities in telecommunications, constructions, properties, infrastructures play in their countries. Carlos Slim and Li Ka-shing are self made men who capitalized on those chances and took the risk. They dreamt of a big empire that can rule the part of the world they live in with a certain kind of strong fists. They are the rebels, the round pegs in the square holes and they see things differently. They are not fond of rules but what they do rules the part of the world they live. They change things, merge and acquire opportunities. They explore. They create. They inspire. They push themselves forward to become what they are.
I admire self-made men like Carlos Slim and Li Ka-shing who can stare at an empty canvas and see their empire which is a beautiful work of art. They followed their dreams from their humble backgrounds and actualized the empires to become the billionaires they are now.
I believe that the people, who are crazy enough to think they can change the world, are the ones who do.
I admire self-made men like Carlos Slim and Li Ka-shing who can stare at an empty canvas and see their empire which is a beautiful work of art. They followed their dreams from their humble backgrounds and actualized the empires to become the billionaires they are now.
I believe that the people, who are crazy enough to think they can change the world, are the ones who do.
Singapore's Interest Rate Shift
Singapore benchmark interest rate will remain fairly stable with a possible pre-emptive modest rise in the short term since the US’s rate is likely to stay low for a while. Asian central banks typically follow the Fed in interest rate setting though with a lag effect. The growth momentum in Asia outstrips those in US and Europe but despite this, the central banks in Asia are unlikely to pursue any aggressive normalization of domestic interest rates independent of those pegged by the Fed.
In the short-to-mid term view, there are two temporary depressants to any possible rate hike. The first depressant is that the world economy is still beset with uncertainties in Europe and US. The possible sovereign defaults in Greece may cause a spill-over panic and if more European countries get embroiled, the state of affair can be debilitating. Any hike will likely slow growth. The second depressant is the uneven effects of stimulative policies employed to promote recovery and their sudden withdrawal may cause steep drop in capital and consumer spending. The recovery momentum is already showing signs of slow down and any spike in interest can shift the axis of the spinning recovery to bring growth to a halt.
To be sure, headwinds to growth must remain significant and sustainable before any modest hike in interest should be considered. Any hike is likely to cool the heated economy and to bring inflationary pressure down.
An interest rate hike will likely shift demands of capital and consumer purchases to a lower gear. The flow rate of hot money will also likely be slowed down bringing assets prices, especially property prices to realistic levels. Fiscal spending is expected to wane as growth driver. At this juncture, it is better for Singapore to maintain a low interest regime to grow the economy out of the woods confidently before any contemplation of a rate hike. Q310 should be a good time for an interest rate rethink – not now. Singapore can have the last laugh.
In the short-to-mid term view, there are two temporary depressants to any possible rate hike. The first depressant is that the world economy is still beset with uncertainties in Europe and US. The possible sovereign defaults in Greece may cause a spill-over panic and if more European countries get embroiled, the state of affair can be debilitating. Any hike will likely slow growth. The second depressant is the uneven effects of stimulative policies employed to promote recovery and their sudden withdrawal may cause steep drop in capital and consumer spending. The recovery momentum is already showing signs of slow down and any spike in interest can shift the axis of the spinning recovery to bring growth to a halt.
To be sure, headwinds to growth must remain significant and sustainable before any modest hike in interest should be considered. Any hike is likely to cool the heated economy and to bring inflationary pressure down.
An interest rate hike will likely shift demands of capital and consumer purchases to a lower gear. The flow rate of hot money will also likely be slowed down bringing assets prices, especially property prices to realistic levels. Fiscal spending is expected to wane as growth driver. At this juncture, it is better for Singapore to maintain a low interest regime to grow the economy out of the woods confidently before any contemplation of a rate hike. Q310 should be a good time for an interest rate rethink – not now. Singapore can have the last laugh.
Are concerns over the surge in the property market justified? How effective are the recent measures to moderate the market, and does more need to be d
The loose monetary conditions globally and a pervasive low interest rate regime are partial reasons for the property asset inflation witnessed in Singapore. Without any interventions, the demand and prices may escalate to levels that may be incompatible and inconsistent with the economic realism and fundamentals. The surge in demand and prices are unexpected in the light of a certain contraction in the first half of 2009. The second half of 2009 saw the built-up of investment momentum and the subsequently ballistic run on property prices.
The government’s announcement of cooling-off measures like the stamp duties imposition on sellers is at best a dampener. The boom-bust cycles are getting too short and too unpredictable Cooling measures must be let in to slow down the sudden spike and fall of prices which will otherwise cause shocks to the market. Elements of speculative trading activities must be brought to a low and to reduce short-term arbitrage opportunities which also may cause asset price distortions.
One best way for the government to cool off the market is to work on the supply-side equation by putting up more land sales and leave the market to decide how high it should bid for the property. Any other interventions like minimum holding period before flip or sub-sale tax for uncompleted properties or even capital gain tax in tiered format may be intrusive for a free market.
Today’s economic recovery combined with low borrowing costs set off this massive increase in property prices which seemed so right and irresistible to the heartland upgraders. The HDB prices remained relatively stable with strong resistance to price deterioration during most part of 2008 till first half of 2009 compared with private properties.
Singapore can least afford a run on its property prices as many Singaporeans’ fortune are intricately tied to property and prices must be built on firm fundamentals and less of froths. Government’s interventionist approach is needed but there must be clarity on the extent of policy tightening so that genuine buyers can factor those policies in their decision making process in the mid to long term.
The government’s announcement of cooling-off measures like the stamp duties imposition on sellers is at best a dampener. The boom-bust cycles are getting too short and too unpredictable Cooling measures must be let in to slow down the sudden spike and fall of prices which will otherwise cause shocks to the market. Elements of speculative trading activities must be brought to a low and to reduce short-term arbitrage opportunities which also may cause asset price distortions.
One best way for the government to cool off the market is to work on the supply-side equation by putting up more land sales and leave the market to decide how high it should bid for the property. Any other interventions like minimum holding period before flip or sub-sale tax for uncompleted properties or even capital gain tax in tiered format may be intrusive for a free market.
Today’s economic recovery combined with low borrowing costs set off this massive increase in property prices which seemed so right and irresistible to the heartland upgraders. The HDB prices remained relatively stable with strong resistance to price deterioration during most part of 2008 till first half of 2009 compared with private properties.
Singapore can least afford a run on its property prices as many Singaporeans’ fortune are intricately tied to property and prices must be built on firm fundamentals and less of froths. Government’s interventionist approach is needed but there must be clarity on the extent of policy tightening so that genuine buyers can factor those policies in their decision making process in the mid to long term.
In your view, what are the most notable aspects and proposals of Budget 2010? Do the proposals cover all the major bases?
2010’s budget is premised on building long term structural adjustments to ensure the sustainability of Singapore’s economy and its fundamental resilience. The dynamic flexibility in the budget allocation – in promotion of certain industries with funds and bank lending coupled with pro-growth policies in R&D, training and innovation will give the economy the ability to overcome future challenges – which should not be taken for granted.
Singapore’s economy still has to contend with short-run cyclical performance of the global economy and may be further subjected to shocks in the Europe, Middle East and the US. The budget is careful not to go into a long-run entitlement spending burden in healthcare or social welfare. A one-time personal tax relief and a 1-percentage drop in corporate tax are significant to show that policies are in place to preserve Singapore underlying low-tax environment which is pro-business. This budget provides a positive environment for small businesses and entrepreneurial activities with its monetary stimulation. With an efficient deployment of funds and loans and with prudent risk-taking implementation, the budget will promote technology and productivity gains. Solid and sustained economic performance is a necessary foundation for a sound fiscal environment and for advancing Singapore’s standards of living.
Human capital development is a key plank in this budget and to set the virtuous cycle in motion, a huge budget is allocated for training to improve productivity and to enhance key skills – skills that can bring about better jobs and incomes for Singaporeans. With a stretched retirement age for the working population, training must be provided to cater to this ballooning workforce with lesser reliance on foreign workers for jobs that can be substitutable with Singaporeans.
Singapore’s economy has shown a remarkable ability to absorb shocks of all kinds and its resiliency is a trademark of Singaporeans. The budget is premised on economic realism based on flexible and efficient markets for labor and capital to eventually build on infrastructures and people.
Singapore’s economy still has to contend with short-run cyclical performance of the global economy and may be further subjected to shocks in the Europe, Middle East and the US. The budget is careful not to go into a long-run entitlement spending burden in healthcare or social welfare. A one-time personal tax relief and a 1-percentage drop in corporate tax are significant to show that policies are in place to preserve Singapore underlying low-tax environment which is pro-business. This budget provides a positive environment for small businesses and entrepreneurial activities with its monetary stimulation. With an efficient deployment of funds and loans and with prudent risk-taking implementation, the budget will promote technology and productivity gains. Solid and sustained economic performance is a necessary foundation for a sound fiscal environment and for advancing Singapore’s standards of living.
Human capital development is a key plank in this budget and to set the virtuous cycle in motion, a huge budget is allocated for training to improve productivity and to enhance key skills – skills that can bring about better jobs and incomes for Singaporeans. With a stretched retirement age for the working population, training must be provided to cater to this ballooning workforce with lesser reliance on foreign workers for jobs that can be substitutable with Singaporeans.
Singapore’s economy has shown a remarkable ability to absorb shocks of all kinds and its resiliency is a trademark of Singaporeans. The budget is premised on economic realism based on flexible and efficient markets for labor and capital to eventually build on infrastructures and people.
Tiger Year for Singapore
2022 will see major shifts in the global distribution of power and the emergence of China to become a superpower in waiting. 2022 will be a Sino-centric world as China steps up to become a leader of a new global economic order. Singapore needs to be integrally locked in tandem into China growth momentum. China and India are emerging as economic and political heavyweights. China holds over a trillion dollars in hard currency reserves. Their phenomenal growth is opening the way for a multipolar era in world politics.
1974, 1986, 1998 are Tiger years and they are periods in decline coinciding with market troughs. Tiger years see great rises and falls and Singapore needs to have its signature fortitude and resolution to ride out these abrupt and disruptive periods. 1974’s oil shock and the Dow crash were hellish. The outbreak of Insider trading in 1986 leading to the Black Monday of October 19, 1987 was period of great stress. The Asian Financial Crisis was a period of financial crisis that gripped much of Asia beginning in July 1997 and through 1998, and raised fears of a worldwide economic meltdown due to financial contagion. 2010 see Singapore coming out of 2009 Financial Crisis of the century comparable to the Great Depression of 1929.
2022 will see Singapore latched on to more multilateral trade arrangements to stabilize its economy. With our small size, Singapore must maintains a high profile foreign economic policy and to develop and maintain activist economic diplomacy linkages at various levels of engagement in Europe, US, Asian and Pacific regions. Given Singapore’s geo-economics circumstances and our trading-state credentials, Singapore is very much dependent on the healthy development and stability of the international economic system.
2022 will see Singapore living in a world of contesting multilateralisms and will see Singapore asserting activism in this multilateralisms especially with China and India. With these broad-based alliances, hopefully it will provide some stability when the next trough forms in the Tiger year of 2022.
1974, 1986, 1998 are Tiger years and they are periods in decline coinciding with market troughs. Tiger years see great rises and falls and Singapore needs to have its signature fortitude and resolution to ride out these abrupt and disruptive periods. 1974’s oil shock and the Dow crash were hellish. The outbreak of Insider trading in 1986 leading to the Black Monday of October 19, 1987 was period of great stress. The Asian Financial Crisis was a period of financial crisis that gripped much of Asia beginning in July 1997 and through 1998, and raised fears of a worldwide economic meltdown due to financial contagion. 2010 see Singapore coming out of 2009 Financial Crisis of the century comparable to the Great Depression of 1929.
2022 will see Singapore latched on to more multilateral trade arrangements to stabilize its economy. With our small size, Singapore must maintains a high profile foreign economic policy and to develop and maintain activist economic diplomacy linkages at various levels of engagement in Europe, US, Asian and Pacific regions. Given Singapore’s geo-economics circumstances and our trading-state credentials, Singapore is very much dependent on the healthy development and stability of the international economic system.
2022 will see Singapore living in a world of contesting multilateralisms and will see Singapore asserting activism in this multilateralisms especially with China and India. With these broad-based alliances, hopefully it will provide some stability when the next trough forms in the Tiger year of 2022.
What items would you put at the top of your Wish List for Budget 2010? Why?
Against the backdrop of a growing economy albeit a slower one, we should make 2010’s budget neutral and focus on building on structural and long term measures to ensure the sustainability of our growth engines. There should be certain conservatism in fiscal and monetary policies. As we turned the corner in 2009, we cannot afford the quick-fix rescue packages which were generally broad-based relief type’s measures to save businesses and jobs.
With disproportionate growth and with a Gini coefficient, which is used to indicate income inequality, remaining persistently high, Workfare’s continued roll-out is important to help supplement the income of low-wage workers. The formula should be tweaked to put more money in the hands of the workers so that affordability of common staples and living expenses can remain sanely affordable to the low-wage workers. Inflationary pressure is likely to rise for food commodity and oil and this will exceed any marginal increase in salary for these workers.
The Government should also look at boosting businesses with new measures like providing tax holidays for new business start-ups for a longer period. To attract offshore risk capital to Singapore to support the entrepreneurial eco-system, the Government should consider providing the risk capital with fixed years of tax holidays so that their risk value will drop. This will gravitate risk capital from the region to Singapore. Investments in the research and developments or green initiatives should receive longer period of tax holiday.
Singapore can differentiate itself by introducing bold fiscal measures to boost investments and increase market liquidity.
With disproportionate growth and with a Gini coefficient, which is used to indicate income inequality, remaining persistently high, Workfare’s continued roll-out is important to help supplement the income of low-wage workers. The formula should be tweaked to put more money in the hands of the workers so that affordability of common staples and living expenses can remain sanely affordable to the low-wage workers. Inflationary pressure is likely to rise for food commodity and oil and this will exceed any marginal increase in salary for these workers.
The Government should also look at boosting businesses with new measures like providing tax holidays for new business start-ups for a longer period. To attract offshore risk capital to Singapore to support the entrepreneurial eco-system, the Government should consider providing the risk capital with fixed years of tax holidays so that their risk value will drop. This will gravitate risk capital from the region to Singapore. Investments in the research and developments or green initiatives should receive longer period of tax holiday.
Singapore can differentiate itself by introducing bold fiscal measures to boost investments and increase market liquidity.
My Thoughts on ESC Reports on Foreign Workers
The dilemma of having foreign workers is as vexing as not having them. Singapore needs these foreign workers to feed the economic boom, foreign workers are able to fill the void and do jobs Singaporeans are not willing to do yet there is a growing social pressure against them. The two main levers in managing the tap of the foreign workers flow are the imposition of dependency ratio and levies. These are old tools which did not significantly discourage the employment of the foreign workers. Despite the tiered levy formula, the rate of employment of foreign workers did not see any contraction year on year.
The impending increase in levy, in actuality, will not dampen the need for hiring foreign workers. Most of these workers are in hot and dirty environment or the 3D trade- dirty, dangerous and debasing. This is the bottom of the pyramid paradox – where the bottom jobs are unwanted by Singaporeans and when filled by foreigners, social pressure mounts. Work at this stratum has no serious takers and the employers have inelastic demand for foreign workers notwithstanding how high the levy may be. This can be counter-productive as it will increase the real cost of operation without increasing any real output. Most of these jobs are dead-end roles. There can be limit to how much job re-design and re-configuration can improve on the prospect for these 3D jobs.
Saving jobs for Singaporeans should be at pointed and focused at the middle section of the pyramid where there is space for productivity gains through up-skilling and training.
The million-dollar question is where to set the base of the pyramid where the levy application can be considerate to these employers since they have an inelastic demand for foreign workers. Above that baseline of the pyramid, a tiered levy formula will apply at the middle section.
At the end, we need synergistic workforces and cooperation at the multiple hierarchies in the job pyramid structure. Singaporeans or foreign workers will be work force of peers and working towards the prosperity of Singapore.
The impending increase in levy, in actuality, will not dampen the need for hiring foreign workers. Most of these workers are in hot and dirty environment or the 3D trade- dirty, dangerous and debasing. This is the bottom of the pyramid paradox – where the bottom jobs are unwanted by Singaporeans and when filled by foreigners, social pressure mounts. Work at this stratum has no serious takers and the employers have inelastic demand for foreign workers notwithstanding how high the levy may be. This can be counter-productive as it will increase the real cost of operation without increasing any real output. Most of these jobs are dead-end roles. There can be limit to how much job re-design and re-configuration can improve on the prospect for these 3D jobs.
Saving jobs for Singaporeans should be at pointed and focused at the middle section of the pyramid where there is space for productivity gains through up-skilling and training.
The million-dollar question is where to set the base of the pyramid where the levy application can be considerate to these employers since they have an inelastic demand for foreign workers. Above that baseline of the pyramid, a tiered levy formula will apply at the middle section.
At the end, we need synergistic workforces and cooperation at the multiple hierarchies in the job pyramid structure. Singaporeans or foreign workers will be work force of peers and working towards the prosperity of Singapore.
My Thoughts on ESC Reports on Productivity and Innovation
With no hinterlands and a dwindling local population, it spells a certain doom for Singapore if those growth gaps are not immediately plugged. Economic regeneration must be preceded with an innovative culture and the “dare to dream and to deliver” mindset.
Rethinking on the unthinkable and untouchable topic of nuclear energy may open opportunities and possibly innovative options. Can Singapore anchor ourselves as an energy re-distributor and connector in Asia even though we do not have oil, coal or gas? With nuclear energy, can we have a regional buy-in and answers for energy-deficit developing neighbors of Singapore?
Rethinking on subterraneous under-city development is innovative and exciting. Singapore can create different livable city standard with a definitive quality of life. We can engineer different types of underground spaces and create vibrant underground cities with museums, shopping centres, restaurant belts or even more casinos. Will Singapore consider a city like Bikini Bottom set deep in Pacific Ocean where SpongeBob SquarePants lives – an underwater sea city altogether?
Productivity focus is not the end-all prescription for a dwindling local workforce which is now supplemented by cheap foreign labor. With a curb on the influx of migrant workers through the twin levers of control (dependency ratio and levy modulations), it is easy to dismiss that these foreign labor will become unnecessary. In fact, productivity gains and use of migrant labor at the same time can create better multiplier economic returns. Sometime, productivity gains may increase unemployment or underemployment rate since each unit of labor can do more work versus the concept of more labor being compartmentalized to do different work. We hope that we do not fall into the productivity trap and paradox.
The real reason for the productivity paradox may lie in the fact that the Singapore economy is emerging from a pure manufacturing play and migrating to one where service also plays a key role. The animating force in the old economy was the desire to mechanize low level manufacturing and productivity gains can be sharp in this area. Where high value, complex manufacturing activities are concerned and where it involved high cerebral activities like research and development, productivity gain can be low as it involves many trials and many errors.
With increasing jobs in the service sector, where productivity growth is low compared to manufacturing, mechanization will run its course as the predominant driver of productivity. It has proven difficult to introduce the kinds of productivity-enhancing technologies in many service industries that are used in manufacturing. Productivity statistics therefore can be elusive and hard to gain but nonetheless, a must pursued objective to ensure that our Singaporeans workers can form T-shape competencies in terms of breadth and depth of knowledge.
Rethinking on the unthinkable and untouchable topic of nuclear energy may open opportunities and possibly innovative options. Can Singapore anchor ourselves as an energy re-distributor and connector in Asia even though we do not have oil, coal or gas? With nuclear energy, can we have a regional buy-in and answers for energy-deficit developing neighbors of Singapore?
Rethinking on subterraneous under-city development is innovative and exciting. Singapore can create different livable city standard with a definitive quality of life. We can engineer different types of underground spaces and create vibrant underground cities with museums, shopping centres, restaurant belts or even more casinos. Will Singapore consider a city like Bikini Bottom set deep in Pacific Ocean where SpongeBob SquarePants lives – an underwater sea city altogether?
Productivity focus is not the end-all prescription for a dwindling local workforce which is now supplemented by cheap foreign labor. With a curb on the influx of migrant workers through the twin levers of control (dependency ratio and levy modulations), it is easy to dismiss that these foreign labor will become unnecessary. In fact, productivity gains and use of migrant labor at the same time can create better multiplier economic returns. Sometime, productivity gains may increase unemployment or underemployment rate since each unit of labor can do more work versus the concept of more labor being compartmentalized to do different work. We hope that we do not fall into the productivity trap and paradox.
The real reason for the productivity paradox may lie in the fact that the Singapore economy is emerging from a pure manufacturing play and migrating to one where service also plays a key role. The animating force in the old economy was the desire to mechanize low level manufacturing and productivity gains can be sharp in this area. Where high value, complex manufacturing activities are concerned and where it involved high cerebral activities like research and development, productivity gain can be low as it involves many trials and many errors.
With increasing jobs in the service sector, where productivity growth is low compared to manufacturing, mechanization will run its course as the predominant driver of productivity. It has proven difficult to introduce the kinds of productivity-enhancing technologies in many service industries that are used in manufacturing. Productivity statistics therefore can be elusive and hard to gain but nonetheless, a must pursued objective to ensure that our Singaporeans workers can form T-shape competencies in terms of breadth and depth of knowledge.
Comments on ESC Report
With no hinterlands and a dwindling local population, it spells a certain doom for Singapore if those growth gaps are not immediately plugged. Economic regeneration must be preceded with an innovative culture and the “dare to dream and to deliver” mindset.
Rethinking on the unthinkable and untouchable topic of nuclear energy may open opportunities and possibly innovative options. Can Singapore anchor ourselves as an energy re-distributor and connector in Asia even though we do not have oil, coal or gas? With nuclear energy, can we have a regional buy-in and answers for energy-deficit developing neighbors of Singapore?
Rethinking on subterraneous under-city development is innovative and exciting. Singapore can create different livable city standard with a definitive quality of life. We can engineer different types of underground spaces and create vibrant underground cities with museums, shopping centres, restaurant belts or even more casinos. Will Singapore consider a city like Bikini Bottom set deep in Pacific Ocean where SpongeBob SquarePants lives – an underwater sea city altogether?
Productivity focus is not the end-all prescription for a dwindling local workforce which is now supplemented by cheap foreign labor. With a curb on the influx of migrant workers through the twin levers of control (dependency ratio and levy modulations), it is easy to dismiss that these foreign labor will become unnecessary. In fact, productivity gains and use of migrant labor at the same time can create better multiplier economic returns. Sometime, productivity gains may increase unemployment or underemployment rate since each unit of labor can do more work versus the concept of more labor being compartmentalized to do different work. We hope that we do not fall into the productivity trap and paradox.
The real reason for the productivity paradox may lie in the fact that the Singapore economy is emerging from a pure manufacturing play and migrating to one where service also plays a key role. The animating force in the old economy was the desire to mechanize low level manufacturing and productivity gains can be sharp in this area. Where high value, complex manufacturing activities are concerned and where it involved high cerebral activities like research and development, productivity gain can be low as it involves many trials and many errors.
With increasing jobs in the service sector, where productivity growth is low compared to manufacturing, mechanization will run its course as the predominant driver of productivity. It has proven difficult to introduce the kinds of productivity-enhancing technologies in many service industries that are used in manufacturing. Productivity statistics therefore can be elusive and hard to gain but nonetheless, a must pursued objective to ensure that our Singaporeans workers can form T-shape competencies in terms of breadth and depth of knowledge.
Rethinking on the unthinkable and untouchable topic of nuclear energy may open opportunities and possibly innovative options. Can Singapore anchor ourselves as an energy re-distributor and connector in Asia even though we do not have oil, coal or gas? With nuclear energy, can we have a regional buy-in and answers for energy-deficit developing neighbors of Singapore?
Rethinking on subterraneous under-city development is innovative and exciting. Singapore can create different livable city standard with a definitive quality of life. We can engineer different types of underground spaces and create vibrant underground cities with museums, shopping centres, restaurant belts or even more casinos. Will Singapore consider a city like Bikini Bottom set deep in Pacific Ocean where SpongeBob SquarePants lives – an underwater sea city altogether?
Productivity focus is not the end-all prescription for a dwindling local workforce which is now supplemented by cheap foreign labor. With a curb on the influx of migrant workers through the twin levers of control (dependency ratio and levy modulations), it is easy to dismiss that these foreign labor will become unnecessary. In fact, productivity gains and use of migrant labor at the same time can create better multiplier economic returns. Sometime, productivity gains may increase unemployment or underemployment rate since each unit of labor can do more work versus the concept of more labor being compartmentalized to do different work. We hope that we do not fall into the productivity trap and paradox.
The real reason for the productivity paradox may lie in the fact that the Singapore economy is emerging from a pure manufacturing play and migrating to one where service also plays a key role. The animating force in the old economy was the desire to mechanize low level manufacturing and productivity gains can be sharp in this area. Where high value, complex manufacturing activities are concerned and where it involved high cerebral activities like research and development, productivity gain can be low as it involves many trials and many errors.
With increasing jobs in the service sector, where productivity growth is low compared to manufacturing, mechanization will run its course as the predominant driver of productivity. It has proven difficult to introduce the kinds of productivity-enhancing technologies in many service industries that are used in manufacturing. Productivity statistics therefore can be elusive and hard to gain but nonetheless, a must pursued objective to ensure that our Singaporeans workers can form T-shape competencies in terms of breadth and depth of knowledge.
Comments on ECS Reports
Singapore, at this decade’s crossroad, is vulnerable without effective change of its growth framework. With the underlying growth momentum and quantum growth rate of 8-9% of some countries in the region and without a cohesive growth strategy, Singapore may be swept under the swift current of change. In a single breath, we need both productivity and innovation to take us to the next lap.
The Economic Strategies Committee’s strategic thrusts are forceful and laser-sharp to pinpoint areas of growth and innovative developments. Now Singapore is at the helm to dream and to deliver to the world. We are to be a vital, thriving city in Asia. With a lack of manpower and raw land, we are using the concept of multiplier to virtually do more with less. Shortage of manpower is compensated by skill development and productivity increase – which is to up-skill unit of labor to produce more. To be a growing, vital, thriving city with a continuous subterraneous city is both innovative and daring. This will virtually and instantly create a larger space for a land-constrained Singapore. This will, effectively, form part of our land expansion effort in addition to our continuing land reclamation which can be cripplingly slow.
Singapore’s economic rejuvenation must be focused on energizing the growth of right industries and premised on the growth of local enterprises which in turn will pull along employment, quality of life and quality of environment.
Innovations will be the catalyst multiplier for Singapore in this competitive heat and productivity will be our answer to manpower optimization.
The Economic Strategies Committee’s strategic thrusts are forceful and laser-sharp to pinpoint areas of growth and innovative developments. Now Singapore is at the helm to dream and to deliver to the world. We are to be a vital, thriving city in Asia. With a lack of manpower and raw land, we are using the concept of multiplier to virtually do more with less. Shortage of manpower is compensated by skill development and productivity increase – which is to up-skill unit of labor to produce more. To be a growing, vital, thriving city with a continuous subterraneous city is both innovative and daring. This will virtually and instantly create a larger space for a land-constrained Singapore. This will, effectively, form part of our land expansion effort in addition to our continuing land reclamation which can be cripplingly slow.
Singapore’s economic rejuvenation must be focused on energizing the growth of right industries and premised on the growth of local enterprises which in turn will pull along employment, quality of life and quality of environment.
Innovations will be the catalyst multiplier for Singapore in this competitive heat and productivity will be our answer to manpower optimization.
Aviation Industry- Survival of the Fittest
The future of the airline industry will see a fundamental shift in tandem with the shift of economic activity from the Atlantic to the Pacific. This fact is a foregone conclusion seen by how countries in the Pacific are emerging from the debris of the financial fallout of 2008/2009. The centre of gravity of air traffic, people and cargoes, will be in the Pacific.
The thrust of many governments will be to promote and enhance trade and tourism rather than protecting the commercial interests of national carriers. Governments may fly into some headwind with such policies of open sky. Airlines can grow only by merging interests through equity swaps or acquisition or simply through routes sharing. Carriers must play in all the segments of the price spectrum - SIA at the high end, Silk Air at the middle and Tiger Airways at the low end.
Bilateral and multilateral route exchanges will be reconfigured and a new aviation framework will emerge with acquisition and merger of airlines. JAL needs to start on a clean slate after its bankruptcy filing by seeking its banks to forgive a hefty debt which will otherwise sink the airline. With a clean slate and new partnerships, JAL may transform itself from a gargantuan outfit of inefficiency and profligacy into a leaner and sharper airline capable of competing in a global airline industry beset by turmoil.
The airline industry has been plagued by several factors such as overcapacity, commoditization of offerings, cutthroat price rivalry exacerbated by the entry of low cost carriers, and occasional bout of terrorism and air disasters that will send the whole industry into tailspin. Oil prices’ wide gyration also added to the unpredictability of the industry and the only certainty is to hedge against movement. Even SIA suffers the brunt when the price of oil goes the other way and that impacted profitability. SIA is positioned as a premium carrier with high levels of innovation and excellent levels of service but the recent crisis saw passengers moving to the back of the plane. SIA has consistently outperformed its competitors throughout its history, in the context of an unforgiving industry environment. However, SIA is not likely to be returning to profitability soon, unless there is a spike in traffic and after it has made some capacity adjustments to certain routes. The premium end of the market offers scant hope of any recovery in yields for all those front-end seats. The low cost carriers are likely to be the bulk carriers bringing passengers to cities from various established hubs and Singapore must thrive to become such a hub point.
The open sky should not be clouded with selfish national interests for carriers to survive.
The thrust of many governments will be to promote and enhance trade and tourism rather than protecting the commercial interests of national carriers. Governments may fly into some headwind with such policies of open sky. Airlines can grow only by merging interests through equity swaps or acquisition or simply through routes sharing. Carriers must play in all the segments of the price spectrum - SIA at the high end, Silk Air at the middle and Tiger Airways at the low end.
Bilateral and multilateral route exchanges will be reconfigured and a new aviation framework will emerge with acquisition and merger of airlines. JAL needs to start on a clean slate after its bankruptcy filing by seeking its banks to forgive a hefty debt which will otherwise sink the airline. With a clean slate and new partnerships, JAL may transform itself from a gargantuan outfit of inefficiency and profligacy into a leaner and sharper airline capable of competing in a global airline industry beset by turmoil.
The airline industry has been plagued by several factors such as overcapacity, commoditization of offerings, cutthroat price rivalry exacerbated by the entry of low cost carriers, and occasional bout of terrorism and air disasters that will send the whole industry into tailspin. Oil prices’ wide gyration also added to the unpredictability of the industry and the only certainty is to hedge against movement. Even SIA suffers the brunt when the price of oil goes the other way and that impacted profitability. SIA is positioned as a premium carrier with high levels of innovation and excellent levels of service but the recent crisis saw passengers moving to the back of the plane. SIA has consistently outperformed its competitors throughout its history, in the context of an unforgiving industry environment. However, SIA is not likely to be returning to profitability soon, unless there is a spike in traffic and after it has made some capacity adjustments to certain routes. The premium end of the market offers scant hope of any recovery in yields for all those front-end seats. The low cost carriers are likely to be the bulk carriers bringing passengers to cities from various established hubs and Singapore must thrive to become such a hub point.
The open sky should not be clouded with selfish national interests for carriers to survive.
Do you believe China's asset markets are in bubble territory? If so, what are the potential implications for the rest of the region, including Singapo
China’s stock markets Great Leap Forward are astounding by any measures and coupling with a hefty real estate price growth, the bubbles are gathering pace in high gear for the world’s third largest economy. The risk of bubbles and excess capacity will grow invariably unless policy is tightened soon. This level of credit expansion is not sustainable and is as surreal as unreal. Any policy action will be towards credit tightening if China has to avert a major credit crisis.
When China’s government announced its stimulus package in November 2008, it is a daring and probably the largest monetary and fiscal stimulus in history. With the injection of liquidity into the economy, bank lending rate grows exponentially and furiously. Such liquidity if properly channeled into infrastructural development and useful investments, it will inevitably prop up the economy but if it is fueling asset prices, the outcome can spiral out of control, complete with a domino effect on the property prices. The impact of credit and liquidity on GDP growth has been declining in China pointing to the fact that excess money may be funneled into speculation in stock and property markets.
If China is to stick to its pro-growth fiscal stance, any withdrawal of its stimulus spending too early can potentially stymied growth. The real aim is to purge the asset market frenzy of speculators, and not the total withdrawal of fiscal and monetary stimulus. The danger is that policymakers may tighten too much, discouraging not only speculation but also business growth and consumer spending, which can precipitate a hard landing for the economy. The jitters in Asia and the rest of the world are rooted in the fear that China will not be able to help pull the global economy from recession if it has a rough and hard landing which can be a big blow to recovery hopes given the inability of the U.S., Europe and Japan to play that role at this time.
The People’s Bank of China has just raised banks’ reserve requirements, but it needs to act more boldly to moderate interest rates upwards and to curb bank lending or at least be selective in its lending. The yuan must be allowed to rise. If China's reckoning does come as a result of the bubble popping, it is hard to say whether it may presage Japan-style deflation, Russian-style hyperinflation or American-style stagnation.
Anyway, bubbles do not deflate gradually; they pop unexpectedly and that is the scary part.
When China’s government announced its stimulus package in November 2008, it is a daring and probably the largest monetary and fiscal stimulus in history. With the injection of liquidity into the economy, bank lending rate grows exponentially and furiously. Such liquidity if properly channeled into infrastructural development and useful investments, it will inevitably prop up the economy but if it is fueling asset prices, the outcome can spiral out of control, complete with a domino effect on the property prices. The impact of credit and liquidity on GDP growth has been declining in China pointing to the fact that excess money may be funneled into speculation in stock and property markets.
If China is to stick to its pro-growth fiscal stance, any withdrawal of its stimulus spending too early can potentially stymied growth. The real aim is to purge the asset market frenzy of speculators, and not the total withdrawal of fiscal and monetary stimulus. The danger is that policymakers may tighten too much, discouraging not only speculation but also business growth and consumer spending, which can precipitate a hard landing for the economy. The jitters in Asia and the rest of the world are rooted in the fear that China will not be able to help pull the global economy from recession if it has a rough and hard landing which can be a big blow to recovery hopes given the inability of the U.S., Europe and Japan to play that role at this time.
The People’s Bank of China has just raised banks’ reserve requirements, but it needs to act more boldly to moderate interest rates upwards and to curb bank lending or at least be selective in its lending. The yuan must be allowed to rise. If China's reckoning does come as a result of the bubble popping, it is hard to say whether it may presage Japan-style deflation, Russian-style hyperinflation or American-style stagnation.
Anyway, bubbles do not deflate gradually; they pop unexpectedly and that is the scary part.
What initiatives and projects could the Integrated Resorts adopt that would not just ring in revenue and profits but also create positive spin-offs fo
The Integrated Resorts in Singapore is an economic development gamble and the odds are high for an economy that was premised on a growth model that is based on the export of initially labor-intensive manufactured goods to world markets. This is to be followed by a move up the technology and value-added supply chains as comparative advantage shifted.
This “shifting sands” syndrome caused Singapore to re-look at its obvious small size and to see how we can diversify out of export manufacturing and into high-value services. Singapore strives in a free- trade environment with free capital flow in the cross-roads between developed countries in US, Europe and Asia and the developing countries. The Integrated Resorts, by themselves cannot be reasons enough to spur the entire service industry in Singapore supplanting the export manufacturing contribution to our economy. The benefits of the IRs are not simply the gaming taxes it generates but instead the direct and indirect multiplier effects – of bringing the rich from around Asia and the region to Singapore, increasing the quality of life quotient, having more entertainment formats (world best tax free shopping experience, all-year Best World Food Fest) and improving mass tourism. High-end goods and services can take Singapore as their destination in Asia since Singapore can have a good catchment of the rich and appeal to the mass-market of Asia. The region's rich come to Singapore because it is safe, secured and predictable. High-end properties and the marina bays will be in high demand.
Free flow of wealth in the region can be magnetized and gravitated to Singapore and this will enhance the wealth management services. In all, Singapore can be the center of money game – whether it is gaming, risk management, exotic financial and structured products, venture capitalism, it is where money management chain take center stage. Whichever growth model, the light will be cast on the IRs in the next 2 years to see how it can be the catalyst for the multiplier growth effects in Singapore.
This “shifting sands” syndrome caused Singapore to re-look at its obvious small size and to see how we can diversify out of export manufacturing and into high-value services. Singapore strives in a free- trade environment with free capital flow in the cross-roads between developed countries in US, Europe and Asia and the developing countries. The Integrated Resorts, by themselves cannot be reasons enough to spur the entire service industry in Singapore supplanting the export manufacturing contribution to our economy. The benefits of the IRs are not simply the gaming taxes it generates but instead the direct and indirect multiplier effects – of bringing the rich from around Asia and the region to Singapore, increasing the quality of life quotient, having more entertainment formats (world best tax free shopping experience, all-year Best World Food Fest) and improving mass tourism. High-end goods and services can take Singapore as their destination in Asia since Singapore can have a good catchment of the rich and appeal to the mass-market of Asia. The region's rich come to Singapore because it is safe, secured and predictable. High-end properties and the marina bays will be in high demand.
Free flow of wealth in the region can be magnetized and gravitated to Singapore and this will enhance the wealth management services. In all, Singapore can be the center of money game – whether it is gaming, risk management, exotic financial and structured products, venture capitalism, it is where money management chain take center stage. Whichever growth model, the light will be cast on the IRs in the next 2 years to see how it can be the catalyst for the multiplier growth effects in Singapore.
Comments on PM's New Year message
Singapore is one of the asymmetries and anomalies in the history of nations. Small and scarce of natural resources including human capital, we should not have survived, let alone survive well. To remain relevant in the global value chains, Singapore must be the nexus between the developing countries in Asia and the advanced economies of the West. Singapore must be a meaningful gateway and passage way for the Chinese and Indian economies. Extending our economy by building townships, eco-cities, industrial parks in foreign lands are like sowing the seeds of growth on foreign soil. When such models become successful, it will pull along Singapore’s economy. Singapore’s government will need to focus on developing local enterprises into specific clusters for success – like research and development in genome, bio-chemical and pharmaceutical products or high end manufacturing in nanotechnology or in building Singapore into the Great Entertainment Paradise – a Service Haven.
With our growth, Singapore still need to hold fast to the precept that no one should be left behind with our progress and it should not be a tale of two worlds – the rich and poor worlds. Poorer Singaporeans should share the success of the country with re-distribution of economic benefits in the form of GST rebates, utility subsidies, medical coverage and education for the poor. Workfare is one good way for the poorer segment to gain some pay re-balancing. Always Singaporeans First!
With our growth, Singapore still need to hold fast to the precept that no one should be left behind with our progress and it should not be a tale of two worlds – the rich and poor worlds. Poorer Singaporeans should share the success of the country with re-distribution of economic benefits in the form of GST rebates, utility subsidies, medical coverage and education for the poor. Workfare is one good way for the poorer segment to gain some pay re-balancing. Always Singaporeans First!
What do you wish for your organisation in 2010, and what New Year resolutions are you making to achieve this? More generally, what are your hopes and
2010 has a “New Normal” and the old economic realities of high leveraging, low interest rate and excesses in capital markets is undergoing a rapid and fundamental change. We are seeing major deleveraging in many companies, an expanding economic role for government with its aggressive fiscal and monetary stimuli to prod the economy along and pervasive uncertainties despite sporadic and occasional sprouts of unexplainable exuberances. The crisis as has broad implications for many businesses which upended business models but at the same time also created unexpected opportunities.
The crisis taught us the importance of building flexibility into a company’s strategy and to always maintain nimbleness and responsiveness. My resolution for Singapore, especially, is for the remodeling of our economic framework to push Singapore into the next decade. Our recent drop in ranking for SGX needs a re-think. Hong Kong and Shenzhen topped the list of world IPO destinations, in terms of numbers and cash raised. Emerging market activity has dominated IPO markets this year with Chinese companies the largest source of total funds raised globally. Our bridging effect between the East and West is dwindling and unless there is a re-think on how we can reconfigure our financial structure to become an important node in the financial value chain, Singapore may be outflanked by increasingly more influential Chinese cities.
The crisis taught us the importance of building flexibility into a company’s strategy and to always maintain nimbleness and responsiveness. My resolution for Singapore, especially, is for the remodeling of our economic framework to push Singapore into the next decade. Our recent drop in ranking for SGX needs a re-think. Hong Kong and Shenzhen topped the list of world IPO destinations, in terms of numbers and cash raised. Emerging market activity has dominated IPO markets this year with Chinese companies the largest source of total funds raised globally. Our bridging effect between the East and West is dwindling and unless there is a re-think on how we can reconfigure our financial structure to become an important node in the financial value chain, Singapore may be outflanked by increasingly more influential Chinese cities.
Major Lessons for 2009
2009 has set a “New Normal” going forward and the old economic realities of high leveraging, low interest rate and excesses in capital markets is undergoing a rapid and fundamental change. We are seeing major deleveraging in many companies, an expanding economic role for government with its aggressive fiscal and monetary stimuli to prod the economy along and pervasive uncertainties despite sporadic and occasional sprouts of unexplainable exuberances. The crisis has broad managerial implications for many businesses which upended business models but at the same time also created unexpected opportunities.
The crisis taught us about the fine balance of leveraging and business growth and that “big is not necessary good”. Bigness entails maintaining a large structure imbued with organizational and people’s complexities, which can be expensive and in times of crisis, it is not easy to toe the thin line with a top-heavy organizational structure. The crisis taught us the importance of building flexibility into a company’s strategy and to always maintain nimbleness and responsiveness. We excel by being nimble and quick and outmaneuvered competition by maintaining high level of liquidity which gives us strategic options for entering into new businesses.
The financial markets, from Wall Street to the Chinese bourses and Singapore Straits Times indexes already experienced powerful rallies over the past six months and the double-dip prospect may look remote. Even with the early week modest pullback on Wall Street, the U.S. stocks are up 60 percent since March. The 52-week range for the Straits Times index is 1,455.47-2,803.85 which is more than 100% leap of faith. Properties prices climbed and are testing new highs for per square feet prices- HDB inclusive. This “New Normal” is unpredictable and can be disruptive like climate changes which can happen in a flash.
2009 taught us to be fiscally and monetary prudent and not to live on the sugar-high influences and the “New Normal” will not be normal to us anymore.
The crisis taught us about the fine balance of leveraging and business growth and that “big is not necessary good”. Bigness entails maintaining a large structure imbued with organizational and people’s complexities, which can be expensive and in times of crisis, it is not easy to toe the thin line with a top-heavy organizational structure. The crisis taught us the importance of building flexibility into a company’s strategy and to always maintain nimbleness and responsiveness. We excel by being nimble and quick and outmaneuvered competition by maintaining high level of liquidity which gives us strategic options for entering into new businesses.
The financial markets, from Wall Street to the Chinese bourses and Singapore Straits Times indexes already experienced powerful rallies over the past six months and the double-dip prospect may look remote. Even with the early week modest pullback on Wall Street, the U.S. stocks are up 60 percent since March. The 52-week range for the Straits Times index is 1,455.47-2,803.85 which is more than 100% leap of faith. Properties prices climbed and are testing new highs for per square feet prices- HDB inclusive. This “New Normal” is unpredictable and can be disruptive like climate changes which can happen in a flash.
2009 taught us to be fiscally and monetary prudent and not to live on the sugar-high influences and the “New Normal” will not be normal to us anymore.
Did the APEC Summit succeed in addressing the most important economic and business issues? How important to Singapore and the region was it to have th
The Summit achieved tremendous momentum in setting the tone for trade liberation and cooperation among members. US’s participation in such dialogue draws the importance of Asean and the Asia Pacific countries in relations to US’s trade policies. During George Bush’s presidency, he met with Asean leaders 3 times – in October 2002 in Los Cabos, Mexico, in December 2005 in Busan, Korea and finally in September 2007 in Sydney. These meetings involved only 7 members of Asean as Cambodia, Laos and Myanmar were not part of APEC. This time, President Obama engaged with all 10 Asean members signifying Washington’s aim to bolster trade and investment links with the region as a mean to strengthen the US economy and to balance relationship with counterweights with China and India.
The acceleration of regional integration to create larger markets is one of the best ways to stimulate growth. The formation of the Trans-Pacific Partnership (TPP) free trade area to pursue the streamlining of customs procedures and financial policies among the region’s economies is one such way to forge ahead with real, substantive development in a free trade area. The group of 4 – Singapore, Brunei, New Zealand and Chile will set the snowball effect of aggregating more members to participate in the opening up a trade in a larger trading area. Washington is pursuing bilateral investment treaties with countries in the region and its indications to throw its support behind the Apec’s "single window" and TPP is symbolic in this Summit.
Coupled with greater Asean integration, TPP can be the foundation of a broad Free Trade Area of the Asia Pacific and Singapore can be the bridge to link this up and plays the pivotal role as a trade channel developer and important gateway to Asean and TPP.
The acceleration of regional integration to create larger markets is one of the best ways to stimulate growth. The formation of the Trans-Pacific Partnership (TPP) free trade area to pursue the streamlining of customs procedures and financial policies among the region’s economies is one such way to forge ahead with real, substantive development in a free trade area. The group of 4 – Singapore, Brunei, New Zealand and Chile will set the snowball effect of aggregating more members to participate in the opening up a trade in a larger trading area. Washington is pursuing bilateral investment treaties with countries in the region and its indications to throw its support behind the Apec’s "single window" and TPP is symbolic in this Summit.
Coupled with greater Asean integration, TPP can be the foundation of a broad Free Trade Area of the Asia Pacific and Singapore can be the bridge to link this up and plays the pivotal role as a trade channel developer and important gateway to Asean and TPP.
What do SMEs here need to do to work more fruitfully with large enterprises and multinationals, on the one hand; and with SMEs from other countries, o
The Singapore business ecosystem is limited by its sheer small size. Singapore has no natural resources and lacks a sizeable domestic market; hence the only rational choice is to attract large enterprises and multinationals to come to our shore to set their bases here. Many SMEs grew in the early 1980s to 1990s on the back of a manufacturing boom brought on by the likes of Seagate and HP. The SMEs played second fiddle and supported these large enterprises and MNCs by providing contract manufacturing of parts and services. They grew on the momentum developed by these large enterprises which provides goods and services to the world. Such clustering of manufacturing focus is necessary – petrol chemical, pharmaceuticals, semi-conductors, etc and Singapore excel by working hand-in-glove with these MNCs.
The other strategic thrust will be for Singapore’s SMEs to reach out and be connected to the global economy especially in growth countries like China, India, Brazil, Russia and also by plugging into the Asia Pacific growth opportunities. For growth, Singapore SMEs must also work with the SMEs in these countries and be plugged into their business eco-system and to become the lifeline of their economic growth. It is through such economic strategy that Singapore is linked up with the global economy.
The other strategic thrust will be for Singapore’s SMEs to reach out and be connected to the global economy especially in growth countries like China, India, Brazil, Russia and also by plugging into the Asia Pacific growth opportunities. For growth, Singapore SMEs must also work with the SMEs in these countries and be plugged into their business eco-system and to become the lifeline of their economic growth. It is through such economic strategy that Singapore is linked up with the global economy.
Service Sector- The New Dynamo for Singapore
For any sustainable growth in Singapore, a service-oriented infrastructure empowering the service economy must evolve in a flexible and dependable way. This will include financial intermediation, business services and information & communications and lifestyle services. There is demonstrable growth and continued strength in the services industries and the service industry was the major contributor to growth in the last 3 quarters of the year. Singapore needs to preemptively alter its economic DNA by not relying exclusively on manufacturing sector. While exports of manufactured goods in chemical, pharmaceutical, biotechnology, electronics and oil refinery products remain key exports indicators, other sources of growth must be nurtured. Such diversification will help reduce the vulnerability of growth to large swings during crises and minimize the economy’s dependence on a few correlated sectors. However, in the near term, it is unlikely that services will take over the mantle from manufacturing as Singapore’s growth engine as it moves into its post-recession gears.
Singapore, despite our size, attracted the global attention when it successfully hosted the world’s first ever Formula One night race. Singapore plays host to the Asia-Pacific Economic Cooperation (APEC) and hosting of the Youth Olympics simply means that Singapore will want to be a hub for such exciting activities and this events will surely reap significant economic spin offs for various trades for the country, in the form of increased tourist influx and swelling patronage for side entertainment and other associated events. Come 2010, our two integrated resorts (IR) namely, Marina Bay Sands and Resorts World, will be launched in Sentosa. The IRs will position Singapore as a must stop-over destination in Asia offering a wide range of entertainment experiences for the leisure and business visitors thus enhancing the tourism receipts. The resorts will promote Singapore’s status as a convention hub in Asia and thereby positively impact the supporting industries, such as hospitality, healthcare, entertainment, F&B, transport & communication etc, apart from attracting huge investments and opening up employment opportunities directly and indirectly.
Singapore is very advantageously located in the Asian region which, is home to the burgeoning middle class demanding quality lifestyle products and services including wealth management services enticing the growing high net worth individuals in Asia.
With such prospects over the horizon in Singapore, it will be a new dawn for Singapore.
Singapore, despite our size, attracted the global attention when it successfully hosted the world’s first ever Formula One night race. Singapore plays host to the Asia-Pacific Economic Cooperation (APEC) and hosting of the Youth Olympics simply means that Singapore will want to be a hub for such exciting activities and this events will surely reap significant economic spin offs for various trades for the country, in the form of increased tourist influx and swelling patronage for side entertainment and other associated events. Come 2010, our two integrated resorts (IR) namely, Marina Bay Sands and Resorts World, will be launched in Sentosa. The IRs will position Singapore as a must stop-over destination in Asia offering a wide range of entertainment experiences for the leisure and business visitors thus enhancing the tourism receipts. The resorts will promote Singapore’s status as a convention hub in Asia and thereby positively impact the supporting industries, such as hospitality, healthcare, entertainment, F&B, transport & communication etc, apart from attracting huge investments and opening up employment opportunities directly and indirectly.
Singapore is very advantageously located in the Asian region which, is home to the burgeoning middle class demanding quality lifestyle products and services including wealth management services enticing the growing high net worth individuals in Asia.
With such prospects over the horizon in Singapore, it will be a new dawn for Singapore.
Will the incentives in the new Malaysian Budget succeed in increasing foreign investment and attracting foreign talent? What aspects of the Budget wou
The new Malaysian Budget contained modest reductions in public expenditures and increased taxation - property gain tax and a hint of Goods and Service tax. The budget is planned to lay a foundation for deficit reduction and prudence and to drive Malaysia towards embracing a high-income economy in 2010. It included provisions to promote selected important industries for Malaysia’s economic development.
The most appealing piece of the budget is the liberalization of foreigner participation in its economy. The government’s aim to attract foreign direct investments (FDI) by allowing equity ownership in companies and joint ventures in local projects is a positive step towards leveling the playing fields in the economy where skewed competitive situations turned away many investors. With a tweak to allow foreign investors to gain full control over corporate finance and financial planning companies set up in Malaysia, it may see a surge of capital finance activities especially in Islamic banking areas. By relaxing conditions and simplifying procedures for foreign companies to operate in Malaysia, it now looks decisively attractive to many foreign investors. The challenges, however, lie not in its policies formulation or structure but its drive and intent to see that such level playing fields are indeed flat enough to promote the intended effect of competition and innovation.
In addition to attracting companies to Malaysia, the government is also simplifying the grant of Permanent Residence status to highly skilled individuals and this will build its catchment for such talents within Malaysia. The move was made in recognition of the importance of attracting highly talented individuals from abroad to accelerate technology transfers and the nation's transformation process. Asia Pacific will be the hotbed of growth in the next decade and the aggregation of talents to key capitals are important as such talents may act as catalysts to actual growth. This is a challenge for Singapore as well and manpower policies have always to be reviewed to ensure that the channels for talent distribution to the various industries are not choked because of policy flaw or oversight.
In advancing towards a high-income economy, the government’s new approach based on innovation, creativity and high value-added initiatives will drive the economy up a different alley but the key is not in the Budget but the verve and determination for the government to see through its program in a fair-minded, balanced approach for the long term.
The most appealing piece of the budget is the liberalization of foreigner participation in its economy. The government’s aim to attract foreign direct investments (FDI) by allowing equity ownership in companies and joint ventures in local projects is a positive step towards leveling the playing fields in the economy where skewed competitive situations turned away many investors. With a tweak to allow foreign investors to gain full control over corporate finance and financial planning companies set up in Malaysia, it may see a surge of capital finance activities especially in Islamic banking areas. By relaxing conditions and simplifying procedures for foreign companies to operate in Malaysia, it now looks decisively attractive to many foreign investors. The challenges, however, lie not in its policies formulation or structure but its drive and intent to see that such level playing fields are indeed flat enough to promote the intended effect of competition and innovation.
In addition to attracting companies to Malaysia, the government is also simplifying the grant of Permanent Residence status to highly skilled individuals and this will build its catchment for such talents within Malaysia. The move was made in recognition of the importance of attracting highly talented individuals from abroad to accelerate technology transfers and the nation's transformation process. Asia Pacific will be the hotbed of growth in the next decade and the aggregation of talents to key capitals are important as such talents may act as catalysts to actual growth. This is a challenge for Singapore as well and manpower policies have always to be reviewed to ensure that the channels for talent distribution to the various industries are not choked because of policy flaw or oversight.
In advancing towards a high-income economy, the government’s new approach based on innovation, creativity and high value-added initiatives will drive the economy up a different alley but the key is not in the Budget but the verve and determination for the government to see through its program in a fair-minded, balanced approach for the long term.
Wage Issues
Despite some early signs of economic stabilization and growth, the issue of wage restoration may be on the cards. During the crisis, there were elevated concerns over job security and losses that led to an increased in employees’ willingness to accept lower settlements for wages – be they wage cut or freeze. With some visibilities on the horizon, job creation has intensified and unemployment has shown signs of dipping but the growth spurts may not immediately translate to wage restoration. Typically, it may take 2-3 quarters of lag from the inception of real growth before wage will see restoration.
With improving times, it is not just heartless but pernicious to assume that companies will not have a reversal on wage freeze and restraints. The real crux is fairness. Only a demonstrably fair approach like keeping retrenchment to a low or belt tightening with wage cuts and restraints is likely to have the broad support that will turn the company around. When profitability returns and when there is no ineffective response, then it is unfair to everyone. Companies have little choice then but to reverse their competitive decline through wage restraint and improved productivity.
The more optimistic forecasts that are beginning to appear are indeed predicated on such a rapid restoration of companies’ ability to compete effectively and productively and hence a similar restoration of employees’ wages of pre-recession level.
This is a time where the management cannot abdicate their leadership opportunities by letting bean counters lead the company's charge through these times. Shortsightedness will not give the companies any latitude to retain good employees. When the tide rises, companies must engage the workforce, promote productivity and retain loyal and motivated employees for the long haul and that will mean a review of the compensation to ensure that everyone on the boat, who have withstood the test of times and have shown resilience and effectiveness, rise with the high tide.
With improving times, it is not just heartless but pernicious to assume that companies will not have a reversal on wage freeze and restraints. The real crux is fairness. Only a demonstrably fair approach like keeping retrenchment to a low or belt tightening with wage cuts and restraints is likely to have the broad support that will turn the company around. When profitability returns and when there is no ineffective response, then it is unfair to everyone. Companies have little choice then but to reverse their competitive decline through wage restraint and improved productivity.
The more optimistic forecasts that are beginning to appear are indeed predicated on such a rapid restoration of companies’ ability to compete effectively and productively and hence a similar restoration of employees’ wages of pre-recession level.
This is a time where the management cannot abdicate their leadership opportunities by letting bean counters lead the company's charge through these times. Shortsightedness will not give the companies any latitude to retain good employees. When the tide rises, companies must engage the workforce, promote productivity and retain loyal and motivated employees for the long haul and that will mean a review of the compensation to ensure that everyone on the boat, who have withstood the test of times and have shown resilience and effectiveness, rise with the high tide.
Singapore's Economic Recovery?
A regional, if not world, trade recovery has begun and looks set to continue unabated into 2010. Singapore's economy surged for a second straight quarter, and the government revised its 2009 growth forecast after confidently emerging from the recession.
The strengthening economic and earnings growth numbers did not shrug off the drudgeries and negatives like the slow but stabilizing job losses in Q209. 5,980 workers lost their jobs in the second quarter of 2009 which is no consolation that this is less than half the number seen in the previous quarter this year. Accordingly, there are 31 to 33 openings per 100 job seekers and the labor market is likely to remain weak till the end of 2009.
Consumer confidence in large asset categories like properties, COEs and shares is not showing any sign of weakness and is showing sustainable strength over the last 2 quarters. This shows the gasping disparity between the haves’ and haves’-not reaction to an imminent economic recovery. The jobless workers are still looking for a job while those in better discretionary positions are betting forward in large asset categories. Hence, the trickle-down effect has not reached the base of the pyramid for the average Singaporeans to feel the effect of growth.
Personally, I would characterize our first half year performance as solid with a broad based focus on key industries like service and manufacturing. During the last three quarters, we have been driving for operational efficiencies, managing our working capital to meet the needs of the business and improving our relationships with our key customers. All our efforts, with financial and organizational discipline, enabled us to be fitter, nimbler and more responsive. Overall, we are confident that our profitable growth is sustainable in the next three to four quarters.
The economy is definitely heading northward and the relentless drum-beat of good economic news should continues into 2010.
The strengthening economic and earnings growth numbers did not shrug off the drudgeries and negatives like the slow but stabilizing job losses in Q209. 5,980 workers lost their jobs in the second quarter of 2009 which is no consolation that this is less than half the number seen in the previous quarter this year. Accordingly, there are 31 to 33 openings per 100 job seekers and the labor market is likely to remain weak till the end of 2009.
Consumer confidence in large asset categories like properties, COEs and shares is not showing any sign of weakness and is showing sustainable strength over the last 2 quarters. This shows the gasping disparity between the haves’ and haves’-not reaction to an imminent economic recovery. The jobless workers are still looking for a job while those in better discretionary positions are betting forward in large asset categories. Hence, the trickle-down effect has not reached the base of the pyramid for the average Singaporeans to feel the effect of growth.
Personally, I would characterize our first half year performance as solid with a broad based focus on key industries like service and manufacturing. During the last three quarters, we have been driving for operational efficiencies, managing our working capital to meet the needs of the business and improving our relationships with our key customers. All our efforts, with financial and organizational discipline, enabled us to be fitter, nimbler and more responsive. Overall, we are confident that our profitable growth is sustainable in the next three to four quarters.
The economy is definitely heading northward and the relentless drum-beat of good economic news should continues into 2010.
How do you see China evolving in the next decade? What role do you envision it will play in the region and the world?
一瞬千变的中国。
In a flicker, a thousand changes for China and whose fortunes and developments took astonishing leaps and bounds. October 1st marked the 60th anniversary of the founding of the People’s Republic of China. Beijing’s mammoth birthday celebration included China’s largest-ever military parade showcasing new weapons and an Olympic-size gala.
US Defence Secretary Robert Gates warned China’s growing military power ‘threatens our freedom of movement and narrows our strategic options.’ China’s sovereign-wealth fund is looking to invest in U.S. real estate, possibly even through a government program created to help bail out struggling banks. The China Investment Corporation (CIC) is responsible for managing part of China's foreign exchange reserves with around US$ 200 billion of assets under management. They are active in pursuing global resources in places like Africa , Australia, South East Asia and US. Singapore’s Mainboard-listed commodity trader, Noble Group, sold a 14.5 per cent stake for US$850 million to China Investment Corporation (CIC) in a private placement. The Chinese tentacles are embracing the world.
Since the 1950s China endeavored to catch-up with advanced Western economies. ‘Made in China’ is one approach to global competitiveness and Chinese goods and products are everywhere. The initial focus on manufacturing and productivity is impeding innovation but not for long with a more assertive China. With changing global market dynamics, the increasing visibility of Chinese brands, and the global strides of certain Chinese companies, such as Lenovo, Haier, Huawei and others, will facilitate China in overcoming its inherent inferior Made-in-China effect. Changing long held perceptions is indeed a Herculean task. China is bound to challenge this current state and alter its country of origin effect in a very positive direction over the next 10-15 years as Chinese manufacturers slowly embrace branding as their primary strategic driver of financial value and to move up the global value chain.
China will continue its real Great Leap Forward.
In a flicker, a thousand changes for China and whose fortunes and developments took astonishing leaps and bounds. October 1st marked the 60th anniversary of the founding of the People’s Republic of China. Beijing’s mammoth birthday celebration included China’s largest-ever military parade showcasing new weapons and an Olympic-size gala.
US Defence Secretary Robert Gates warned China’s growing military power ‘threatens our freedom of movement and narrows our strategic options.’ China’s sovereign-wealth fund is looking to invest in U.S. real estate, possibly even through a government program created to help bail out struggling banks. The China Investment Corporation (CIC) is responsible for managing part of China's foreign exchange reserves with around US$ 200 billion of assets under management. They are active in pursuing global resources in places like Africa , Australia, South East Asia and US. Singapore’s Mainboard-listed commodity trader, Noble Group, sold a 14.5 per cent stake for US$850 million to China Investment Corporation (CIC) in a private placement. The Chinese tentacles are embracing the world.
Since the 1950s China endeavored to catch-up with advanced Western economies. ‘Made in China’ is one approach to global competitiveness and Chinese goods and products are everywhere. The initial focus on manufacturing and productivity is impeding innovation but not for long with a more assertive China. With changing global market dynamics, the increasing visibility of Chinese brands, and the global strides of certain Chinese companies, such as Lenovo, Haier, Huawei and others, will facilitate China in overcoming its inherent inferior Made-in-China effect. Changing long held perceptions is indeed a Herculean task. China is bound to challenge this current state and alter its country of origin effect in a very positive direction over the next 10-15 years as Chinese manufacturers slowly embrace branding as their primary strategic driver of financial value and to move up the global value chain.
China will continue its real Great Leap Forward.
Cooling Measures for Property Market
Witnessing the burst US property bubble, it is not hard to imagine how those conditions if not tempered with cooling-off measures by Ministry of National Development will put Singapore in similar dire straits. Property prices should be aligned with economic fundamentals. With the current spiraling of prices, these are signs of heightened speculative activity with no major shift in economic fundamentals.
The intervention with the immediate withdrawal of the interest absorption scheme and interest—only loans being offered for purchases of uncompleted property developments will halt any frivolous speculations for the moment. However, with the interest rate pedal nailed to the floorboard and remaining so low for such long time, new money will find properties as good investment options. Whatever the case, it looks like demand outstrips supply and therefore there is a chasing up of the property prices. Private home sales witnessed strong upswing since February this year when 11 times more homes were sold compared to January’s 108 units. Since then, developers have sold more than 10,000 units, more than double the 4,300 sold in the entire 2008.
All eyes are on the economic performance since should growth turns out weaker than expected, all buyers of property will be chasing the tails of escalating prices with possible capital losses should the market suddenly corrects and re-balances. This will create a negative wealth effect traceable to a flattening out or worst, drop in property prices. On the contrary, should the recovery maintains its course, interest rates will shoot north and drive up financing cost and this can have serious implications for those who over-extended with no real money to back their purchase. To avert such clammed up, the government is bringing back a confirmed list of land sales programme in the first half of next year to ensure a steady supply of private housing.
The removal of the IAS and IOLs technically will remove the speculative element from the burgeoning sales volume. This is good for mid to long term genuine homebuyers and investors as it will take out the speculative element in the pricing of the property.
The cooling-off measures by the government will discouraged property “flippers” but I suspect that property prices and sales volume will continue to improve; only now that the pace of increase would be more sustainable with less volatility with the hope that cool and level heads will prevail.
The intervention with the immediate withdrawal of the interest absorption scheme and interest—only loans being offered for purchases of uncompleted property developments will halt any frivolous speculations for the moment. However, with the interest rate pedal nailed to the floorboard and remaining so low for such long time, new money will find properties as good investment options. Whatever the case, it looks like demand outstrips supply and therefore there is a chasing up of the property prices. Private home sales witnessed strong upswing since February this year when 11 times more homes were sold compared to January’s 108 units. Since then, developers have sold more than 10,000 units, more than double the 4,300 sold in the entire 2008.
All eyes are on the economic performance since should growth turns out weaker than expected, all buyers of property will be chasing the tails of escalating prices with possible capital losses should the market suddenly corrects and re-balances. This will create a negative wealth effect traceable to a flattening out or worst, drop in property prices. On the contrary, should the recovery maintains its course, interest rates will shoot north and drive up financing cost and this can have serious implications for those who over-extended with no real money to back their purchase. To avert such clammed up, the government is bringing back a confirmed list of land sales programme in the first half of next year to ensure a steady supply of private housing.
The removal of the IAS and IOLs technically will remove the speculative element from the burgeoning sales volume. This is good for mid to long term genuine homebuyers and investors as it will take out the speculative element in the pricing of the property.
The cooling-off measures by the government will discouraged property “flippers” but I suspect that property prices and sales volume will continue to improve; only now that the pace of increase would be more sustainable with less volatility with the hope that cool and level heads will prevail.
"What is the biggest people or leadership challenge you face as a leader today? As a business leader, how do you inspire others in your organisation t
The ultimate test of leadership is not in moments of comfort but where the organization stands at times of challenges and extreme duress. The boundaries which divide winning and losing are at best narrow and vague. At those times of stress, no one will have clear visibility on how to navigate out of the troubled waters but a leader must rely on intuition and his articulation of clarity of vision and purpose.
2008 to the first half of 2009 presented a difficult window to many businesses and the whirlwind of uncertainties and dried sales pipelines raised issues of sustainability of our business. The slow down in business coupled with a bleak macro-economic environment was no consolation until we finally secured the tender for our Singapore casino’s recruitment. A lesson I learned from a SVP from the casino is that every game is a game of equal chance. Every bet is as uncertain as the last. Our business and organization sustainability is as good as the next 6-12 months of business pipeline and for so long as we continue to flip every card, we shall have every chance to win or lose for so long as we bet with a long view. As leader, we are focused on winning in the short term by building and strengthening the organization for the long term. No leader can focus only on short sighted actions and short term fixes.
To inspire, a leader must be a dealer and wheeler of hopes and craftsman of dreams. Naturally, the actions of the leader must inspire others to dream more, to learn more, to do more and to achieve more than they set out for themselves. In the absence of clearly defined goals, we may become strangely fixated to performing daily acts of mediocrity and trivia.
The future inevitably belong to those who believe in the beauty of their dreams and a leader should craft that dream and let the team stand tall on his shoulder so that they can see the further shores.
2008 to the first half of 2009 presented a difficult window to many businesses and the whirlwind of uncertainties and dried sales pipelines raised issues of sustainability of our business. The slow down in business coupled with a bleak macro-economic environment was no consolation until we finally secured the tender for our Singapore casino’s recruitment. A lesson I learned from a SVP from the casino is that every game is a game of equal chance. Every bet is as uncertain as the last. Our business and organization sustainability is as good as the next 6-12 months of business pipeline and for so long as we continue to flip every card, we shall have every chance to win or lose for so long as we bet with a long view. As leader, we are focused on winning in the short term by building and strengthening the organization for the long term. No leader can focus only on short sighted actions and short term fixes.
To inspire, a leader must be a dealer and wheeler of hopes and craftsman of dreams. Naturally, the actions of the leader must inspire others to dream more, to learn more, to do more and to achieve more than they set out for themselves. In the absence of clearly defined goals, we may become strangely fixated to performing daily acts of mediocrity and trivia.
The future inevitably belong to those who believe in the beauty of their dreams and a leader should craft that dream and let the team stand tall on his shoulder so that they can see the further shores.
"With the benefit of hindsight, what lessons should have been learned by policymakers, bankers and market participants from the collapse of Lehman Bro
A cruel wind blew over the graveyards of many investment banks like Lehman Brothers. The tombstone’s inscription reads “Live by Risk, Luck Took a Miss”. After the collapse of Lehman Brothers, the market threw one tantrum after another shaking in convulsion posing serious credibility and collapse of faith in modern finance. The collapse of faith inevitably led to a catastrophic economic failure due mainly to a global liquidity crunch.
With the benefit of hindsight, collapse of Lehman Brothers originated with unabated and uncontrolled risk taking, spurred by greed and avarice that led to disproportionate rewards and bonuses. The risk structure of the bank was thrown to the cruel wind and Lehman leveraged itself to oblivion.
Second lesson is the danger in relying too heavily on short-term financing. Lehman took long-term financing to ensure that the business never faced similar short-term pressures. The positions taken by Lehman caused spontaneous fall of the dominos when there was an immediately liquidity crunch and seizure of market confidence.
Third lesson is CEO Dick Fuld's false portrayal of Lehman's strong cash position and the hint of overconfidence during the period of duress. That showed a lack of care for transparency when Lehman was already on the brink of collapse.
The Fall of the House of Lehman hinges on excessive leverage, greed, myopia and lack of transparency and betrayal of trust. That betrayal of trust and faith is the underlying reason for the liquidity freeze across the world.
With the benefit of hindsight, collapse of Lehman Brothers originated with unabated and uncontrolled risk taking, spurred by greed and avarice that led to disproportionate rewards and bonuses. The risk structure of the bank was thrown to the cruel wind and Lehman leveraged itself to oblivion.
Second lesson is the danger in relying too heavily on short-term financing. Lehman took long-term financing to ensure that the business never faced similar short-term pressures. The positions taken by Lehman caused spontaneous fall of the dominos when there was an immediately liquidity crunch and seizure of market confidence.
Third lesson is CEO Dick Fuld's false portrayal of Lehman's strong cash position and the hint of overconfidence during the period of duress. That showed a lack of care for transparency when Lehman was already on the brink of collapse.
The Fall of the House of Lehman hinges on excessive leverage, greed, myopia and lack of transparency and betrayal of trust. That betrayal of trust and faith is the underlying reason for the liquidity freeze across the world.
Productivity Talks
It seems like an aberration when Singapore economy can do well in some dimensions and yet suffer a fall in labour productivity. Whether it is labour under-utilization that contributes to the dip in labour productivity, the government, union and employers are gripping with the links between labour market deregulation and real fall in labour productivity.
Our current manpower policies exercise a great deal of labour market flexibility by allowing foreign labour supply to support business growth and needs. These policies are designed not to substitute local labour content. The quota system is constantly adjusted so that the local labour utilization may be increased with the hiring of foreign labour. The wider implication of this is that, with a freer flow of foreign labour, the real wage growth of the local labour stagnant at best. The wage-setting equilibrium between foreign and local labour is affected.
Indiscriminate use of foreign labour does contribute to lower productivity. Hence to reverse a fall in labour productivity, labour market training must be in force to upgrade and adapt the skills of workers, foreign and local. Lower productivity is a result of structural problems which revolve around low rates of labour utilisation.
The crucial determinants of labour policy effectiveness will be to ensure that skilled labour, local or foreign, is applied to the work role and productivity can be increased with better mechanization, work flow and planning. Skilled labour can only come with training.
In order to compete for labour and extract optimal effort from their work forces, employer must put in place a robust training regime to train workers fit for their roles. The equilibrium values of foreign and local labour must be constantly moderated to ensure that Singapore can have a faster and better workforce - not cheap per se but with each unit of labour producing more.
Our current manpower policies exercise a great deal of labour market flexibility by allowing foreign labour supply to support business growth and needs. These policies are designed not to substitute local labour content. The quota system is constantly adjusted so that the local labour utilization may be increased with the hiring of foreign labour. The wider implication of this is that, with a freer flow of foreign labour, the real wage growth of the local labour stagnant at best. The wage-setting equilibrium between foreign and local labour is affected.
Indiscriminate use of foreign labour does contribute to lower productivity. Hence to reverse a fall in labour productivity, labour market training must be in force to upgrade and adapt the skills of workers, foreign and local. Lower productivity is a result of structural problems which revolve around low rates of labour utilisation.
The crucial determinants of labour policy effectiveness will be to ensure that skilled labour, local or foreign, is applied to the work role and productivity can be increased with better mechanization, work flow and planning. Skilled labour can only come with training.
In order to compete for labour and extract optimal effort from their work forces, employer must put in place a robust training regime to train workers fit for their roles. The equilibrium values of foreign and local labour must be constantly moderated to ensure that Singapore can have a faster and better workforce - not cheap per se but with each unit of labour producing more.
"Which elements of the government's $20.5 billion economic stimulus package should be retained, and which modified or removed? Are there other policie
The intent and purpose of pumping S$20.5 billion “Resilence Package” was to mitigate and slow down the steep downward spiral of Singapore economy. The pertinent risk then was the severity of the financial meltdown and the key responses were to saves jobs and to keep companies afloat. The one percent point cut in corporate tax went a certain distant to show Singapore’s commitment to reduce business cost. Direct tax cut should be maintained or reduced further to make our tax regime competitive and compelling. Direct taxes should be kept simple, low and predictable and that should become the hallmark of Singapore business environment. With signs of growth, tax for industrial and commercial properties should impact businesses less and therefore rebates should be reviewed for modification or removal.
The slew of measures like Jobs Credit did avert massive hemorrhaging job losses but the blunt tool also mean that such indiscriminate credits reimbursement should be modified as the economy heals with job growth outpacing job preservation. The $5.1 billion on training support and other measures to save jobs such as skill training and upgrading should be retained and be made a standard fixture in the re-shaping of Singapore labor contents and skills.
The Workfare Income Supplement (WIS) must be tweaked constantly as the wage gap widens to compensate the poorest 20% of our population since they are the hardest hit with inflationary pressure. WIS must be a tool used to help the bottom 20% survives the rising food and housing prices.
The $20.5 billion Resilence Package was not meant to change the shape of the economic curve but to avert sharper downturn but with an improving world economy, the uptick will mean that the government budget should be placed on bets for a better future – infrastructure, healthcare and education.
The slew of measures like Jobs Credit did avert massive hemorrhaging job losses but the blunt tool also mean that such indiscriminate credits reimbursement should be modified as the economy heals with job growth outpacing job preservation. The $5.1 billion on training support and other measures to save jobs such as skill training and upgrading should be retained and be made a standard fixture in the re-shaping of Singapore labor contents and skills.
The Workfare Income Supplement (WIS) must be tweaked constantly as the wage gap widens to compensate the poorest 20% of our population since they are the hardest hit with inflationary pressure. WIS must be a tool used to help the bottom 20% survives the rising food and housing prices.
The $20.5 billion Resilence Package was not meant to change the shape of the economic curve but to avert sharper downturn but with an improving world economy, the uptick will mean that the government budget should be placed on bets for a better future – infrastructure, healthcare and education.
What were the key messages you took from the Prime Minister's National Day Rally speech? In particular, from your perspective as a CEO, what are your
There is a certain universal seduction in healthcare- it affects everyone. Even the charismatic President Obama’s influence is vacillating as outrage over healthcare in US heats up. In Singapore, the 3Ms are the fundamental pillars holding up the healthcare infrastructure as the government try to fine-tune the system to better serve socialized medicine to the greatest number of Singaporeans. With an ageing profile in its demographics, Singapore cannot stand idly by on its healthcare. It needs to plan forward on its capacity, technology and human capital and ensure that the healthcare service delivery can be demographically convenient and properly delivered without any unnecessary escalation of costs.
The rallying call in Prime Minister’s speech is on unity. A united Singapore- regardless of race, language or religion. The chemistry of race and religious in Singapore is quite unnatural compared to many supposedly secular and democratic countries. Such state of collegiality of race and religion cannot be taken for granted and any single flashpoint can spark social unrest and degeneration of society where hate culture takes root like in the early years of Singapore.
Unity is also about sharing and spreading the fruit of growth. When the economy shrinks, all Singaporeans suffer. When the economy grows, wealth distribution may be disproportionate and may cause income imbalances – which can be the making of social unrest. Hence, the government took the pain of providing support to companies with Jobs Credits and building a robust training and re-training regime and infrastructure so that jobless Singaporeans can migrate to a different trade and skill when the economy swings.
Singapore, in order to posit for growth needs a New Frontier where we can all believe in and look forward to. The Prime Minister will have to show the way and spread the excitement of a new Singapore.
The rallying call in Prime Minister’s speech is on unity. A united Singapore- regardless of race, language or religion. The chemistry of race and religious in Singapore is quite unnatural compared to many supposedly secular and democratic countries. Such state of collegiality of race and religion cannot be taken for granted and any single flashpoint can spark social unrest and degeneration of society where hate culture takes root like in the early years of Singapore.
Unity is also about sharing and spreading the fruit of growth. When the economy shrinks, all Singaporeans suffer. When the economy grows, wealth distribution may be disproportionate and may cause income imbalances – which can be the making of social unrest. Hence, the government took the pain of providing support to companies with Jobs Credits and building a robust training and re-training regime and infrastructure so that jobless Singaporeans can migrate to a different trade and skill when the economy swings.
Singapore, in order to posit for growth needs a New Frontier where we can all believe in and look forward to. The Prime Minister will have to show the way and spread the excitement of a new Singapore.
How would you explain the recent pickup in the property market, despite a weak economy? Is it likely to be sustained? Is there any cause for concern a
The liquidity-driven economy in Singapore propped up not only the benchmark Straits Times Index but all assets classes. The 52 week range is 1,455.47 - 2,843.57 which shows a doubling of the index within a year. The Singapore dollar remains strong and stable and the dollar functions as a channel for financial intermediation from investors in Asia, Europe and the Middle East. Such channel will give rise to volatile cross border capital flows which typically are driven by factors or reasons unrelated to local economic fundamentals. The sharp spike of demand for property can be mostly attributable to such flow of funds from overseas as it is obviously clear that the economic weakness cannot spur such frivolous consumption. The economy contracted 6.5% in the first half of the year. The GDP growth forecast for 2009 is at -6% to -4%.
Such capital inflow can become unpredictable and volatile and is unlikely to be sustainable if the major force supporting the high property demand is from this source of funds alone. Domestically, we are also seeing more local investors taking strong positions in the hope of a recovery in 2010. With new property launches seeing high take-up rate, it is clear that the optimism carries with it a certain momentum. Investors’ snapping up of risky assets is also fueled by the recent adjustment of attractive interest rate for property buyers.
The tide seems to have turned, nevertheless. It is not about pessimism in the air but how strong the tide will turn to lift everyone up for fresher air.
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Such capital inflow can become unpredictable and volatile and is unlikely to be sustainable if the major force supporting the high property demand is from this source of funds alone. Domestically, we are also seeing more local investors taking strong positions in the hope of a recovery in 2010. With new property launches seeing high take-up rate, it is clear that the optimism carries with it a certain momentum. Investors’ snapping up of risky assets is also fueled by the recent adjustment of attractive interest rate for property buyers.
The tide seems to have turned, nevertheless. It is not about pessimism in the air but how strong the tide will turn to lift everyone up for fresher air.
- Hide quoted text -
What kind of economy and business environment would you like to see emerging in Singapore over the next five years? How will it be different from what
Accept certain inalienable truths and one of them will be that Singapore will have its manufacturing base hollowed out. We can no longer produce cheap and will no longer be cheap. Our indigenous labor and land cost will rise. Our distinct comparative advantages in labor productivity is lowered and eroded by competition in the regions. We need a re-think to position ourselves as a center and hub of sorts and to integrate all the hinterlands’ competitive and comparatives advantages into our Singapore’s value chain to the world.
Going forward into the mid to long term future, Singapore’s tentacles must run deeply into the regional countries. They will be integral parts of Singapore hinterlands. The idea is much akin to the integrative action of nervous system where Singapore can add value in the coordination of research and development, providing arterial financial distributions and movement of capitals and funds and in the area of logistics. We may not be the manufacturing bases but Singapore can act to move human and financial capitals and use our transshipment advantages to provide gateway services.
One key way to build an inseparable alliance is to think of new ways to provide energy (refined or renewable energy) and water to many of our developing neighbors and how we can use technology and investments to boost our joint collaborations. All these will provide the links in a grand chain of mutual cooperation with our neighbors in Asia, which will promise to bolster Singapore’s significance in regional affairs.
If we do not re-frame our competitive advantages, at risk will be the sustainability of our economic model which is premised on strong manufacturing base with a strong financial infrastructure. We need more tentacles of progress.
Singapore will be a City of Dreams and a Future for all- galvanizing talents and businesses across Asia to Singapore. We’ll become a global schoolhouse drawing students of all Asian stripes to study and to work in Singapore. Some will be rooted here. Some will return but will establish their links from their home country to Singapore. As the City of the Future, Singapore will be the hub for sustainable solutions for tomorrow’s global opportunities in renewable energy, environmental protection, global schoolhouse, entertainment and healthcare. All these will be possible for so long as Singapore continues to have a visionary and stable government with a can-do spirit and taking every conceivable opportunity to take Singapore into the next lap and transformational change.
Going forward into the mid to long term future, Singapore’s tentacles must run deeply into the regional countries. They will be integral parts of Singapore hinterlands. The idea is much akin to the integrative action of nervous system where Singapore can add value in the coordination of research and development, providing arterial financial distributions and movement of capitals and funds and in the area of logistics. We may not be the manufacturing bases but Singapore can act to move human and financial capitals and use our transshipment advantages to provide gateway services.
One key way to build an inseparable alliance is to think of new ways to provide energy (refined or renewable energy) and water to many of our developing neighbors and how we can use technology and investments to boost our joint collaborations. All these will provide the links in a grand chain of mutual cooperation with our neighbors in Asia, which will promise to bolster Singapore’s significance in regional affairs.
If we do not re-frame our competitive advantages, at risk will be the sustainability of our economic model which is premised on strong manufacturing base with a strong financial infrastructure. We need more tentacles of progress.
Singapore will be a City of Dreams and a Future for all- galvanizing talents and businesses across Asia to Singapore. We’ll become a global schoolhouse drawing students of all Asian stripes to study and to work in Singapore. Some will be rooted here. Some will return but will establish their links from their home country to Singapore. As the City of the Future, Singapore will be the hub for sustainable solutions for tomorrow’s global opportunities in renewable energy, environmental protection, global schoolhouse, entertainment and healthcare. All these will be possible for so long as Singapore continues to have a visionary and stable government with a can-do spirit and taking every conceivable opportunity to take Singapore into the next lap and transformational change.
Monday, August 3, 2009
Woman Entrepreneurship
Female enterprise is an uphill struggle to begin with and for them, it is really a case of unequal entrepreneurship. For billions of the world’s women, their lives are already intertwined with a web of constraints, limitations, obligations and sacrifices and for many they live in a certain pre-determined pattern of lives and are subject to a certain order of things.
There is a significant and systematic gap existing in the entrepreneurial involvement and business ownership of men compared to women – reasons are obvious as they clearly lack the opportunities in many societal contexts. These cases are more prominent in Asian than Western societies. Women generally lag behind men in terms of pay, promotion, benefits and access to opportunities. They are underrepresented in politics and management and are obviously less seen in most board rooms.
While the struggle of women's groups in every country is unique, increasingly, they are participating in market economy and even in politics where societies tend to be more matriarchal – like in Philippines and Indonesia. A Gloria or Megawati represents liberation of women’ power in those countries and within a strategic realm, it allows for empowerment of women and it elevates them to equal status as men. What are really needed for empowerment of women are role models to show the world those women folks are equal to the task and can rise to any occasion. What is needed is an enabling and encouraging environment that foster women folks to become entrepreneurs by showing them they can do it through role models like Ho Ching of Temasek, Olivia Lum of Hyflux or even Lim Hwee Hua who joins the ranks of Singapore's top political leadership as a full minister.
Women constitute an overwhelmingly untapped pool of entrepreneurial talents, and if we can encourage more women to start their own businesses or to head enterprises, we can add to our economic prosperity and vibrancy. It can add diversity from boardrooms to parliaments.
There is a significant and systematic gap existing in the entrepreneurial involvement and business ownership of men compared to women – reasons are obvious as they clearly lack the opportunities in many societal contexts. These cases are more prominent in Asian than Western societies. Women generally lag behind men in terms of pay, promotion, benefits and access to opportunities. They are underrepresented in politics and management and are obviously less seen in most board rooms.
While the struggle of women's groups in every country is unique, increasingly, they are participating in market economy and even in politics where societies tend to be more matriarchal – like in Philippines and Indonesia. A Gloria or Megawati represents liberation of women’ power in those countries and within a strategic realm, it allows for empowerment of women and it elevates them to equal status as men. What are really needed for empowerment of women are role models to show the world those women folks are equal to the task and can rise to any occasion. What is needed is an enabling and encouraging environment that foster women folks to become entrepreneurs by showing them they can do it through role models like Ho Ching of Temasek, Olivia Lum of Hyflux or even Lim Hwee Hua who joins the ranks of Singapore's top political leadership as a full minister.
Women constitute an overwhelmingly untapped pool of entrepreneurial talents, and if we can encourage more women to start their own businesses or to head enterprises, we can add to our economic prosperity and vibrancy. It can add diversity from boardrooms to parliaments.
Indonesian's Prosperity with SBY
Incumbent Susilo Bambang Yudhoyono (known in Indonesia as ‘SBY’) headed for a landslide win in Indonesia's presidential election becoming the first leader since the fall of Suharto in 1998 to secure a second term in office and this is significant since the shifting power bases become more predictable. With the second term, SBY can up his ante and ratchet up the pace and scope of reform and development. There is great potential in Indonesia as it is one of the world’s largest middle income countries if they catch up in their transformational development.
Although Indonesia is weathering the global economic downturn with 35 million Indonesians still living below the poverty line and half the population still remaining vulnerable to poverty, SBY has to look ahead to push its largely uneducated Indonesians to fit them into the global economy but skilling them appropriately and exporting these human resources will be his challenge. The Middle East and Muslim countries globally will be huge export destinations of such brains and brawns. Apart from its natural resources from petroleum, tin, natural gas, nickel, timber, coal to gold and silver, its manpower is a huge resource by itself.
Singapore, by all accounts, lack what Indonesia has in abundance – land mass, natural resources and human capital. With a stable political framework, cooperation with Indonesia can be in township and manufacturing hubs developments. Singapore’s proximity with Indonesia and closeness of ports will make such triangulation of manufacturing and trade management explosive. Singapore can work with SBY’s government to form manufacturing hubs in certain regions. Such cross border manufacturing and trades will spur employments and lower the overall cost structures of managing manufacturing in Singapore alone. For the least Indonesia is closer to Singapore than China or India.
Indonesia is a land of many possibilities for so long as the political climate remains predictable. SBY is known to be a deliberate, measured perhaps overly cautious leader. With such strong mandate, this is his opportunity to make profound and meaningful impacts both politically and economically. Suharto brought prosperity to Indonesia under different terms. SBY now has his chance to bring prosperity under his term.
Although Indonesia is weathering the global economic downturn with 35 million Indonesians still living below the poverty line and half the population still remaining vulnerable to poverty, SBY has to look ahead to push its largely uneducated Indonesians to fit them into the global economy but skilling them appropriately and exporting these human resources will be his challenge. The Middle East and Muslim countries globally will be huge export destinations of such brains and brawns. Apart from its natural resources from petroleum, tin, natural gas, nickel, timber, coal to gold and silver, its manpower is a huge resource by itself.
Singapore, by all accounts, lack what Indonesia has in abundance – land mass, natural resources and human capital. With a stable political framework, cooperation with Indonesia can be in township and manufacturing hubs developments. Singapore’s proximity with Indonesia and closeness of ports will make such triangulation of manufacturing and trade management explosive. Singapore can work with SBY’s government to form manufacturing hubs in certain regions. Such cross border manufacturing and trades will spur employments and lower the overall cost structures of managing manufacturing in Singapore alone. For the least Indonesia is closer to Singapore than China or India.
Indonesia is a land of many possibilities for so long as the political climate remains predictable. SBY is known to be a deliberate, measured perhaps overly cautious leader. With such strong mandate, this is his opportunity to make profound and meaningful impacts both politically and economically. Suharto brought prosperity to Indonesia under different terms. SBY now has his chance to bring prosperity under his term.
World Problems
The early twenty-first century carries with it both the promise of the future and the complexities of living in a seemingly unsustainable world with H1N1, terrorism, financial credit crunch and global warming. The devastating terrorist attack in Jakarta last Friday on 17/7 and the bombing in Mumbai on 26/11 last year are sad episodes and they will not be the last. The complicity of terrorism is beyond Jemaah Islamiah, India and Pakistan or Israel and the Palestinians or North Korean leader Kim Jong-il holding sway of the world with its nuclear threat. Whichever way, global instability, death, starvation, reactionary extremism and fundamentalism are just signs to a larger problem.
Terrorism is not a real threat to the lives and livelihoods of billions. Global warming will someday, through mankind’s contrivance and genius, right itself through innovations, sheer grit and determination.
It is about oil money where politics are deeply implicated and religions are mixed into its potency driving people to self destruction. The challenge is how to untangle the unholy trinity of oil, politics and religions and whoever has the key to untangle this will solve a great part of the world’s problem.
This challenge is certainly and infinitely more difficult than a Da Vinci’s Code.
Terrorism is not a real threat to the lives and livelihoods of billions. Global warming will someday, through mankind’s contrivance and genius, right itself through innovations, sheer grit and determination.
It is about oil money where politics are deeply implicated and religions are mixed into its potency driving people to self destruction. The challenge is how to untangle the unholy trinity of oil, politics and religions and whoever has the key to untangle this will solve a great part of the world’s problem.
This challenge is certainly and infinitely more difficult than a Da Vinci’s Code.
My Own Adventure in Business - Beneficiary of a Meritocratic System
Personally, I benefited from Singapore’s entrepreneurial ecosystem. Against the wisdom of the crowd , I graduated in 1994 and went straight to start my own business. I founded more than 10 businesses since.
To me, superstars of businesses are propelled not by genius and talent alone but the beneficiaries of extraordinary opportunities and seasons that allow them to strive, to make sense of the world in ways other cannot comprehend. Most of the entrepreneurs I know of are outliers in their fields or the barbarians at the gates who redefine the norms and rules of the industries. I have witnessed how successful people rise on a tide of advantages like MMI, JIT, Venture or even Hyflux who immensely benefited from the period of manufacturing boom in the 90s. Even our water-resource strain has produced a Hyflux who benefited from this demand gap.
The Singapore business ecosystem evolves, particularly, public policies which play an important role in stimulating and accelerating the pace of developments in certain sectors. The government seems to have a hand in shaping the desired industries and in picking the sunrise and sunset businesses. For that, some alleged that Singapore’s entrepreneurial ecosystem has been uniformly weak for start-ups or even backward. The key is to pick the right type of business to start in Singapore where the business can leverage on the strength of Singapore’s infrastructural, financial, political strengths. Connecting the red dot to other hinterlands and making Singapore into hubs of sorts will be a good starting point.
The power of guts is not taught enough in schools and for now, many of the successful self-made businessmen in Singapore can attest to that. I have been the beneficiary of various windows of opportunities and I know that the impulse factor has been key- some of us play it safe while others risk it all. I chose to risk it all when I started and had never look back.
To me, superstars of businesses are propelled not by genius and talent alone but the beneficiaries of extraordinary opportunities and seasons that allow them to strive, to make sense of the world in ways other cannot comprehend. Most of the entrepreneurs I know of are outliers in their fields or the barbarians at the gates who redefine the norms and rules of the industries. I have witnessed how successful people rise on a tide of advantages like MMI, JIT, Venture or even Hyflux who immensely benefited from the period of manufacturing boom in the 90s. Even our water-resource strain has produced a Hyflux who benefited from this demand gap.
The Singapore business ecosystem evolves, particularly, public policies which play an important role in stimulating and accelerating the pace of developments in certain sectors. The government seems to have a hand in shaping the desired industries and in picking the sunrise and sunset businesses. For that, some alleged that Singapore’s entrepreneurial ecosystem has been uniformly weak for start-ups or even backward. The key is to pick the right type of business to start in Singapore where the business can leverage on the strength of Singapore’s infrastructural, financial, political strengths. Connecting the red dot to other hinterlands and making Singapore into hubs of sorts will be a good starting point.
The power of guts is not taught enough in schools and for now, many of the successful self-made businessmen in Singapore can attest to that. I have been the beneficiary of various windows of opportunities and I know that the impulse factor has been key- some of us play it safe while others risk it all. I chose to risk it all when I started and had never look back.
Financial Prudence - Intervention of the Invisible Hand
President Obama’s overarching hand, no longer the invisible hand of free market, on the entire financial system will be closely watched as it was deemed that a culture of irresponsibility took root from Wall Street to the Main Street.
One of the most striking aspects of his intervention was his increase in the volume and velocity of money supply in the economy. His government’s policy response to the crisis is to stabilize the confidence and to thaw the credit stalemate that crippled the entire US economy and affected world’s confidence. The domino effect brought devastating consequences to many economies. With the overhaul, they are looking to speed up structural adjustments.
The crisis which was magnified by the shakeout in the subprime mortgage market alongside the toxic CDOs and other derivatives were not properly understood. These weaknesses were due to a lack of transparency in management, inadequate supervision of banks and financial institutions.
In Singapore, whilst the subprime mortgages cause a precipitous drop in asset prices in the US, the effect is not as acute in Singapore. In fact, there was a stabilization of HDB prices which held up well in the heat of turmoil. Singapore’s banks are regulated in a conservative framework and the issues of indiscriminate credits extension are limited.
Whether it is DBS High Notes 5 and Merrill Lynch Jubilee Series 3 products, they have limited impact on most investors in Singapore and even for those who were affected; MAS stepped in and provided stern warning to banks to resolve any misrepresentations with certain groups of less sophisticated investors. There is also a Financial Industry Disputes Resolution Centre (FIDReC) for further mediation. Such acts are enough said of a responsible MAS.
Any ambitious reforms to the Singapore’s financial system may end up prompting more, not less, interventions by MAS. For so long as MAS set up a framework with sufficient monitors and safeguards with constant scanning of macro risks in the ecosystem, Singapore may be better off this way with a steady hand prompting and cueing markets than one that directly intervene in the market mechanism.
Point is -the hand should not be invisible when a crisis is imminent.
One of the most striking aspects of his intervention was his increase in the volume and velocity of money supply in the economy. His government’s policy response to the crisis is to stabilize the confidence and to thaw the credit stalemate that crippled the entire US economy and affected world’s confidence. The domino effect brought devastating consequences to many economies. With the overhaul, they are looking to speed up structural adjustments.
The crisis which was magnified by the shakeout in the subprime mortgage market alongside the toxic CDOs and other derivatives were not properly understood. These weaknesses were due to a lack of transparency in management, inadequate supervision of banks and financial institutions.
In Singapore, whilst the subprime mortgages cause a precipitous drop in asset prices in the US, the effect is not as acute in Singapore. In fact, there was a stabilization of HDB prices which held up well in the heat of turmoil. Singapore’s banks are regulated in a conservative framework and the issues of indiscriminate credits extension are limited.
Whether it is DBS High Notes 5 and Merrill Lynch Jubilee Series 3 products, they have limited impact on most investors in Singapore and even for those who were affected; MAS stepped in and provided stern warning to banks to resolve any misrepresentations with certain groups of less sophisticated investors. There is also a Financial Industry Disputes Resolution Centre (FIDReC) for further mediation. Such acts are enough said of a responsible MAS.
Any ambitious reforms to the Singapore’s financial system may end up prompting more, not less, interventions by MAS. For so long as MAS set up a framework with sufficient monitors and safeguards with constant scanning of macro risks in the ecosystem, Singapore may be better off this way with a steady hand prompting and cueing markets than one that directly intervene in the market mechanism.
Point is -the hand should not be invisible when a crisis is imminent.
Strategies for Singapore
The strategists shaping Singapore of the future have to focus on one central question. How do we play up our geopolitical convenience and centrality within Asia and to capitalize on our stable infrastructure to become hubs for education, healthcare, pharmaceutical, clean-energy and technology innovation or any innovations that can become our core economic pillars?
Our small physical size belies our great economic strength and resilience. We can be that small heart connected to all parts of Asia through different veins and arteries forming different supplies chains for critical industries.
I think our approaches to go China whether is it the Suzhou Industrial Park, Tianjin Eco-city or Nanjing Eco-Island or the Indonesia-Malaysia-Singapore growth triangle or the Singapore-Johor Iskandar Development Region, they are all part of our hub-hinterland growth strategy. We go the hinterlands to enhance economic competitiveness with exploitation of comparative advantage, economics of scale and clustering. We exploit synergies with the different countries from geographical proximity and economic complementarities.
Forming transnational economic zones and regions will extend Singapore’s physical space and resources so that we can grow beyond Singapore. Collectively the whole of Asia will give us a larger market and consumer access.
The push for a larger hub-hinterland framework must be hinged on Singapore playing a lead in the supply chains- be they in pharmaceutical research and development or in cleantech innovations.
To be credible, Singapore should be a living demonstration and test-beds and be the vanguard of knowledge creation for example in cleantech solutions. The world is moving into the cleantech space, including cleantech clusters and industries. Singapore should quickly leverage our strengths in systems integration and implementation. With governmental leadership we can differentiate ourselves, including developing globally distinctive cleantech parks.
China and India are giants and they are already among the world’s top carbon emitters. They need clean technologies – energy-efficient buildings, renewable energy sources, alternative energy, clean water and waste management and recycling. They are our hinterlands of opportunities.
Combining capital, people, technology with a supportive government, I am sure we can work towards a successful hub-hinterland framework. With China and Indonesia or even Malaysia, we are standing on the shoulders of giants to win in this world.
Our small physical size belies our great economic strength and resilience. We can be that small heart connected to all parts of Asia through different veins and arteries forming different supplies chains for critical industries.
I think our approaches to go China whether is it the Suzhou Industrial Park, Tianjin Eco-city or Nanjing Eco-Island or the Indonesia-Malaysia-Singapore growth triangle or the Singapore-Johor Iskandar Development Region, they are all part of our hub-hinterland growth strategy. We go the hinterlands to enhance economic competitiveness with exploitation of comparative advantage, economics of scale and clustering. We exploit synergies with the different countries from geographical proximity and economic complementarities.
Forming transnational economic zones and regions will extend Singapore’s physical space and resources so that we can grow beyond Singapore. Collectively the whole of Asia will give us a larger market and consumer access.
The push for a larger hub-hinterland framework must be hinged on Singapore playing a lead in the supply chains- be they in pharmaceutical research and development or in cleantech innovations.
To be credible, Singapore should be a living demonstration and test-beds and be the vanguard of knowledge creation for example in cleantech solutions. The world is moving into the cleantech space, including cleantech clusters and industries. Singapore should quickly leverage our strengths in systems integration and implementation. With governmental leadership we can differentiate ourselves, including developing globally distinctive cleantech parks.
China and India are giants and they are already among the world’s top carbon emitters. They need clean technologies – energy-efficient buildings, renewable energy sources, alternative energy, clean water and waste management and recycling. They are our hinterlands of opportunities.
Combining capital, people, technology with a supportive government, I am sure we can work towards a successful hub-hinterland framework. With China and Indonesia or even Malaysia, we are standing on the shoulders of giants to win in this world.
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