singapore's income gap

After my last post on Singapore's GDP, a friend commented that we have a record high GDP but the common person is not seeing any of it. I guess that's as good a segue as any to look into my next topic: the income gap.

This post is part of my horizon scanning research project.

The most common measure of income inequality or the income gap is the Gini Coefficient. When I first studied this ten years ago in university, I distinctly remember having the impression that Singapore had a very low Gini Coefficient.

Well according to the 2009 UN Development Programme report, Singapore had the second highest Gini Coefficient in the world after Hong Kong. Here's an article from Businessweek. In a nutshell, here are the top three winners:

No. 1 Hong Kong
Gini score: 43.4
GDP 2007 (US$ billions): 207.2
Share of income or expenditure (%)
Poorest 10%: 2.0
Richest 10%: 34.9
Ratio of income or expenditure, share of top 10% to lowest 10%: 17.8
Renowned for its high concentration of Rolls-Royces, expensive real estate, and posh shops, the Chinese special administrative region has plenty of rich who enjoy showing off their wealth. However, Hong Kong also has one of the largest public housing sectors in the world, with about half the population living in government-supported or -subsidized housing estates. The city has no minimum wage—except for domestic helpers from the Philippines, Indonesia, and other countries.

No. 2 Singapore
Gini score: 42.5
GDP 2007 (US$ billions): 161.3
Share of income or expenditure (%)
Poorest 10%: 1.9
Richest 10%: 32.8
Ratio of income or expenditure, share of top 10% to lowest 10%: 17.7
Singapore is one of the world's most open economies, and it suffered badly following the bankruptcy of Lehman Brothers last year. Recently, though, the city-state's economy has rebounded, with GDP growing an annualized 14.9% rate in the third quarter compared with the previous quarter.

No. 3 U.S.
Gini score: 40.8
GDP 2007 (US$ billions): 13,751.4
Share of income or expenditure (%)
Poorest 10%: 1.9
Richest 10%: 29.9
Ratio of income or expenditure, share of top 10% to lowest 10%: 15.9
The share of income for the top percentile of Americans was 23.5% in 2007, the highest since 1928, according to Emmanuel Saez, a Berkeley economist who won the prestigious John Bates Clark Medal in April. Income for the top 0.01% hit a record-high 6.04%. And the recession may be exacerbating income inequality.

I also found an interesting analysis of Singapore's recent Gini Coefficient performance at squareCircleZ. Here's the graph that it compiled based on Straits Times data, and the observation that "The rapid rise from 2002 and spike in 2007 were due to several factors, including rapid population increases (through immigration) of higher-income people, and a subsequent boost in the overall economy. The drop in 2008 and 2009 is due to the Global Financial Crisis, where many high-paying jobs either disappeared, or bonuses were slashed."
So what does it mean for us if the income gap is widening? According to my favourite academic resource Wikipedia, there are a few broad outcomes of income inequality. These include an erosion of social cohesion (less trust and less community involvement), poorer population health (with negative impact on life expectancy, economic growth and infant mortality) and lower economic growth (Gini Coefficient of below .25 or above .40 is bad for growth).

In Singapore's case, the rise in income inequality is almost definitely due to the recent emphasis on attracting foreign talents, so an argument for the necessity of income inequality would go along the same lines: these people may seem overpaid, but they are the ones driving profits and creating employment that will eventually benefit the entire country. The lower income groups may seem relatively worse of, but in absolute terms they are still in a better position.

Mr Brown made a case against just such an argument in 2006, and it cost him his column in Today. Here's the account as reported by fellow blogger Alex Au aka Yawning Bread.

Lee Kin Mun, who writes under the pseudonym "Mr Brown", wrote a harsh, though humorous, commentary on June 30 concerning Singapore’s rising cost of living, mentioning that latest official statistics showed that one in every three Singaporean households had suffered a reduction in income over the last five years. The irony, which was not lost on the island state’s government, was that Lee cited official statistics to bolster his argument.

Of course, Mr Brown wrote that article in 2006, in the aftermath of 9/11, the dot.com bust and a worldwide recession. Looking at the numbers again, the last five years seem to have been a lot better for the average Singaporean. Here is a table put together from SingStat's Key Household Income Trends, 2009 report and the Time Series on CPI & Inflation Rate. The real change in household income is definitely overall positive for these last few years, especially 2005-2008.


Of course, someone looking to buy a car might not appreciate how much his real income has increased, as shown in this chart from Singapore Real Estate. This is also a sharp reversal of the trend that saw Cat A COE prices fall from $30,000+ in 2003 down to $10,000+ in 2008. I don't have any good data showing the price of public transport, but it's pretty clear that that is going up too. Yet the CPI measure for transport has barely moved (from 98.3 to 100) from 2005 to 2009, it will be interesting to see when the figures for 2010 are released.

And as mentioned in the previous post, someone looking to buy a house (like me) isn't exactly spoilt for choice either. The CPI measure for housing has increased almost 25% (from 84.1 to 100) from 2005 to 2009.

Lastly, here's another recent article on the cost of living in Singapore. HR Consultancy Mercer has ranked Singapore the 11th most expensive city in the world. It should be noted that this is for expatriate employees, who would not be eligible for government subsidised housing, hence clearly accomodation would be a huge chunk of their expense. Nevertheless, given our cheap food and cheap (relative to others) public transport, I'm quite surprised to see us so high on the list. Is this another wake up call?

Up till now, I've just been getting a grasp on the current situation. It is definitely worse than I thought before I started doing this research, but I'm not quite ready to draw an conclusions yet until I read a little more on income inequality. One thing is clear, as my friend pointed out, is that this could have an impact on the next election. In democracies, the lower income groups may have disproportionately small spending power, but they have equal voting power, especially when the lower income group is disproportionately large.

And finally, another interesting way to visualise the income distribution is as a parade of dwarfs and giants, as depicted by Dutch economist Jan Pen in 1971. This is the concept:

Suppose that every person in the economy walks by, as if in a parade. Imagine that the parade takes exactly an hour to pass, and that the marchers are arranged in order of income, with the lowest incomes at the front and the highest at the back. Also imagine that the heights of the people in the parade are proportional to what they make: those earning the average income will be of average height, those earning twice the average income will be twice the average height, and so on. We spectators, let us imagine, are also of average height.

Pen then described what the observers would see. Not a series of people of steadily increasing height—that’s far too bland a picture. The observers would see something much stranger. They would see, mostly, a parade of dwarves, and then some unbelievable giants at the very end.

A friend sent me the Singapore version of the parade some years back, and it is quite an interesting read. Unfortunately I cannot find it online to link to or attribute, so at the risk of making this the longest and most un-original blog post ever, I am going to reproduce it in full. I am quite curious how the parade would look today, after the foreign talent policy.

In literally the first few seconds after commencement, we observe a number of people of negative height passing. On closer inspection they look like businessmen who have suffered losses. In fact, they are not necessarily short people – some of them are awfully tall, with their feet on the ground but their heads deep in the earth; they are in a severe liquidity constrained position. The market is never sentimental – many are attracted to the successes of private enterprise, which, however pass them by. Indeed, an EPD study found that only less than half of new firms set-up survive the sixth year.

After this tragic-comic opening, tiny gnomes rush by, the size of a matchstick then a cigarette. This contingent could include: housewives who do some part-time work, school kids working at McDonalds, etc.

The heights of the next group of participants though still very small – about 3 feet – increase by leaps and bounds. They are quite a mixed bunch: they may include a few owners of small shops, but mostly people not in formal paid employment – retirees, people with physical handicaps.

The ordinary workers, about whom there is nothing out of the ordinary except that they are in the lowest jobs. The contingent of cleaners & labourers is clearly visible. The unskilled clerks and other admin workers march in front of the unskilled manual workers. We have ample opportunity to observe them at our leisure. It takes almost fifteen minutes before the passing marchers reach a height of substantially more than four feet. For the spectators it can be a rather disturbing sight: fifteen minutes is a long time to keep watching small people pass by who barely reach to our midriff. More than a third are women. In embarrassment we avert our gaze and look towards the direction of the next contingent in hope of catching sight at long last of normal height persons.

But a surprise awaits us – we keep on seeing dwarfs. They are gradually becoming a little taller, but it's a slow process. They include the masses of workers, just ordinary people from the heartlands sometimes with not inconsiderable technical knowledge - a testimony to our excellent ITE training programmes. After ten minutes, the small people approach our collar bones. We see the skilled manufacturing workers, those from our polytechnics. There are also office workers, all respectable persons.

We are now half-hour into the parade; we know that the entire event will last an hour and hope to be able to look at the marchers straight in the eye, this is not so. We still look down on the top of their heads, and even in the distance we do not pick up an obvious improvement.

It is after 45 minutes or about 12 minutes before the end that the average income recipients pass by. We are interested in who these people are and crane our necks to get a better look: SBS bus drivers, lower grade teachers and civil servants, some IT people, older NCOs in the SAF, shopkeepers, sales representatives, insurance agents, foremen.

After the average income recipients have passed, the scene changes rather quickly. The marchers' height grows; seven minutes later we see the arrival of the top 10%. The head of this group to our surprise are still people with fairly modest jobs: school principals, analysts at brokerage firms, small contractors (PCK Ltd?), mid-ranking army officers (perhaps up to the rank of Colonel), SilkAir pilots. These are people who never thought they belonged to the top ten percent. Again office staff, department/division heads, but not the genuine top executives.

In the last few minutes, giants suddenly loom. A lawyer, not exceptionally successful, 18 feet tall. A Brigadier-General of similar height. Some (private sector) doctors come into sight, engineers at the large pharmaceutical companies.

There is still one minute to go, and now we see towering fellows. A Permanent Secretary about thirteen yards tall, a High Court judge, CEOs of some GLCs, eye surgeons, corporate lawyers.

During the last seconds, the scene is dominated by colossal figures. Most of them prove to be successful businessmen, managing directors of large firms sitting on many boards, top TCS stars.

The rear of the parade is brought up by a few participants who are measured in miles; their heads disappear into the clouds – Khoo Teck Puat, Kwek Leng Beng, Wee Cho Yaw and perhaps Olivia Lum.

Suddenly the parade is gone – the income recipients disappear from sight.

It appears that we have organised a parade of dwarfs. Indeed, a striking fact is that we had to wait so long for the average income recipient. This of course reflects the rich people bringing up the rear. Not only do they attract the attention of the spectator so much, but they also raise the average; it shifts to well above the great mass of income recipients. For that reason by far the greater part of the parade consists of small men and women, and not to mention the dwarfs. If we were to exclude from the parade those who bring up the rear, say during the last minute, the average height would drop considerably. Those remaining in the parade would not become taller mind you, but the impression would be removed that we have organised a parade of dwarfs.

Each of us has a particular spot in the marching contingents at every parade. Each of us is a participant and witness of a dramatic spectacle.

will the casino save us?

The headlines of 2010 and 2008 are an interesting contrast.

Singapore officially in recession, 21 Nov 2008, BBC
Singapore's economy shrank between July and September, confirming it was the first Asian country in recession in the current financial crisis.

Singapore May Pass China as Asia's Fastest-Growing Economy, 9 Jul 2010, Bloomberg
Singapore may overtake China as Asia’s fastest-growing economy this year

This post is part of my horizon scanning research project.

From the first country in Asia to enter recession to the fastest growing economy in the world. What is the significance of this?

1. Is this just an indicator of how reliant we are on international trade; are we merely a volatile indicator of the health of the world's economy?

2. Does the answer lie in PM Lee's national day message? "This exceptional performance is the fruit of Singaporeans’ united response during the crisis. This enabled us to take full advantage of improved global conditions." Have we improved the fundamentals of our economy, to fare better in the future regardless of fair or foul business conditions?
3. Or is this just the coincidental timing of the opening of our two new Integrated Resorts, and the flood of foreign investment and tourism they have brought with them. And if so, will this rush last, and how sensitive will it be to future business cycles?

I've been asking myself these questions because of a bigger question in my mind. How well will Singapore weather a double dip recession, if we get hit by one in the near future?

After several weeks of surfing the net in my spare time, I'm no closer to finding the answer to these questions. I have, however, made a few interesting observations, particularly about the third point.

The graph below from SingStat shows manufacturing is on the decline. The growth industries over the last few years are construction and business services, both of which are probably influenced greatly by casino-related activities in the past five years. So the casino definitely has had a positive impact, and the question remains whether this impact will be long-term, and how sensitive it will be to business cycles.

Tourism as an industry seems to be quite susceptible to the health of the global economy. Singapore's own visitor arrivals reflect this, with dips corresponding with the recession in 2001-2003 and the global financial crisis from 2007-2009.
Since I can't find any research on the sensitivity of casinos to the economic cycle, the next best thing was a dataset provided by the Bureau of Economic Analysis. This allows me to view GDP data by industry and metropolitan area over the last ten years. So for example, I can see how the GFC has affected the gambling and entertainment industries in Las Vegas and Atlantic City. I can also compare it to the growth of other core industries such as Finance in NYC and Chicago, or a mix of industries in Philadelphia as controls.

This table shows the absolute GPD figures for each metropolitan area and industry

This chart show normalised growth rates by dividing the GDP by the first year

The first observation is that Las Vegas did really well, in fact both its gaming and hospitality industries did the best over the eight-year period. Atlantic City was also growing in the later years. So maybe they really are immune to economic trends. But then again, the third best performer is the finance industry of New York. Is it possible that the global financial crisis - the worst recession since the great depression - missed Wall Street?

The Economics of Casino Gambling seems to be the most widely cited paper on the topic of the economics of the casino industry. And while it didn't answer my questions, I did learn quite a bit about casinos.

• Social resistance to the casinos will probably be a passing phase. Gambling and casinos were illegal and frowned upon in most U.S. states until the 1970's, because of concerns that introducing casinos would bring with them many social problems. Sounds familiar? And most of the policies introduced to mitigate these social concerns were more symbolic than effective. Having been to both Las Vegas and Atlantic City, and the surroundings, I don't recall much overt opposition to the casinos in the present day.


• The casino might lead to growth that is sustainable over a decent length of time. "Nevada was among the three fastest growing states in the United States for each of the last four decades of the 20th century. Nevada's major city, Las Vegas, was one of the five fastest growing metropolitan areas in the country in each decade over the same period."

On the bright side, if we do go into recession again, housing might become affordable again.

horizon scanning: trends and challenges for singapore

I have often asked myself what the biggest challenges facing Singapore's survival are. Ten years ago, I was afraid our manufacturing economy would be crushed by low-cost labour in China, and that we were too exposed to global financial markets. Today, I worry that the greatest dangers are internal: loss of national identity with the influx of PRs and foreign talents, and the growing income gap. The truth is, I don't know.

So over the next few months, I will try to compile a list of the possible threats to our future survival, prioritise and research each one to understand it better. Hopefully at the end of this exercise, I'll be able to form a more educated opinion on the question I posed above. And for whoever else is interested, perhaps this will be an interesting exercise too.

Comments and suggestions are welcome, the first step is to compile the list of trends (and some of the direct effects) that will shape our future. That can be found at the bottom of the page. From that list, I'm also posing myself some questions, which I hope to answer soon.

Questions

1. How will Singapore be affected by a double-dip recession, and how has the casino affected the resilience of our economy and our exposure to the rest of the world?
2. What are the biggest military threats to Singapore, and are we equipped to handle them? What else needs to be done?
3. How will the combination of declining birth rate, Singaporeans working overseas and increasing immigration affect our identity as Singaporeans and national institutions such as national service?
4. What are the threats to racial and religious harmony in Singapore, and what is the significance of recent government actions to restrict certain activities among religious groups?
5. What does the rise of China mean for Singapore? How will it affect our economic, diplomatic and defence policies? How will it affect our society?
6. Taking into account recent changes in CPF policy (such as cuts in employer contributions), is this system able to to support our aging population?

This list will continue to grow and priorities may shift, as I do more preliminary research into the list below.

General Trends (Laundry list of ideas)

Global
Dependence on Global Economy
- Double dip recession
- Global impact on local export-led economy
- Decline of USD as world reserve currency
- Revaluation of Yuan
- Impact of casino
- Status as trade and transport hub
Security Threats
- Terrorism
- Cyber Crime / Cyber Warfare
- Conventional threats
Globalisation
- Decline of nation-state, national identity and nationalism
- Growing PR population and NS
- Brain Drain
Rising China
- Risk of global power transition / contest for influence in Southeast Asia
- Conflict over Taiwan / Spratly Islands

Regional
- Political and ethnic instability in Malaysia
- Political unrest in Thailand
- Resolution of longstanding bilateral issues
- Relations with neighbours

Domestic
Aging population / Declining birth rate
Racial and religious harmony
Growing income gap
Income Tax and CPF
Environment
- Environmental Damage and Pollution
- Water

Useful References
Statistics - Economic Indicators (Singstat charts)
4 Challenges Facing Singapore (National Day Rally 2009)

best ndp ever

Since I seem to have a tradition of blogging about NDP every year, it seems fitting to end a long silence with another NDP post. I would never voluntarily attend NDP, but this year I was compelled to go, and fortunately I was lucky enough to get one of the best seats in the house.
I must say I thoroughly enjoyed the show. Perhaps it may be because I've avoided NDP for the last few years, so I don't have NDP fatigue. The Black Knights were spectacularly, especially when they dived down on the crowd, and it was really cool how the entire stage backdrop became a huge psychedelic screen. I particularly liked the shadow Silat performance, and the singers were all really good. I liked the dancing as well, probably because they chose to showcase some individual performances rather than relying purely on the standard mass dance routines. Even the parade was great, especially hearing the gun salute in stereo for the first time. And of course, the fireworks were probably the most beautiful even, set against a lovely combination of the city skyline and the water.
It was only when it came to the singing of the national anthem that I realised, with a twinge of guilt, that I did not feel particularly proud to be Singaporean, or on some patriotic high. I felt bad, because I figured it was just cynical me.
But talking to many other people since, the main comment seems to be "no feeling". Some people attributed it to the jaded Singaporeans around them who refused to participate. Another said it was too artsy and the common person couldn't appreciate it. "They even took everybody's favourite song 'Home' and translated it into Tamil, how to sing along?? Why they do that??" So I guess it's not just cynical me then.
But despite all that, this was still the best NDP ever!

hdb dwelling

It's been about 2 months since the wedding, and while I've been busy, I guess the main reason I stopped blogging is because I lost the habit. So here's a start.

Just over a year ago, we were deciding between living in a HDB or Condo. As usual I approached the issue in a very pragmatic way, also received lots of helpful advice from readers. So now we are living comfortably in a tiny 4-room flat, what's it like?

I suppose the biggest adjustment to make is really taking the lifts, especially since our lift only stops on the 6th and 11th floor. And it will only be upgraded by end of next year, so it means I have to be really really careful to remember everything whenever I walk from car to flat and back.

This also led me to an interesting observation about my neighbours. When I get into the lift to go up, more often than not if there is someone already in the lift, they don't bother to ask which floor I want to go to. They just press both 6 and 11. It works pretty well if they get off on the 6th floor, but sometimes they get off on 11 with me, and so the lift stops at 6 for no reason.

This type of behaviour leads me to wonder if there is something so shy about Singaporeans that they just can't just open their mouths to ask what floor I want?

Oh, and people still pee in the lifts.

the opportunity cost of ns

Some time ago I attended a talk by an officer from the Ministry of Manpower. It was a report card on our current manpower situation - employment and unemployment rates within different industries, the efforts to draw in foreign talent and the implementation of workfare efforts. In the midst of this, he commented how many poly students with diplomas in IT or digital media design find their education obsoleted after their 2-year stint in NS. That got me thinking.

We all know there are urgent and pressing needs for national service, as it provides the deterrence and security that allows a peaceful military and political environment and a conducive climate for business. But just out of curiousity, what is the true opportunity cost to individuals and the economy of 2 years of full-time national service and at least 10 years of in-camp training?

• 'A'-level students often complain of how the 2 years in NS makes them stupid, and how they have to struggle in university to catch up with their female counterparts who are fresh from JC. What more the polytechnic students who have to find jobs upon their ORD? Many of them would have forgotten much of what they learned. Others in the fast-moving IT fields would find that whatever they learned has already been overtaken by newer and more powerful versions of the software. To make themselves employable, they have to go into retraining again!
• Singaporean employers have commented (both in the forum as well as in personal conversations) how tempting it is to employ PRs and foreign talent over Singapore citizens, simply because their productivity is not interrupted by the compulsory stints of up to a month of NS each year. Their patriotism in choosing to employ citizens imposes a cost as project deadlines are delayed awaiting the return of these people.
• And of course, there are the Singaporean citizens themselves who may be passed over for employment because of their national service liabilities. After all, not all employers are that patriotic.
• On the macroeconomic scale, there is also the lost productivity if you add up all the weeks and months of national service training done each year, taking people away from their regular jobs.
• An additional cost to the economy is that these people are still paid wages equivalent to what they would usually draw, often to do nothing but sit around and wait. Imagine a high-flying lawyer may be called back to perform his role as a rifleman or clerk, and spend most of his time just waiting around or eating in the canteen. Your taxes are paying for his idyll. (And yet, he isn't particularly happy about it either because back home the work in the office is waiting for him and piling up.)

I never really had my questions answered, because the MOM officer just told me flat out that no, he had no idea what the economic cost of NS was. He also mentioned that at the end of the day, the diploma students all find jobs anyway so they are happy.

But what if they are not happy, I countered? I would be most unhappy if I spent my 3 years in poly learning programming and graphic arts, but my dreams of working for LucasArts sour and I end up working as a web designer or in some company's IT support department.

The others laughed, the officer had no reply. I guess I put him on the spot, but I'm still looking for an answer to this question.

call from america

I realise I don't really have an opinion on ministerial pay, per se. Is it too high or too low, I don't know. The thing that annoys me is the arguments some people raise, the two most prominent being that 1) public service is about self-sacrifice and 2) our ministers earn much more compared to other countries.

For the first point, you can see my previous post. For the second point, I always thought that this was a moot point because in other countries, top leaders enjoy plenty of other kickbacks such as real power, and a whole bunch of business affiliationsa and concessions that might be seen as corruption on our sunny island. Anyway, rather than belabour the point, I found that it was expressed far more eloquently and convincingly (with numbers and statistics some more) by Janadas Devan in his recent Call from America. I heard this on 93.8 Live, but since managed to find it online as well. Happy reading ...

Radio Singapore International - Call From America with Janadas Devan
How much is Hillary Clinton worth?
April 11, 2007

How much were the Clintons worth when Mr Bill Clinton stepped down as president in 2000? Answer: More than US$11 million below zero – which was what they owed to all the lawyers who had helped to defend them against a flurry of charges in the 1990s. They had no home, having lived in public housing for a good portion of their adult lives – in the White House for eight years, and before that in the Governor’s mansion in Arkansas. Unlike almost every other previous presidential couple in the second half of the 20th century, the Clintons had no private vacation home – no Kennebunkport, as in the case of the elder Bush; no Crawford ranch, as in the case of the younger Bush..

How much are the Clintons worth now?

There are no exact figures – Mrs Hilary Clinton, as Senator, is obliged to disclose only a broad estimate of her wealth: for example, that the Clintons have a joint bank account worth between $5 million to $25 million, as well as a blind trust worth in the same range – but their total net assets must be in the tens of millions of dollars. We know that Mrs Clinton made at least US$10 million on her memoirs and Mr Clinton at least US$12 million on his. We also know that in 2004 alone, Mr Clinton made at least US$4 million giving speeches. The Clintons have paid off all their legal debts, and now own three homes –in Washington DC, in Long Island and in New York City. Aside from his speech making and memoir writing, his philanthropic work and his work on his Presidential Library, Mr Clinton is also an advisor to funds run by the Yucaipa Companies, a California private equity firm controlled by one of his many best friends, the billionaire Ronald Burkle. The New York Times reported last year that Mr Clinton will receive a share of the profits in the funds “should their returns exceed 9 percent over the life of the funds. One fund had reported a gain of 51.3 percent and the other 25.8 percent in 2005.” Mr. Clinton, according to the Times is also a partner in another “Yucaipa fund that invests in overseas ventures, for which
he receives regular payments and would draw one-third of the profits when the
fund is dissolved at least five years from now.”

''If we make money, he makes money,'' Mr. Burkle was reported to have said. Mr. Clinton's share of the profits in the Yucaipa funds could reach into the tens of millions of dollars. Not bad for a man who earned only US$250,000 a year when he was president and who had massive debts when he left office six years ago.

Which is better: The US system of relative poverty for officials while serving in government, followed by rather obscene amounts of money once they leave; or the Singapore system of relatively high salaries for public servants so they will stay in government for as long as possible? Americans and Singaporeans will have to decide these questions for themselves.

But it should be noted the US system has a cost. Mr Clinton is only one man, and he is not the only former president who has grown rich in his post-presidential years. Of more concern are the thousands of other public servants.

Take judges. Chief Justice John Roberts complained in January of the low salaries judges get. Appellate court judge get US$175,000 a year, about the same as first-year associates at top metropolitan law firms. And federal district court judges are paid about half what senior law professors get. As a result, the bench is losing judges. The hemorrhaging “has now reached the level of a constitutional crisis,” Chief Justice Roberts said.

Mr Clinton and other famous politicians can take care of themselves easily in their retirement. Not so judges and other public servants on low government salaries. The best leave for the private sector the first opportunity they get. They don’t lose. Instead the Government suffers; the judiciary is weakened; the public loses.

the only things sure in life are death and ...

Was it just me, or did anyone else have a good laugh when they saw the headlines this morning. The first article caught my eye, and I started reading:

To finance more govt spending to help the lower income:
GST will go up to 7 per cent
PM pledges more help in several areas, and more regular Workfare bonuses
By Lydia Lim, SENIOR POLITICAL CORRESPONDENT

HE Goods and Services Tax (GST) will go up from 5 to 7 per cent to pay for more government spending to help the lower income.

Mapping out his government's plan for the next five years and beyond, Prime Minister Lee Hsien Loong yesterday pledged to 'tilt the balance' of public spending in favour of lower-income Singaporeans, who are not benefiting as much as other groups from economic growth...

Whenever you see Lydia Lim's byline, you know that this is a matter of political sensitivity. And I think she was in top form because in just the sub-header and the first two paragraphs alone, we already see three mentions that the lower income groups will be the beneficiaries of this tax hike. It even mentioned that they would also alter the constitution to utilise some of the reserves. I read the article and of course was utterly convinced that my dollar would go towards those who needed it more than I.

But wait, my eye drifted across the page, and was captivated by yet another headline.

Corporate tax rate may have to be lowered

SINGAPORE is prepared to cut its corporate tax rate further to remain competitive in the global race for investments.

Announcing a hike in the Goods and Services Tax (GST) in Parliament, Prime Minister Lee Hsien Loong said Singapore might have to adjust accordingly if Hong Kong moved to lower its current rate of 17.5 per cent...

I don't know who wrote this one, and I don't really have much to say about it. Surely it is quite brief and to the point because the compelling logic of cutting the tax rate to remain competitive needs no explanation.

Anyway, I just started laughing then, because I couldn't help but wonder which editor does the layout for the front page. Because after all Lydia Lim's hard work, some simpleton might glance across the front page and, without reading, immediately jump to the misguided conclusion that the increased revenues from GST might not entirely benefit the lower income. After all, it might seem superficially obvious that an increase to the upper tax brackets would be a more exact approach to achieve the desired outcome professed. But I'm sure the economists have done their math right when they picked on the GST.

Perhaps there yet remains some rebellious streak in the mouthpiece.

---

Added Later:
So I had dinner with an old friend and discovered that the GST hike was one of her projects. And apparently the government never intended to sell it purely as a means to offset lower-income aid, but the press decided to add its own spin ... to make it more palatable? Kind of backfired, if you ask me.

Among all the furor the GST raised, this stands out as a well-reasoned pro-GST post. Andy Mukherjee also explains it in layman'ss terms for Bloomberg. I'm tired of people railing at economics that they don't understand. Personally, I figure life goes on ...

much ado about nothing

I could not help but wonder, as I sat there watching the idiot box with the dog whining and trying to make me walk him, if I was not just wasting my time. About an hour into the National Day Rally speech and I had to ask, "So what's new?" It is a pity I had fallen asleep when they announced the five-day week two years ago. Since then, I have watched two rally speeches in anticipation of some other electrifying announcement that would turn the world on its head, but they have been rather boring, really.

I guess there were two points that stood out more for me in this speech. The first was the issue of foreign talent, and the creation of a new agency withing the PMO to manage this. I think PM's points can be summarised briefly as
1) It is very important to stay in touch with overseas Singaporeans. It is good to go overseas, but please come back. We will set up an agency to manage this.
2) We all know our birth rate cannot support population replacement. I won't bore you with the details.
3) Since our birth rate is too low, the best way to sustain our population is to attract foreign talent.

In the first place, I think perhaps he glossed over the second point a little too quickly. Is it really so hard to increse the birth rate? It seems we are pouring a lot of resources into the whole foreign talent thing, might it not be possible to invest this in subsidising the costs of a third child instead? Every time the issue of birth policies comes up, my mother becomes incensed because she feels the PAP really screwed up on this one. She will tell the story of how she went to the hospital for a checkup when pregnant with the baby sister, and the nurses kindly directed her to the abortion room (obviously a fair assumption since this was the third, and she should stop at two). And she feels that the government should really show some backbone and admit for once that they were wrong in those early years. Instead, they introduce new and unpopular measures to attempt to fix this problem.

Personally, I have no problem with foreign talent. I see this as a problem of the individual welfare versus the welfare of society. And I believe that by picking and choosing the cream of foreign talent, they would certainly contribute to the country more than a few hundred more babies born to random Singaporean parents.

On the other hand, it is likely that with more competition (whether local or foreign), individuals would be less well off. This is the innate fear that leads people to reject the notion of more foreigners. The key differences are that with foreign talent, the culprits are easily identified (as opposed to some faceless statistic on the birthrate) and with foreign talent, people feel the pain immediately because they are competing for jobs now, not 20 years down the road. It is easy to gripe if you are replaced or passed over in favor of some yellow haired dude, but if some other Singaporean gets your job or promotion, how would you know if he might not have existed if not for government birth control policies?

The other thing that PM focussed on was the new media, the internet and blogs. It is quite clear from the time allotted that this has been identified as a key issue that they are taking very seriously. It is unfortunate that after all the talk, I was still not convinced that the action taken against Mr Brown was reasonable and public spirited. And yet I am still very hopeful for our blogging scene, and especially Mr Brown.

I was pleasantly surprised to discover recently that Mr Brown ranks #300 on Technorati. Given our miniscule population (since popularity is based on links), it is really impressive to have one of our own ranking up in the clouds. To me this signals a very active blogging scene, which bodes well for the continuance of civic discourse, whether serious, fallecious or otherwise. Kudos to Mr Brown, and keep up the good work!

quitters

I haven't really been following the debate on emigration closely. I'm sure its more of the same again. In fact, it strikes me as slightly hypocritical that the government should make an issue of this at all. Of course, we don't want to lose our intellectual capital to other countries. But considering that we have very public efforts of our own to attract foreign talent, and that our continued population growth rate is probably not due to the declining birth rate, I'd say what goes around comes around. For years, we have been beneficiaries of the repressive domestic racial policies of our neighbours. Can we in good conscience condemn people for going someplace else?

But on the other hand, is emigration really such a bad thing? In their 2001 aricle Brains Abroad¹, Janamitra Devan and Parth S. Tewari made a convincing case that an overseas population is not necessarily a bad thing. For example, “In 1999, 70 percent of China’s $50 billion in foreign direct investment came from Chinese people living abroad”, and “Indians abroad deposited $5.5 billion at the state bank of India”². Domestic helpers from countries such as the Phillipines and Mexico have made up a large chunk of credit in their countries' current account balance. And in recent news, we also hear how Mittal Steel is returning to invest in India. Another more extreme example are the Jews, who are accused of using their positions of influence in many countries, most notably the United States, to support the reconstitution of the state of Israel and its subsequent actions. These are all examples of people who have contributed to their home countries from abroad.

The decision to leave a country is not a sign of disloyalty. There could be many reasons, which I think KTM has covered quite comprehensively at SingaporeAngle. Bottom line is that if we cannot keep these people physically, we should at least retain their loyalty and goodwill, or all will truly be lost.

---

¹ "Brains Abroad", Janamitra Devan and Parth S. Tewari, The McKinsey Quarterly, Number 4 pp 51-60
² ibid, pg 54

I think it's a pretty good article, but unfortunately it's not available online due to copyright I suppose. If anyone wants to read it, drop me a comment, I can email to you.

As a really random aside, I thought it was interesting to note that Janamitra Devan is the brother of Jenadas Devan, both sons of Devan Nair. Jenadas Devan has long been my favorite ST columnist, which is the polar opposite from my opinion of Andy Ho. I was once given an article by Jenadas on Japans' deflation for my political economy class. Considering that my Prof is one of the leading Japan experts and a consultant to the Japanese government, that article must have been pretty good to be selected. Which is pretty extraodinary considering that Janadas' area of expertise seems to be English literature.

the tyranny of public perception

Let's start with the article that first sparked my thoughts on this matter.

SIA plane delays landing at Changi to avoid hitting another plane
By Tan Hui Leng, TODAY | Posted: 29 July 2006 0016 hrs

SINGAPORE : A Singapore Airlines plane which was about to land had to pull up again and move into a circling pattern in order to avoid hitting another plane on the runway.

The plane then circled for about 15 minutes before making a landing.

The pilot had announced to passengers that the other aircraft "was too close" and he "had to take off again to avoid any incident," recounted one passenger.

An SIA spokesperson said: "When the go-around was initiated, there was ample separation between SQ11 and the other aircraft. And at 500 feet, this procedure can be done safely without compromising safety. This is a normal manoeuvre and pilots are thoroughly trained in the execution of a go-around."

This is just an excerpt, see the full text at CNA. Or TODAY. Or Straits Times.

Reading this, I felt sorry for SIA and CAAS. I'm sure that at all times, there was no danger to the plane. The station control was probably 90% sure that the plane on the ground would vacate the runway, and to save everyone half an hour, why not just get the next plane ready to land? The worst case was that he would have to ask the next plane to full up and start again, everyone was no worse off than before, and there was no danger involved. Right? No danger to the passengers, but maybe some danger to their reputations now that someone has decided to squeak to the media about it.

And this is on thing I find difficult to reconcile with our modern reality. Oftentimes the most beneficial decision is not the most acceptable decision, because of the way it is perceived. So we may end up taking a sub-optimal solution, because it is more acceptable. This annoys me no end because I am quite an efficiency and optimisation freak. In this case maybe the station controller should never have tried to bring the plane down. Or maybe the captain just shouldn't have opened his big mouth to explain. But now they have an image problem. Just a little nagging doubt in people's minds that maybe CAAS and SIA made a mistake. But of course, no one is really going to bother to find out the real truth and report about it.

I have encountered such situations in my personal work too. Once for an event, the boss canned the reommended proposal, because he said it would not go down well with the public. They would think we spent a lot of money on something excessive, when in reality actually it was a really good deal and not that expensive at all. But he refused to do it because of what people might think. To drive home his point, he gave us the analogy of the minister:

Apparently some Singapore minister was outfitting his office with a new carpet. He was given two options: a thin one and a luxurious lush one. They were the same price. He chose the thin one because he didn't want people to get the idea that the government wastes money on unnecessary oppulence. This is just one examples, I have others where more money was spent to project an image of thrift.

I thought it was just plain ridiculous. But not for long, because what drove it home for me was the Thaksin-Shin Corp-Temasek saga. It was a perfectly legal deal, which could well have been based on solid business stategy fundamentals. Instead, Thaksin got slimed for evading tax, and Temasek was portrayed as an aggressive foreign takeover. (A Bangkok taxi driver told me that Thaksin avoided the tax perfectly legally, but his opponents mobilised many rallies to denounce him and make it appear that he had lost public support.) In the end, I think Temasek was also pressured to liquidate its holdings at a loss.

While I think this phenomenon exhibits itself most clearly in public institutions, our little lives are not exempt. Every day, in the decision making process for crafting proposals, I have to divorce myself from the most optimal solution and the consider all the little intricacies of giving face and playing politics. When turning people down, I have to decide if I should just give the straight truth, or find something more tactful, especially to avoid misinterpretations over sensitive issues.

Is it because there is no trust left in this world? Everyone always assumes the worst case or most malicious reasons behind everything, or so it seems. And something in me screams everytime I have to put aside the most efficient and instead apply the most acceptable.

I'm not writing this to condemn my organisation or any others. Rather, I think this is the natural defence mechanism to the structural problems of a flawed society that lacks trusts and openness. That is quicker to criticise than to investigate, and where the media can too easily paint an innocent action into the most controversial light. That is the tyranny of public perception.

no questions asked

The recent furor over Mr Brown and MICA is just the latest verse in a very old song. But with recent shifts in global trends, the world's beat is clearly changing. Perhaps it is time we start singing to a different tune.

So let's start by talking about NORA. In the post 9/11 era, NORA is one of the systems that U.S. Homeland Security relies on to develop greater synergies between its many agencies. This is especially imporatant since the post-mortem showed that various U.S. agencies had all the pieces of the puzzle, but they failed to put them together. One of the interesting concepts NORA is built on is that questions, even without answers, have a value of their own. In the past, if the CIA asks "Who is Mr Mohd" and no one knows the answer, its significance is lost forever. But now, NORA remembers. And if the FBI later asks "Who is Mr Mohd", NORA will say, "I don't know, but the CIA is asking the same question." Immediately the two agencies can link up and share the information that has led them each to independant suspicions. And if later again, NSA discovers important information on a Mr Mohd, NORA can immediately identify who needs it.

Another emerging trend is the harnessing of the masses. Chris Anderson calls it The Power of Peer Production, Jeff Howe calls it Crowdsourcing (via Legal Janitor). The hottest business model now is to design an ecosystem and then let everyone else do the work of content generation. Then the traffic and the business just flows in. We all know e-Bay, and some m ore recent examples cited are creating a TV show from the hottest videos being shared on the internet, or providing the infrastructure for amateurs (such as amateur photographers) to market their goods, and of course take a hefty cut. In this way, the system is able to tap onto the ideas and resources of the multitude.

So what does this mean to us?

One of the uniquely Singaporean OB markers that was recently bolded and underlined to Mr Brown is the need to accompany criticism with solutions. Otherwise, we are told, we are just creating dissent, which is unconstructive and unpatriotic. But if no one dares to ask the question, how can we collaborate to find the answer? Until someone identifies the problem, how will others start searching for the solution? Just like for NORA, the question is important too. It can spark open discussion so that individuals with different fields of expertise can cross swords (pens, or blogs) and find the most optimal solution.

While Singapore has survived well by nurturing a stable of immensely capable technocrats, we cannot ignore the changes sweeping through technology and business. In this new world model, we have one advantage: we have very good people. So we must find ways to tap them, before we are left behind. And one way to do this is to let me people ask questions and identify problems, even if they have no ready answers.

new blog dead horse

I've found an interesting new political blog. It was actually recommended by my technologically-challenged auntie and mother, so I assume that most people already know about it. Nevertheless, Gayle Goh is a JC student with a sharp mind and strong opinions. She blogs at i-speak.

The first post brought to my attention was on ministerial salaries. A dead horse, perhaps, yet Gayle brought up an interesting rebuttal to one of the PAP's oft-quoted justifications for the high pay, namely the need to prevent corruption. She writes:

According to the aforementioned CPI, there are four countries in the world which are even less corrupt than ours. As Singaporean ministers are paid the highest in the world, it obviously goes to follow that all these countries' ministers are paid less than ours. I did a bit of research and found out, via this article, that New Zealand PM Helen Clark's salary is NZD 305 000 per annum, or USD 189 440 - less than George Bush, and six and a half times less than PM Lee... New Zealand is ranked 3 places above Singapore in the CPI, as the 2nd least corrupt government in the world. Why is it that New Zealand ministers can be even less corrupt than our ministers, and yet are paid so many times less?

It will be interesting to hear if there is an official reply to that. Nevertheless, there is still one other argument for high salaries that was not addressed as adequately. This is the justification that our civil servants, usually drawn from the cream of each academic cohort, need to be compensated for the opportunity cost of joing the civil service over the private sector. Gayle's stand on this can probably be inferred from this excerpt:

There is a basic principle to keeping ministerial salaries from skyrocketing, and it is one that is often overlooked in Singapore. Politicians in our government exist not to further their own interests, but to subordinate their personal advancement to the needs of the nation. They serve the nation, and not the other way round. As a child, I used to wonder why they were called civil servants - the word 'servant' always had insulting connotations of someone that's second-class, servile and unworthy of much note. But as I grew, I came to realise that there is great dignity, perhaps even the greatest dignity, in being a servant of others; in placing their needs above your own, and in committing yourself to serve and protect them. That is the sacred vow, the tacit contract that politicians undertake by entering this service. Lower salaries make it clear that they are fundamentally different from those in the private sector who seek to profit from their positions, making the frequent comparison between public workers and private ones like corporation directors or media stars totally redundant. The nature and purpose of their work are as different as night and day. Managing ministerial salaries ensures, too, that people do not enter politics simply to gain from the high pay and benefits, but that they do so because they genuinely want to put their talents to the good use of representing the country. Else, people would work towards entering the government simply because of the dangling carrot that is a fat pay cheque - which would clearly have disastrous consequences for us all.

It is refreshing to see such idealism in the youth. Yet this is a common view I often see expressed that I have been very wary of. From a political-economist standpoint, this does not gel with my view of basic human nature as rational, utility-maximising actors. I use the word utility-maximising rather than selfish because I do believe that people can derive real pleasure from helping others at the expense of self. This explains why people may leave high-flying corporate jobs to do volunteer work, or serve in government. The real question is how much utility can one derive from working in the Singapore government. This is impossible to quantify, so I will try to shed some light on it using anecdotal evidence, based on decisions made by people in these positions.

Siphoning The Cream
It is common knowledge that the government offers scholarships to the cream of the education system. (Whether this is a good thing is another debate.) After going to Ivy League or OxBridge universities, they come back to the civil service with a starting pay of $2000-3000 a year, with 1.5-2 months bonus. Meanwhile their counterparts in consulting or banking are earning $6000-10000 with obscene bonuses. And they work just as hard. It would be interesting to see how many of these people eventually leave the civil service or stat boards after their terms expire, or how many feel that service to the country is sufficiently fulfilling in itself.

Keeping The Cream (From Going Sour)
There is a lot of talk in the comments on Gayle's blog on how to make a meaningful salary comparison. Jame says:

I think comparing ministerial pay with what ministers could earn if they were in the private sector as, say top lawyers or doctors, is in principle wrong. If you are a top lawyer or top surgeon, you earn millions of dollars yearly, because the clients who engage you are invariably rich people or big corporations in the former case, and rich individuals in the latter case. Lawyers or doctors who serve the men in the street or small corporations are unlikely (in fact they dont) to earn millions or dollars a year. Ministers should be compared, if at all, to lawyers or doctors who serve the men in the street, because they make up the overwhelming majority of the population. Hence ministerial incomes should be pegged to the incomes of the average professional, rather than the TOP few professionals in every TOP profession.

I think this is a fallacy in interpreting the classical principle of supply and demand. Why do GPs earn less? Because they have a commodity skill; but also because they are subject to price controls to maintain the cost of medical care within an affordable range for the poor. Specialists like plastic surgeons face no such moral constraint to keep costs low. The top dog of Jurassic Park once said he could get his scientists to develop cures for diseases instead of resurrecting dinosaurs, but theme parks are much more profitable than pharmaceuticals. The question then is why a person would choose to be a GP. (Remember, they do have a choice in this.) The answer is probably A) he doesn't have the ability to be a specialist or B) he actually wants to help the general populace because it gives him pleasure to do so.

So in conclusion, I think the comparison should be made with other jobs the person could have held, top of private sector or otherwise. It is silly to compare it with the national average, or what other professionals serving the same constituents receive.

Pay Peanuts, Get Monkeys
I think the central argument so far is you get what you pay for. The monetary payout is somewhat offset by the patriotic satisfaction of serving country. But this value is not quantifiable, and seems to be dminishing over time. So we can approach the question from a different angle: do we need really good people in government? Let's also remember that the Singapore model is unique in that we have a very high proportion or our top brains starting out in the civil service and stat boards, driving the economy from without through economic policy, direct investment (GIC, Temasek, A*STAR, etc) and whatever perks EDB cooks up. In most other countries, these people would be making their waves in the private sector and driving the economy from the coporate side. The successful ones would be making big bucks. So if we feel that it is in the country's best interest to have the best people in government, shouldn't we be willing to pay them?

Money Isn't Everything
Draw on results from HBS survey and Hertzberg's theory of motivators and hygiene factors to illustrate that salary should not be everything. Maybe Gayle is right. Maybe there is a flaw in our government. Maybe there is a flaw with $ingaporeans.

Case Studies
All the speculating is great, but why not hear what the ministers have to say? And actions speak louder than words. It would be instructive to do a case study to see how long each minister stays in parliament, and their reasons, if stated. One case that comes to mind is Mr Tony Tan, who has finally retired after being recalled to parliament from OCBC in 1995 after he first quit in 1991. Clearly he felt a strong passion for country. But clearly it was also a great personal sacrifice.

Power Brings Wealth
In the U.S. (with whom most comparisons are drawn), power begets money. We all know Dick Cheney's ties with Halliburton. The company benefited much from U.S. oil exploitation and Cheney benefited much from the company. (Maybe they should have paid him more.) In his first year out of office, Clinton earned $25m in speaking fees and book deals. It would be interesting to know how much our ex-Ministers and Presidents make, but I think it likely pales in comparison. (See this article for more interesting insights.)

This entry is a work in progress. Given my notriously slow updates lately, it may take a while. Comments are still welcome in the meantime. The general points I hope to discuss are that 1) it is wrong to assume that people would happily forgo income for the joy of serving the country and 2) there are many dimensions to consider when comparing ministerial salaries and returns across countries and industries 3) if people do not derive sufficent utility from serving the country, as evidenced by high salaries required to keep them, then is there something wrong with the government or the people?

taxi talk

It's rare that I get a chance to talk to taxi drivers. So when I sent my car for repairs, I caught one to work. This one quite dao, didn't make any effort to talk to me. So I decided I would have to start the conversation.

"So are you pro-PAP or anti-PAP I asked?" He was a bit stunned and cast a wary eye on me. Oops, maybe I was a bit too direct. Some more he knows where I work, probably thinks I'm a government spy. "Don't worry I'm not a spy," I said, "it's just that I don't often get to talk to taxi drivers. But I like talking because I think taxi drivers really know what Singaporeans are thinking. They talk to everybody. Much better than reading the newspaper."

Visibly flattered, he brightened up. "That's right," he said, "many people tell taxi drivers a lot of things. Sometimes I also tell people things that they find to be very useful... Actually I have always been a strong supporter of PAP, just that I feel that last few years they have not been doing a good job. You all younger generation don't know what things was like 10 years ago. Now they always tell you what a good job they are doing, but life is actually much harder. We are still moving forward, but that's because the government squeeze very hard." The ball was rolling ... now to sit back, relax and listen to the stories.

Well the crux of it is that he sees the quality of life detriorating here. He'd rather be back in the 70's, when life was simpler and less stressful. Back then, you could compare Singapore to the neighbouring countries and know that our government was truly making a difference, bringing us forward by leaps and bounds. Now he's not so sure.

He also feels that the government should make a big deal about giving things that they are just going to give away. "How is that?" I asked. "You see they gave us a bonus on May 1. Everyone very happy. But two days later on May 3 what happened? The banks announced that they are increasing the interest rate of housing loans by 0.03%..." What happened was an impressively lengthy computation on how much more the average Singaporean would paying in loans, and how this more than negated the progress package.

He got so engrossed talking he missed my exit, even after I pointed it out. So we had to make a very slight detour and he insisted on taking $10 instead of $12, even though any increase in fare could only have been marginal.

"What for I take more money then feel bad later," he said. "I rather take less, everyone happy." I like that philosophy; I wish more peope could share it.

little ball bearing

Singapore Angle has a really interesting piece on Patricia Herbold, nominated as the next Ambassador to Singapore. Here are a few of the more interesting things that jumped out at me:

Frank Lavin, the current ambassador, has over twenty years of experience with Asia issues, a Lt Commander in the U.S. Naval Reserves, and not to mention a B.Sc.F.S. from SFS at GU, an M.Sc. in Chinese Language and History from GU, an M.A. in International Relations and International Economics from SAIS at JHU and an M.B.A. in Finance from Wharton. [all schools truncated from the original for your guessing pleasure]

I am astounded. His educational qualifications read like the who's who of top institutions. And I don't mean top institutions in the generic sense - this guy studies at the top institution for each field. I don't know how he managed to accumulate such a wealth of academics but ... I also want!

There always has been a small collection of "plum" ambassadorships that U.S. presidents of both parties save for their closest friends and reliable contributors: Paris, London, Tokyo, Buenos Aires and Singapore.

Why is Singapore considered a plum ambassadorship? I wonder what it takes to qualify to be a plum.

And this bit is from Ms Herbold's testimony, which also contains a very concise summary of Singapore-U.S. relations for anyone who is interested.

Singapore is a strong supporter of a U.S. military presence in the region. It is a critical logistics hub for U.S. forces transiting between the Pacific and Indian Oceans. Singapore boasts the only pier outside a U.S. base at which a U.S. aircraft carrier can dock, for example. Singapore is also an important partner in promoting maritime security in the Strait of Malacca, through which one-third of the world's trade and one-half of the world's oil transits.

It brings to mind two fond memories. The first was when a bunch of friends were discussing regional militaries and someone joked that Thailand has an aircraft carrier and not enough aircraft. The comeback was: we have an aircraft carrier dock and no aircraft carrier. I didn't realise we were the only one in the world, though.

The second point is the now oft-quoted statistic about the Straits of Malacca. Soon after 9/11, I was engaged in a study of Terrorist Threats to Singapore under one of the foremost terrorism experts in the U.S. This was one of our core findings, and to this day I still wonder if the media spotlight a year or two later had anything to do with our little school project. My professor was, after all, a CIA consultant and who knows whatever other government links he had. But so what if half the world's oil flows through our Straits? Let me try to elucidate its significance to Singapore and the world, with excerpts from our research.

August 17, 1943. Bombers from the Eighth Air Force attacked ball bearing plants at Schweinfurt in a massive daylight raid. The allies had identified anti-friction bearings as a critical component of the German war machine and attempted to snap this weak link. Here is one example of input-output analysis [now more popularly know as Effects Based Operations], and how the destruction of something seemingly insignificant could have disproportionately large repercussions.

I was offended when my professor approached the problem by asking, "How could Al Qaeda attack America through Singapore?" Ethnocentric b***** I thought - but no, he actually had a very good point because the ISD had already proven it could deal with JI - and the only thing that would entice the intervention of Al Qaeda in our lion city was the prospect of dealing larger damage to the U.S. We used input-output analysis to figure if any of the weak links might reside on our soil.

The Straits of Malacca is one of the busiest and most crucial shipping lane in the world. Every year, more than US$1 trillion worth of goods are transported through the straits and the volume of shipping traffic through the straits in 2000 amounted to 49,062 vessels. The use of the Straits saves the Japanese petroleum industry about $400m a year just on transportation cost savings. Much of the trade that takes place in the world relies heavily on the Straits of Malacca, a narrow 1.5 mile stretch between Singapore and Indonesia, and it is estimated that half the world’s shipping passes through this point. It is easy to envision the world economy being severely crippled if use of the straits is made impossible, even if for just a few months. Industries, being heavily dependent on oil, will come to a standstill, especially in the poorer countries in East Asia, leading to the lack of components critical in driving world economic production.

There was little doubt in our minds of the magnitude of the problem should the Straits be blocked - we then spent a considerable effort researching dirty bombs, mines and RPGs on fast craft to determine how it might be done. Personally, I am very glad our respective governments have taken strict measures to control this threat even before any incident occurred.

And so that explains the significance of the Straits of Malacca. We also found some other less sexy and still unpublicised stuff, so I guess I will keep that to myself for now.

singapore number one

Here's a really quick link because Singapore topped a ranking I've not heard of yet: Infant Mortality.

If it's shameful that we have bloated corpses on New Orleans streets, it's even more disgraceful that the infant mortality rate in America's capital is twice as high as in China's capital. That's right - the number of babies who died before their first birthdays amounted to 11.5 per thousand live births in 2002 in Washington, compared with 4.6 in Beijing.
...
The national infant mortality rate has risen under Mr. Bush for the first time since 1958. The U.S. ranks 43rd in the world in infant mortality, according to the C.I.A.'s World Factbook; if we could reach the level of Singapore, ranked No. 1, we would save 18,900 children's lives each year.

Taken from the New York Times: The Larger Shame

not my cup of ndp

Today is Singapore's big day. Yet although I consider myself very patriotic, I really don't give a damn about NDP 2005. Never have, and probably never will. I'm sure the irony of this will not be lost on my friends.

I guess I'm just not one for shows - I don't watch TV and rarely movies. I don't know the meaning of a "natural high", so I am never able to immerse myself in the euphoria of a mob mentality. Nonetheless, I'm happy to see the patriotic fever rising and everyone getting into the mood.

For me, perhaps the best part of NDP was a girl I met on Sunday. She's from Hong Kong, she's been here for two months, and she tells me she loves it. When foreigners tell me they love my country, that's what really warms my heart. For the rest of us, shame on us if it takes a little celebration to make us feel Singaporean.

It is often commented that to feel Singaporean, you really have to leave Singapore. My parents always made sure we were on our best behaviour during holiday travels - they hate the image of the ugly Singaporean tourist. And I found this to be especially true during my time in the US. As the only Singaporean in many of my classes, I often felt the sensation that I was on display as an ambassador of the country and this put far more pressure on me to uphold a good public image than I ever felt back home. I really put in a lot of effort to maintain a wholesome image of balanced academic and social life, to dispel any inkling of Singaporeans as antisocial muggers. And as president of our little association, my main focus was encouraging my fellow countrymen to mix around outside of the Singaporean cliques.

So for now, I'm just looking forward to the fulfillment of numerous promises to come visit our little island. And in the meantime, I guess I'll just be nice to tourists and do what I can to make their time here a pleasant experience. We don't need a casino to keep them happy. That would be my best gift to Singapore.

fresh air at last

About two years ago, Ireland banned smoking in pubs. I immediately wrote in to the ST Forum and suggested that Singapore should ban smoking in pubs and clubs. After all, some of the world's most advanced cities like those in New York and California have already done it. And if the Irish Pub capital of the world can do so, why should our progressive society not be among the first to suit. This was prompted in part by my own experience at a smoke-free establishment in CA, which was most enjoyable and unforgettable.

The counter-argument would be that there is a tremendous cost to banning smoking. A cost both to the tobacco companies, to tax revenues, and worst of all to the owners of nightspots. Of course, these costs are currently borne by people like myself - the non-smokers. Unfortunately, ST did not publish my letter.

However, today I read this, and my heart is beating a little faster:

SINGAPORE will ban smoking in more public areas from July 2006 as part of a campaign to cut tobacco-related diseases here , Dr Yaacob Ibrahim, Minister for the Environment and Water Resources, said on Sunday.

Dr Yaacob was quoted as saying on Singapore radio station, News Radio 93.8, that smokers would be allowed to light up only in designated smoking corners at open-air cafes and hawker centres.

'Come 1 July 2006, non-smokers will be insulated, and they can have makan at our hawker centres or the coffee shop without having to suffer secondary smoke,' he was quoted as saying on News Radio 93.8.

Smoking is currently banned in all air-conditioned buildings and establishments except bars.

Dr Yaacob said the ban will be extended from July 2007 to include indoor entertainment outlets such as air-conditioned karaoke lounges and pubs.

'This would give (owners) enough time to make adjustments to their outlets,'such as building smoking rooms with separate ventilation systems, he said.

This is wonderful news, nightspots will never be the same again.