For those who boycott the Straits Times (and rightly so), today's headline screams out "Wage cost burden heavier than in US: Quoting a Perc global survey, Deputy PM Tony Tan tells why it is urgent that costs are brought down through CPF rate cuts".
Everyone knows that Political and Economic Risk Consultancy, Ltd (PERC, for short), is a respected think-tank whose reports are quoted by governments, Alan Greenspan, the International Monetary Fund, and Transparency International. I will prove that this survey should be dismissed with more than a pinch of salt, together with the ministers' mantra about cutting social security.
About Perc
Perc is more known for its studies on international corruption/graft. The organisation conducts surveys on expatriate businesspeople in East and Southeast Asia, and publishes its findings and rankings of countries every half-yearly.
So it's just a survey, you ask? Well, it always looks very scientific and credible if you display the results in numerical form, such as "We give Singapore a 4.2 grade out of 5 on xx aspect of its economy/corruption, etc". Then, everyone gets the impression that there was some quantitative, fact-based measure of corruption in the study, whereas in reality, the study measures the subjective perceptions of a very specific bunch of people.
The right method for the right measure
A perception-based study, i.e. a survey, is appropriate for some measures and not others. Measuring corruption based on 'hard facts' is notoriously difficult. Reports of corruption that has been unearthed are dependent on the resolve of the state to investigate and prosecute corrupt officials. So, relatively 'clean' countries might have more reported cases of corruption than really corrupt countries where graft is already accepted as part of the landscape, and nothing can be done about it...
Hence, corruption is a measure that is best gauged by surveying perceptions of businessmen, especially expatriates, who are alien to the local 'culture of corruption'.
Let's turn to the issue of wage costs. Singapore ranks as 4th highest in 14 countries, in terms of wage costs. Higher than the US and Australia, and only less expensive than Japan, South Korea, and Hong Kong. The nations with the lowest wage cost are India, the Philippines, and China.
Something stinks in the report
It's the appropriateness of using a survey to rank 'wage costs'. Why bother with perceptions when there is concrete, reality-based economic data that is easily available? If we want to ask "Are wage costs too high?", or "Can we rank these countries with respect to wage costs?", the most logical way of finding the answer would be to check the published statistics of each country. What Perc has really found out in their survey, is that Singapore ranks fourth in perception of being a country with high wage costs. NOT that it really has high wage costs.
Let's not get into the issue of whether Perc used expat businessmen from Southeast and East Asia to generate its values for the US and Australia, although it's a legtitimate point to throw at them. If expats in Southeast and East Asia are used to evaluate the region, then the US and Au regions should be evaluated by expats there. Was it done? We have no idea, since unlike other responsible and scholarly think-tanks and journals, Perc does not reveal its methodology or the specifics of its surveys. Hell, even the Straits Times has to reveal some details of its own surveys to look credible!
Getting back on track... While the use of expatriates for a survey on corruption is justiable and logical, we must remember that using them for a survey on wage costs is not reasonable, and it's got to do with the SAME point: being alien to the local culture.
Regardless of the local culture (in the form of the 'culture of corruption), corruption is always wrong. However, the local culture is very important to understanding and properly evaluating wage cost. I suspect Perc has forgotten to take into account the LOCAL cost of living. Wage costs must be adjusted to the cost of living in order to get a true picture of how overpaid a nation's workers are. Not only that, but a respectable cross-national study on wage cost will have to factor in exchange rates and purchasing power parity.
Obviously, Hongkong, Japan, South Korea and Singapore have the highest costs of living in the region. Definitely, the absolute wages will be high. The reverse holds true for China, et al. The question that was NEVER asked was: What is the average wages, expressed in terms of the average cost of living? Yet another question never asked: How do wage costs compare to other costs, like office rent, administration, inventory, investment?
Then, the other question that was NEVER asked was: Is there any currency undervaluation that causes some countries to offer comparatively cheaper wages than others?
Will an expat businessman, an alien, factor all these in, during a simplistic survey? Which, by the way, the question asked was simply "Do you think the wage costs of X country are high?".
Wrong survey, wrong conclusion, wrong remedy
Other economists are starting to complain about the yuan, which they judge to be fixed at 20-40% under its true exchange value.
So, Singapore's ministers want to compete with the low wage costs of China? Adopt an exchange rate devaluation.
27 August 2003
24 August 2003
Denoument
Today is the anniversary of Martin Luther King's historic "I have a dream" speech. 40 years ago, the good reverend spoke out against discrimination and poverty.
Of course, our national newspaper posts nothing about the anniversary, or the commemorative events and speeches in the Lincoln Memorial, in Washington today. Perhaps our journalists think that there is no poverty and no racial prejudice in our beloved Singapore?
Instead, we have 4 pages devoted to the "Singapore Succession System" and the Heir Apparent, Mini-Lee.
I quote from Pascal:
We do not choose as captain of a ship the most highly born of those aboard.
Of course, our national newspaper posts nothing about the anniversary, or the commemorative events and speeches in the Lincoln Memorial, in Washington today. Perhaps our journalists think that there is no poverty and no racial prejudice in our beloved Singapore?
Instead, we have 4 pages devoted to the "Singapore Succession System" and the Heir Apparent, Mini-Lee.
I quote from Pascal:
We do not choose as captain of a ship the most highly born of those aboard.
23 August 2003
The coming crisis of capitalism
Sometimes I wake to the feeling that the world is going to the dogs, and I have a front seat to the ensuing spectacle.
Yesterday's economic figures show France joining Germany and Italy in the League of Nations in Recession (or lurching into recession). Today, we read that South Korea, the economic powerhouse least affected by 1997, is in technical recession this quarter. In a desperate attempt to grow out of its own recession, Singapore's leaders take the extraordinary step of cutting the pension rate of its citizens.
Compounded to all this: reports that regardless of skills, efficiency, specialisation... all kinds of jobs are haemorraging from the developed world to China and India. To me, this is the biggest and most prominent sign that capitalism is once again in crisis.
Let me explain: the 'rationale' for international capitalism is 'free trade', leveraging on supposed efficiencies of production and specialisation of skilled labour. In theory, developed countries should lose low-skilled jobs to developing countries who are more efficient, cost-wise. Developing nations should technically lose out to the skill-efficient labour and higher-order services of developed nations. What should not happen is for low cost to trump over skills and technical specialisation. But it is happening.
The theory and rationale for international capitalism and free trade is unravelling before our very eyes. It is impossible for developed countries to compete on cost alone. That's why our economic leaders have always stressed that going higher-skilled will create more jobs... but the facts show their advice is wrong. We're haemorraging both unskilled and skilled labour.
Let's take a step back. Capitalism is a long tradition; it has seen several crises and remade itself several times over the course of 4-5 centuries. There was Mercantile Capitalism in the 16th century, run on equal parts free trade and the expansion of empires.
The most recent form of capitalism, "Industrial Capitalism", started during the Industrial Revolution. For a short while, it brought some progress to people. However, it soon came to a crisis: Capital had too much power over labour. Workers everywhere were genuinely exploited, with low pay, long hours, and poor, hazardous conditions. Confrontation looked imminent, and Marx became the prophet of the Communist Revolution.
Thankfully, Marx saved Industrial Capitalism. Realisation of the dangerous trends within capitalism forced everyone to reform it. Unionised labour was legalised. Minimum wage and other employment laws were drafted.
Both Capital and Labour were corporatised into the State, so much so that almost all modern democracies are actually Socialist. The state's major duty is the education of the population - so that they are employable for Capital. At the same time, it guarantees the safety of Labour in employment laws. There is Social Security, to ensure that unemployment is a temporary yet non-threatening state.
While Industrial Capitalism faced the problem of unfettered Capital, International Capitalism faces a similar crisis: unfettered free trade. 1997 was caused by the unfettered currency and investment flows. The reform? World Band and IMF agreed eventually that Malaysia's currency controls was the right step to take. However, the greatest problem still plagues us: the unfettered flow of jobs that goes against the "mutual specialisation" rationale of International Capitalism. Now that cost appears to be the ONLY factor, it makes mutual specialisation a joke.
I have no doubt that there will be an eventual crisis. I look forward to the next prophet, and the resulting reforms to the system, and the birth of a new kind of Capitalism.
Yesterday's economic figures show France joining Germany and Italy in the League of Nations in Recession (or lurching into recession). Today, we read that South Korea, the economic powerhouse least affected by 1997, is in technical recession this quarter. In a desperate attempt to grow out of its own recession, Singapore's leaders take the extraordinary step of cutting the pension rate of its citizens.
Compounded to all this: reports that regardless of skills, efficiency, specialisation... all kinds of jobs are haemorraging from the developed world to China and India. To me, this is the biggest and most prominent sign that capitalism is once again in crisis.
Let me explain: the 'rationale' for international capitalism is 'free trade', leveraging on supposed efficiencies of production and specialisation of skilled labour. In theory, developed countries should lose low-skilled jobs to developing countries who are more efficient, cost-wise. Developing nations should technically lose out to the skill-efficient labour and higher-order services of developed nations. What should not happen is for low cost to trump over skills and technical specialisation. But it is happening.
The theory and rationale for international capitalism and free trade is unravelling before our very eyes. It is impossible for developed countries to compete on cost alone. That's why our economic leaders have always stressed that going higher-skilled will create more jobs... but the facts show their advice is wrong. We're haemorraging both unskilled and skilled labour.
Let's take a step back. Capitalism is a long tradition; it has seen several crises and remade itself several times over the course of 4-5 centuries. There was Mercantile Capitalism in the 16th century, run on equal parts free trade and the expansion of empires.
The most recent form of capitalism, "Industrial Capitalism", started during the Industrial Revolution. For a short while, it brought some progress to people. However, it soon came to a crisis: Capital had too much power over labour. Workers everywhere were genuinely exploited, with low pay, long hours, and poor, hazardous conditions. Confrontation looked imminent, and Marx became the prophet of the Communist Revolution.
Thankfully, Marx saved Industrial Capitalism. Realisation of the dangerous trends within capitalism forced everyone to reform it. Unionised labour was legalised. Minimum wage and other employment laws were drafted.
Both Capital and Labour were corporatised into the State, so much so that almost all modern democracies are actually Socialist. The state's major duty is the education of the population - so that they are employable for Capital. At the same time, it guarantees the safety of Labour in employment laws. There is Social Security, to ensure that unemployment is a temporary yet non-threatening state.
While Industrial Capitalism faced the problem of unfettered Capital, International Capitalism faces a similar crisis: unfettered free trade. 1997 was caused by the unfettered currency and investment flows. The reform? World Band and IMF agreed eventually that Malaysia's currency controls was the right step to take. However, the greatest problem still plagues us: the unfettered flow of jobs that goes against the "mutual specialisation" rationale of International Capitalism. Now that cost appears to be the ONLY factor, it makes mutual specialisation a joke.
I have no doubt that there will be an eventual crisis. I look forward to the next prophet, and the resulting reforms to the system, and the birth of a new kind of Capitalism.
21 August 2003
Kill the Thirtysomethings!
How do we evaluate the role people play in history? I present you the case study of the 30something generation of Singaporeans.
Following accepted historical procedures, one might begin by looking at the Singapore they inherited when that generation came of age and first started out work, and compare that to the Singapore our quarter-life crisis generation has inherited from them, when it's our turn to start out...
Wasn't it not so long ago that Our Generation was predicted to screw up Singapore with our wishy-washy liberal leanings? (Old Man Lee's theory that the 3rd generation will undo what the founders and the 2nd generation built up) Well, whaddaya know... the country didn't last long enough for us to ruin it ourselves. Thanks alot, 30somethings!
You disappoint me deeply. Let's see: our 30somethings were the first SG generation to be
1. highly educated
2. experience upward social mobility never seen before by their parents generation
3. exposed to cosmopolitan forces
Unfortunately, they didn't pick up anything but an unbridled lust for pleasure and money. Ah, the allure of the 1990s! Upgrade mania, conspicuous consumption, and the Singapore Dream of the 6Cs. Politically, the 30somethings truly deserved their "leadership of Singapore", with its bloated policies pandering to greed and a penchant for reducing every issue into a referendum for "4 more good years" - aka more upgrading.
I'm sure you had a good run, 30somethings. Wasn't it such an experience to be able to buy, upgrade and sell flats once every 3 years during the economic bubble? Well, WE can't even afford new housing nowadays, unless we want to remain in debt for more than half of our working lives, thanks to the property inflation that you single-handed caused.
Way to go, 30somethings. You occasionally complain that this recession has cost you your whitecollar, middle management jobs and sometimes lower pay. Well. WE can't even get decently employed because companies would rather hire experienced 30somethings instead of fresh grads. You've stolen our jobs.
If I had a big hammer now...
Following accepted historical procedures, one might begin by looking at the Singapore they inherited when that generation came of age and first started out work, and compare that to the Singapore our quarter-life crisis generation has inherited from them, when it's our turn to start out...
Wasn't it not so long ago that Our Generation was predicted to screw up Singapore with our wishy-washy liberal leanings? (Old Man Lee's theory that the 3rd generation will undo what the founders and the 2nd generation built up) Well, whaddaya know... the country didn't last long enough for us to ruin it ourselves. Thanks alot, 30somethings!
You disappoint me deeply. Let's see: our 30somethings were the first SG generation to be
1. highly educated
2. experience upward social mobility never seen before by their parents generation
3. exposed to cosmopolitan forces
Unfortunately, they didn't pick up anything but an unbridled lust for pleasure and money. Ah, the allure of the 1990s! Upgrade mania, conspicuous consumption, and the Singapore Dream of the 6Cs. Politically, the 30somethings truly deserved their "leadership of Singapore", with its bloated policies pandering to greed and a penchant for reducing every issue into a referendum for "4 more good years" - aka more upgrading.
I'm sure you had a good run, 30somethings. Wasn't it such an experience to be able to buy, upgrade and sell flats once every 3 years during the economic bubble? Well, WE can't even afford new housing nowadays, unless we want to remain in debt for more than half of our working lives, thanks to the property inflation that you single-handed caused.
Way to go, 30somethings. You occasionally complain that this recession has cost you your whitecollar, middle management jobs and sometimes lower pay. Well. WE can't even get decently employed because companies would rather hire experienced 30somethings instead of fresh grads. You've stolen our jobs.
If I had a big hammer now...
18 August 2003
The meaning of words
Ko.yaa.nis.qatsi (from the Hopi language), n.
1. Crazy life
2. Life in turmoil
3. Life disintegrating
4. Life out of balance
5. A state of life that calls for another way of living.
This should be a Singaporean word, it's so fitting.
Also, according to my O Level tuition kids, our local English examinors leaked the news to their teachers that "Don't" is officially banned from the oral examination (because the kids pronounce it as donch. My my, just when I thought education reform in Singapore was crazy enough.
1. Crazy life
2. Life in turmoil
3. Life disintegrating
4. Life out of balance
5. A state of life that calls for another way of living.
This should be a Singaporean word, it's so fitting.
Also, according to my O Level tuition kids, our local English examinors leaked the news to their teachers that "Don't" is officially banned from the oral examination (because the kids pronounce it as donch. My my, just when I thought education reform in Singapore was crazy enough.
07 August 2003
Love Song for a Merlion
I was born in kk hospital and delivered
through the singapore mill
the standard life cycle of a clone
(the limited presidents scholars edition is now available)
reproduced in strict quality control
allowing, of course, for a touch
of personal creativity.
in my years in kindergarten, hao kong ming, social studies,
and now the national education module in university
i have bowed to the icons of singaporeanista
drawn the courtesy lion the orchid
and crude representations of the singapore flag
(this is not a singaporean flag
but it really is, since i'm not a
countercultural american liberal artist)
never have i heard
the name of merlion
uttered in the same breath as the courtesy lion
singlish or garden city
i was lied to.
all tourist brouchures compress this nation
to an icon the size smaller than a postage stamp
but placed in the same upper right-hand corner
a fish-lion in the posture of a sea-horse.
another singapore first:
proud product of our life sciences industry.
when the merlion turns 80
perhaps there will rise
from the concrete ground of this manicured garden
scribes, biographers, each hired pen mythologising.
for them, the merlion did not just exist
and was created by the wild imaginings
of a tourist promotion board
but had stood since time immemorial
a singaporean - OUR VERY OWN!!!! - colossus of rhodes
benign guardian of the singapore harbour
that has seen this country rise from the sea-foam
small fishing town to the aphrodite of the knowledge economy.
the missionaries of our urban redevelopment gospel,
the excavation tractor and the demolition pile
shall boldly put to death the real
transmogrify place to memory
replace it with a million ornamental plaques
and a merlion:
We can learn to remember.
through the singapore mill
the standard life cycle of a clone
(the limited presidents scholars edition is now available)
reproduced in strict quality control
allowing, of course, for a touch
of personal creativity.
in my years in kindergarten, hao kong ming, social studies,
and now the national education module in university
i have bowed to the icons of singaporeanista
drawn the courtesy lion the orchid
and crude representations of the singapore flag
(this is not a singaporean flag
but it really is, since i'm not a
countercultural american liberal artist)
never have i heard
the name of merlion
uttered in the same breath as the courtesy lion
singlish or garden city
i was lied to.
all tourist brouchures compress this nation
to an icon the size smaller than a postage stamp
but placed in the same upper right-hand corner
a fish-lion in the posture of a sea-horse.
another singapore first:
proud product of our life sciences industry.
when the merlion turns 80
perhaps there will rise
from the concrete ground of this manicured garden
scribes, biographers, each hired pen mythologising.
for them, the merlion did not just exist
and was created by the wild imaginings
of a tourist promotion board
but had stood since time immemorial
a singaporean - OUR VERY OWN!!!! - colossus of rhodes
benign guardian of the singapore harbour
that has seen this country rise from the sea-foam
small fishing town to the aphrodite of the knowledge economy.
the missionaries of our urban redevelopment gospel,
the excavation tractor and the demolition pile
shall boldly put to death the real
transmogrify place to memory
replace it with a million ornamental plaques
and a merlion:
We can learn to remember.
03 August 2003
United Nations to Recruit Singaporean Graduates Next Year
Well, don't blame me for being cynical about this.
The New New Colossus
(poem inscribed on the Statue of Bureaucracy)
Give me your tired, your poor,
your huddled graduates yearning to find jobs,
The wretched refuse of your teeming shore.
Send these potential agitators for democracy to me,
I lift my lamp beside the golden door!
The New New Colossus
(poem inscribed on the Statue of Bureaucracy)
Give me your tired, your poor,
your huddled graduates yearning to find jobs,
The wretched refuse of your teeming shore.
Send these potential agitators for democracy to me,
I lift my lamp beside the golden door!
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