Should Singapore still mourn the loss of The Projector?

It has been exactly a month since the sudden closure of indie and second-run cinema operator The Projector. The closure may have provoked widespread despair and outrage online, however performative or overwrought, but for the sake of public education this discussion must now move beyond narratives marked by self-regarding romanticism, naive sentimentality, and uninformed anti-capitalism.

What different things can we learn if, for example, we took a production of culture perspective? What if we treat watching an indie or foreign film in a shabby chic cinema as an end result of the interplay between organisational structure, industry culture, market forces, audience preferences, and contractual agreements and unwritten norms within the wider movie industry? That is: What does it really take to screen a movie in a cinema? And if a cinema operator like The Projector fails, whose fault is it really?

Woud've been appropriate and poetic, but
The Projector didn't end its run with a screening of Goodbye, Dragon Inn

Did the New Naratif Civil War destroy New Naratif?

In April 2022, New Naratif raised the alarm. For the very first time, despite several years of releasing "accountability reports" to his subscribers and the public at large, Dr PJ Thum, the managing director of the website and director of its holding company Observatory Southeast Asia Pte Ltd, admitted to a crippling financial shortfall. Subscriber numbers have been misreported, subscription fees not collected, leading to a corrected revenue shortfall of USD 40,000. Not soon after, he appears to have let go almost all his editorial staff. Even now, New Naratif's restructuring is still in progress as it pivots to a different business model, publishing angle, and reason for existence.

This is par for the course for any financially distressed enterprise—until the staff laid off by Dr Thum chose to fight it out in the public. They allege that Thum misled both his readers and staff. Thum accused the staff of attempting to subvert his management, and furthermore accused them of waging a disinformation campaign. The staff stand by what they said, noting that documented evidence (presumably in the reports and subscriber emails) supports their narrative, not Thum's.

English Civil War woodcut in pamphlet, c.1643

In a fit of madness, Thum and his former employees have fired off the equivalent of ICBMs in a mutually-destructive civil war. Both sides may refuse to issue further responses but the damage is done.

What can Singapore do about its dormitory population?

Are guest workers a hidden and permanent underclass in Singapore?

"S11", a dormitory or worker camp in Singapore
Photographer: Suhaimi Abdullah/Getty Images

The segregation of COVID-19 numbers in Singapore's daily reporting is a misguided attempt to boost domestic morale through window dressing and impression management. Don't panic at these high numbers; guest workers living in dormitories are not part of the community, they're not local, they're not permanent residents! This intrusion of politics into technocratic competency in Singapore's effort to manage the coronavirus pandemic is now affecting key policy. The minister heading the coronavirus task force announced yesterday in parliament that our goal is to end the lockdown when new daily community cases are at low single digits. One can only infer this will be achieved by simultaneously discounting new daily numbers in the ongoing outbreak in the dormitories.

This attempt to handwave away more than 90% of SARS-COv-2 infections in Singapore is not supported by medical science. From an epidemiology standpoint, what's happening in Singapore's guest worker dormitories is a classic community outbreak. Contact tracing has established early on that guest workers living in dormitories were infected through a cluster at Mustafa Centre, a megamall popular with Singaporeans, permanent residents, guest workers, as well as tourists from all over the world.

Is there a public housing crisis in Singapore? NDRS 2018 edition

After watching prime minister Lee Hsien Loong's 2018 National Day Rally speech, many Singaporean homeowners asked the question: Is it worth it to opt into the new housing improvement (HIP 2) and voluntary early redevelopment scheme (VERS)?

Yet his latest housing minister recently announced that the value of public housing will plummet to zero at the end of their 99 year lease. Are Lee's new schemes an exercise in futility in retaining the value of your Housing Development Board (HDB) flat? Or do they show up the ongoing "asset enhancement" schemes as doomed and misguided? Should Singaporean homeowners feel more secure after Lee's new promises, or more angry at the PAP's old promises?

More importantly, do Lee's new HDB schemes actually solve the public housing crisis in Singapore?

What was the political compact between UMNO, PAP, and the people?

A democratic and liberal housecleaning is possible in Malaya

Having won an unprecedented election, Tun Dr Mahathir's new administration continues to signal its intention to prosecute Najib and his cronies over 1MDB, and investigate the state agencies that protected Najib and his cronies. From his pronouncements so far, it appears Malaysia's transition to from Barisan Nasional to Pakatan Harapan will be achieved, in defiance of popular expectations, without:

i. ruthlessly and undemocratically oppressing the former ruling coalition;
ii. cannibalising the partisan grassroots and patronage networks of the former ruling coalition;
iii. taking over the politically co-opted civil service.

These popular expectations are similar, if not identical to the narrative in Singapore, that in the event of a "freak election result", the new ruling party or coalition is expected to do all 3 (especially take over the openly partisan government-policy-friendly People's Association) and turn itself into a new People's Action Party. The subtext of this narrative: Better vote the PAP that you know, rather than an opposition who will betray its own democratic values and morph into the PAP rather messily.

Singapore and Malaysia: Even less dissimilar than Vulcans and Romulans!

For Dr Mahathir to achieve a transition without turning Pakatan into a new BN would be an achievement not only for Malaysia but Singapore as well, given how both countries continue to share a similar if not common culture.

Dr Mahathir's victory was only possible because the electorate decided that former prime minister Najib Razak's particular brand of corruption had broken BN's longstanding political compact on two counts: behaving badly (say, being spectacularly and narrowly corrupt and abusing the agencies of the state) while publicly failing to deliver key items (people really felt the pain from the inflation and public debt).

But what does the government supply in the Malayan political compact?

It is easy to see from self-gratifying behaviour when leaders have broken the compact. But what about the deliverables of the compact itself?

If presented with the disturbingly adjacent and anomalous positions of Singapore and Malaysian on the Ingelhart-Werzel cultural map, a student of historical sociology might propose that instead of seeing the two as far outliers from the "Confucian" and "Islamic" groupings, we should place India, Pakistan, Singapore, Malaysia, and Burma in a separate "former British East India" category, all incidentally occupying the narrow -1.0, -1.0 space. Said historical sociologist may argue that the similar if not common experience of than 2 centuries of British administration and decolonialisation have created a cultural and political similarity.

For Singapore and Malaysia, the birth of the modern political compact comes from their experience of post-war reconstruction. The end of the WW2 saw an immediate realisation that independence or divestment of Empire had to be given despite less than ideal conditions. Malaya had the best run and competent civil service in colonial Southeast Asia, but as United Nations observers pointed out, the people were too politically immature to govern themselves safely in 1945.

And for independence to be successful (at least to the British and their preferred post-colonial successors), the 5 and 10-year post-war reconstruction plans under the British Military Administration and its civilian successors had to deliver Malayanisation. That meant not just the expulsion of the transitory population in Malaya (a point recognised by the earlier UN report), but the continuation of British and Commonwealth grand interests and economic policy under a local administration and workforce. That could only be done by providing sensible social welfare (mostly in the form of affordable, standardised mass housing and healthcare), sufficient education, and create a modern industrialising economy. Failing which, the decolonialisation project would end in Mugabean chaos or a communist regime taking control of the industrial prize of Malaya. It helped that these were also the same things that citizens in Malaya told the BMA and the Social Welfare Department they wanted in several immediate postwar surveys.

Consequently, the political compact in both Singapore and Malaysia are the same: affordable mass housing (that would remain affordable for later generations), creating a native middle class and professional class through education (that would be gainfully employed in a native-controlled economy), and sharing with the people the fruits of a well-managed resource-rich and geographically strategic economy.

Likewise, the political leadership in Singapore and Malaysia are extremely sensitive to the same things: popular fears about the escalating costs of public housing, an education system that is failing future generations of workers, and an economy that is failing to deliver jobs and security to the people. In Singapore, these fears have put policy reversals for a largely immigrant-centric population plan, a moratorium on mass housing construction prior to GE2011, and sparked several rounds of economic restructuring talks and feedback sessions.

One more thing, perhaps the most important

While the Philippines had the highest GDP, it was Malaya had the best run civil service and the potentially richest economy in Southeast Asia (the British planned decolonialism and independence on the back of an expected postwar tin and rubber boom). This provides the final piece of the political compact between the political leaders of Singapore, Malaysia, and their people, beyond the deliverables that are expected, beyond the particular bad behaviour that cannot be tolerated.

In Singapore: The PAP has its mandate so long as Singapore is the least worst country in Southeast Asia.

In Malaysia: BN has its mandate so long as Malaysia is the least worst country in Southeast Asia, aside from Singapore.

So even if the People's Action Party should pull its socks together in the next two years, so long as Tun Dr Mahathir creates a post-BN Malaysia that inspires hope, that threatens to have a brighter future than Singapore, the PAP could be in for a lot of trouble in the next polls.

Keppel and Lava Jato corruption: Is there a cover-up in Singapore?

News of Keppel Offshore & Marine's (Keppel O&M) decade-long bribery in Brazil has filtered slowly into Singapore. The initial announcements in 2014 happened in a country far away. The denials by Keppel's chairman, a former cabinet minister, were robust enough. What really did happen? Investigations were taking place and Singaporeans were willing to give the benefit of the doubt, hoping that all would be revealed in due course.

It is only after investigations have been complete, record regulatory fines paid to anti-corruption agencies in Brazil and the United States that Singaporeans are beginning to realise the enormity of the situation (the enormity being Keppel's fine ranks number 7 in FCPA penalties, historically!)

Lava Jato involved international companies paying bribes to Petrobas,
kickbacks moved down the economic chain, and to also the ruling party and its coalition

But the response from Singapore's government has been most disappointing and a cause for concern.

The realities of Singapore's online landscape

Bertha Henson and Daniel Yap have announced the impending closure of The Middle Ground (TMG), revealing that the news website had failed to meet the challenges of sustainability. Earlier last month, the trio of Dr Thum Pin Tjin, Kirsten Han, and Sonny Liew announced the setting up of "New Naratif" and rolled out their vision, accountability, and subscription model.

Bertha Henson has done a great job with TMG and will be back with Bertha Harian

These developments may fit the establishment's Wild West model of Singapore's online news media, where newcomers can rise out of nowhere to carve an empire of their own, then fall just as fast or settle into also-ran status. On a less simplistic level, the online media landscape is dominated and controlled by Singapore's regulatory framework to such an extent that no full-fledged news site can be economically viable. Where the Newspaper and Printing Presses Act empowers the government to shutter presses as it pleases and more insidiously and demand presses award shares to entities it chooses, recent Media Development Authority regulations empower the government to demand any news site it chooses to cough up hefty monetary guarantees, and to demand forfeiture of that guarantee at its discretion.

Singapore's regulatory framework is a deterrence against the setting up of online news sites, and indirectly incentivises bloggers to stay small and stay within the government's OB markers.

No kiss and make-up: Sonny Liew and Singapore's National Arts Council

After Sonny Liew won several Eisner awards for the graphic novel which the National Arts Council (NAC) of Singapore has previously denounced as "potentially undermines the authority and legitimacy of the Government and its public institutions", the government agency (despite its reluctance to spell out its direct affiliation to the ministry of culture on its own website) and self-declared champion of the arts in Singapore released a congratulatory statement whose mixture of embarrassment and halfhearted conciliation did not escape notice.

It appears that this would not be the end of the matter, and it was wrong to expect a kiss and make-up between award-winning artist and the nation's arts administrators.

So we decided to interview Sonny Liew ourselves.

Blind men and the elephant: Chua Mui Hoong describes crony capitalism in Singapore

You've probably heard about the blind men and the elephant. In the dominant narrative, the moral of the story one should learn is the limitations to knowledge, how imperfect and incomplete information on the Truth may lead equally wise people to disagree on things. For my readers, I offer a counter narrative. The blind men and the elephant is an allegory for how things look to people who refuse to see what they're looking at.

Rethinking the haze and Indonesia

Tiny and rich Singapore flails comically when it comes to Indonesia and the haze. For all its claims to being a diplomatic giant on the world stage, Singapore fumed helplessly for the last 2 months as forests and peatland burned in Borneo and Sumatra.

It's a smog that gives Peking, Shanghai, and Hong Kong a run for their money. A smog that's more lo-fi, yet more poisonous. And according to both locals and expats, a smog that has more immediate effects on health. More importantly, Singapore's credibility as a vibrant cosmopolitan city and productive financial centre withers each day the haze lingers over its skyline.

Modelling the 2015 Singapore general elections V: Rational voter choices

We at Illusio, having duly considered the facts and circumstances laid before us in the past 5 years and during the rally season, do hereby endorse for the 2015 Singapore general elections...

The PAP clown show continues! (Town council edition)

"Hegel remarks somewhere that all great world-historic facts and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second time as farce."
-- Marx's introduction in The 18th Brumaire of Louis Bonaparte

Almost two years ago, half-hearted reports in the mainstream media hemmed and hawed over Aljunied-Hougang Town Council (AHTC) and its award of a contract to a firm which was registered barely on the eve of the elections.

Thanks to my sources, I sought to provide a fuller picture of just what was unsettling about the AHTC case, namely non-transparency, less than proper procedures in the tender process, a clear conflict of interests in the firm that won the contract. Whether or not there was any intention or whether this was simply a matter of non-standard or even slipshod management, it did lead my source and others familiar with town council procurement procedures to question if there was any procurement corruption - intentional or accidental.

Almost two years later, Marx's quip about history repeating itself holds true. We wouldn't say there has been a scandal but at the very least, there has been widespread concern over the blogosphere and media, again composed of half-hearted hemming and hawing, over how 14 PAP-run town councils outsourced their management software solution to a company called AIM.

Like before, as the priestess of Ise, I am bound by duty and obligation to point out the farce that lies before us - even though I fully expect the mainstream media now, as it did before two years ago, to leave the matter hanging while the balls are up in the air, out of sheer cowardice and fear of inquiring after what people need to know and want to know.

The real issue, as before, is conflict of interest

To a process auditor, the fact that (Action Information Management Pte Ltd) AIM is a company with $2 paid-up capital is immaterial.

The real cause for concern is the fact that a firm registered to former PAP MPs was awarded a contract for 14 PAP-held town councils by Teo Ho Pin, who was a sitting MP at that time and now names himself the "coordinating chairman" of these town councils, after being the sole bidder for the tender, and submitting the tender way past the deadline.

The fact of the case is there has been a conflict of interest, just as there was a clear conflict of interest in the AHTC case 2 years ago. AHTC awarded a contract to a firm set up by its former employees and managers. Now, it is revealed that Teo Ho Pin awarded a contract to a firm set up by his former parliamentary colleagues.

But a conflict of interest or a preferential awarding of contracts doesn't necessarily imply that there is any criminal or otherwise illegal behaviour, much less political corruption or procurement corruption.

A hypothetical professional auditor may query MP Dr Teo Ho Pin and former MP Chandra Das thus: Was the conflict of interest disclosed by AIM during the bidding process?

The auditor-general of Singapore, whose purview is checking the books of town councils, may query MP Dr Teo Ho Pin and former MP Chandra Das thus: Was the conflict of interest disclosed by the town councils in their annual reports submitted to him?

If the answer to both questions (both easily verifiable) is no, then according to some process auditors there might be a case for an investigation by the relevant regulatory authority.

Love me tender (as a farce)
We refer to the report in The New Paper, dated 5 January 2013 on page 6. As Lucky Tan points out: "For the tender process to work successfully and fairly, companies have to be provided sufficient information to put in a bid. In this case, the tender involves the purchase a custom software and specifications have to be sufficiently detailed so that companies can value the system and put in a competitive bid."

Instead, Hutcabb Consulting believes that the tender was a non-transparent one, with insufficient information provided about the nature of the work to be contracted. We infer from what the IT procurement experts canvassed by TNP said, that the contract made no business sense, the work had no financial benefit; hence "companies would ordinarily not bid for such contracts." You can find other software experts saying the same thing elsewhere.

And like the AHTC saga from 2 years ago, we come to the same questions of whether the tender process and the terms and scope of the contract was preferential in the sense that no other firm aside from the one awarded would have put in a bid for it. An auditor will ask if the tender process and terms of the contract make no business sense to bid for the contract unless that one firm was connected to the town council or the PAP.

Nothing illegal or corrupt yet but the non-transparency stinks anyway

I admit that even if this were a case of preferential contracts, this is not a smoking gun for political corruption.

What makes this entire affair a clown show and a farce is how Dr Teo Ho Pin and Mr Chandra Das proceed day by day to whittle down their vast reserves of citizen goodwill, reasonable doubt over the rightness of the tender and award process, as well as the general trust in the transparency of Singapore's only ruling party since independence.

We can only say it's nothing short of flabbergasting the elan that possesses Teo when he says that during the time of him awarding the contract to AIM, he already knew that AIM was backed by the PAP. And that's not as farcical as the further admission from Chandra Das himself that AIM is PAP-owned. And perhaps not as mindblowingly hilarious that Das follows that up with a refusal to state how much assets and business his PAP-owned company has.

But let's look at the other real issue of transparency here:

1. How does a company registered under the names of 3 former PAP MPs become a PAP-backed company (according to MP Dr Teo), a PAP-OWNED company (according to former MP Chandra Das)?

2. Is there any reflection in ACRA records that AIM is a PAP-owned company?

3. Do Chandra Das and his other 2 directors have a legal duty to declare that AIM is a PAP-owned company in its official records?

4. Is it legal for the PAP as a political party with donation and funding limitations to 'own' companies registered in the names of private individuals?

5. Does the PAP operate any other businesses that are registered in the names of private individuals, as Das and his other 2 directors were?

6. As a political party, has the PAP furnished the Registrar of Societies, whose purview is in part the management and disciplining of political parties in Singapore, a full list of companies officially PAP-owned and unofficially held in trust for PAP by private individuals, their assets, and their business returns?

As the priestess of Ise retires for the night, we leave these questions hanging in the air for a day or two, or a week or two, as fruit for your thought.

Our thoughts? What a clown show!

ASEAN diplomacy, Singapore style!

Will East Timor be allowed to join ASEAN (the Association of Southeast Asian nations)?

Its application is sponsored by Indonesia, its former occupier. A few days ago, it appeared to be a done deal.

"We have visited all ASEAN countries and everyone has agreed politically that Timor can join," said Ramos-Horta.

That was then. Now, it seems the ASEAN members who have given East Timor's president assurances are backing away. The loudest dissenters, according to Barry Wan from The Straits Times, are a motley group consisting of Singapore, Cambodia, Laos, Vietnam, and Burma.

Their reasoning?

Singapore has been quite adamant that the prospective new member needs to prepare properly before it can join the bloc.

Cambodia, Laos, and Burma believe ASEAN cannot afford to accept a weak and poor nation as a member.

Vietnam believes accepting a weak nation will put ASEAN more firmly into the Chinese orbit.

In ASEAN, diplomacy is another name for international comedy.

Singapore's diplomats lobbied hard for the entry of the Indochinese nations into ASEAN in its last expansion, knowing full well that Cambodia, Laos, Burma, and Vietnam were not properly prepared to join the grouping.

Cambodia, Laos, and Burma certainly didn't object to their own membership applications despite being already preyed upon by the Chinese model of mercantile capitalism prior to them joining ASEAN.

As part of the new Indochinese membership of ASEAN, Vietnam's diplomats and politicians should already know that their neighbours (let's say Burma at the very least) report dutifully to Peking the proceedings of each ASEAN meeting they attend.

East Timor, as a Southeast Asian nation with oil reserves, will attract Chinese diplomacy, development, and political influence whether or not it joins ASEAN.

ASEAN diplomacy deconstructed

Being China's second banana in ASEAN, Singapore will not want to see ASEAN fall further under or more obviously into the Chinese orbit because it means having to compete with 10 other countries who also want to be China's second banana in the region.

Similarly, Cambodia, Laos, and Burma are aware that East Timor is an oil-producing upstart. As a new country that needs to build its infrastructure from scratch, East Timor is terra firma and fresh meat for investment and development funds. The three Indochinese nations do not want China to divert its ASEAN warchest (spent partially on building railroads to connect Peking to Indochina) to this new nation.

As Vietnam's diplomats and leaders are aware, being earmarked as a Chinese satellite doesn't mean co-option as a Chinese ally. Vietnam's China policy consists of resisting Chinese political influence in its ruling party and state organs, while accepting Chinese money. Their opposition to East Timor's membership is motivated by the fear that East Timor will better Vietnam on its own China policy.

Will East Timor be allowed to join ASEAN? Even its biggest detractors in ASEAN think it would do just fine in ASEAN!

Wall Street Smarts

This was your comparative reading for the week:

Wall Street Smarts by Calvin Trillin
Smart Guys and Wall Street by Paul Krugman

As your readings for the week have been suspended for the duration of Singapore's Silly Season, this will be a presentation instead.

What makes a theory valid?

Calvin Trillin is a humorist, not an economist. The essay is a tall tale told by a fictitious man. Wall Street Smarts exists in the realm of fable, establishing timeless truths (or morals) from fabrications.

Why was there a financial crisis in 2008? Trillin tells a story instead, which Paul Krugman, winner of the Nobel Prize for Economics, endorses from his observation of graduate school and the financial service industry.

How do we measure the validity of a piece of qualitative research (or in this case, a qualitative essay)? Without recourse to charts and statistics, the idea expounded must be tested in terms of theoretical rigour, explanatory value (both in context and transferability), and credibility. The biggest test of whether a qualitative piece of reasoning is valid lies very much with its credibility - when deconstructed and restated in its barest axioms, would you be able to buy the explanation whether or not you agree with it?

Wall Street Smarts, restated

Why did the financial crisis of 2008 occur? One could point to the many economic explanations - overinvestment, market bubbles, toxic instruments. But why were overinvestment, market bubbles, and toxic instruments promoted? Why indeed were derivatives invented and then pushed the way they were?

Here, the economists have no answers because the question asks for an exogenous explanation for the crisis, which lies outside the boundaries of the economics discipline.

Trillin in effect proposes an explanation that turns the spotlight on the history of economics, the social anthropology of the finance industry, and the political economy of employment.

1. In the old days where finance was about selling actual industry, the financial services sector largely recruited from a hereditary class of bankers and financiers. Barriers to entry were not too high: a college education would have done it (plus either relatives or friends or classmates in the industry).

2. Owing to comparative lower prestige, the financial services sector did not attract the best, the brightest, the most ambitious, the most greedy.

3. The roots of the financial crises of the late 20th century and 2008 lie in the increase of prestige of the financial services sector, its attraction of the best and the brightest (etc.) graduates, and the increase in university tuition and student debt, and of course the balloon in executive pay in the financial sector compared to other sectors.

4. The last two factors create an industry fronted by innovative, ambitious, and greedy agents who were smart enough to invent complicated toxic instruments, fake products, massaged company accounts...

5. The financial crisis occurs because there is no longer any correlation between the healthy trade of toxic instruments and massaged numbers, and the health of the real economy.

Wall Street Smarts, Singapore civil service edition!

The next best test (other than the very subjective notion of 'credibility') is transferability. What other context, what other industry can we find a similar set of environmental factors?

We note that a post-independence strategy of the Singapore is its much-vaunted introduction of university graduates into its civil service. Gathering pace more in the late 1970s, the policy has morphed into the recruitment of scholars fast-tracked into senior posts and handpicked for politics by the ruling PAP.

Note the increasing salaries and bonuses for the civil service. Note the increasing salaries for MPs and ministers - which only began when the scholars started entering politics. Note the increasing reliance on complicated KPIs and statistics that no one can comprehend and therefore trust, note the trumpeting of dodgy rankings that somehow suggest Singapore is the best nation is this and that and the other. Note the anger from the ground about how far the trumpeted KPIs and rankings are divorced from the everyday reality and experience of normal Singaporeans.

Wall Street Smarts - not just a story that took place a long time ago in a country far, far away.

Tharman Shammugaratnam's crowning clown moment

Economic illiterate or discombobulator?

Finance minister Tharman Shammugaratnam (PAP-Jurong) continues to perform his clown routine in parliament as he defends Singapore's budget for 2010.

Possible in light of strong criticism from the blogosphere, the minister admitted that yes, the GST is a regressive tax. However, it seems that is his knowledge of basic economics ends here. Tweaking the rate of the consumption tax will benefit higher income groups and foreigners more, he claims. Yes. That's what Shammugaratnam said -- reducing the rate of the GST will benefit the rich more because the bulk of the GST is collected from them.

Which part of regressive tax does finance minister Tharman Shammugaratnam not understand? Why will he not admit or acknowledge what any introductory econs text states baldly - that a consumption tax makes the poor pay a higher proportion of their income than the rich and that reducing the rate of a regressive tax will make the poor pay a lesser proportion?

Either finance minister Tharman Shammugaratnam is an economic illiterate and should be removed from his post forthwith, or the minister a glib discombobulator who thinks that Singaporean citizens and residents are economic illiterates and should be removed from his post forthwith.

Why Tharman Shammugaratnam will rather clown about than tell you the truth

In 2003, the GST was introduced to gradually replace income taxes, the complicated system of duties and levies, and corporate taxes as the main revenue source for the Singapore government.

The advantages? The global rich will be more likely to make Singapore their home or at least vacation home. Singapore, I suspect, has one of the world's more lenient tax regimes for the rich. Corporate taxes in Singapore are now the lowest in Asia, next to Hong Kong. Having to deal with less duties and levies lessens the red tape that corporations and entrepreneurs have to deal with.

The downside? The progressive tax instruments that existed prior to 1993 have all been dismantled -- progressive income taxes, corporate taxes, and levies and duties to target the rich. Wealth is redistributed from the poor to the rich in Singapore's post-1993 tax system.

Tharman Shammugaratnam and the PAP will go down defending the GST in the short to medium run as a reform of the entire system will take time and planning. They will go down insisting that the regressive tax structure stay in place (and the poor receive strategic state handouts). They will if necessary play dumb on the regressive tax structure because it constitutes the main revenue source of the Singapore government.

They will attempt to tweak the system and preserve the GST for as long as they can, unless the electorate speaks loudly, unless citizens and residents complain loudly and often, unless bloggers continue to expose the PAP's faulty and discombobulating defense of an indefensible regressive tax.

A chief clown for the clown show?

Tharman Shammugaratnam is the finance minister of Singapore. Goh Chok Tong and Lee Hsien Loong were the finance ministers of Singapore before they became prime ministers themselves.

Tharman Shammugaratnam is unfit to be the finance minister of Singapore. He is either economically illiterate, or a glib discombobulator, or an insincere leader who cannot level with Singaporeans. Tharman Shammugaratnam is unfit to be the next prime minister of Singapore.

In the coming general election, I strongly urge the electors to strongly reject Tharman Shammugaratnam (PAP-Jurong) and deprive him of the opportunity to further damage the poor and the middle class.

GST, inequality and regressive taxes: A Model Answer

Joseph Henry Greene is part of the Citibank team headed by Johan van Oenen that made Goh Keng Swee and Singapore its first billions, betting the US dollar against the British pound. The team subsequently recommended that Dr Goh develop Singapore as a finance hub servicing the "Asian dollar market".

Here is Joseph Henry Greene on the subject of the GST just when the consumption tax was about to be set in place:

This sales tax which is coming on is regressive. Why the government would have a sales tax – which is regressive – at a time like this? It won’t hurt the people at the moment but if there should be any trouble in the future, it’s going to make the disparity between the very wealthy and the average working class of Singapore... It will cause a strain and it will exacerbate.

(Economic development of Singapore, Interview with Joseph Henry Greene. National Archives, Oral History Centre. 1994)

Here is a member of the economic literati telling you the GST is a regressive tax. Listen to him instead of the PAP clown show.

The PAP clown show continues! (GST edition)

This is not your reading for the week. We are suspending your readings for this week and indeed for many months to come. That is because we are in Silly Season. Very Silly Season

The headlines say it all:
PAP MPs question who WP is trying to help
Cutting GST to tackle inflation would benefit rich more than poor, they say

excerpts:

PAP MPs on Monday hit back at Workers' Party chief Low Thia Khiang's broad-ranging attack on the Government's Budget. At least seven MPs from the ruling party stood up to disagree, as they questioned his call for GST cuts...

Mr Christopher de Souza (PAP-Holland Bukit Timah) and Prof Koo Tsai Kee (PAP-Tanjong Pagar) said that trimming GST would be more beneficial to the rich than to the poor

Said Mr de Souza: "High income earners, we know, consume more and therefore pay more GST."

In 2008, finance minister Tharman Shammugaratnam (PAP-Jurong) said that in absolute terms, the bottom 60% of earners here pay less than 25% of the total GST collected each year.

We can only come to one of two conclusions. Singapore is run by

1. A bunch of economic illiterates who don't bother to pick up any econs textbook, which will tell them a consumption tax (i.e. the GST) is a regressive tax.

2. A bunch of glib discombobulators who know that the GST is a regressive tax but refuse to acknowledge it as such. Instead, they work on the assumption that the electorate is composed of economic illiterates.

Finance minister Tharman Shammugaratnam will distract you by talking about absolute terms. He hopes you won't realise that no matter what the bottom 60% pay for their GST, they're still paying proportionately more out of their total income than the top 40%.

Christopher de Souza will distract you by saying the rich spend more and therefore pay more total GST. He hopes you won't realise that the rich spend a lower proportion of their income on consumption - and have a higher proportion of their income in savings - than the poor.

Prof Koo Tsai Kee will distract you by saying that the tax pool gets redistributed disproportionately to the lower income earners in the form of GST credits. He hopes you won't realise that he just conceded the inherent regressiveness of the tax, and that it requires annual government handouts (aka GST credits) to redress the balance or appear to redress it.

The PAP continues to run a clown show.

Whether they are economic illiterates or glib discombobulators, I recommend that the following current MPs be dropped from the PAP slate for the coming elections, and that if reselected to run, the electorate vote against such clowns:

Mr Christopher de Souza (PAP-Holland Bukit Timah)
Prof Koo Tsai Kee (PAP-Tanjong Pagar)
Tharman Shammugaratnam (PAP-Jurong)

Stupidity and disingenuity must never be rewarded.

Underemployment in post-crisis economies

Your comparative readings for the week

Ex-NUS graduate: I'm a failed product of our meritocratic system
In Japan, young face roadblocks
The curse of the class of 2009

Discussion questions
1. What is a labour market?

2. As a perfect market, how would we theorise it to work? In a perfect, rational world how would the labour market deal with a recession situation? How would a "recession graduate" experience this?

3. Consider the real world examples. Why does it not work perfectly? Can there be cultural, social reasons why a local labour market will never work perfectly?

Nobel Prize winner on immigration

Your reading for the week

Paul Krugman, The Curious Politics of Immigration

Excerpts:

The [Republican] party likes inexpensive workers - and would really enjoy a huge guest-worker program that would both provide such workers and ensure that they can neither vote nor, in practice, unionize...

Open immigration can't coexist with a strong social safety net; if you’re going to assure health care and a decent income to everyone, you can't make that offer global.

A parable and lesson for the whiteshirts

Duly noted: taxi uncles setting MPs on fire, foreign non-talent workers deprived of wages (not even their fair wages), a full third of Singaporeans expecting to be retrenched, raised tempers at the shambolic job fairs ill-matching jobs to about-to-be retrenched white collar workers, and the unsurprising revelation that Shatec's casino school in China will most probably end up training the (obviously foreign) managers and heads who will boss around the (obviously local) low level flunkies who studied in Shatec's casino school in Singapore.

Aki's non-shrill anthropologist lecturer in university made a cryptic remark in class years ago:

Despite modern man's penchant for self-congratulation, urbanisation was never a recent invention. Look at history - more precisely, look at the dustbin of prehistory - and you'll find the great cities of Mezo and South America, the Indus valley, the floodplains of Mesopotamia, the plains of China and the jungles of Indochina: all rising in wealth, power and population until, for some unknown reason, these cities are suddenly abandoned, often without violence, and almost always without a trace of their former occupants.

And then: silence, for a few hundred years. Until the next brilliant mind invents the city again. We observe from written history that cities necessarily mean the accumulation of wealth, the specialisation of labour, the creation of class and caste, and hence social and economic inequality and stratification. And we merely speculate that urbanisation and what it entails can sometimes be too unbearable, the compromises too cutting and unliveable, and upon realising it, the people just simply walk away. Or pull down the stones, then walk away.



Der Mittler zwischen Hirn und Händen muss das Herz sein!