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12-08-2015, 10:40 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
http://www.tremeritus.com/2015/08/12...p-re-election/ (http://www.tremeritus.com/2015/08/12/economy-past-and-present-not-so-hot-for-pap-re-election/)
Economy past and present not so hot for PAP re-election (http://www.tremeritus.com/2015/08/12/economy-past-and-present-not-so-hot-for-pap-re-election/)
http://www.tremeritus.org/simages/dmca_protected_sml_120n.png?f4cf7f http://www.tremeritus.com/wp-content/themes/WP_010/images/PostDateIcon.png?f4cf7f
August 12th, 2015 | http://www.tremeritus.com/wp-content/themes/WP_010/images/PostAuthorIcon.png?f4cf7f
Author: Contributions (http://www.tremeritus.com/author/contributor/)
http://www.tremeritus.org/wp-content/uploads/2013/03/pap_badge.jpg?f4cf7fThe
PAP’s election strategy even at this early stage is so obvious it can only come
from all those unproven military scholars. The AHPETC affair was really a
reconnaissance in force to locate and fix the enemy before bringing on the full
frontal assault of the general election campaign onto the entire opposition’s
unproven competence in running town councils. No subtlety required.
Economy not so hot
However a slowing economy this year and the new normal of 2-4% GDP growth
going forward means the PAP is vulnerable in their key competence; the economy.
So better to use town council competency to fix the opposition parties onto the
PAP’s chosen set-piece battle than to fight a less predictable encounter battle
on the consequences of the PAP’s handling of the economy.
Little wonder then, Prime Minister Lee Hsien Loong was waxing lyrical about
the past achievements of glittering 6% plus GDP growth in his tenure. But to
voters, it is much more how socio-economic circumstances have and will affect
one’s income, healthcare and savings plus all the ancillary factors such as cost
of living, job opportunities and career prospects.
Glittering GDP and its consequences
It is worth repeating that the Mr. Lee achieved his glittering GDP growth by
running macro-economic policies along the same old capital and labour intensive
growth model and the same old extreme fiscal conservatism of the past 50 years.
Put on cosmetics and give them new names: “growth maximisation strategy” and
“fiscal prudence”. It is as if Singapore today is still the Singapore under Lee
Kuan Yew.
As the writer repeats ad nauseam, macro-economic policies predicated on
out-growing the natural constraints of land and labour have long term
consequences. The more these policies are pursued, the more extreme the
consequences.
Low wages
Only 41% of Singapore’s GDP is accounted by wages, nearly 50% lower than the
OECD average. Low wages and low productivity are caused by dependence on
unskilled and inadequately qualified foreign workers which also caused
under-employment and reduced career prospects among qualified local workers.
The government’s solution to wage growth from productivity growth is only a
half-truth. As long as easy access to foreign labour remains, any increase in
productivity will be captured by owners of businesses and capital rather than by
labour.
High real estate prices
Coupled with low taxes, rebates and business set-up subsidies, growth
maximisation indiscriminately creates too many businesses, many of which are
non-viable without access to cheap labour, low tax, rebates and business set-up
subsidies. The upshot is excessive demand for residential, commercial and
industrial real estate property leading to rampant prices.
Inadequate retirement and healthcare
CPF and household savings are depleted in what is, in effect a massive
financial transfer from households to the government as a result of rampant real
estate prices and low rates of returns from savings. The absence of mandatory
social entitlements means that the depletion of savings results in inadequate
provision for retirement and healthcare.
Inter-generational social inequity
For the low-income and increasingly the middle income, inadequate provisions
for retirement and healthcare, under present policies of using children’s CPF
accounts to support the elderly, results in social inequality being passed from
one generation to the next. It also prevents social mobility.
Incompetence or fixing the voter
The list can go on. In apparent contradiction to its own claim of competency,
the PAP is very bad in managing the consequences of its economics. If
macro-economic policies calls for a huge influx of foreign workers, then
infrastructure spending must increase to meet the demand of the large increase
in population.
Is it sheer incompetence – why else is it possible for a government to be
“blindsided” by demand for housing when the same government controls the growth
maximisation strategy and all policies levers? Or is it a deliberate policy
choice not to mitigate these consequences because of the beneficial financial
effects to the government’s narrow party political objectives?
The excess demand for infrastructure and real estate delivers huge financial
transfers to the government through Temasek’s ownership of the GLCs and land
sale revenue. The resulting depletion of savings made the lower income and
increasingly the middle income dependent on discretionary government hand-outs
given in drips and drabs which, given these are non-mandatory entitlements, are
in effect “fixing” the voters.
Gold dust among the chicken feed
The question should rightly be how or whether at all one has benefited from
the glittering GDP growth. Policies overly friendly to business and optimal to
the government are rarely ever optimal to wage earners and Singapore has seen
enough evidence of that. The sharp wealth disparity says Mr. Lee’s economic
record is gold dust for the few among the chicken feed for the many.
So more of the same with 6.9m, maybe even 10m population? More of the same
meanness and stinginess of a government which became excessively rich over stuff
like “fiscal prudence” and “self-reliance”? Or is it time to stop voting against
one’s own economic interest and help your country to change course before it
irretrievably steers towards the rocks.
Chris
Kuan
* Chris was regional head of capital markets
for Asia Pacific until his retirement. He writes opinions and commentaries
mostly on economic and financial matters.
Click here to view the whole thread at www.sammyboy.com (http://sammyboy.com/showthread.php?212544-Economy-past-and-present-not-so-hot-for-PAP-re-election&goto=newpost).
http://www.tremeritus.com/2015/08/12...p-re-election/ (http://www.tremeritus.com/2015/08/12/economy-past-and-present-not-so-hot-for-pap-re-election/)
Economy past and present not so hot for PAP re-election (http://www.tremeritus.com/2015/08/12/economy-past-and-present-not-so-hot-for-pap-re-election/)
http://www.tremeritus.org/simages/dmca_protected_sml_120n.png?f4cf7f http://www.tremeritus.com/wp-content/themes/WP_010/images/PostDateIcon.png?f4cf7f
August 12th, 2015 | http://www.tremeritus.com/wp-content/themes/WP_010/images/PostAuthorIcon.png?f4cf7f
Author: Contributions (http://www.tremeritus.com/author/contributor/)
http://www.tremeritus.org/wp-content/uploads/2013/03/pap_badge.jpg?f4cf7fThe
PAP’s election strategy even at this early stage is so obvious it can only come
from all those unproven military scholars. The AHPETC affair was really a
reconnaissance in force to locate and fix the enemy before bringing on the full
frontal assault of the general election campaign onto the entire opposition’s
unproven competence in running town councils. No subtlety required.
Economy not so hot
However a slowing economy this year and the new normal of 2-4% GDP growth
going forward means the PAP is vulnerable in their key competence; the economy.
So better to use town council competency to fix the opposition parties onto the
PAP’s chosen set-piece battle than to fight a less predictable encounter battle
on the consequences of the PAP’s handling of the economy.
Little wonder then, Prime Minister Lee Hsien Loong was waxing lyrical about
the past achievements of glittering 6% plus GDP growth in his tenure. But to
voters, it is much more how socio-economic circumstances have and will affect
one’s income, healthcare and savings plus all the ancillary factors such as cost
of living, job opportunities and career prospects.
Glittering GDP and its consequences
It is worth repeating that the Mr. Lee achieved his glittering GDP growth by
running macro-economic policies along the same old capital and labour intensive
growth model and the same old extreme fiscal conservatism of the past 50 years.
Put on cosmetics and give them new names: “growth maximisation strategy” and
“fiscal prudence”. It is as if Singapore today is still the Singapore under Lee
Kuan Yew.
As the writer repeats ad nauseam, macro-economic policies predicated on
out-growing the natural constraints of land and labour have long term
consequences. The more these policies are pursued, the more extreme the
consequences.
Low wages
Only 41% of Singapore’s GDP is accounted by wages, nearly 50% lower than the
OECD average. Low wages and low productivity are caused by dependence on
unskilled and inadequately qualified foreign workers which also caused
under-employment and reduced career prospects among qualified local workers.
The government’s solution to wage growth from productivity growth is only a
half-truth. As long as easy access to foreign labour remains, any increase in
productivity will be captured by owners of businesses and capital rather than by
labour.
High real estate prices
Coupled with low taxes, rebates and business set-up subsidies, growth
maximisation indiscriminately creates too many businesses, many of which are
non-viable without access to cheap labour, low tax, rebates and business set-up
subsidies. The upshot is excessive demand for residential, commercial and
industrial real estate property leading to rampant prices.
Inadequate retirement and healthcare
CPF and household savings are depleted in what is, in effect a massive
financial transfer from households to the government as a result of rampant real
estate prices and low rates of returns from savings. The absence of mandatory
social entitlements means that the depletion of savings results in inadequate
provision for retirement and healthcare.
Inter-generational social inequity
For the low-income and increasingly the middle income, inadequate provisions
for retirement and healthcare, under present policies of using children’s CPF
accounts to support the elderly, results in social inequality being passed from
one generation to the next. It also prevents social mobility.
Incompetence or fixing the voter
The list can go on. In apparent contradiction to its own claim of competency,
the PAP is very bad in managing the consequences of its economics. If
macro-economic policies calls for a huge influx of foreign workers, then
infrastructure spending must increase to meet the demand of the large increase
in population.
Is it sheer incompetence – why else is it possible for a government to be
“blindsided” by demand for housing when the same government controls the growth
maximisation strategy and all policies levers? Or is it a deliberate policy
choice not to mitigate these consequences because of the beneficial financial
effects to the government’s narrow party political objectives?
The excess demand for infrastructure and real estate delivers huge financial
transfers to the government through Temasek’s ownership of the GLCs and land
sale revenue. The resulting depletion of savings made the lower income and
increasingly the middle income dependent on discretionary government hand-outs
given in drips and drabs which, given these are non-mandatory entitlements, are
in effect “fixing” the voters.
Gold dust among the chicken feed
The question should rightly be how or whether at all one has benefited from
the glittering GDP growth. Policies overly friendly to business and optimal to
the government are rarely ever optimal to wage earners and Singapore has seen
enough evidence of that. The sharp wealth disparity says Mr. Lee’s economic
record is gold dust for the few among the chicken feed for the many.
So more of the same with 6.9m, maybe even 10m population? More of the same
meanness and stinginess of a government which became excessively rich over stuff
like “fiscal prudence” and “self-reliance”? Or is it time to stop voting against
one’s own economic interest and help your country to change course before it
irretrievably steers towards the rocks.
Chris
Kuan
* Chris was regional head of capital markets
for Asia Pacific until his retirement. He writes opinions and commentaries
mostly on economic and financial matters.
Click here to view the whole thread at www.sammyboy.com (http://sammyboy.com/showthread.php?212544-Economy-past-and-present-not-so-hot-for-PAP-re-election&goto=newpost).