Growing pains
Friday, 14 November 2008, 6:27 pm | 1,290 views
Questions raised about the government’s growth model.
It was a coming out party of sorts for Singapore when Formula One came to town in September. The most ecologically unfriendly cars in the world zipped through a spectacular setting of glitzy towers and luxury hotels, showcasing Singapore’s astonishing growth story. Local bourgeoisie and wealthy expatriates mingled in private suites overlooking the race, surrounded by a canopy of cranes heralding the next slew of swanky new landmarks. It was deliciously reminiscent of the late Jazz Age.
Some short weeks later, the outlook is rather different. Singapore’s huge exposure to the world economy (its trade levels were nearly four times the size of its GDP) meant that it could not be immune to the crisis unfolding in its main export markets in the EU and US. Talk of Asia being “decoupled” from the developed economies has proven chimerical – India, whose firms make up the third largest presence of foreign firms in Singapore measured by nation of origin, is slowing; even China, another of Singapore’s biggest export markets, is weakening more severely than expected.
The latest numbers paint a gloomy picture for Singapore: the economy is already in technical recession, the vital manufacturing sector is proving erratic and the government is predicting job losses. The stock-market has also tanked by nearly half since the beginning of the year, probably taking with it quite a bit of the portfolio wealth of both the government’s holding company as well as ordinary Singaporeans.
Singapore’s much-trumpeted and supposedly diversified growth engines seem to be sputtering just when they are most needed. The government’s big bet on pharmaceuticals is not proving to be the fillip that it expected as exports from the sector declined for the fifth straight month in September 2008. The performance of the pharmaceuticals sector, which is supposed to even out the swings from the more established electronics sector, has instead moved in tandem with the latter of late. The financial sector, a key engine of growth in previous years, is also going through some trying times. Singapore’s biggest bank has started torching local jobs – despite loudly professing to be financially sound – sparking worries that other firms could soon follow suit.
Under such circumstances a blow was dealt to the prospects of what has been touted as Singapore’s next engine of growth – the highly anticipated casino and resort at Marina Bay, one of two casinos expected to pull in tourists and generate gambling tax revenues for the government. Market talk emerged that Las Vegas Sands – the company behind the Marina Bay project – could be running out of money. The government hurriedly held talks with the company and made high-level reassurances that the project wasn’t in trouble.
The problems with the Marina Bay casino are indicative of the risks present in government-led diversification. Local banks have large exposures to the project, which probably crowded out some domestic investment. The government could become stuck in the unenviable position of having to pump liquidity into the project or be saddled with a huge dud on prime land. Taxpayers would be loath to see their money poured into something that a good deal of them vocally rejected a few years ago. Furthermore, Las Vegas Sands could still be dragged down by its huge liabilities elsewhere in the world even if it has enough capital to keep the Marina Bay project going, and it’s questionable whether any other company can take over the project in the current liquidity crunch.
A concentration of risks
Such developments have resurfaced questions about whether the Singapore’s much-trumpeted government-led model for growth – the time-honoured route of the state gearing capital and labour resources towards industries that it favours – is worth the risks.
In this context, Linda Lim of the University of Michigan questioned the continued viability of state-led development at a local economic conference in October, arguing that instead of “letting the state make big bets on a few major, capital-intensive, projects dependent on foreign capital, labour and skills in which they have no intrinsic comparative advantage, it might be worthwhile to consider releasing capital and talent to local entrepreneurs” 1.
Professor Lim has a point. Though the government’s diversification thrusts are dependant on foreign capital, huge resources still have to be diverted – land allocations, tax breaks, workers trained at local expense, lending from local banks – to support incoming foreign firms. This represents a considerable opportunity cost in what is still a smallish economy.
Such resources – cheaply financed through Singapore’s model of compulsory savings – might be more efficiently allocated to local firms by the market. It has been pointed out that the historical rate of return on domestic savings has been rather low, perhaps the bulk of savings was even wasted2 – a point that Professor Lim reiterated during her talk in October.
There is also the possibility that the government could unwittingly diversify into industries at the tail-end of their cycles: for example, some Singaporeans had argued that the gambling boom may have already peaked when the government awarded gambling licenses to foreign casino operators back in 2006, an argument that seems to be rather prescient in the current circumstances.
Furthermore, the government might be undermining its own efforts by trying to do too much too quickly, something one academic called “industrial targeting taken to excess”3. In moving on to its next diversification project too hastily, the government could have failed to reap the full benefits of higher productivity in one sector before resources are diverted elsewhere.
Even so, there are still good odds that the government’s bets on pharmaceuticals and financial services will pay off in the longer run. Part of the problem now is that no one expected the world economy to come crashing down so quickly on all fronts, as in previous recessions either the developed world or the emerging countries picked up the slack while the other faltered.
Nevertheless, there is a case to be made for the government to gradually move away from directing the commanding heights of the economy. As an authoritative account of Singapore’s early industrial strategy has argued4, the government-led approach worked because of unique historical opportunities and socio-political conditions, such as being the first to grasp the chance presented by electronics and an acquiescent domestic business class, and therefore argued that the approach cannot be taken as a given.
In today’s highly competitive global environment, the job of identifying such opportunities might be best left to the market rather than the government. It’s also instructive that the government’s record is not without blemishes, notably its premature attempts to move away from low-wage manufacturing in the early 1980s. In any case, Singapore is no longer the backwater that it was in the 1960s – it has a far more developed workforce, economy, brand name and capital market, all of provide a good base for it to develop as an economy away from government direction. This could prove to be more sustainable in the long run.
Yet that’s unlikely to happen anytime soon. Singapore’s current government-dominated model for industrial growth is too tightly enmeshed with other aspects of its political economy – the dominant one-party system, the nexus between state institutions and the party, its CPF policies, the trade union system – for it to be easily loosened up, much less by the party that stands at the heart of the entire system.
******
1 Straits Times. 25th October 2008
2 Straits Times. 1st December 1999
3 Alwyn Young (1992), “A tale of two cities: Factor accumulation and technological change in Hong Kong and Singapore”, in Fischer and Blanchard (eds), NBER Macroeconomics Annual 1992, Number 7, Cambridge: MTI Press.
4 Garry Rodan (1989). The Political Economy of Singapore’s Industrialisation: National State and International Capital. (Basingstoke: Macmillan)
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Sadly, considering that most of our technological know-how are brought from overseas, are local entrepreneurs capable of leading the government’s diversification effort into new high-growth sectors?
Keynes whose time has come again said, ” In the long run, we are all dead”.
A great economy, like the investments in UBS, ML and Citi, will not benefit those in their late 50s and 60s who gave their all to build S’pore.
And to add insult to injury, they have been told that they deserved to lose their money, at least the educated ones.
yes, all the 66% also voted PAP with their eyes open.
ABC learning centre
Citbank
UBS -
It may be surprising to many born in the Internet Age that murmuring about the long term sustainability of the Singapore “growth” model were voiced as early as immediately after independence. But in those days the argument was between so-called “self sufficiency” (today the term is “entrepreneurial” driven) models vs the “foreign” investment led. So much of the argument presented here is not new.
Of course as it turns out the PAP “growth” model appears to have won, after a seemingly “miraculous” transformation over a 40 years period. By some account 40 years run would be considered a long run. So it could and has been argued that the “growth model” is indeed sustainable.
The alternative “self sufficiency” model of growing an industrial base organically and within the constrains of existing resources lost out and voices arguing for such model are no where to be heard.
Chances are even if people see that the growth model, as highlighted by Farquhar, quite accurately I might add, to be deficient, it is hard to imagine any section of Singapore society would be able to present an alternate model. This is more so whoever holds the reins of power in Singapore now and possibly in the foreseeable future.
Firstly, the deficiency of the model has yet to run its course. As Farquhar has pointed out: “Even so, there are still good odds that the government’s bets on pharmaceuticals and financial services will pay off in the longer run”. Even if the pay off is due to normal economic cycle than the foresight of the government, unless there is clear signs that these targeted industries did NOT pay off in the long run, no one (the people and the PAP) is going to believe the growth model is dead. On this score, it is hard to see how the status political enconomy can be disentangled.
Secondly, moving from a “growth” model to as Farquhar eluded to in this article an entrepreneurial driven model will required a substantial change in mindset not just from the PAP leadership but also the people of Singapore. It will also change the economic landscape of Singapore from an “infrastructural” mindset to a “knowledge” based one.
Even in Singapore’s so-call financial services sector, much of it is still tied to infrastructure — i.e. provide bricks-and-mortar, and regulation for financial services sector to operate from. The alternative model of financial services is to a hotbed for inventing innovative products (as in the case of Iceland) or venture capital funding. How many people in Singapore after being brought out with “infrastructure” mindset is prepare to move to the “knowledge” mindset? Very few I suspect.
I wonder what is singapore’s engine of growth?
What is the strategic plan?
Can anything be guaranteed?
I am concerned about it being the 1st in whole wide Asia to go into a Recession.
Is it gonna rely on Casino Gambling and rubber burning F1?
What happens if Casino player Sands goes kaput? Of course, everything is possible right?
Who is the ultimate BAILER?
There is another possibly flawed aspect of the govt’s economic strategy, which is the “spotting” of local firms (mostly GLCs) which are supposed to expand abroad and develop S’pore’s “external wing”. This is what academic Augustine HH Tan wrote in “The Economic Prospects of Singapore”:
(There is a) rising trend of factor income from abroad as Singapore invests more in its external wing. The question is whether this growth is at the expense of the domestic economy. Unlike Japanese firms, there appears to be no conscious effort on the part of Singapore firms abroad sourcing from Singapore. In terms of employment, when Singapore firms initially go abroad, Singaporean managers and technical experts would undoubtedly be sent. Later, when it becomes clear that it is a lot cheaper to hire locals, such jobs will disappear. The pattern for MNCs, except for Japanese MNCs, is to have multi-national talents. Singaporeans cannot hope for special treatment by home-grown MNCs. What then will happen to those who do not enter the global job market or who cannot do so? They will surely add to the structural unemployment figures. (p28)
For SMEs, part of the vision is to help some grow into MNCs. One problem with this approach is whether Singaporeans will gain from jobs generated over the medium and long term, as noted earlier.
Singaporean GLCs and MNCs will not necessarily behave differently from global MNCs: in their quest for profit maximisation, location of production and activities will be dictated by cost and tax considerations.
We must blame the leadership for failing to predict the unpredictable. Why can’t they control the world economy? Why can’t they make more fuel available?
Even if America, UK, France, Germany, Japan and China are facing trouble, we should not be allowed to face trouble.
We have lost money on the stock market. They should make our stocks rise even when there is a recession.
Referring to 1)
Please do not underestimate Singapore as whole. Our forefather had brought us out of a slump didn’t they? It is the one party political system like a father always telling his son, this cannot and that can’t that make Singapore in whole lost the ability to survive!
This articles in general is a spot on! Through out my 10 years of working life, I had witness that general Singapore people is more capable than you think and most of the time they are silent worker behind the scene. They may not have gone thru high education but sure some tough nuts to crack even when the so called FT came in and threaten their rice bowl!
To put it simple, they walk their talks more than our ministers until I lost count. They really inspired me to relook myself and be proud to be a Singaporean despite having a F-up gahmen! When can they start to realize that they are not cut out to be a business man and just run the bloody country properly and take care the people of Singapore that worked very hard for the country and be a public “servant” and not self service into our pockets!
I really hope it will not be too late when the master and his dogs went down, Singapore still have something left to build on!
I have heard all our ministers actually put their saving in foreign banks, and wonder if this is truth? If so, I say they are preparing for the worst to get out of the country if shit happened like LHL said! Btw, I believe all ministers sent their children to study overseas don’t they? Building base in other country? Who is the quiter? GCT! Everyday, I do hope the general Singaporean wake up from their dream and do the right thing during election!
I don’t know what will happened if opposition come into power? But it can’t be worst to have the current DOGs gang to continually digging into our pockets. Our people deserve better than cleaning the tables and looking for paper board when they retired!
Singapore’s economic approach towards greater GDP expansion is effective only in the short run. In the long run, other countries will still outlast us.
(9) Dr. Albert on November 15th, 2008 12.06 am wrote:
I really hope it will not be too late when the master and his dogs went down, Singapore still have something left to build on!
Maybe it’s a good thing for the Master and the Poodle to screw up and let the country go to the dogs. Singapore might emerged from the crap stronger after!
Hi,
I found your use of ‘bourgeoisie’ in the 1st paragraph condescending.
You ought to have added an apostrophe after ‘Singaporeans’ in the 3rd paragraph.
‘Could’ in the last line of the 4th paragraph would have been better with ‘would’; it would have been better on the ear– but this is a matter of subjective opinion.
Why ‘casino and resort’ in the 5th paragraph? Why not ‘IR’ or ‘integrated resort’ as is more commonly referred to? If the use of ‘casino and resort’ was deliberate, what is the point, and does the use of ‘casino and resort’ add to its effectiveness?
‘Is worth the risks’ in the 7th is awkward and ambitious. ‘Risk’ would have sufficed and would have served as understatement to ‘risks’ later referred to, which would have added to the overall effectiveness of the writing.
8th paragraph: You’ve quoted, like the local daily, one Ms Linda Lim of an American university in British English orthography (’labour’). How does this elucidate her position (and yours) on the issue?
9th paragraph: In the specialist language of finance and investment, ‘diversification of resources’ is standard use and so would be ‘diversified resources’. To ‘divert’ resources, however, is only creative use of the language on your part. Standardisation, please.
Syntax can often lend to the effectiveness of a sentence. ‘Is still’ in the same paragraph would be better re-arranged ’still is’.
10th paragraph: the verbal ‘was’ in ‘the bulk of savings was even wasted’ could have been dropped to add greater fluency to the sentence.
Again, in the 11th paragraph, the article ‘the’ in ‘under the current circumstances’ could have been dropped to add to fluency. Special mention on the use of tense in this paragraph: while grammatical, there is a sense of inconsistency that makes for difficult reading.
In the diction of current international political economy, ‘world economy’ could have been as ‘global economy’. A matter of subjective opinion, although in the latter part of the paragraph you’ve left out ‘where’ between ‘recessions’ and ‘either’. Omission in this case neither adds to fluency nor clarity.
As the article develops, clarity begins to regress. By the 13th paragraph the allusion to an ‘authoritative’ piece of work is so succinct as to be a convenient one to persuade. You don’t savvy? I guess that is the conundrum of us mice and men. Anyway, ‘therefore argued’ could have been omitted, unless repetition, especially of ‘argued’, proves your point about the work being authoritative instead of argumentative.
Syntax again in the 14th paragraph would have been more effective if ‘might be best’ were arranged to ‘might best be’. Subjective opinion again, but I think ‘market forces’ could substitute ‘market’ and ‘government intervention’, ‘government’– and for ‘government direction’ as well. ‘Blemishes’, as with ‘risks’ earlier on, could have been more effectively used in the singular. A necessary ‘which’ has been omitted between ‘all of’ and ‘provide’ in the same paragraph.
Finally, my own comments on the article: I think you’ve only pointed out the complexity of the way things are done in Singapore. On the one hand– forgive the clichéd expression– you’re saying that there ought to be less government intervention in market activities here, and on the other you’re saying that a party that has been leaning towards the capitalistic– parties that are ruling or governing don’t usually do so– ought not to be.
You’re welcome.
Thanks again for a well written provocative article by Farquhar.
I have worked in two other countries before and have never failed to see how enterprising Hong Kong and Taiwanese companies have in conquering the vast market in China. I have yet to see a SME or mid-sized company from Singapore go overseas and succeed except for those MNC which are almost state-run.
Even in Suchow, where LKY spearheaded, we lost heavily to the tune of a billion tax-payer money.
In China, where money is laid on the street for the taking, many Hong Kong and Taiwanese go in single-handedly without any govt trade delegations like ours and many became millionaires after a year or two.
Whatever happened to the Singaporean businessmen? Are we less enterprising or simply lose the edge in smelling a rich pot of gold waiting for the taking?
Many toiled years behind a desk working for foreigners who got all kinds of incentives from the local govt to set up shop here. They did not come in with alot of money to do business in Singapore but has enough incentives and drive to succeed overseas using borrowed money.
In fact, we are the only country in Asia whereby citizens prefer the sweet 8 to 5 routine than venturing out on our own to strike it rich. In HK, people worked for a company and after learning the trade they will venture out on their own so much so that companies never allow a staff worker to be an all-rounder. He only works at one specific job portfolio so that he will not have enough skills/ideas to start a duplicated company on his own.
Here, we are expected to be a all-rounder and though we are master of all trade in the company, we dare not venture out on our own for fear that we will lose our pants. Are we that cowardly or plain adverse risk-taker copying our instincts from our master govt?
When I was jobless for 20 months during the Sars period, I have not the faintest clue or guts to do something on my own. What was stopping me? Perhaps I was raised in an environment whereby I was told to get a job and go home after that. If you have enough CPF for flat repayment and retirement it is enough. if you go out and risk it, you may not even have any pants left behind! The fear factor of risk is very high here. There is also the no-face factor when you venture out like that uncle there who lost everything and now has to drive taxi.
Something is very wrong within our society in terms of wealth creation. Maybe we are trained to work for someone the whole life. Maybe the govt has all along take good care of us so we lose the venturing-out edge. Or are we simply resign to a life of contentment and medicrocity? If we have a HDB flat, car, maid and a happy family we are satisfied.
When in China, I asked a Taiwanese businessman what does he think of Singaporean businessman? His answer was very blunt but frank: “They are useless. They will come and discuss whole day and night and can only decide after one week. For me, the decision is always now as by the time I wait one more week, the cow has already come home.” (words to that effect).
That probably summed up the whole reason why we may not make it overseas. So we are left to fending for ourselevs working our whole life behind the desk for foreigner bosses who dare to risk it on our shore.
I have found similar sentiments on the facebook group A United ASEAN that government-led commercial activity will lead us no where eventually. Perhaps a new future might emerge if we all embrace ASEAN integration. After all, the ASEAN Charter just came in effect.
Very well thought assessment and might I say I share your sentiments(Gilbert #13). I will impugn this behaviorial pattern partially to environmental coerced by the iron fist governing in our early days and the other the confidence level of its citizenry at large. It is hard to draw the line as we are not so different to the rest of the world (i.e. we are all the same human kind as compared to your cited citizenry of those nations). I can only say that Singaporeans generally are the lesser risk taker and prefers the familiarity and comfort zone of home turf as they felt saver. Put it bluntly, we are afraid of failures. Could this also be attributed to the lack of exposure to the outside world in our early days that foster the kind of overly cautious mindset in most that we are even today?
I believe today’s environment in Singapore has taken a very different route and I think most would have agreed that it is much more competitive, stressful and less inclusive because of the change of our “puzzling” policies. The bringing process is a crucial factor. That sparks off a question in my mind that I am interested to know and hope to hear candid sharing of readers’ sentiment here.
How much “independence” do we confer to our young ones? Parents and the likes who are from our generations are generally overly protective and will never allow our young minds to freely explore their interest. I think it is not any different of the younger generations of parent (hope I am wrong on this). The golden rule (correct me if I am wrong), parent ’s choice is always in the best interest of their young, but may be we might not fully understand and might have neglected the potential of our kids and may have inadvertently deprive them of their creative thinking. How many (those who are married with kids) allow the young ones to trial and err (in their interest) without inteferring? Do we allow them to tell their stories, coach or share our perspectives constructively with them like we do amongst friends when they err or we sternly put our foot down (even before they take off) because we felt it is wrong to trial and err. If the latter is generally advocated by a large majority, then we too fall into the same category of being authoritative governing (within our home front). “Change” then indeed is so near yet so far.
If one is given the freedom (at least in the family front) to make their choice albeit we may fail initially, if given time to build the courage and strength to overcome failures,with each failure and if mistakes are learned and corrected, the confidence level will improve over time and may be to a point where risk taking to venture into the unknown and become more entrepreneur thinking may become a reality. Mindset can be change indeed if we want to. It has to start somwhere, and I could not think of any better to stand from ground up; i.e. from within one’s family where no goernment, no policies, no rules can dictate.
Oops, typo..it should read “…comfort zone of home turf as they felt safer”. My apology.
Is DBS a GLC?
What has its staff union done for its union members? I like to know.
Is it correct to say that, when retrenched , singaporeans will whine about it but still ACCEPT retrenchment ?
Wow, so what happens if many more companies also cut staff to cover losses?
I think all will ACCEPT even if they whine about it.
Best place. biz.
First of all, when the whole world and every sector is going into recession stemming from private sector troubles in the US, this is an odd time to lament over a government-led growth strategy. Other countries are re-examining their adherence to markets, and looking for governments to step in. Under these kind of trying world economic conditions, who can say with confidence that a private-sector led Singapore economy would have done any better at mitigating the shocks? Taiwan and HK are small open economies that are more private-sector based, but they aren’t taking this global slowdown any better.
The article claims there is a case against government led growth, citing some ‘authoritative account’. The footnote says ‘Garry Rodan (1989).’ How is he authoritative? Besides, there’s no mention of any of his arguments, so how is there a case?
And finally, the author mentions that the growth strategy is too enmeshed with other aspects of Singapore’s political economy, but simply leaves it at that.
I’m not saying there isn’t a case against government led growth. I’m also not saying that the growth strategy isn’t too enmeshed with other aspects. But the article doesn’t try to argue for these things.
What then is left of the article? A description of the current situation that all can see for themselves.
IMO that’s close to zero value-added.
18) Jason on November 15th, 2008 11.58 am
In your opinion, what happened to TC investment and the effect on HDB leasors?
corrections: I meant ‘lease holders’ instead of ‘leasors’.
12) freelanceproofreader - why don’t you write in to TOC to offer your services as a sub-editor?
A few months ago, MM Lee says that the coming years for Singapore will be golden years and he was wrong. A few other ministers (including the PM) also said that Asia and Singapore will be ring-fenced from the US sub-prime crisis and they are dead wrong.
I do not know what these people at the top did right in recent years and months and days to warrant paying them millions of dollars per year. BTW, anyone knows if the Cabinet will get their exorbitant bonuses this year? I suggest the best way to stimulate the economy, along the lines of SM Goh, is for all the ministers to spend or donate one year’s pay to help the economy and the poor.
anything down from MM are just parrots, you know how parrots don’t really talk right? they just copy the sound and playback lah. thats way their statements are very contradicting these days.
To: Unreplied Questions:
Our unions here is a joke. If this thing happened here in Australia, first unions will group together to protest. Secondly, they will all boycott the organisation and even strike for a few days. Though I am sceptical of strikes but sometimes in Singapore the companies tend to rule with an iron fist as our unions are all so controlled and powerless. The tri-partite alliance that Lim Swee Say so advocated for many years seems to work more against the employees now than the company. Big organisations like DBS and many others to follow will just retrench as it is the fastest way to trim cost. By trimming 900 staff, DBS save millions a year enough to pay off those minibond investors.
Our unions need to change as they lack the power to fight for their wokers that they represent. NTUC can only do so much. When DBS started to retrench, what did LSS did? He was quiet and when they actually started to retrench, he then spoke up. Why don’t he speak on the first notion that DBS will retrench and intervene?
It is all a show I am afraid. More retrenchment may come. Some are predicting as many as 20,000 may be retrenched by early next year.
Thos who work in DBS as MDs for at least 20 years stand to reap a big severance package though. MDs there are known to be paid around $8K to $9K x 20 years, so they are richer by $160,000 but of course they lost the security of a stable income.
MDs there are known to be paid around $8K to $9K x 20 years, so they are richer by $160,000 but of course they lost the security of a stable income. - Gilbert Goh (#25)
S$8K-9K per month is so little for a MD. DBS pays real peanuts for their monkeys. The DBS Relationship Managers will then ask these retrenched MDs to invest their retrenchment benefit in DBS High Notes to aid in stimulating the economy. If we have so many unemployed bankers in Singapore, instead of asking for handout, perhaps it is time for these retrenched bankers to set up their own banking consultancy to boost competition in the local financial advisory market.
I’m not saying there isn’t a case against government led growth. I’m also not saying that the growth strategy isn’t too enmeshed with other aspects. But the article doesn’t try to argue for these things. - Jason (#18)
If it does, would you label it as anti-PAP propaganda? I think there is a thin line one between well-reasoned and constructive and outright PAP-slinging. What Farquhar has highlighted is that even government-led growth has its limits and economic impact. The question remains on how we Singaporeans will take on the problem of the national growth model ourselves. Just as Gilbert Goh mentioned, the risk appetite among the local SMEs is quite small. It is an issue we all must contend with and contribute our part for a better Singapore.
Refering to #8
Note that I am not underestimating the population. I suppose the government went by the fastest way of long-term economic growth by pumping increasing amounts of labour and capital into the economy. Although they did succeed in bring our GDP per capita to first-world standards, we are now facing diminishing returns in labor and capital. Unlike our counterparts in other rapidly developing countries, our government had not encouraged innovation and entrepreneurship in order to accomplish GDP growth, which made the local economy dependent on foreign technological know-how. This was by-and-large a mistake by the government, and they are now still pumping labour and capital into the economy with large projects like the IRs and the biomedical industry.
Dear Jason,
Thanks for your comments. It’s not wrong to argue that a private-sector led approach might not do as well, and certainly the success of the government-led strategy over the years is precisely why folks are reluctant to put their trust in the private sector. Furthermore, as Tan Ah Kow has pointed out (and which the article has noted), questioning Singapore’s government-led growth strategy is not something new.
Nevertheless, questioning the government’s strategy is pertinent at the moment because it doesn’t seem to be delivering, especially when it’s needed the most. Worse, the Marina Bay casino offers a striking example of the downsides involved. Coupled with the arguments from various economists over the years, and it seems that there is a case for the government to gradually distance itself from its previous strategy.
That’s what the column has argued in the article. But examining how possible the scenario of the government abandoning its old strategy might be is out of the scope of this week’s article.
Garry Rodan’s work is used because it is a frequently cited source, and in this column’s opinion, that’s what makes it “authoritative”. Furthermore, the article does not claim that Rodan makes a case against government-led growth (in fact Rodan wrote about the striking success of the strategy). Rather, this column noted that Rodan has argued that the government-led approach worked under some unique conditions and therefore cannot be counted on to continue working if these conditions change.
“Alwyn Young (1992), “A tale of two cities: Factor accumulation and technological change in Hong Kong and Singapore”, in Fischer and Blanchard (eds), NBER Macroeconomics Annual 1992, Number 7, Cambridge: MTI Press.”
How may this even be remotely relevant to the whole discussion? I perused it and there is only one paragraph that remotely refers to what is written here; even so, it was specific to the whole issue of manufacturing competitiveness between HK and the world and NOT sg.
“4 Garry Rodan (1989). The Political Economy of Singapore’s Industrialisation: National State and International Capital. (Basingstoke: Macmillan)”
Again I fail to understand. Nothing there is relevant to the what needs to be discussed at hand. Rodan’s write up, must be seen in the general discussion of what he calls the tiger economies. Besides what has happened recently is a global meltdown and how might that related to a regional phenomenon.
Pls try to research better bfr you write.
Good Evening,
There is some truth to this article. There is no denying, Singapore is a country that lacks a strong middle band of entrepreneurs. Apart from the run of mill resort and spa operators, along with maybe a handful of curry puff and fish ball tycoons and one of two notable flash in the pan’s. There isn’t very much verve, élan and panache in the private sector fish tank.
Most of it has been filled up by juggernaut super sized oligarchies like Temasek etc – so yes, there is some truth to what the author has said here – this cannot be denied.
Singapore in my view will be hit hardest by this economic down turn; as unlike Hong Kong, Malaysia and Thailand and Taiwan who have a strong middle band of entrepreneurs; the vast majority of us rarely aspire to run our businesses.
Many reasons can be attributed for this shortcoming; bad planning cannot be discounted along with even short sightedness to see value in the god of the small. I don’t think this can ever be denied. As a result, we are now in a real fix; as most of our brightest are salaried men and that’s really as useful as a rubber shovel especially when you need to dig yourself out of a recession fast.
Ironically, the only people who have the experiential knowledge and élan to get us out from this dung heap is what darkness calls the rubber band brigade (that’s a private joke between them, as they usually have to make do with superglue, duct tape and rubber bands to get by). These were the people who our govt once considered troublemakers; what our govt likes to term quitters, ungrateful lot who they once treated like garbage by naming and shaming etc. What the government once consider useless and worthless, we picked up, polished and sayang.
Many years ago, the father of our game, Darkness reached out to them even when no one wanted to have anything to do with them. He was like an older brother to them, and so they listened to him. In the years that followed a very strong bond based on mutual trust, respect and friendship formed.
There are plans to recall every man in the rubberband brigade back. Darkness is convinced only they can save us. He says the rest only knows how to talk a lot, but when you ask them to do something all they can do is give a hundred and one excuses why it cannot be done.
This is an affliction that he has noticed, the rubber band brigade doesn’t suffer from; every problem we throw to them; they solve in half the time, half the resources and half the manpower. They’re like special forces – as for years, they have perfected their skill-at-arms abroad; they are the most adaptable people on the face of this planet; every muscle is tight; every cell is charged and their killer instincts are honed to perfection - the call will go out very soon.
We will call them back and they will return, start businesses and they will save us all.
You will see.
SD (Internet Liaison Officer of the Brotherhood)
Dear rats,
Thanks for your comments. Young’s article is relevant because it is part of the school of thought that interventionist state policies have resulted in large-scale inefficiencies in resource allocation and investments with low return. Singapore is used as the example (and as a contrast to Hong Kong) in the article, and the phrase “industrial targeting taken to excess” used to describe it (which is cited in this week’s article) is on page 43.
As mentioned in an earlier comment, Garry Rodan’s work was cited because Rodan argued that Singapore’s government-led approach worked due to certain unique conditions. He therefore made the point that the model cannot be counted on to continue working if these conditions were to change. This is exactly the point that the article has tried to highlight, along with the deficiencies in the current interventionist model. And, as the article has noted, some of these conditions are changing - e.g. Singapore has a more developed workforce and economy, it is becoming harder to pick winning industries, etc.
Sorry, entered the wrong nick above (#32).
Shd we see a pay cut for those in charge now that the economy is confirmed not golden anymore, in fact it’s going to be negative. They reaped their high pay n bonuses, now it is pay back time. Let’s follow the DBS model and ask, what do I pay you clowns for? Instead of gold, you guys gave me shit and now I have to clean it up. It is a transactional relationship between government and citizens, it is not our fault that I demand some redress, they shove it down our throats in the first place.
Dear singaporedaddy
I will get directly to my main point. I personally dont believe this darkness character is a very good role model. We did a check on his virtual background. And we discovered this character has a very strong criminal trait.
He was the first singaporean to hold up a virtual bank. The first to try to start a pyramid selling scheme. And the first to mass market love stories online forcibly. Now that we know that he will be leading the rubberband brigade back to our shores. I really feel quite uneasy. Firstly, he doesnt have the education, not the right one at least. I am not saying is he not highly educated, only his credentials can be bettered. Secondly, if he really wants to solve our economic woes, you should all consider working along side YPAP or the P65 bloggers or maybe someone who has a sterling reputation. There is no shortage to pick and choose from. But I am not comfortable with this darkness character, as he has shown himself consistently to be phenomenonly unreliable.
It does not surprise me that they all listen to him. Only I feel as I said, if he wants our country to benefit. He should work through the official channels.
For example I consider what you chaps did here very good for our government.
http://dotseng.wordpress.com/2008/10/30/suggested-solutions-for-managing-e-relationships-between-netizens-and-government-part-3-b-the-strategic-initiative-the-final-chapter/
It was a great piece of work that for the first time charted in great clarity and precision the before, after and during picture. So not only does it give a chronological account but it helped bridged understanding. As a public servant not only did I and my staff find it exceedingly helpful, but we found ourselves returning to it time and again. This is the type of effort that we need. I noticed the leader there was a certain vollariane.
Could you pls provide us with more info as to his background. As I said, all of you should consider coming out into the open and working with the proper authorities.
What is the point of hidding in darkness?
Many thanks for reading this.
I personally don’t believe this darkness character is a very good role model. We did a check on his virtual background. And we discovered this character has a very strong criminal trait
singaporedaddy, the Singapore army contingent is coming for youuuu! green rover you know.
Hi green rover
No, don’t worry. I am a bit on your side because I do get the same feel that singaporedaddy seems to have some peculiar affection for Darkness which only he can understand.
Role model?. I guess there are a lot of Singaporeans who are on the lookout for role models other than the ones available from within the PAP. Never mind if it is Darkness or Brightness, anyone will do except Lightning.
Irrationally dangerous you say? It is, I agree. And we can attribute this to the perception that this PAP govt does not care enough. Good deeds must not only be done but must be seen to be done. That’s life in high office with high pay.
As for your description of Darkness and his ideologies, and, to lend support to your observation that his personality is flawed, I think, although your message was addressed to singaporedaddy, and that it being posted here in TOC, only signal that you are looking for a confrontation more than looking to convince singaporedaddy that he has better use for his talent.
No one enters the lion’s den to preach to the lions unless his name is Daniel.
Secondly, if he really wants to solve our economic woes, you should all consider working along side YPAP or the P65 bloggers or maybe someone who has a sterling reputation.
Am I hearing correctly? You want a bunch of ‘misguided, thrown-in-the-gutters-and-left-to-die social misfits’, (at least this is what I get from your description of Darkness and his followers), to work alongside “someone who has a sterling reputation?”. Bluffing or not?
I am not comfortable with this darkness character, as he has shown himself consistently to be phenomenonly unreliable.
You see, in your own words. The Master is phenomenonly unreliable, and yet you want to work alongside his pupils. Don’t you think normal Singaporeans like myself should start shitting in our pants if such a liaison becomes real?
It does not surprise me that they all listen to him. Only I feel as I said, if he wants our country to benefit. He should work through the official channels.
Do you seriously think it will work? To work through official channels? It will be more like sending himself to the gallows.
What is the point of hidding in darkness?
And what might be the point in coming out into the open with the kind of judgements you have already made on Darkness?.
No offence, but I speak my mind with truth in my heart.
Good afternoon Green rover # 35
Let me put it this way. I don’t think very much of Darkness personally. I think less about some of his crackbrained theories and I have even told him this directly in his face. I know many people find this hard and even impossible to believe, but Darkness is not the brotherhood.
He may have once been the most vocal and colorful character in our game, but he certainly doesn’t command blind universal veneration and adulation.
What I will say about Darkness the man is. He remains a very enigmatic and charismatic figure. In the gaming world at least, his name provokes a multitude of opinions ranging from open adoration to hatred. Alas, that reality remains unrealized in the real world at least. So I don’t really see how role modeling even features, unless you are using either Donald duck or Mickey Mouse as a comparative?
I don’t know him well enough to comment on whether he has or is not inclined towards the criminal lifestyle. What you may need to understand here is the brotherhood comprise of very serious gamers. It’s a hobbyist group who may not be dissimilar to wine cognoscenti’s or even people who regularly train spot – there is nothing subversive or insidious about what we do – we study competitive scenarios, it may well be the American or even Malaysian political scene. But we do so very much in the way gamers who mull over what arrow heads were once used in the battle of Agincourt or why the French lost the battle of Waterloo – we are apolitical and neutral. True to the mantra of hardrock café, we love and serve all.
You take us too seriously madam. Besides we ask for very little. Just an opportunity to speak our mind from time to time – have you considered, here is good. Here everything is clear. Here everything is above board. Here you can even see everything. Have you wondered what happens, if we go elsewhere – how could you possibly manage the situation then? Go back to your masters and tell them, we come in the name of peace. We are not a threat. Work with us. Dont fight us.
Even the Romans understood the wisdom of when theory failed to overach reality; “those who cannot be conquered, must be embraced.”
Use your mentality. If you push us off the edge. Who will win? Please think.
As for your reference concerning the rubber band brigade –this is a complex matter and it hasnt been decided whether they will be called back. Its very much still on the table.
I will have to answer that question at another time. My work awaits me.
Thanks
SD (Internet Liaison officer of the brotherhood)
We are not stupid people like some here, where you can press their hot buttons and they will jump up and down as if their pants are on fire. If you want to play that game, then please move on to the next excellent thread here.
When you write something like this; we will ask why? What is your motivation? How well organized are you? What are your beliefs? Who are your masters?
Do you understand? Are we clear?
Always remember, keep the peace. We have already shared with you in our AIMS report secret information that even your so called “best” minds could NEVER have fashioned even if they were given 10 lifetimes. So we are not idiots, please treat us with a bit of respect.
So please. As I said, we ask for very little in return.
A bit of respect, privacy and understanding will go a very long way.
Good
SD
Sometimes, dealing with people who are suspected of suffering from Delusional Disorder makes it hard for one to remain poised and composed in a cyberspace discourse. On one hand you feel sympathetic towards these people, on the other hand, at times you just do not know what they are driving at as the diversion of the original intent of subject matter in discourse get digressed to something far from meaningful to continue the engagement. The best code of practice when dealing with such case is, ignore and disregard.
‘…at times you just do not know what they are driving at as the diversion of the original intent of subject matter in discourse get digressed to something far from meaningful to continue the engagement.’
What were you trying to tell us? That you’re suffering from some disorder?
I wonder so far what milestones we have achieved under the “New Singapore” economic plan. If you look at MTI’s website, there is zero post-2003 economic milestones listed.
———————————————–
Singapore unveils new economic plan
International Herald Tribune
August 21, 2001
Compiled by our staff from dispatches AP, Reuters
Prime Minister cites a ’serious’ threat from China’s surging growth
SINGAPORE is facing a serious economic threat from China, and will pursue a new strategy to make the country more globally competitive and less dependent on foreign investment for its prosperity, Prime Minister Goh Chok Tong said.
In a speech televised Sunday evening, Mr Goh laid out a 10-year plan he called “New Singapore.” The blueprint aims to deal head-on with the challenges posed to Singapore’s economy from China’s rise as an emerging manufacturing powerhouse. It calls for an increase in productivity to the level of Switzerland.
“I have seen China’s transformation at close quarters,” Mr Goh said. “It is scary.”
“Our biggest challenge is therefore to secure a niche for ourselves as China swamps the world with her high quality but cheaper products,” Mr Goh added.
Mr Goh, an economist by training, said Singapore’s new economic strategy would enable it to develop “new bases of growth.”
He said the country, currently dependent on electronics exports, could no longer rely on past policies which, until now, had succeeded in transforming the resource-poor island into Southeast Asia’s richest economy.
“Singapore’s growth up to now has primarily been investment-driven,” Mr Goh said. “This has taken our prosperity to an extraordinary level. But looking into the future, there are limits as to how much more we can rely on such a strategy,” he said.
Mr Goh said his new economic vision would focus more on spreading Singapore’s wings into regional and global markets, as well as a continued restructuring of the economy.
Mr Goh announced his blueprint amid growing signs that Singapore’s economy has stalled, hurt by the severe downturn in the global electronics sector and the slowdown in the United States.
Singapore’s key non-oil domestic exports slumped by a record 24 percent in July from a year earlier, marking the fourth straight month of decline. That has prompted warnings by some economists who say the Singapore economy could contract over the full year. The economy grew 9.9 percent in 2000.
Mr Goh rejected any intervention in wages to prop up the income of less-skilled workers.
But, in an innovative bid to ward off further economic sluggishness, Mr Goh said Singapore would give the country’s 3.2 million citizens “shares” of government revenue that will pay a guaranteed dividend and are partly redeemable for cash.
The so-called New Singapore shares will be redeemable immediately for cash, though not all at once. Details of the program will be announced after the third-quarter economic performance, he said. “How much to whom, and when, will depend on the state of the economy this year,” he said.
The shares will pay a guaranteed dividend for a fixed number of years, plus bonus payments as the economy recovers. Lower-income brackets will be given more.
“It sounds like government bonds,” handed out for free, said Song Seng Wun, an economist with G.K. Goh Research Pte. “Instead of stuffing people’s pocket with cash, it’s in line with the government plan to deepen the bond market.”
Arjuna Mahendran, a regional economist from SG Securities, said that China’s huge pool of cheap labor makes it increasingly difficult for countries like Singapore, with high wages, to compete.
“We basically have to gear ourselves to become more productive,” he said.
China’s impending entry into the World Trade Organization will accelerate its rise on the economic ladder and draw foreign investment away from the region, including Singapore, Mr Mahendran said.
(AFP, Bloomberg)
http://www.singapore-window.org/sw01/010821ih.htm
I understand completely. First of all. For us to even ask Darkness to recall back the rubber band brigade (as for some strange and inexplicable reason, they consider him to someone who they can trust). We ALL want Philip Yeo to go.
We cannot work with him.
Once he goes or is transferred to a place where there is no room to a view, then we can discuss nation building etc.
Before that happens, this is just a sterile debate and what Observer (SG-HK) on November 18th, 2008 4.40 pm said may just as well be the case.
Let’s see what happens.
I am serious, we cannot work with people who back stab us and try to name and shame all of us.
Go and then we will gladly come to the table.
I am just a messenger here.
SD (Internet Liaison officer of the brotherhood)