Fundamentals to S’pore’s progress

Dear Mr Shanmugam,

I refer to your speech at the New York State Bar Association Seasonal Meeting as reported by the Straits Times on 29 Oct 2009.

You said that Singapore had a weak economy back in 1965 when our per capita GDP was US$500. ‘Weak’ as we were then, we nevertheless had the fourth highest per capita GDP in Asia after oil rich Brunei, Japan and Hong Kong.

Next, you said that foreign investment would come only if we had laws which men of commerce could trust. But men of commerce have invested in the oil fields of Russia and factories in China despite their less than ideal laws. Law or no law, as long as there is money to be made, men of commerce are willing to take risks. Furthermore, the need for good commercial laws doesn’t imply the need for laws that excessively constrain basic rights. Take Hong Kong for example. It’s commercial laws are as good as ours, yet it does not have laws that constrain basic rights like the right to demonstrate.

Next, you said that Singapore faced a severe communist threat in 1948 that threatened our existence. But the Malayan communist insurgency of 1948 never once reached the shores of Singapore but was always confined to remote towns and jungles in Malaya. The strikes and riots of the 1950s were essentially nationalistic rather than communist in nature. They arose from the hardships that the people faced in the aftermath of the war and the unfair treatment of the Chinese educated Chinese by the British. Sure, strike leaders like Lim Chin Siong and Fong Swee Suan have been labelled as communists and locked away. But these were charges that have never been unequivocally proven even until today. What is clear however is that their struggles were anti-British and anti-colonial. What is also certain is that the strike participants were ordinary students and workers. They hardly qualify as communists, so the incidents hardly qualify as communist threats. Given that there wasn’t even an armed struggle to begin with, it would be ridiculous to say that the strikes terrorised the people and threatened Singapore’s existence.

Next, you said that there were racial tensions and riots due to ideological differences between our leaders and the leaders of the Malay Peninisular which eventually led to Singapore’s expulsion from Malaya. This shows that the root of the racial riots were political in nature and once the political antagonism between Lee Kuan Yew and Tungku Abdul Rahman were disentangled, the racial tensions went away.

Next you said that we are a little red dot surrounded by two countries with whom our relationships were tense. But we weren’t the only ones in this situation. South Korea didn’t just have a tense relationship with North Korea, it actually went to war with the latter and lost many lives. Yet the South Koreans are some of the fiercest demonstrators today. Likewise, Taiwan had to face the People’s Liberation Army jauggernaut. Yet Taiwan today is a much freer, more democratic country than ours. So the phrase ‘little red dot’ is no excuse for us to be authoritarian.

Next, you analogised our situation with a hypothetical situation of the US being shrunk into the size of Connecticut and sandwhiched between Russia and China. This analogy is not appropriate because the US shrunk to the size of Connecticut will not have the firepower to counteract Russia or China. On the other hand, shrunk as we are, Singapore has the firepower to counteract either Malaysia or Indonesia. This should not be surprising given that Israel is able to hold its own despite being surrounded by numerous and much larger adversaries.

So while stability is not a luxury we take for granted, it is also not an excuse upon which authoritarianism can be justified.

Next, you said that speed of response is important to us. But speed of response is also important to Hong Kong. Yet Hong Kong is not authoritarian like us.

Next, you said that chewing gum is not illegal. But you neglected to mention that the sale of chewing gum is illegal. What material difference does it make whether you ban chewing gum or you ban the sale of chewing gum?

Next you compared Singapore with the US to show that we have lower crime rate achieved with a smaller police force. Why don’t you compare us with Hong Kong, which depending on the year of comparison, has lower crime rates? Yet Hong Kong is not authoritarian like us.

CJ on judicial independence and judicial review

Dear Mr Chief Justice,

I refer to your speech at the New York State Bar Association Seasonal Meeting as reported by the Straits Times under the following titles:

– CJ on judicial independence and judicial review – 28th Oct 2009
– Raffles, MM Lee and the rule of law – 28th Oct 2009
– Bridging the gulf between ideal principle and practice – 29th Oct 2009

In your speech, you said that Mr Lee Kuan Yew’s precepts and values are reflected in all laws found in the Singapore statute. Since they are Mr Lee’s precepts and values, they are not necessarily the precepts and values of the people. Therefore, it may not be entirely right to say that our laws reflect the political, social and cultural values of the people. Take for example our tough defamation laws. What basis do you have to say that people want tough defamation laws? Is Ah Kow the char kuay tiao seller very concerned about being defamed? More likely than not, it is politicians who are more concerned with being defamed. So it may be more appropriate to say that tough defamation laws reflect the values of politicans rather than the values of our people.

You also said that the judge’s pay and tenure are protected and a Supreme Court judge can only be removed by no less than five of your peers. But does that mean that the judge is therefore completely and absolutely unaffected by executive interference? Are money and position the only things that can influence a person’s judgement? What about good old friendship? Let’s say I am a judge presiding over a case involving my good friend Ali. Unless I profess to be a robot completely devoid of human feelings, how can I be absolutely sure that when it boils down to matters involving subjective judgement, I will not lean towards Ali not matter how slight that leaning might be?

Finally, you say that contempt power is necessary to punish allegations that could undermine the court’s authority or public confidence in the impartiality of the court. But on what basis do judges judge public confidence? You said that the judge interprets the law. That is fine. But how does the judge judge public confidence? Without a reasonably good survey, how does the judge know what the public is thinking or is confident about?

Shanmugam: Our approach to the law has worked

I refer to the report dated 29 Oct 2009.

Mr Shanmugam starts by saying that women and children feel safe to travel any time, anywhere in Singapore which he then attributes to our strict laws and law enforcement. However, there are many first world cities and countries like Hong Kong and Japan where women too can walk safely at night. Yet these places do not have laws as strict as ours. These places show that it is not necessarily strict laws that explain why our country is so safe.

Mr Shnmugam’s statement that 90% of our population owns homes may not necessarily be true either. Of the more than 900,000 HDB homes in existence, more than 400,000 have yet to repay their loans. For these 400,000 homes, the title deed is kept by the HDB so technically, the HDB owns these homes. So the real home ownership rate in Singapore is probably closer to 50%.

The speech given by Chief Justice Chan Sek Keong has also served to confuse participants like Mr Jeffrey Tanenbaum who concedes, based on his observation of the commercial realm, that the law here merely reflects our culture rather than executive interference. But why would the executive interfere with commercial affairs when it is highly dependent on multinationals for our continued economic prosperity? Executive interference only makes sense in the political realm where the battering of political opponents and the control of the media can only bring good and nothing but the good for the executive. So making reference to the wrong field has led Mr Tanenbaum to make the wrong conclusions.

To continue with Mr Shanmugam’s metaphor, the pig has no need for lip stick because he rules over the animal farm.

If there is such a thing as the Singapore exceptionalism, it is no more exceptional than those of the other East Asian dragons of Hong Kong, Taiwan and South Korea. With the rapid rise of China, the whole of East Asia, will collectively be exceptional. So what is really so exceptional when each of the democracies of Hong Kong, Taiwan and South Korea achieves as much as authoritarian Singapore?

So perhaps, the exceptionalism lies not with Singapore per say but with the fact that Singapore is East Asian.

Press can criticise, but Govt expects right of reply

I refer to the Straits Times report dated 28 Oct 2009.

Mr Shanmugam was reported to have said that Singapore’s low ranking in press freedom is both absurd and divorced from reality. Is Mr Shanmugam man enough to allow International organisations to conduct a referendum or a survey to verify just how true his allegation is?

He questions how people can be unempowered in a modern, open economy. China is a good example. It’s economy is not only open but also one that is very rapidly modernising as well. Yet, the people of China remain firmly gripped by communism. So his question is really quite silly given the living example that clearly demonstrate that it is indeed possible.

Mr Shanmugam implies that it is not possible for a modern, successful, wired and internationally connected city like Singapore to be a repressive state where people’s thoughts are controlled. But thought control happens even in modern and prosperous Japan. Since the end of World War 2, generations of Japanese have been brought up to believe that the Nanking massacre never happened and that the Japanese were the victims rather than the aggressors of the war. So too in Singapore, students have been receiving an education slanted towards the vitures of the government. This mind setting process throughout their formative years hardens quite often into stone for the rest of their lives.

Furthermore, many old folks in Singapore are either uneducated or cannot read English. They are not connected to the Internet but are dependent instead on Chinese or malay or Indian news supplied by virtually state owned newspapers. So despite Singapore being wired internationally, there is a significant proportion of us who aren’t.

Mr Shanmugam states that the government demands the right of reply but that right of reply is not extended to the people. So in that sense, it is true that the media favours the government but not the man on the street.

Mr Shanmugan also says that critics of government policies should avoid personal attacks or that which is untrue. But it was precisely on the 11th Oct 2009 that Minister Mah Bow Tan personally attacked some Singaporeans over application claims. Furthermore, the allegations made by Minister Mah weren’t entirely true either. Is this how things work in Singapore? The govt has the right to make personal attacks and to say things which may only be half true while the people are refrained from doing so?

Mr Shanmugan brushes off Singapore’s low ranking by Reporters Without Borders by implying that since Singapore’s social order is much better than those of Guinea, Kenya, Congo or Venezuela, Singapore’s press freedom must necessarily be better. That is not necessarily true. The law and order in China is much better than Guinea, Kenya, Congo or Venezuela. Ye we all know that China is a communist state that imposes strict controls on the press and what it publishes. So Mr Shanmugam’s argument is simply nonsense. You can have very strict press controls with reasonably good law and order. In this case, the same agent that is enforcing strict law and order is also the one enforcing strict press controls.

So if Mr Shanmugam wishes to question the objectivity of the rankings, it needs to come up with more objective arguments than merely equating law and order with press control.

MM Lee, SM Goh continue to go all out for S’pore

I refer to the letter to Straits Times by Steve Tan dated 31 Oct 2009.

Mr Tan feels that the glowing tributes by American dignitaries place in context the vision and stewardship of MM Lee. But many of those tributes don’t even make sense. Mr Clinton said that MM helped millions of people across Southeast Asia to live better, more prosperous lives. Yet, much of Southeast Asia is still in poverty. Should we instead say that MM helped millions across Southeast Asia to stay in poverty?

Mr Bush said that MM has done so much for Singapore and desserves the recognition for making Singapore the thriving, prosperous nation it is today. But the fact remains that Singapore was already a thriving city under the British. MM merely inherited a Singapore that had been thriving for more than a century. Hong Kong, Taiwan and South Korea have similarly thrived and prospered without the stewardship of any one ‘legendary’ figure. This suggests that the prosperity that we experience today is not necessarily the work of any one individual but the result of something common amongst East Asians.

We should ask ourselves what this incessant pursuit of growth is for? Do we pursue growth for growth’s sake? Or do we pursue growth to become prosperous? But we are already prosperous. The developed economies have shown us that as we near the apex of prosperity, growth slows naturally. Like a child who improves by 10 marks every year, very soon, he’ll hit 100 marks.

When Sir Stamford Raffles brought in immigrants, Singapore was just a colony. Now that Singapore is a nation, can we continue to behave like we are a colony? When will we ever start behaving like a nation?

The recognition and honouring of our leader doesn’t automatically translate to the honouring of our country. Just like the honouring of Stalin or Hitler doesn’t automatically translate to the honouring of Russia or Germany.

Both MM and SM have shown us that at ages when many can no longer find gainful employment, they are privileged enough to continue to work for the millions they pocket every year.

You don’t need the harshest critics to see the meaninglessness of it all. I wish MM au Revoir and ‘early’ retirement for the good of Singapore.

US ties, challenges for China, Singapore’s role

I refer to your report “US ties, challenges for China, Singapore’s role” dated 29 Oct 2009.

MM Lee was reported to have advised our neighbours not to assume that the Americans will be in Vietnam forever and to be prepared so as to avoid being overrun by the communists. But the Americans have maintained their presence in Southeast Asia throughout the cold war with military bases in the Philippines. After the cold war, a logistics unit was relocated to Singapore. So there is no denying that US forces have always been present and contributed to peace and stability in Southeast Asia.

MM Lee was also reported to have said that Singapore is like a catalyst and a model to China, who followed the Singapore path of inviting all multinationals instead of the South Korean path of building its own champions. First, it is wrong to think of ‘inviting multinationals’ as a distinctively Singaporean model as South Korea, Taiwan and Hong Kong have their fair share of investments from multinationals, especially from the US. In fact, Dr Goh Keng Swee once said that perhaps the start of China’s Cultural Revolution in 1966 and its peak in 1968 scared investors away from countries bordering China so they avoided South Korea, Taiwan and Hong Kong and came to Singapore instead. So it’s hard to say whose model China is following especially when there are so many Taiwanese and Hong Kong entrepreneurs in China.

Furthermore, China’s approach is similar to South Korea’s and Taiwan’s because in addition to inviting multinationals, it has also started to build its own brands. Cherry is one such brand which even MM cannot deny. This is where Singapore’s approach differs from those of China and the other East Asian dragons. In all these years, with the exception of the SIA, the state has never been able to nuture a home grown winner like those from our East Asian counterparts.

A trigger for Asian miracle

Dear Mr President,

I refer to your recent compliment to our Minister Mentor, Mr Lee Kuan Yew. You said Mr Lee ‘helped to trigger the Asian economic miracle.’ But just how momentous or crucial has this ‘trigger’ been?

The ‘Asian economic miracle’ began with the miracles of the four East Asian dragons of Hong Kong, Taiwan, South Korea and Singapore. Since all started industrialisation around the same time, how do we know if it was Mr Lee’s Singapore that helped ‘trigger the Asian miracle’ and not Hong Kong, Taiwan or Korea instead?

We now know that the success of the Asian miracle rests with export oriented industrialisation. Countries that embarked on import substitution industrialisation failed to prosper. Yet, when Mr Lee first took over the reins of government in 1959, it was precisely the route of import substitution that he took. It was only in 1965 when Singapore was separated from its Malaysian hinterland that import substitution became untenable, forcing Singapore to embark on export oriented industrialisation instead. So if there had been a ‘trigger’ for the ‘Singapore miracle’, it must have been lady luck.

Moreover, Singapore’s plans for industrialisation came largely from one man – the Dutch economist Dr Albert Winsemius who was also instrumental in bringing the first multinationals like Shell and Philips onto the shores of Singapore. So if we have to name one person who ‘helped trigger the Singapore miracle’, it would have been Dr Winsemius rather than Mr Lee.

Finally, if all it takes is just a ‘trigger’, why aren’t we seeing more ‘miracles’ all around the world? The Singapore story is no secret but an open recipe for all to see and to emulate. Yet even within Asia itself we see so many countries languishing in poverty. Does it make sense to say that Mr Lee ‘triggered’ China more and the Phillippines less? It doesn’t make sense. So clearly, it takes more than just ‘triggers’ for ‘miracles’ to happen. Thus it makes little sense to attribute the ‘Asian miracle’ to any one ‘trigger’.

Thank you

The great public housing debate

I refer to the Straits Times report “The great public housing debate” dated 17 Oct 2009.

PRs

In her report, Ms Tan concluded that the PR effect on resale flat price is not strong because only one in five resale flats are bought by PRs. There were a total of 30,928 resale flat transactions from third quarter last year to second quarter this year. One fifth of that number is 6,186 flats bought by PRs. So out of the 55,000 newly minted PRs, only 6,186 supposedly bought flats. What happened to the remaining 48,814 PRs? Did they disappear into thin air?

The remaining 48,814 PRs and many more foreigners must have either bought a condo or have been renting a flat or condo. All else being equal, this large influx of buyers or renters would have taken a huge chunk off the supply of available units from the housing market leaving less for Singaporeans.

For example, when PRs or foreigners buy condo units, they help to prop up condo prices so Singaporeans who could otherwise have bought condos would end up buying resale flats instead which tends to push up the price of resale flats in turn.

The same goes for PRs or foreigners renting flats or condos. Renting provides good income to the investor / owner who then has no need to sell his flat or condo. So all the housing units that are profitably rented out becomes unavailable for sale to the masses and with the depletion of supply comes price increases.

Therefore, we cannot isolate the HDB resale market and examine it on its own since all segments of the property market are invariably linked to one another like a jigsaw puzzle. We cannot appreciate the larger picture just by looking at one small piece of the jigsaw puzzle.

Flats heavily subsidised?

Economist Liu Yunhua from NTU reportedly said that it is fair that the capital gain from land price appreciation goes to the govt and not to individuals. But land price appreciation is not some bag of gold that drops from the sky. It will invariably be borne by new buyers who would then have to cough out even larger sums of money for the same living space. This would have been acceptable if land price appreciates slowly over time in tandem with inflation and salary increases. But now, under the “sensibly watchful eyes” of the HDB and its minister, the price of flats has gone up by $100,000 to $200,000 overnight. Where is the fairness to new buyers?

Prof Kim Kying-Hwan says that the HDB hands out real subsidies. But he is only considering a snapshot view of the price situation at any particular time while ignoring the wider price considerations over time. Because when the price of a flat goes up by $100,000 overnight while the subsidy remains at $30,000, the subsidy becomes as good as no subsidy.

HDB has chosen to compare the sale price of new 4-room Punggol flats with their 7-year old resale counterparts that range from $310,000 to $357,000. With this comparison, there appears to be a 10% to 15% discount on the sale price of new flats compared to old flats. But as mentioned earlier, such a snapshot comparison fails to capture significant price increases over time.

Consider instead that from the second quarter of 2007 to the second quarter of 2009, the median price of a 4-room resale flat in Punggol increased from $252,500 to $334,500, an increase of 33%. So even though the HDB gives a 10% to 15% discount on new flats sold, this discount is based on the price of old flats that are now 33% higher than two years ago. So on the whole, the buyer of a new flat doesn’t get a discount but a net price increase of 13% to 20% instead. This is the good old business trick of increasing the price first and then giving a discount to make people feel good about buying a discounted product that is actually more expensive than before.

Income ceiling distorts buying decisions

Ms Tan also says that raising the income ceiling now will introduce even more competition for subsidised home seekers. But Mr Mah has been proudly proclaiming that 8 in 10 applicants for BTO flats are successful first time round. With such good performance, I see no reason why a little bit more competition in the BTO market would hurt.

NUS professors Fu Yiming and Lum Sau Kim reportedly found that households nearing the $8,000 income ceiling “over consumed” by buying bigger flats directly from the govt compared to similar households that bought from the resale market. But think about it, is a household that earns $7,500 and buys a 5-room flat directly from the HDB for $300,000 “over consuming” compared to another household that also earns $7,500 but buys a 4-room flat from the resale market for $400,000? It is obvious who is “consuming more” and it isn’t the couple who bought directly from the HDB. So what the professors found does not seem out of the ordinary. It simply refects the exhorbitant prices charged by the HDB resale market that needs reining in.

Ms Tan also sounded alarm bells by pointing out that while only 20% of first time resale flat buyers bought 5-room flats in 2007, that percentage has increased to 30% by 2009. Similarly, first time buyers of resale executive flats increased from 13% to 21%. But does that necessary show that first time buyers are throwing caution to the wind and “over consuming”?

We first note from the HDB website that demand for 4-room flats is much higher than 5-room or executive flats. Even demand for 3-room flats is higher than that for 5-room flats. The greater demand for smaller flats is understandable given the steep rise in HDB prices since 2007. This greater demand for smaller flats has led to steeper price increases for smaller flats resulting in bigger flats becoming more ‘worthwhile’ compared to smaller flats. So it’s no surprise that first time buyers who can afford it would go for the more ‘worthwhile’ flats.

So once again, what we see is rational consumer behaviour, not irrational “over consumption” to the steep rise in resale flat prices caused by inadequate HDB supply.

HDB deserves praise

I refer to the letter “HDB deserves praise” dated 10 Oct 2009.

In his letter, Dr Lee urged Singaporeans to be thankful and to not forget what HDB has done for us. But the gargantuan problem Dr Lee refererred to occurred four decades ago. Why should we continue to pay tribute to an organisation that no longer serves the needs of the people as it did four decades ago? If we adopt this attitude, wouldn’t we be condoning current bad practices on the basis of past good performances?

Take the case of TT Durai. No amount of good work he has done in the past can prevent him from going to jail for the misdeeds that he subsequently committed. Take too, the recent case of Dr Martin Huang, who has to answer for the medical malpractice he was found to be guilty of regardless of the good work he has done in the past. Similarly, if Dr Lee is ever found to be guilty of whatever medical malpractices, he can be rest assured that the law of this country will not be thankful or remember the good work he has done in the past.

Dr Lee compares a HDB to a condominium and concludes that the HDB is cheap. So if the prices of HDB and condominium both increase by a million dollars overnight, Dr Lee will still think that the HDB is affordable. His thinking betrays the ignorance that is unbecoming of a medical doctor.

He can only blindly quote Mr Mah’s findings but he doesn’t even suspect let alone question the validity of Mr Mah’s findings. Unless Dr Lee sells his house now and moves to the second floor of an HDB, he is not qualified to criticise those who do not wish to stay on a low floor.

All in all, I would say no thanks to an ill thought letter from Dr Lee that contributes absolutely nothing to this discussion.

Watching HDB price behaviour, sensibly

I refer to the Straits Times editorial “Watching HDB price behaviour, sensibly” dated 23 Sept 2009.

The writer wonders why buyers don’t exercise their democratic right to avoid paying a premium by looking at towns less “prime”. Because towns less “prime” aren’t exactly cheap either. The writer doesn’t understand that the rise in property prices is across the board, prime and not-so-prime. So whether one is looking at prime or not-so-prime, one cannot avoid paying a “premium” for nothing.

The writer denigrades the people’s concerns as being “grouses” while applauding Mr Mah’s address of those concerns as being timely. As has always been the case, the wretched people’s concerns are always grouses in the eyes and ears of our elites who have long taken for granted their million dollar salaries and can never understand let alone appreciate the citizens’ fear and panic of watching the cost of buying a flat increase by $100,000 overnight.

The statement “affordability influences supply” tells us that the writer knows absolutely nothing about what he is saying for there is one and only one pre-eminent supplier, the HDB, who monopolises and hence determines the overall price and affordability of flats.

The writer has chosen to parrot Mr Mah’s 30% rule for housing loan payment but fails to justify the use of such a rule. We are left to wonder why the government chooses to follow international benchmarks when it comes to extracting money from its citizens but when it comes to paying themselves, they choose not to follow international norms, but to pay themselves obscene and astronomical millions instead? Under what circumstances are international benchmarks adhered to becomes arbitrary at best.

The writer has little doubt that state housing is affordable. Nevertheless, many old folks have to sell their houses now for retirement funds despite having poured all their hard earned money into their homes all their lives. And that’s what “affordable” means in Singapore, you can “afford” to pay all your life and still end up with nothing in the end.

The writer is sure that HDB has every conceivable flat type and location for every budget. If only the writer can explain what that means in light of the expected 20,000 applications for the 2,000 flats released recently.

The writer puts the blame squarely back on us wretched citizens for creating problems for ourselves by buying biggers places than we can afford. But would banks or the HDB have lent us money if there had been serious doubts about loan repayment in the first place? Sounds just like the US sub-prime crisis isn’t it? Whereas in the US, banks are being blamed for lending money to folks who can’t afford housing, here in Singapore, we the wretched citizens are being blamed instead.

The writer blames us wretched citizens for selfishly wanting to stay near parents for child minding convenience. But as far as child minding convenience is concerned, nothing beats having a maid. With maids, what need is there to stay near parents? So surely there must be something altogether different for wanting to stay near parents? But the writer probably wouldn’t understand. He probably doesn’t care if his children stays in Siberia or Zimbabwe as long as there is Internet connection for him to see them via facebook.

The writer reasons that the farthest points on this island are reachable inside an hour by public transport. I wonder if the writer has ever used public transport in his entire life. I take more than an hour to travel to my workplace via public transportation and that’s not even half the distance from Changi to Tuas South. This must be the loudest bullshit the writer has managed so far. Or he could be thinking that every spot in Singapore is within 2 min of walking to the nearest MRT.

But the writer would go even further, by chastising us wretched citizens to stop hectoring the HDB for impossible concessions due to our own obstinance. Of course concessions are impossible, since when has it been possible for the government to give concessions? Bus concession for children and old folks perhaps but little else. Notice that the writer uses the word “hectoring” which means “bullying”? Wow, we wretched citizens of Singapore have started bullying the authorities. Now that is something new, like lambs bullying the big, bad wolf. But lambs will never be smart enough to come together to bully the wolf. Lambs can only scream for help when being pushed into a tight corner.