Archive for March, 2011

Old HDB flats for new: Over 9 in 10 back scheme

March 29, 2011

Dear Straits Times,

I refer to the 12 Feb 2011 Straits Times report on selective en bloc redevelopment.

Retiree Pay Meng Hock reportedly paid $9,500 for his three-room flat in 1973 but relocated to a $310,000 five-room unit in 2006. He paid only $152,000 after receiving a compensation of $158,000.

Mr Pay’s three-room flat was worth $9,500 in 1973 and $158,000 in 2006. That represents 8.9% annual price increase. If we assume the same 8.9% annual price increase for the five-room flat, the five-room flat should be worth $18,639 in 1973.

If Mr Pay had bought a five-room flat right from the start in 1973, he would only have paid an extra $18,639 – $9,500 = $9,139. Even if we were to account for inflation, Mr Pay would be paying an extra $20,947 only.

But because he bought it much later, in 2006, he ended up paying an extra of $152,000 instead. So he ended up paying a lot more because of the 8.9% property price inflation from 1973 to 2006.

In the case of polytechnic lecturer Mr Gareth Lai, whose four-room flat in Jalan Membina jumped from $110,000 in 2005 to $700,000 today, property price inflation is 36.1% annually. So if Mr Lai were to upgrade to a five-room flat or a maisonette in the same area in future, he would end up paying more than he would had prices not climbed so rapidly.

Mr Pay’s and Mr Lai’s cases represent property inflation of 8.9% and 36.1% respectively. Did salaries increase by 8.9% annually between 1973 and 2006 or 36.1% annually between 2005 and today? Property inflation has clearly far outpaced salary growth. This benefits land owners the most and represents generations of wealth transfer from home buyers to land owners. The government, being the biggest land owner of all, is the ultimate winner of property inflation.

‘Being ordinary is a strength’

March 29, 2011

Dear Mr Steve Tan,

I refer to the 24 Mar 2011 Straits Times report of your media comments “Being ordinary is a strength'”.

You shared with us how you thought you could never afford a computer when you were young to illustrate your idea that it is not whether things are getting pricier but whether youths are prepared to work hard for what they want. But computers are getting cheaper, not pricier. Also, HDB resale prices have shot up by $150,000 over the last four years. For most youths, it will probably take an entire lifetime of hard work just to make up for this price increase. Some may never be able to make up for this price increase.

You said you are convinced by Mr Mah and you feel that his answers are plausible provided we are open and objective. Are you saying that if we feel that Mr Mah’s answers are not plausible, we are therefore not open and not objective? Does being open and being objective depend on being receptive to the government’s version of the truth? Then wouldn’t all the Germans of the Third Reich open and objective when they accepted the Nazi government’s version of the truth?

Dear Mr Desmond Lee,

I refer to the 24 Mar 2011 Straits Times report of your media comments “Politics runs through his veins”.

While the casinos have brought buzz, the true costs have not been totally revealed. For example, we still don’t know how many millions were lost by Singaporeans at our gambling tables. We still don’t know how many of the jobs created were actually cannibalised from elsewhere in Singapore when firms had to either close down or downsize as a result of the opening of the casinos.

Singapore being small and vulnerable is no reason to curtail fundamental rights and freedoms. Is Singapore much smaller than Hong Kong? Certainly not and yet Hong Kong has so much more freedom. They can at least hold placards and protest on the streets. Is Singapore more vulnerable than South Korea which had its submarine sunk recently leading to the death of countless servicemen and had artillery rained upon it? Yet South Korean liberalisation has seen the efflorescence of their popular culture which many Singaporeans can’t seem to get enough of. The small, vulnerable argument is weak and unsubstantiated.

It is also not true that Singapore doesn’t have the strategic depth to bounce back from disaster. We’ve bounced back from the Global Financial Crisis, SARS, September 11 stock market crash, dot com bust, 1997 Asian Financial Crisis. But the biggest disaster we have ever bounced back from is the three years, eight months of Japanese Occupation. We have never failed to bounce back from disasters so please don’t tell me we can’t bounce back from disasters.

Go East, young bureaucrat​. Emerging Asia can teach the West a lot about government

March 28, 2011

Dear Editor Economist,

I refer to the 17th Mar 2011 article: “Go East, young bureaucrat. Emerging Asia can teach the West a lot about government”. This article was also carried by the Straits Times on 25 Mar 2011 with the title “Why Singapore Works”.

In your attempt to explain why emerging Asia has a lot to teach the West, you ended up explaining why Singapore has a lot to teach the West. The article almost exclusively holds Singapore up as that “emerging Asia” that the West should learn from.

The article starts with the Singapore education miracle. If we refer to the OECD’s PISA ranking of countries according to students’ performance in reading, mathematics and science and take the average of the three, we see that by and large, East Asians do well in studies, not just Singaporeans:

Country / economy Average of reading, math and science Overall reading Mathematics Science
Shanghai-China 577 556 600 575
Hong Kong-China 546 533 555 549
Finland 543 536 541 554
Singapore 543 526 562 542
Korea-South 541 539 546 538
Japan 529 520 529 539
Canada 527 524 527 529
New Zealand 524 521 519 532
Chinese Taipei 520 495 543 520
Australia 519 515 514 527
Netherlands 519 508 526 522
Liechtenstein 518 499 536 520
Switzerland 517 501 534 517
Estonia 514 501 512 528
Germany 510 497 513 520
Belgium 509 506 515 507
Macao-China 508 487 525 511
Poland 501 500 495 508
Iceland 501 500 507 496
Norway 500 503 498 500
United Kingdom 500 494 492 514
Denmark 499 495 503 499
Slovenia 499 483 501 512
Ireland 497 496 487 508
France 497 496 497 498
United States 496 500 487 502

The picture is even more consistent if we look at the mathematics and science scores. Without exception, all of East Asia has performed well above the OECD average in math and science. The Singapore education miracle is thus no more than the East Asian education ‘miracle’. It is of course not a miracle but a natural outcome of the East Asian cultural emphasis on education. But an emphasis on education doesn’t imply that East Asians are therefore more creative. It doesn’t churn out Bill Gates or Steve Jobs.

ITE

While most ITE graduates are being snapped up quickly, their median gross salaries range from $1,100 to $1,250 when Health Science ITE graduates are excluded. Compare this with our Workfare income supplement eligibility criteria of $1,500. To qualify for Workfare is to be earning a low income which necessitates topping up from the government. While ITE graduates are too young to qualify for Workfare, it is quite clear that their income is quite low which could be one reason why they are being snapped up so quickly.

Myth of Asian authoritarianism

You have correctly identified the myth of the (East) Asian authoritarian and state directed success. The continued prosperity of Taiwan and South Korea after they have given up authoritarianism and after they have shrunk their state directed foot print shows that East Asian prosperity lies fundamentally with something else altogether different.

Better schools

When we say better schools, what we really mean is better results because we judge schools by their results. But as we have seen from the data, East Asia tends to produce better results, not just Singapore. In fact, East Asians don’t just score well in their own countries, they also score well in Western schools too. Since East Asians can do well in both Asian and Western schools, the notion that Asian schools are better is therefore highly suspect. Most of the time, scoring well doesn’t mean better schools but better students instead. At least better at studying.

Better hospitals

In the case of hospitals, we compare countries by comparing health indicators like life expectancy using WHO data:

Country Life expectancy
Japan 83
Australia 82
Italy 82
Switzerland 82
Canada 81
France 81
New Zealand 81
Norway 81
Singapore 81
Sweden 81
Austria 80
Belgium 80
Finland 80
Germany 80
Ireland 80
Luxembourg 80
Netherlands 80
Republic of Korea 80
United Kingdom 80
Denmark 79
United States of America 78

As far as life expectancy is concerned, there is no evidence that Singapore is better than most Western countries. Other indicators like percentage of births attended by skilled personnel, tuberculosis mortality rate, physicians per 100,000 population and so on also don’t show Singapore to be better than most Western countries.

Newsweek actually ranked countries according to health and Singapore shares the 7th spot with nine Western nations while five Western nations are ranked above it.

Also, according to the 25 Mar 2011 Straits Times report “S’pore faces challenges to be among best in health care”, our health minister reportedly compared our hospitalisation rates for diabetes complications, congestive heart failures and chronic obstructive pulmonary disease with those of New Zealand’s, South Korea’s and Japan’s respectively to show how Singapore still falls short in its aspiration to having one of the healthiest populations among developed countries.

Safe streets

The United Nations survey on crimes shows Singapore to be on par with Japan and Hong Kong in having safe streets with fellow East Asian nation, Korea not far behind. Again, the picture of Singapore sharing and exhibiting East Asian qualities is reinforced. We also note that many Western nations are relatively safe places too.

Country / economy Homicide (less than) Rape (less than) Robbery (less than)
Japan 1 5 10
Singapore 1 5 40
Hong Kong 1 5 40
Brunei Darussalam 1 10 10
Switzerland 1 10 60
Germany 1 10 70
Austria 1 10 70
Netherlands 1 10 100
Norway 1 20 40
Sweden 1 60 100
Canada 2 5 100
Denmark 2 10 70
Luxembourg 2 20 70
France 2 20 180
United Kingdom (Northern Ireland) 2 30 70
United Kingdom (England and Wales) 2 30 150
New Zealand 2 40 60
Australia 2 No figures 100
Liechtenstein 3 10 10
Republic of Korea 3 20 10
Finland 3 20 40
United Kingdom (Scotland) 3 20 70
United States of America 6 30 150

Low government consumption

The Singapore government’s reported consumption of only 19% of GDP will not seem so out of the ordinary when compared to other East Asian economies. Whether we refer to World Bank data or data from the 2011 Index of Economic Freedom:

Country / economy World Bank
General government final consumption expenditure (% of GDP)
Country / economy 2011 Index of Economic Freedom
Govt. Expenditure % GDP
Macao 7.1 Macau 14.9
Hong Kong 8.3 Singapore 17.0
Singapore 10.1 Taiwan 18.5
Switzerland 10.8 Hong Kong 18.6
China 13.3 China 20.8
Luxembourg 14.9 South Korea 30.0
Korea, Rep. 15.3 Switzerland 32.0
United States 16.7 Australia 34.3
Australia 17.0 Japan 37.1
Ireland 18.0 Luxembourg 37.2
Germany 18.1 United States 38.9
Japan 18.5 Canada 39.7
Austria 18.7 Norway 40.2
Norway 19.3 New Zealand 41.1
Canada 19.7 Germany 43.7
New Zealand 19.8 The Netherlands 45.9
Italy 20.2 United Kingdom 47.3
United Kingdom 21.7 Austria 49.0
Finland 22.5 Finland 49.5
France 23.2 Belgium 50.0
Belgium 23.2 Denmark 51.8
Netherlands 25.6 Sweden 52.5
Sweden 26.0 France 52.8

The general picture is that of East Asian frugality which is again more culture driven than anything else. Thus, the competitive advantage of good, cheap government is not the sole preserve of Singapore but a shared cultural heritage of East Asia in general. So while it may appear natural to attribute this supposed ‘Singapore advantage’ to MM Lee for having the wisdom to keep social transfers down and to not indulge in Western style eat all you can welfarism, the facts and the data show otherwise. Singapore exceptionalism is merely East Asian exceptionalism, not the exceptionalism of any one man.

In many International rankings, Hong Kong stands side-by-side Singapore. Yet, China respects MM Lee more than any leader in Hong Kong. But the way East Asian economies bunch together near the top of international rankings with or without an MM Lee like leader suggests that we may have accorded MM Lee more credit than he deserves. The fact that East Asia has prospered and continues to prosper with or without a larger than life figure head shows that the figure head is really nothing more than just that – a figure head.

Land, CPF, Temasek

Huge government land holdings are a result of the passing of the Land Acquisition Act in 1967 which allowed the government to acquire land from the people for as cheap as $1. This allowed government land holdings to increase from about 40% at independence to more than 80% by the time the act was amended in 2007. The equivalent to this would be Stalin’s forced acquisition of land from the peasants. This is something you will never find in America and which no decent American would approve of.

The CPF supposedly provides the capital for Singaporeans to pay for housing, pensions and healthcare. But even CPF is struggling to cope with housing prices exploding by 66% over the last four years and the rapid increase in cost of living and healthcare.

Temasek represents the government’s monopoly in many facets of life in Singapore. It represents easy money that the government squeezes from the people.

Regular elections

Our elections lack the true test found in Western nations because:

– Until very recently, government funds to improve housing estates were reserved for wards that voted for the government which is really a form of vote buying

– All newspapers have been amalgamated into one company whose shares can be mostly traced back to government linked companies and whose chairman has always been important ex-ministers. In other words, there is no alternative voice.

– Up to six constituencies are lumped together as one, effectively allowing one incumbent to win six seats.

Long-term view

Examples of the government’s supposed strategic thinking and looking ahead are:

– Stop-at-two campaign beginning in the 1960s to control birth rate which ends with low birth rate today and about turn in policy

– Over-reliance on electronics industry until its mass exodus in the early 2000s followed by a mad scramble to find the replacement biomedical industry

– Caught without sand, an important construction material, not once but twice

– Mass import of workers over the last few years without catering to their housing needs leading to an explosion of housing prices and a sudden slew of measures to contain the problem

So time and again, it has been shown that ours is a government that is more of the fire fighting type than the strategic, looking ahead type. MM Lee even professed to have a long antenna to see into the future when he couldn’t even see the Global Financial Crisis unfolding right under his nose.

Credit to the elites

While it is commonly believed that Singapore’s success has a lot to do with our $2 million a year elites who run it, success factors like good education and frugal government have been shown to be more cultural in nature than due to any one elite.

It is arguable whether people who don’t make the grade are being pushed out quickly. A lot depends on how you define ‘make the grade’. You can let a terrorist loose or allow hundreds of thousands of foreigners to swarm the island without making adequate preparations and still ‘make the grade’. When mistakes are always delegated to those lower down the food chain and credit is always yours for the taking, you simply cannot but ‘make the grade’.

Industrial policy

Our decades old central theme of attracting foreign multinationals to manufacture for global export has often been mistaken to be the Lees dabbling in industrial policy. That idea actually came from Dr Albert Winsemius instead, an economist sent by the United Nations in the 1950s to help Singapore industrialise. In fact, when MM Lee first took charge in 1959, he favoured the strategy of import substitution with Malaysia as the target market instead. Luckily for Singapore, that dream didn’t materialise when Singapore became separated from Malaysia.

A Western place

Perhaps the most appealing reason why the West should learn most from Singapore instead of from East Asia in general is Singapore’s appearance to be a pretty Western place. How deceiving appearances can be. While Singapore is arguably the most English speaking Asian nation, it is hardly Western in culture. Our self-reliance is not of the Victorian nature but of the East Asian nature. American management theory has been adapted to suit our East Asian culture.

Since much of what Singapore is, is largely a consequence of us being East Asian, to learn from Singapore is to learn to be East Asian. This entails a fundamental shift in culture which can be a monumental task. Also, in trying to be more East Asian, the West runs the risk of becoming less Western. Imagine if Western societies were as obsessed with academic results as East Asians, how would Bill Gates be convinced to give up his Harvard education to start Microsoft? Perhaps the reason why Singapore hasn’t found our Bill Gates yet is because that person is busy counting his $2 million salary.

DPM Wong questions opposition​’s GRC motives

March 25, 2011

Dear Mr Wong,

I refer to the 24 Mar 2011 Straits Times articles:
– DPM Wong questions opposition’s GRC motives
– Need to ‘look beyond Chinese-educated candidates’

It is unbecoming of a deputy prime minister to insinuate that the opposition wants to win a GRC just because it wants to make history by becoming the first to do so. Do you have very good reasons for saying that? You are not going to stand corrected like MM Lee did, are you?

82 out of 84 seats won. The PAP is already more than strong enough. What good making it even stronger? No, what we need now is not for PAP to be stronger than it already is. What we need now is to vote in a stronger opposition to counteract the bungling, staunch and unrepentant PAP government.

You said PAP renewal is about serving Singapore’s interests. But Singaporeans in Potong Pasir and Hougang had to wait for so many years before lift upgrading was offered. How do you expect Singaporeans to believe that PAP is about serving Singapore’s interests?

As a Singaporean, I don’t feel short changed just because the opposition has yet to reveal more candidates. The opposition has a tough job coordinating amongst so many parties. It of course needs more time to finalise candidates. As long as sufficient time is given to the opposition to campaign and to properly introduce its candidates, I would be more than happy.

You said decisions you make will be in the national interest. You mean withholding lift upgrading from Potong Pasir and Hougang for so many years is also of national interest?

Housing Board does have buffer stock of flats

March 25, 2011

Dear Straits Times,

I refer to the 24 Mar 2011 letter by HDB’s Mr Ignatius Lourdesamy.

Mr Lourdesamy said there is a 10% to 20% buffer from unsold BTO flats and from balance en bloc redevelopment flats. However, according to a 4 Mar 2011 Straits Times report, Mr Mah said there have always been unsold flats over the past decade. Is the 10% to 20% buffer referring to these unsold flats that nobody wants? What good is a buffer of flats that nobody wants?

He also said that the surge in housing demand is due to strong economic recovery, low interest rates and bullish market sentiments. However, during the global financial crisis years of 2008 and 2009, HDB resale prices continued to climb by 14.5% and 8.2% respectively. Since housing demand continued to surge during the economic crisis, economic recovery or bullish market sentiments cannot be the main reasons for the explosion of housing prices this time.

He also said that HDB flats cannot be compared to a staple like rice because it is an investment and its purchase can be advanced or deferred. But rice can also be a form of investment just like any commodity. If you foresee an imminent crop failure, you may profit from shoring up rice at cheap prices and selling it later at higher prices. Similarly, the purchase of staples or necessities can also be advanced or deferred. Some Singaporeans were reported to have stocked up on rice during the global rice shortage in 2008. A few days ago, Hong Kongers were shown on TV queuing up to buy Japanese milk powder in advance. Japanese restaurants here were also shown to be buying up essential raw materials in advance too. For many years now, the deflation climate in Japan also meant that many consumers chose to defer their purchases of just about anything including rice. Therefore, HDB flats can be compared to a staple like rice.

He disagreed that oversupply is a local problem because depressed flat prices due to oversupply affects all home owners. The word ‘depressed’ comes from an investment perspective. But the HDB flat is first and foremost a basic essential, not an investment. For a basic essential item, the correct word to use is ‘stable’, not ‘depressed’. Also, stable prices cannot be due to oversupply which will only cause prices to plummet instead. So when prices hold steady, it is not an oversupply situation but a situation where supply meets demand. A situation where prices are stable is fair to everybody. Buyers don’t pay more, sellers don’t earn less. After all, we are just Singaporeans selling to fellow Singaporeans.

The situation where people are in debt even after selling their flats is precisely due to the property market rising sharply and then falling sharply. So if we can prevent prices from climbing sharply to begin with, we can avoid this situation. It is therefore all the more important to keep HDB prices stable.

The interests of flat owners are no less important than flat buyers. But is it the HDB’s prerogative to make sure that flat owners profit at the expense of flat buyers? By letting HDB prices climb up, up and away, is the HDB telling Singaporeans that flat owner interests are more important than flat buyer interests?

For the HDB resale market, increasing prices means a transfer of wealth from Singapore buyer to Singapore seller. That is like robbing Peter to pay Paul. The country gains nothing. But for new HDB flats, increasing prices means that Singaporeans pay more to the government. So the ultimate winners in a property boom are the land owners. Since the government owns most of the land in Singapore, it therefore becomes the biggest winner of all.

Under-40s make up half of PAP new faces

March 24, 2011

Dear Straits Times,

I refer to the 22 Mar 2011 reports:

– Hougang man has a heart for the needy

New PAP candidate Mr Desmond Choo reportedly declared his heart is with the underprivileged and his mantra is that no one should be left behind. The people of Potong Pasir and Hougang are underprivileged because they had to wait for so many years to finally enjoy what the rest of Singapore enjoys. Whether or not Mr Choo gets elected, he must not forget his mantra but should instead push his fellow PAP comrades to make sure that no one, not even those from opposition wards are left behind. In fact, any PAP candidate who puts the PAP above Singaporeans is not fit to lead Singapore.

– Man with a long-term view
– Under-40s make up half of PAP new faces
– Labour candidates on ‘symbiotic’ ties with PAP

New PAP candidate Mr Ong Ye Kung said that his family’s and relatives’ uprooting from their Lorong Chuan kampong was more beneficial than detrimental. But those benefits went largely to the government. The land was taken from his family on the cheap. But were Lorong Chuan flats sold to the people as cheaply? The people of Lorong Chuan collectively paid much more than what the government had compensated Mr Ong’s family decades ago.

Mr Ong reportedly had a change of heart to the integrated resorts because of the thousands of jobs brought in. But many of the jobs went to foreigners. Food and beverage stalwart Mr Dennis foo reported 20% drop in business. Smaller outlets might have downsized of closed down. In the end, what appeared to be job creation might simply be job transfer from existing F&B outlets to the new integrated resorts. Also, what hasn’t been revealed thus far is how much Singaporeans have lost in our casinos. If the bulk of the billions made by the integrated resorts came from Singaporean pockets, then those billions would merely be money changing hands within the country without the actual production of real goods and services.

Mr Ong said PM Lee’s decisions are always about bringing real benefits to real people. How does the explosion of property prices bring real benefits to real people? The greatest beneficiary is none other than the government itself since it owns most of the land and would therefore benefit the most from a property bull run.

The fact that Singapore acted more decisively than the US in the US-Singapore FTA could simply reflect the greater importance Singapore attaches to the FTA as compared to the US since the US is one of our biggest export markets whereas we play only a tiny part in the US economy. The claim that Singapore needs a strong government to act decisively falls apart when we look at how laissez faire Hong Kong too can act decisively when required.

Mr Ong thinks that Singapore does pass the democracy test because voters have a choice to throw out the current government. But that description of the process is too simplistic since there are extra hurdles placed by the current government to entrench itself. Lack of media freedom, using HDB upgrading as a political currency to literally buy votes and lumping six constituencies into one are all cheap, undemocratic tricks that put our ‘democracy’ to shame.

Mr Ong reportedly said that the only test that mattered is whether workers benefited. His assessment is that investments have come in, jobs have improved, wages have gone up. But how can we have passed the test when we continue to see stagnant wages at the bottom that require topping up through Workfare?

Mr Teo Chee Hean reportedly referred to German union representatives sitting on company supervisory boards to justify NTUC’s ‘symbiotic’ relationship with PAP. But the relationship between union and company is not the same as the relationship between union and political party. The company is all that the union needs to support. But the political party is not all that the union needs to support. The union must support the entire nation, not just one party.

– ‘I’m staying, I’m fully invested’

Dr Janil Puthucheary said he is staying, fighting and fully invested. Talk is cheap. It would be better if he can serve two years of national service before saying that.

He said a viable two-party system depends on what else is put up for Singaporeans. That’s not true. It also depends on the tear down of unfair entrenchment practices by the PAP.

– Their dads were once PAP adversaries

Dr Puthucheary said that the Internal Security Act is used very differently today while Mr Ong said it is a new generation and should move on. But the fact that the Internal Security Act is used very differently today doesn’t mean it was used correctly in the past. If it was not used correctly in the past then surely any wrong doing deserves redress, even today. Moving on is easier said than done. Some of the victims of the Internal Security Act were locked away for twenty, thirty years. If Mr Ong is willing to be locked away for thirty years and not have his freedom back until he is seventy years old, would he say move on so easily?

Tanjong Pagar to get a facelift

March 20, 2011

Dear MM Lee,

I refer to the 20 Mar 2011 Straits Times report of your comments at the unveiling of Tanjong Pagar GRC’s five-year master plan.

It’s heartening to see Tanjong Pagar so well taken care of. It is hoped that the same care can be extended to Potong Pasir and Hougang too. The residents of Potong Pasir and Hougang are as Singaporean as any in Tanjong Pagar. They shouldn’t be denied their fair share of the fruits of the nation’s progress.

Home ownership as the reason to fight for Singapore is too shallow. Many PRs own homes in Singapore. Does that mean they will fight for Singapore? Conversely, there are Singaporeans who stay in rental flats. Does that mean they cannot be counted upon to fight for Singapore? Did Lim Bo Seng’s Force 136 or Lt Adnan’s Malay company require home ownership to fight for and to die for Singapore? You had and still have your Oxley home. Did you fight for Singapore when the Japanese came? You don’t need to own a home to feel that this is home. Conversely, you may own a home and still not feel that this is home. We fight not because we own homes but because we feel that this is home, truly.

There have been few riots since the 1960s because PAP’s political hegemony had been established by then. All the opponents were either locked away or permanently separated. There were no more duels for the PAP to fight so naturally there would have been fewer riots, not because the people had flats to protect or to pay for.

You can’t increase home ‘value’ without also increasing home cost, home price. The increase in the seller’s home ‘value’ becomes the increase in price for the buyer. One man’s gain is another man’s loss. There is no net gain for the nation as a whole. Also, unless one intends to migrate or has several homes, one has to buy another home at increased prices after selling at increased prices. Again, there is no net gain.

In the case of new homes, increased prices means future buyers will end up paying more for their homes. Whether it is new HDBs or new condominiums built on land bought from the government, increased prices means paying more to the government. So it is understandable why the government will always keep the price of homes up. It will keep the government’s revenue stream from the people up as well. The money that the government has pledged to improve the homes of Singaporeans will be more than earned back since new flats are being sold to Singaporeans at much higher prices. So it’s future buyers who end up paying for the facelift to our flats.

Second batch of signed Hard Truths raises $1.75m

March 19, 2011

Dear Straits Times,

I refer to the 23 Feb 2011 report of Irish hedge fund manager Bill Bollinger’s comments on Singapore and MM Lee.

Mr Bollinger, having lived in New York and London and having travelled to major cities around the world, finds none functions as well as Singapore, citing rule of law, competence and most importantly safety as key reasons. However, using data from the World Bank governance indicators 2009:

Country Rule of Law Country Regulatory quality Country Government effectiveness
FINLAND 120% SINGAPORE 100% SINGAPORE 100%
SWEDEN 120% HONG KONG 100% DENMARK 100%
NEW ZEALAND 119% DENMARK 99% FINLAND 97%
NORWAY 117% NEW ZEALAND 96% SWEDEN 90%
DENMARK 116% AUSTRALIA 95% SWITZERLAND 87%
LUXEMBOURG 114% FINLAND 94% NEW ZEALAND 85%
NETHERLANDS 111% NETHERLANDS 92% LIECHTENSTEIN 82%
CANADA 110% SWEDEN 91% CANADA 81%
AUSTRIA 109% CANADA 90% LUXEMBOURG 80%
SWITZERLAND 109% LUXEMBOURG 90% HONG KONG 80%
AUSTRALIA 107% SWITZERLAND 85% AUSTRALIA 79%
UNITED KINGDOM 106% UNITED KINGDOM 84% NORWAY 79%
GERMANY 101% LIECHTENSTEIN 82% NETHERLANDS 77%
SINGAPORE 100% AUSTRIA 80% AUSTRIA 74%
LIECHTENSTEIN 100% GERMANY 80% GERMANY 68%
UNITED STATES 95% NORWAY 76% UNITED KINGDOM 67%
HONG KONG 93% UNITED STATES 74% UNITED STATES 63%

We see that while Singapore shares the top spot in regulatory quality and government effectiveness, it is far from the top when it comes to rule of law.

Also, if we were to average out the scores of the three categories:

Country Average
DENMARK 105%
FINLAND 104%
SINGAPORE 100%
SWEDEN 100%
NEW ZEALAND 100%
LUXEMBOURG 94%
AUSTRALIA 94%
CANADA 94%
SWITZERLAND 94%
NETHERLANDS 93%
HONG KONG 91%
NORWAY 90%
LIECHTENSTEIN 88%
AUSTRIA 88%
UNITED KINGDOM 86%
GERMANY 83%
UNITED STATES 77%

We find quite a number of countries that are quite close to us in these three World Bank governance indicators. This is despite the fact that Singapore is so much smaller and hence so much easier to administrate. There is also a “voice and accountability” indicator which Mr Bollinger would probably not be interested in.

For crime rate comparisons, we can refer to the United Nations survey on crimes:

Country Homicide (less than) “Rape
(less than)”
“Robbery
(less than)”
Japan 1 5 10
Singapore 1 5 40
Hong Kong 1 5 40
Brunei Darussalam 1 10 10
Switzerland 1 10 60
Germany 1 10 70
Austria 1 10 70
Netherlands 1 10 100
Norway 1 20 40
Sweden 1 60 100
Canada 2 5 100
Denmark 2 10 70
Luxembourg 2 20 70
France 2 20 180
United Kingdom (Northern Ireland) 2 30 70
United Kingdom (England and Wales) 2 30 150
New Zealand 2 40 60
Australia 2 No figures 100
Liechtenstein 3 10 10
Republic of Korea 3 20 10
Finland 3 20 40
United Kingdom (Scotland) 3 20 70
United States of America 6 30 150

* all figures are per 100,000 population

We can see that Japan and Hong Kong have low crime rates like us and many other countries are not far behind too. Again, it is worth noting that a small city like Singapore is much easier to police than much larger countries.

Mr Bollinger might be pleased to know that places like Hong Kong, Switzerland, Germany, Austria and Denmark have scored well for both the World Bank governance indicators as well as the United Nations crime survey.

Mr Bollinger reportedly read MM Lee’s book to find out what made Singapore tick and found MM Lee to be visionary. That is like reading a Japanese history textbook to learn about Japanese involvement in WWII. One is bound to find Japan’s war time atrocities glossed over. To get the full picture, one has to also read history books from the other side of the conflict too. Similarly, Mr Bollinger should also read books written by MM Lee’s detractors to get the complete picture.

Budget debate over, now for the voters’ verdict?

March 17, 2011

Dear Mr Mah,

I refer to the 11 Mar 2011 Straits Times report – Budget debate over, now for the voters’ verdict?.

You said this government is unlike most governments that focus on the short term. But what is the outcome of any such difference? Double digit housing price inflation for three of the last four years. HDB resale price rising by more than $150,000 on average over the last four years. That is the difference. It is a difference in the portrayal of truth to the public. That despite double digit housing price inflation for several years, despite housing price having shot up by many times the ‘generous’ subsidy of $40,000, this government continues to insist that housing is affordable.

The reason why we can overcome so many challenges along the way is because we have an entire nation’s resources to squander and thank goodness we have a nation of hardworking people. Even if there are agencies which have passed with flying colours, yours is not one of them. You have failed miserably and your report card is a lousy F9.

Flying or crashing colours will not be revealed in the next election. What will most likely be revealed, time and again, is the blind faith of many people for the PAP.

Homing in on what matters most to S’poreans

March 17, 2011

Dear Mr Mah,

I refer to the 4 Mar 2011 Straits Times report “Homing in on what matters most to S’poreans”.

You reportedly joked about us being hit by doubt-digit inflation. According to the HDB resale price index:

Year Quarter Index Year to year increase
2010 IV 172 14.1%
2009 IV 150.8 8.2%
2008 IV 139.4 14.5%
2007 IV 121.7 17.5%
2006 IV 103.6

We did experience double-digit housing price inflation for three of the last four years. Even during the depths of the Global Financial Crisis in 2009, housing price grew by a significant 8.2%.

A market based system doesn’t absolve the government of the responsibility of keeping housing price inflation low.