Archive for February, 2013

Commentary on the 10 things every Sg should know about White Paper

February 27, 2013

This is a commentary on the 10 points Ms Aresha Krishnan raised in her 26 Feb 2013 TREmeritus article “White Paper: 10 things every SG should know & think about”.

Ms Krishnan started by saying we are a small, young country with no natural resources going from zero to hero in 50 years whereas it takes hundreds of years to stabilise a country. Much of that is not true. Singapore has been around since 1819 so we are already 194 years old, not that young anymore. We weren’t zero back in 1965, we were at least middle income back in 1960 [1] and according to LKY was already a metropolis or very nearly so [2]. According to Dr Goh Keng Swee, even though Singapore didn’t have natural resources, our very geographic location is one of four reasons why Singapore succeeded [3].

Point 1: We were founded and sustained from day 1 on the basis of foreign migrants

Ms Krishnan’s first claim is based on the fact that our parents or grandparents were foreign migrants. While that may be true, it doesn’t mean that generation after generation must continue to be foreign migrants or that our new found indigenity isn’t worth protecting and promoting.

Ms Krishnan supposedly found data [4] to show that there aren’t that many true blue Singaporeans. Her data supposedly shows that out of 3.81 million Singapore residents; 1.96 million are foreign born while only 1.85 million are local born. That is not true. Our own 2010 population census [5] shows that in 2010, out of 3.77 million residents, 0.86 million were born outside of Singapore, 2.91 million were born in Singapore. So the number of foreign-born residents should be 0.86 million and not 1.96 million as stated by Ms Krishnan. The Singaporean population should be 2.91 million strong, not 1.85 million strong as stated by Ms Krishnan. So how did Ms Krishnan get her figures so wrong?

Mr Krishnan’s data source [4] is World Bank’s Stock of International Migrant data which is in turn obtained from the United Nations Population Division, Trends in Total Migrant Stock: 2008 Revision. By retrieving data from the 2008 Revision website [6], we can confirm that Ms Krishnan’s figure of 1.96 million refers to Singapore’s stock of international migrants for the year 2010. The UN defines international migrants [7] as the number of persons born in a country other than that in which they live. This means that our international migrants refers to all those who live in Singapore but who were not born in Singapore and that includes all foreigners and foreign born residents. Thus, Ms Krishnan mistook “international migrants” to mean foreign born residents when it actually means all foreign-born including foreigners and foreign born residents.

Point 2: The Population White Paper proposes to slow down the volume of foreign migrants to the lowest ever in the history of Singapore

One look at Ms Krishnan’s data source [4] and we can immediately tell her second claim to be false. The following chart obtained directly from Ms Krishnan’s link shows there was no increase in our migrant stock between 1960 and 1980. No amount of ‘supposed slowing’ by the White Paper can be lower than that recorded between 1960 and 1980. It is also clear from the graph that our most recent rate of foreign migrant intake between 2005 and 2010 is the fastest in our self-rule history.

migrant stock singapore

More precise numbers in the table below are obtained from the source of Ms Krishnan’s data source: the United Nations International Migrant Stock: The 2008 Revision [6].

Year Number foreign migrants Average foreigner intake per year
1960 519,246
1965 525,047 1,160
1970 527,453 481
1975 529,006 311
1980 530,873 373
1985 619,330 17,691
1990 727,301 21,594
1995 991,549 52,850
2000 1,351,806 72,051
2005 1,493,976 28,434
2010 1,966,865 94,578

The Population White Paper estimates our population to be between 6.5 million to 6.9 million by 2030 of which 3.6 million to 3.8 million will be citizens from which we can estimate the foreigner and PR population to be between 2.9 million and 3.1 million. That will mean an addition of about 0.94 to 1.14 million foreigners and PRs to the current 1.96 million. Add to that 15,000 to 25,000 new citizens injected each year till 2030 or a total injection of 0.255 million to 0.425 million new citizens, we will have a total of 1.2 to 1.6 million international migrants injected from now till 2030. This is equivalent to the injection of between 70,294 to 92,059 international migrants per year, a level comparable to our current all-time high of 94,578 between 2005 and 2010 or second all-time high of 72,051 between 1995 and 2000. In other words, the claim that the Population White Paper is seeking to slow down foreign migrant intake to the lowest level in our history is false. Far from it, it is proposing to maintain it at the current historic high or the next historic high.

Point 3: Our GDP growth correlates to a ‘T’ with foreign worker numbers and number of overseas born residents

The graph below shows how foreigner numbers, GDP and per capita GDP changed since 1980. We can see that spurts of growth in foreigner numbers in the early 1980s and in the mid-1990s did not correspond to spurt in GDP while in the early 2000s, foreigner numbers fell while GDP continued to go up. Correlating to a ‘T’ isn’t exactly how you would describe the relationship between foreigner numbers and GDP. While foreigner numbers grew by 11.3 times since 1980, GDP only grew by 7.8 times. Foreigner growth outstripped GDP growth by 1.5 times.

GDP

More importantly, it is per capita GDP that matters rather than GDP itself. Per capita GDP grew by only 3.5 times since 1980 compared to 11.3 times growth in foreigner numbers. Foreigner growth outstripped per capita GDP growth by more than 3 times suggesting that our growth is very much labour driven rather than productivity driven.

Point 4: The ratio of working adults to households will fall as birth rate falls

Fall in birth rate means fall in working adults and fall in households too. Depending on which falls faster, the ratio may increase, decrease or remain unchanged.

Point 5: We have the lowest GDP in Asia

That can’t be true given the abundance of poor countries in Asia. East Timor and Bhutan have lower GDP than us. Again, it is not GDP per say that is important but per capita GDP.

Point 7: The two child policy gave birth to a well-educated society

That only makes sense before compulsory education when parents with too many children may not be able to afford to let all their children go to school. But compulsory education meant that all were given a chance at education regardless of population size. Hence, compulsory education was probably more important in giving birth to a well-educated society.

Point 8: The property boom in 1994 may have led to drop in population

Ms Krishnan claims there is a second fertility slump post 1992 due to the 1994 property boom. The following graph shows Singapore’s TFR from 1960 to 2010. There is no evidence of a significant second TFR drop post 1992. Apart from a small spike around 1997, our TFR has mostly been flat and gradually declining since around 1977.

fertility

Point 10: Our success today is the result of our government

In his essay [3], Dr Goh Keng Swee wrote of four reasons why Singapore prospered despite insurmountable difficulties: our excellent geographical location; Victorian principles of free trade and free market system which helped keep Singapore efficient and adaptable and the continuous development of Southeast Asia. Dr Goh wrote that Singapore had to constantly adapt her economy to changing circumstances throughout our colonial days and it is this adaptability that is the priceless advantage that we inherited from the British. In other words, our success and competitive advantage is largely the result of our British inheritance. We inherited a most invaluable port from the British. We inherited free trade, free market principles from the British too. We also inherited an outstanding civil service and other institutions from the British. In so many ways, our success really is a continuation of the success we have always had since colonial days. This can be seen from the fact that we had already achieved middle income status back in 1960, 5 years before independence [1] as well as many other historical snippets [2] which show that we were already quite successful before or at the start of PAP rule. Last but not least, we also owe our success to Dr Albert Winsemius who came up with the economic plan which we followed.

Conclusion

Ms Krishnan recommends that we slowly deconstruct our economy since it is a foreigner based one. But as shown in Point 1, her recommendation is based on her false finding that Singapore residents comprises 1.96 million foreign born and only 1.85 million Singapore born. That is found to be untrue. Our own census shows that 2.91 million out of 3.77 million or 77% Singapore residents are Singapore born.

Ms Krishnan lends support to the Population White Paper by supposedly showing that it too recommends the slowing down of foreigner intake. Again, that is found to be untrue. The Population White Paper recommends foreigner intake that is comparable to our current record high.

[1] Carl A. Trocki, Singapore: wealth, power and the culture of control, Page 166
Singapore had already attained a middle income status in 1960 with a per capita GDP of $1,330

[2] Peter Wilson / Gavin Peebles, Economic growth and development in Singapore: past and future, Page 26
Post-war Singapore was never a backward fishing village waiting to be transformed by Lee Kuan Yew into a modern economy. The King of Thailand wouldn’t have sent 20 of his sons to a fishing village for education in the late nineteenth century. A fishing village could not have staged a manned air flight as early as 1911. Singapore was credited with the finest airport in the British Empire in the 1930s. LKY had already acknowledged in an Aug 1967 speech to American businessmen in Chicago that we were already a metropolis.

[3] Goh Keng Swee, The Practice of Economic Growth, Chapter 1: Why Singapore succeeds, pages 6-7

[4] http://bit.ly/X4PiHE

[5] Census of Population 2010, page 6, table 5
http://www.singstat.gov.sg/pubn/popn/c2010acr.pdf

[6] United Nations International Migrant Stock: The 2008 Revision
http://esa.un.org/migration/

[7] United Nations International Migrant Stock: The 2008 Revision
http://esa.un.org/migration/index.asp?panel=5

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Tolerate, kowtow, team up

February 25, 2013

I refer to the 18 Feb 2013 Straits Times letter “Cultivate core attributes behind Singapore’s success” by Mr Sebastian Langendorf.

Mr Langendorf claims that if Singaporeans collectively cultivated our three core attributes of tolerance, meritocracy and team spirit, the question of how many people come 2030 will become secondary.

Let’s see how we can apply those three core attributes to cope with many more people come 2030.

Attribute 1: Tolerance
Government pumps in 1 million, we tolerate. Government pumps in 2 million, we doubly tolerate. Government pumps in 3 million, we triply tolerate. Whatever government pumps in, we just tolerate.

Attribute 2: Meritocracy
Government pumps in 100,000 new foreigner bosses, we kowtow to 100,000 new foreigner bosses. Government pumps in 200,000 new foreigner bosses, we kowtow to 200,00 new foreigner bosses. Whatever government pumps in, we kowtow to.

Attribute 3: Team spirit
Government pumps in from China, we team with the Chinese. Government pumps in from India, we team with the Indians. Government pumps in from the Democratic Republic of Congo, we team with the Congolese. Whatever government pumps in, we team with.

No matter how many government pumps in, we tolerate, we kowtow to and we team up with, everything will be a-ok.

Straits Times forum
Cultivate core attributes behind Singapore’s success
18 Feb 2013
IN THE past fortnight, there has been much discussion about the Population White Paper. An important aspect was the Singapore core.
My family and I have lived in Singapore for nearly two years. From what I have seen, the issue is not about Singaporeans on one side and foreigners on the other.
The Singapore core is, for me, best described by three attributes that have made the country so successful in the past.
The first attribute is tolerance, particularly racial and religious tolerance.
Having lived in Europe, the United States and Africa, I find Singapore the most tolerant place of all. Except for New York and London, I know of no other place where race and religion are so well respected and even celebrated together. Such tolerance has helped Singapore become a truly global and colourful place.
The second attribute is meritocracy. Performance, hard work and skills generally pay off for those who possess or apply them.
People with talent can enter the best universities and take up top public-sector positions; their social backgrounds do not matter. This has resulted in strong and effective institutions.
The third attribute is team spirit. I refer particularly to members of the first generation after Singapore’s independence, who showed the willingness to forgo individual benefits for the sake of a bigger common goal.
This team spirit and commitment to work together have been the foundation upon which to define one vision and find solutions accepted by most.
All three core attributes are being tested today. The rising cost of living, together with the prospect of becoming rich through the allocation of capital rather than labour, poses all kinds of challenges.
Also, Singaporeans are striving for even bigger goals than just economic prosperity.
This is a good thing but should not come at the expense of the core attributes.
It is worthwhile for everyone living here to be aware of these attributes and to always cultivate them together.
Then the question of how many people will be living in Singapore by 2030 will become secondary.
Sebastian Langendorf

Throwing door wide open to foreigners is un-Singaporean too

February 25, 2013

I refer to the 18 Feb 2013 Straits Times letter “Closing door to foreigners is un-Singaporean” by Mr Simon Huang Minghui [1].

Mr Huang describes Singapore’s achievements with the over-used phrase “punch above its weight”. Singapore has been punching above its weight even during colonial days, yet there was never a conscious need to celebrate that fact because punching above our weight was never our overarching goal and should never be. Our goal is not to glorify but to better the lives of all. Glorification is for despots seeking to satisfy over-sized egos.

Mr Huang lists having overseas born parents and grandparents as part of his Singapore identity while rejecting attendance of local schools and national service as part of his Singapore identity. In that case, anyone in this world can have the Singapore identity. They just need to have non-Singapore born parents and grandparents. That means potentially 7 billion people in this world bear the Singapore identity. Mr Huang has magically solved our low birth rate conundrum. We have no birth rate problems, the world is our population. Mr Huang should have been there to receive the Rohingya refugees and to embrace them as fellow Singaporeans for sharing the same Singapore identity of having parents or grandparents not born in Singapore.

While women don’t serve NS, they often have brothers, fathers, sons or husbands who do and have to carry the burden of looking after the family alone while dearly missing their loved ones serving NS away from home. So it’s not just the men but the women too who are affected by NS which is the common thread that permeates and binds all Singaporean households.

Mr Huang shouldn’t feel sad but should sincerely understand the situation instead. The situation isn’t about foreigners and immigration per say but their excessive numbers. Foreigners and immigration have been with us since day one with no problems. Our problems are recent and correspond to the recent mass influx.

Since when has immigration restriction gone against our values? Singapore has been restricting immigration since independence [2], [3], [4], [5]. Closing the door to foreigners isn’t the only thing that goes against our values, throwing our doors wide open goes against our values too.

Mr Huang urges us not to turn our country into a place we do not recognise. It is Mr Huang who should learn to recognise the true fabric of our nation in order to recognise what not to turn our nation into.

[1] Straits Times, 18 Feb 2013, Closing door to foreigners is un-Singaporean

[2] Singapore Year Book 1965, Ministry of Culture, Page 286
Strict immigration control continued to be maintained after the separation.

[3] The City As A Centre Of Change In Asia, D. J. Dwyer, Page 97
Since 1965, internal migration between the States of Malaya and Singapore has become increasingly subject to controls which have been partly restrictive and partly procedural.

[4] The Population of Singapore (Third Edition), Saw Swee-Hock, Page 16
The rigid control of immigration from Peninsular Malaysia since August 1965 and from other countries after the Japanese Occupation resulted in a net migration surplus of only 33,000. Migration has become a negligible factor of population growth.

[5] The Global Family Planning Revolution: Three Decades of Population Policies and Programs, Warren C. Robinson, John A. Ross, Page 204
Control of immigration was easily achieved, as both Malaysia and Singapore introduced border controls soon after their separation, although low levels of selective immigration continued.

Getting to the root of the vicious cycle

February 24, 2013

I refer to the 13 Feb 2013 Straits Times letter “Stuck in vicious circle of rising wages and costs?” by Ms Teo Mei Ling.

Ms Teo says that if SMEs were to increase the salaries of Singaporeans, costs will increase which will be passed on to consumers. In other words, foreign workers help SMEs save cost but has this cost saving been passed on to consumers? Things have become more not less expensive. So where is the cost saving for using cheap foreign labour? The answer lies in ever increasing rentals so in the end the cost savings went to the landlords and the government being the biggest landlord of all stands to benefit most from these cost savings. The WP call for rentals to be lowered is the missing piece in this whole wage-SME survival conundrum. Ms Teo’s husband need not be caught in this vicious cycle if only he recognises its root cause and joins in the fight to overcome it.

Population growth wrongly related to livelihood

February 24, 2013

I refer to the 20 Feb 2013 Straits Times letter “Population growth’s relevance to a livelihood” by Mr Fred Yap Hoe Kiat [1].

Mr Yap claims that a conducive business environment and foreign direct investments (FDI) naturally leads to immigration. The following table [2] shows the top 20 economies by per capita FDI between 2007 and 2011. Most of these top FDI recipients had low population growth. FDI leading to immigration and population growth is anything but natural.

Country Name Average per capita FDI (2007 to 2011) % population increase (2007 to 2011)
Cayman Islands $1,525,869 3.70%
Hong Kong SAR, China $48,895 2.10%
Belgium $48,708 3.60%
Ireland $41,543 3.00%
Singapore $37,769 13.00%
Iceland $29,820 2.40%
New Caledonia $27,927 2.70%
Macao SAR, China $26,198 9.90%
Bermuda $16,257 1.10%
Norway $15,556 5.20%
Switzerland $13,981 4.70%
Hungary $13,200 -0.80%
St. Kitts and Nevis $13,025 5.10%
Turks and Caicos Islands $12,367 13.90%
Qatar $11,330 58.70%
Malta $10,750 2.40%
Bahamas, The $10,670 5.60%
Sweden $10,623 3.30%
Netherlands $10,561 1.90%

The following table [3] shows the top 20 economies by ease of doing business ranking. Again, most of these top ranked business destinations had low population growth. Again, conducive business environment leading to immigration and population growth is anything but natural.

Country Name Ease of doing business rank % population increase (2007 to 2011)
Singapore 1 13.00%
Hong Kong SAR, China 2 2.10%
New Zealand 3 4.20%
United States 4 3.40%
Denmark 5 2.10%
Norway 6.5 5.20%
United Kingdom 6.5 2.70%
Korea, Rep. 8.5 2.40%
Sweden 10.5 3.30%
Australia 10.5 7.30%
Finland 10.5 1.90%
Georgia 10.5 2.20%
Malaysia 13 6.70%
Iceland 13.5 2.40%
Ireland 15.5 3.00%
Canada 16 4.70%
Thailand 17.5 2.50%
Germany 19 -0.70%
Estonia 20 -0.10%

Unless we recently forgot how to process and manage foreigners, our many recent problems cannot simply be an issue of processing and managing foreigners. Our recent problems correspond to the massive numbers imported recently as shown in the table below [4]. The 488,700 foreigners imported in the 5-year period 2008 to 2012 are more than that imported over the preceding two 5-year periods combined. So it is about numbers and how fast they grow. While population growth is synonymous with Singapore’s economy, massive population growth such as the 723,800 increase over the period 2008-2012 is unheard of since independence. It is almost as though we are re-colonising the island all over again.

5-year increase foreigners (‘000) 5-year increase population (‘000)
1963 – 1967 227.4
1968 – 1972 174.8
1973 – 1977 172.9
1978 – 1982 321.2
1983 – 1987 -59.9 128.3
1988 – 1992 160 455.9
1993 – 1997 291.7 565.3
1998 – 2002 120.5 380
2003 – 2007 212.4 412.6
2008 – 2012 488.7 723.8

While there have been calls to reduce foreign worker growth, there have been no calls for us to take it easy. Gunning for productivity growth is not taking things easy, continuing to rely on population growth is. If such calls are unrealistic to the ruling party, it might be better some other more capable team to take over. It is not as though we have never embarked on risky economic restructuring before; economic restructuring is a never ending process since the mid-1980s. Mr Yap got it wrong, it should be: without business investments there would be no economic growth rather than the other way round.

Mr Yap points to the fact that in all his 20 years in sales, his bosses never reduced his growth targets. He forgets to mention that his bosses also never expected him to massively expand his sales force to generate those sales. He claims that no one will trust a non-growing company. But at the same time, no one will seriously regard a company whose only growth strategy is to grow worker numbers.

Mr Yap feels it is senseless to turn businesses away. But we have been turning businesses away since the mid-1980s to improve jobs and wages. If we had continued to cling on to businesses of earlier times, we would have been poorer for it.

Mr Yap feels that crowded trains is a happy problem, it is not. To many coping with the daily crush, it is anything but a happy problem.

Mr Yap claims we do not have severe unemployment. But we never did even when population growth was slower as shown in the table below [5]:

Year Population (‘000) Population increase (‘000) Resident Unemployment (%)
2001 4,138.00 3.7
2002 4,176.00 38 4.8
2003 4,114.80 -61.2 5.2
2004 4,166.70 51.9 4.4
2005 4,265.80 99.1 4.1
2006 4,401.40 135.6 3.6
2007 4,588.60 187.2 3
2008 4,839.40 250.8 3.2
2009 4,987.60 148.2 4.3
2010 5,076.70 89.1 3.1
2011 5,183.70 107 2.9
2012 5,312.40 128.7 2.8

It is Mr Yap who cannot understand the hard problems and therefore feels that our fears and uncertainties are based on emotions. While there has never been a time when Singapore had few foreigners, there was never a time when Singapore mass imported foreigners like it did over the last five years. While Singaporeans are descendants of foreigners, Singaporeans are not foreigners.

While feeling lucky that Singapore is blessed with a stream of foreign direct investments, Mr Yap should remember that the mastermind behind that strategy was Dr Albert Winsemius, not Lee Kuan Yew.

Mr Yap claims he was employed by a foreign talent who gave him opportunities to grow his career. But that doesn’t mean that a local employer won’t also give him opportunities to grow his career. He says he was pushed to work hard by his high expenses as he simply could not fail. If Steve Jobs had been pushed by high living expenses to work hard, how would he have found time, energy and inspiration to create Apple Computers?

Mr Yap should understand that our goal is not to create a different Singapore but a better Singapore. How can Singapore be better if life gets harder?

Mr Yap is asking us to spare a thought for the wrong people. Businesses that are fuelled by foreign direct investments tend to be high in technology and low in manpower demand. Their success should not depend on mass import of manpower.

Mr Yap should look beyond ministers’ promise to look after Singapore’s interest and see the reality of what is happening to Singapore today.

If Mr Yap doesn’t want our economy, politics and national integrity to be compromised, he should oppose the Population White Paper because explosive population growth undermines the economic wellbeing of the people and compromises politics and national integrity. How can Singaporeans feel proud, secure and protected when they have little to gain and everything to lose?

[1] Straits Times, 20 Feb 2013, Population growth’s relevance to a livelihood

[2] World Bank databank
First sum the FDI for each country from 2007 to 2011 (latest year available), then divide by population in 2011 to get FDI per capita over the 5-year period. Could have divided by average population from 2007 to 2011 but doesn’t make much difference to outcome. The period 2007 to 2011 (latest year available) is chosen because it corresponds to our years of growth at all costs which is the period of our concern.

[3] World Bank databank
Average out ease of doing business scores in 2010 and 2011 (the only two years available).

[4] Singstats

[5] Ministry of manpower website

More than one way for Singapore to adapt

February 23, 2013

I refer to the 21 Feb 2013 Straits Times letter “Singapore must adapt or perish” by Mr Ee Teck Ee [1].

Mr Ee claims he was told there has never been a city-state that survived for long. That is not true, Mr Ee shouldn’t blindly accept what he was told. The Greek city state of Athens survived more than 2,500 years of Macedonian, Roman, Byzantine and Ottoman rule to become the capital of Greece today. Although Athens is no longer a city-state today, it has more than survived and has grown in stature to become the capital city of a larger nation. If Singapore were to become the capital city of a much larger nation in future, do we say Singapore has failed to survive or do we say Singapore has been elevated to the status of capital city? Other city states that have survived to the present day include Venice, Florence, Genoa, Basel, Zurich, Cologne, Mainz, Nuremberg, Naples, Geneva, Bologna, Milan and Rome [2].

While Singapore has no natural resources, we are gifted with a resource as precious as any natural resource can be – our excellent geographical location at one of the choke points of the shipping route between Europe and the Far East which was the reason for our founding and of our prosperity. In fact, our port managed to grow strongly during the shipping downturn years of 2008, 2009 and 2011 as a result of good luck in our location which has provided an advantage over our main competitor Hong Kong [3]. The growth and development of neighbours like Vietnam has benefited us rather than made us obsolete [3]. Invasion risk is low today, given our global police, USA which has demonstrated its commitment to reversing invasions.

The need for a critical mass of talented workers doesn’t say anything about it being 3.5, 4.5, 5.5 or 6.5 million. Many cities have succeeded with much smaller populations. Stuttgart with a population of about 0.6 million is home to Mercedes, Munich with a population of about 1.2 million is home to BMW, Smaland-Sweden with a population of about 0.7 million is home to Ikea and Zurich with a population of about 0.4 million is the financial capital of Continental Europe. So it’s not true that we have to keep growing our population to maintain status quo or to grow further. We just have to come up with one or two global winners and grow these winners. Stuttgart, Munich, Smaland-Sweden and Zurich clearly demonstrate that we don’t have to adopt more outsiders to survive.

While the United States has blossomed due to the talents and skills of many gifted immigrants; Germany, Switzerland, Sweden, the Netherlands, Denmark, Finland, South Korea and Taiwan have also blossomed but with mostly indigenous talents. The United States’ is just one way of succeeding but not the only way.

Adapting to the world doesn’t mean we selectively choose that part of the world to compare with and adapt to. Adapting to the world means we look across the entire world and recognise other possibilities other than growth at all costs.

[1] STforum, Singapore must adapt or perish, 21 Feb 2013

[2] “Cities, Constitutions, and Sovereign Borrowing in Europe, 1274-1785” page 44 Table 1, David Stasavage, London School of Economics and New York University

[3] Straits Times, “Shipping slump? Not for our ports”, 19 Feb 2013
Good luck comes in the form of Singapore’s location which has provided an advantage over its other main competitor Hong Kong, which is grappling in recent years with China’s slowing growth. South-east Asia and South Asia are seeing more business and production work, which is benefiting Singapore.
“There’s more manufacturing being done in Vietnam and in Bangladesh for items like textiles,” said Mr Andrew Chiang, regional head of Asia for shipping, offshore and logistics at DNB Bank. “As these countries have less developed ports they usually use the port in Singapore (to ship the goods farther away).”
The result is that Singapore’s container-handling numbers last year grew more than those of any regional competitor.

5.9 million or 6.9 million does matter

February 20, 2013

I refer to the 14 Feb 2013 Straits Times letter by Mr Daniel Chia [1].

Mr Chia says that whether it is 5.9 million or 6.9 million doesn’t make a difference; that the White Paper is just a master plan; no one knows for sure if the figure of 6.9 million would be hit; the nation needs to plan for the next 10 to 20 years and the plan should be reviewed yearly and is not a stagnant plan.

There is a huge 1 million difference between 5.9 million and 6.9 million. Tampines, one of our biggest New Towns, has slightly less than a quarter million people. So we are talking about four additional Tampineses which will require much land, infrastructure as well as time and money to build. It does make a big difference and is not something that can be reviewed on a yearly basis.

Also, we can’t be building houses for 6.9 million while expecting the population to be 5.9 million. That would be most irresponsible. What are we going to do with four empty Tampineses? In other words, we can’t be planning and preparing for 6.9 million without expecting the final figure to be close.

Mr Chia also claims that we have come a long way with a forward-looking government. Mr Chia should understand that we came a long way under previous governments. The present government hasn’t taken us much further from where we already were. He should also realise that the forward-looking element wasn’t our previous government but our former economic advisor Dr Albert Winsemius whose proposed industrialisation programme became the basis for Singapore’s industrialisation strategy [2], [3], [4].

Mr Chia urges us to be grateful that the government doesn’t leave problems for future generations to handle. But in doing so, the government may be creating even bigger problems for future generations to handle.

[1] Straits Times, 14 Feb 2013, 6.9m figure no cause for alarm

[2] Philip Nalliah Pillai, State enterprise in Singapore: legal importation and development, Page 30
With Singapore’s secession in 1965, the United Nations Proposed Industrialization Programme for the State of Singapore became the basis for Singapore’s industrialisation strategy.

[3] Danny M Leipziger, Lessons from East Asia, Page 240
The 1960-61 United Nations mission led by Albert Winsemius helped develop a blueprint for Singapore’s industrialisation and development plan and recommended the establishment of EDB.

[4] Ngiam Tong Dow / Simon Tay, A Mandarin and the making of public policy: reflections, Page 66
Dr Winsemius and I.F. Tang made extraordinary contributions to the economic development of Singapore as leader and secretary of the first UN Industrialisation Survey Team in 1961.

Not as bad as Mr Khaw suggests

February 16, 2013

I refer to the 7 Feb 2013 Straits Times report on Mr Khaw’s recent parliament comments [1].

Mr Khaw said that Workers’ Party’s alternative road map will badly affect his housing plan to deliver 200,000 new homes in the next four years.

During the period 1996 to 2000, 157,919 new homes were built [2]. The average number employed by the construction industry over that period was 309,712 persons [3]. If we had to build 200,000 instead of 157,919 new homes then and we had to build them in 4 years instead of 5, ignoring any productivity improvement due to scaling up, we would have needed 200,000 / 157,919 × 5 / 4 × 309,712 = 490,302 persons which are 47,033 more than the 443,269 employed in 2012 [4]. However, if we can build the 200,000 homes over 4½ years instead, the employment requirement becomes 200,000 / 157,919 × 5 / 4.5 × 309,712 = 435,824 persons, approximately the number we currently employ. It may not be a bad idea to get people to choose between having 47,033 more construction employment delivering homes over 4 years versus freezing construction employment and delivering the same number of homes over 4½ years [5]. In any case, ½ year longer isn’t as bad as Mr Khaw makes it out to be.

Mr Khaw also claimed that quality of life would not suffer as Singapore gets more crowded. Let’s not kid ourselves. As Singapore got more crowded over the years, did our flats get bigger or smaller? Did they get cheaper or more expensive? In the end, a better quality life may mean a walk in the park because the house is too cramped and other things are too expensive because all our money has been sunk into our flat.

Mr Mah claimed that the Population White Paper is the most important document since independence. How can that be when we have had population planning scenarios before? Or is it the most important because the previous one done by him led to our miserable state today?

ESM Goh said Singapore succeeded because of the courage of our leaders and people to face challenges squarely. How can that be when it was not too long ago when our leaders were busy denying problems and didn’t do anything until much later when the problem had already escalated far beyond what it was when the first alarm bells were sounded by the people?

[1] Straits Times, 7 Feb 2013, Major shift in planning strategy: Khaw

[2] HDB Annual Report 2007/2008, page 56, HDB’s achievements since 1960, Building Statistics

[3] From Ministry of Manpower website, we can obtain the construction employment for 2001 (http://www.mom.gov.sg/statistics-publications/national-labour-market-information/statistics/Pages/employment.aspx). We can then work backwards to obtain construction employment in previous years by making adjustments using Ministry of Manpower’s Annual Employment Change by Industry 1991 – 2001

[4] Ministry of Manpower, Employment
Total employment, 2012 = 3,358.1 thousands
Percentage in construction, 2012 = 13.2%
Construction employment, 2012 = 0.132 × 3,358.1 = 443,269

[5] Back-of-the-envelope calculations here are based on whatever limited public information available, Mr Khaw has access to more precise numbers. In any case, the ballpark figure should be there. Construction employment requirements also depend on improvements in technology and productivity which should see less employment required than calculated here.

While the current construction of the Downtown Line soaks up construction manpower, the period 1996 to 2000 also had manpower soaked in the construction of the Northeast Line.

Comments on Mr Shanmugam’s comments on the Population White Paper

February 12, 2013

I refer to the 4 Feb 2013 Straits Times report on Minister Shanmugam’s comments on the Population White Paper [1].

Mr Shanmugam claimed that 6.9 million is not a target but a possibility to plan for. But the Population White Paper wrote: “if we can achieve 2% to 3% productivity growth per year (which is an ambitious stretch target) and maintain overall workforce growth at 1% to 2%, we can get 3% to 5% GDP growth” [2]. As written, the 2% to 3% productivity growth is a target, not a possibility to plan for. The 1% to 2% workforce growth and hence the associated population growth cannot be some random possibility. It must be a distinctive possibility that is either being targeted or constrained as such by other factors. Since the government insists that population growth and hence workforce growth are not being targeted, they must have been constrained by other factors. Since workforce growth + productivity growth = GDP growth, constrain to workforce growth must require constrains to both productivity growth and GDP growth. This means that besides productivity growth, GDP growth is also being targeted. The setting of targets to both productivity growth and GDP growth automatically constrains workforce growth and hence population growth. Thus, even if 6.9 million is not a target, it is the result of targets set to both productivity growth and GDP growth.

Mr Shanmugam also claimed that a responsible government will look 15, 20 years ahead so that we would not be caught by surprise as we were in the 2000s when there was an infrastructure crunch. But the government in the 2000s is also the government today. Is Mr Shanmugam saying that our government had been irresponsible in the 2000s as they were caught by surprise then?

Mr Shanmugam urged young people to think hard about the need for economic growth to create enough good jobs for a rising number of future graduates. If young people thought hard enough, they might come to the conclusion that they should have fewer children. If the need for economic growth is to feed a growing number of future graduates, to alleviate that need would be to reduce the number of future graduates by reducing the number of children. So in the end, the government is contradicting itself by saying on the one hand there is a problem with too few children and saying on the other hand that too many children is also a problem as there would be more future graduate aspirations to fulfil.

[1] Straits Times, 4 Feb 2013, Paper on population is ‘to spur debate’

[2] Population White Paper, chapter 3, item 3.35, page 43

For Pete’s sake, “Instant citizens” is not demeaning

February 11, 2013

I refer to the 6 Feb 2013 TR Emeritus posting “Instant citizens? I think not!” by Pete.

Pete may be genuinely mistaken in thinking that the phrase “instant citizens” is demeaning. It is not. It is an accurate portrayal of the current situation where in some cases, citizenship forms are completed before hand and handed over at the airport to the arriving foreign talent for his endorsement. You can’t get more instant than that. Foreign talents like Feng Tianwei are given citizenship in less than a year after stepping onto our shores. You can’t get more instant than that.

Perhaps to Pete, giving up his former citizenship requires much consideration, not an instant decision. Not so for many others running away from the oppression or poverty of Third World countries. For them, citizenship is never instant enough.

Which history shows that division is caused by labeling and not by fundamental differences of different peoples forced to come together?

Pete’s experience at an integration workshop could be due to statistical bias. 25% who has at least one parent not born in Singapore out of 50% born in Singapore means that every other person born in Singapore (50%) has at least one parent not born in Singapore. That’s not quite representative of the statistical truth amongst Singapore born adults. The table below shows the percentage of Singapore-foreign marriages from 1990 to 2002 [1]:

Year Total Number of Marriages in Singapore Singapore-Foreign Marriages Percentage of Singapore-Foreign Marriages
1990 24339 3936 16
1991 25192 3757 15
1992 25876 5029 20
1993 25306 5022 20
1994 24662 4959 20
1995 24974 5087 20
1996 24111 5149 21
1997 25672 4447 17
1998 23114 5102 22
1999 25653 5173 20
2000 22566 4823 21
2001 22280 5059 23
2002 23198 4928 21

Assuming little difference in birth rates between Singapore-Singapore and Singapore-Foreign marriages, we should see about 15% to 23% of any cohort born out of marriages between 1990 and 2002 having one parent not born in Singapore. That is quite far from the 50% experienced by Pete. Pete’s experience could be due to the unique audience assembled by the government for his integration experience. The answer to Pete’s rhetorical question to Sylvia Lim of how many generations it takes to make a true blue Singaporean out of new / instant immigrants is that it depends on the degree of immigration pursued by the country. If the country keeps immigration low, the process will be speeded up. If the country opens the immigration flood gate, the process may go on and on forever without ever reaching an end point.

[1] Ministry of Social and Family Development, State of Families in Singapore, Annex, Page 7, Table 2.10