Archive for July, 2013

Rebutting the harsh reality of slower growth

July 31, 2013

I refer to the 31 Jul 2013 Straits Times letter “Harsh reality of slower growth” by Mr Ng Ya Ken.

In response to a previous letter by Ms Catherine Ho Shull, Mr Ng raises the question of whether the GDP is a bunch of irrelevant numbers and explains its importance in reflecting the amount of consumption, government services, net exports and savings accumulated each year. But Ms Ho’s letter didn’t question the relevance of the GDP. Instead it questioned whether GDP should be the over-riding concern above all else including happiness, suicide rate, rich-poor divide, fertility rate, innovation and creativity and simple enjoyment of life. Should we sacrifice all these for GDP?

Mr Ng explains how lower GDP growth means one or more components of the GDP is growing more slowly or even shrinking. Growing more slowly doesn’t mean shrinking. Even in zero growth there is no shrinkage of GDP. Slower growth is also not the same as slow growth as slowing down from a high growth rate could still mean a good growth rate. Moreover, too high a growth rate may lead to higher inflation leading to lower real GDP growth. It is possible to achieve the same real GDP growth with slower nominal GDP growth rate at correspondingly lower inflation rate.

Mr Ng takes issue with those who blamed the government for growing at all costs. He likens the country to a company which must set a reasonable growth target failing which market share may be taken away resulting in smaller or no bonuses for workers. But a responsible company will grow within its means and not over-reach itself by for example over leveraging itself and placing shareholder capital under undue financial risks.

Mr Ng says slowing down may mean raising interest rates, tightening money supply, trimming public expenses, scaling down or delaying infrastructure projects, restricting labour supply or raising consumption or income taxes. But if we hadn’t grown at all costs to begin with, why would we even need the extra infrastructure projects, extra labour supply or greater public expenses?

Countries like Germany have shown that growing slow and steady doesn’t necessarily harm the long-term survival of the country. Having no natural resources is no excuse to grow at all costs as most First World nations derive less than 2% of their GDP from natural resources. Making as much hay as possible while the sun shines doesn’t mean suddenly jam packing the farm with workers to make two years’ worth of hay in one year without adequate provisioning.

Natural resources rent as percentage of GDP

The reality is that many Western nations have better work-life balance and higher living standards through higher wages despite lower per capita GDP. They show us how it’s possible to trade away the single minded pursuit of GDP for better work-life balance and higher living standards.

Country Average annual hours worked per worker (2000-2011) PPP (consumption) adjusted average annual wage 2000-2011 (2011 USD) PPP (consumption) adjusted average annual wage per hour worked 2000-2011 (2011 USD)
Luxembourg 1,619 $51,512 $32
Netherlands 1,398 $44,473 $32
Switzerland 1,644 $50,048 $30
United States 1,799 $52,212 $29
Norway 1,422 $40,340 $28
Belgium 1,563 $44,296 $28
Ireland 1,635 $45,910 $28
Germany 1,428 $39,388 $28
Denmark 1,572 $42,274 $27
United Kingdom 1,670 $43,529 $26
Australia 1,720 $43,822 $25
France 1,489 $36,225 $24
Austria 1,765 $42,062 $24
Canada 1,738 $40,558 $23
Sweden 1,613 $35,009 $22
Finland 1,708 $34,492 $20
Spain 1,694 $32,367 $19
Japan 1,775 $33,139 $19
Italy 1,813 $32,911 $18
Israel 1,948 $30,593 $16
Korea 2,337 $32,984 $14
Singapore 2,406 $32,361 $13
Greece 2,065 $27,741 $13
Portugal 1,768 $22,911 $13
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Housing not ‘more affordable’ now even if measured against income growth

July 30, 2013

I refer to the 20 Jun 2013 Straits Times report “Housing ‘more affordable’ now if measured against income growth” [1].

A DBS economist reportedly said that Singapore property prices are more affordable today than 10 years ago. The following table shows that the 2012 URA private property price index is 1.81 times compared to 10 years ago while the 2012 household income or employment income is between 1.40 to 1.71 times compared to 10 years ago [2]. So property prices are not more affordable today than 10 years ago.

2002 2012 2012/2002
URA private property price Index 115.4 208.3 1.81
Resident households Average household income Include employer CPF $5,667 $9,394 1.66
Exclude employer CPF $5,069 $8,637 1.70
Median household income Include employer CPF $4,096 $6,772 1.65
Exclude employer CPF $3,628 $6,000 1.65
Employed resident households Average household income Include employer CPF $6,229 $10,348 1.66
Exclude employer CPF $5,572 $9,515 1.71
Median household income Include employer CPF $4,590 $7,566 1.65
Exclude employer CPF $4,038 $6,712 1.66
Median gross monthly income of full-time employed residents Include employer CPF $2,380 $3,480 1.46
Exclude employer CPF $2,083 $3,000 1.44
Average monthly earnings per employee $3,158 $4,433 1.40

The following table shows that even if we were to compare 2013 Q1 to 2003 Q1, again property prices are not more affordable today than 10 years ago.

2003 Q1 2013 Q1 2013 Q1 / 2003 Q1
URA index 114.1 213.2 1.87
Average monthly nominal earnings per employee $3,283 $4,948 1.51

DBS managing director Mr David Carbon also said that incomes have grown much faster compared to the 55% increase in property prices since Mar 2009.

The following tables show that unlike what Mr Carbon said, whether we compare with 2009 Q1 or 2009 Q2, incomes have not grown much faster than property prices but the other way round.

2009 Q1 2013 Q1 2013 Q1 / 2009 Q1
URA index 139.9 213.2 1.52
Average monthly nominal earnings per employee $4,155 $4,948 1.19
2009 Q2 2013 Q1 2013 Q1 / 2009 Q2
URA index 133.3 213.2 1.60
Average monthly nominal earnings per employee $3,609 $4,948 1.37

Finally, he said home prices have risen in tandem with income over the past five years and that home prices are now 15% lower compared with 2000. Five years ago is 2008. The following graph shows that both 2000 and 2008 were peak years for the URA private property price index. Comparing against previous peaks will make any price increase appear smaller. It is fairer and more appropriate to compare against a period where the price is more stable like between 2002 and 2006.

URA price index graph

The following four plots of ratios of median URA private property [3] price to median annual household income between 2000 and 2012 shows that except for a small dip in 2009, private property prices have indeed become more unaffordable since 2007 compared to between 2001 and 2006. More importantly, it shows that throughout the entire period, our private property price to household income ratio was more than double the limit for severe unaffordability [4].

Median URA private housing price to household income ratio graph

The following four plots of ratios of median HDB resale price [5] to median annual household income between 2000 and 2012 shows that median HDB resale price hovered around the line of severe unaffordability throughout this period.

Median HDB resale price to household income ratio graph

The following table [4] shows that our HDB resale flat affordability is comparable to private housing affordability in top Anglo Saxon cities while our private housing is roughly twice as unaffordable as those in top Anglo Saxon cities comparable to that of Hong Kong’s.

City with more than one million population Country Ratio
Singapore (Median private property price / Median annual household income of resident households, excluding employer CPF) Singapore 14.8
Hong Kong China 13.5
Singapore (Median private property price / Median annual household income of resident employed households, excluding employer CPF) Singapore 13.3
Singapore (Median private property price / Median annual household income of resident households, including employer CPF) Singapore 13.1
Singapore (Median private property price / Median annual household income of resident employed households, including employer CPF) Singapore 11.8
Vancouver Canada 9.5
Sydney Australia 8.3
San Jose US 7.9
San Francisco US 7.8
London UK 7.8
Melbourne Australia 7.5
Plymouth & Devon UK 7.3
London Exurbs UK 6.8
Auckland New Zealand 6.7
Singapore (Median HDB resale price / Median annual household income of resident households, excluding employer CPF) Singapore 6.6
Adelaide Australia 6.5
San Diego US 6.4
New York US 6.2
Los Angeles US 6.2
Singapore (Median HDB resale price / Median annual household income of resident employed households, excluding employer CPF) Singapore 5.9
Toronto Canada 5.9
Perth Australia 5.9
Singapore (Median HDB resale price / Median annual household income of resident households, including employer CPF) Singapore 5.9
Brisbane Australia 5.8
Bristol-Bath UK 5.7
Liverpool UK 5.3
Singapore (Median HDB resale price / Median annual household income of resident employed households, including employer CPF) Singapore 5.3
Newcastle UK 5.2
Boston US 5.2
Bimingham UK 5.2
Sheffield UK 5.1
Montreal Canada 5.1
Stoke UK 5
Nottingham UK 5
Blackpool UK 4.9
Seattle US 4.8
Manchester UK 4.8
Hull UK 4.8
Glasgow UK 4.7
Miami US 4.5
Derby UK 4.5
Portland US 4.3
Denver US 4.3
Calgary Canada 4.3
Washington US 4.1
Leeds UK 4.1
Providence US 4
Milwaukee US 3.9
Philadelphia US 3.8
Baltimore US 3.8
Salt Lake City US 3.7
Riverside – San Bernadino US 3.7
Edmonton Canada 3.7
Hartford US 3.6
Dublin Ireland 3.6
Austin US 3.6
Ottawa Canada 3.5
New Orleans US 3.5
Virginia Beach US 3.4
Richmond US 3.4
Birmingham US 3.4
San Antonio US 3.3
Sacremento US 3.2
Nashville US 3.2
Chicago US 3.2
Charlotte US 3.2
Tampa US 3.1
Raleigh US 3.1
Oklahoma City US 3.1
Phoenix US 3
Houston US 3
Orlando US 2.9
Louisville US 2.9
Dallas US 2.9
Minneapolis US 2.8
Las Vegas US 2.8
Buffalo US 2.8
Pittsburgh US 2.7
Memphis US 2.7
Kansas City US 2.7
Columbus US 2.7
Jacksonville US 2.6
Indianapolis US 2.6
Cleveland US 2.6
Saint Louis US 2.5
Rochester US 2.5
Cincinnati US 2.5
Atlanta US 2
Detroit US 1.5

[1] Straits Times, Housing ‘more affordable’ now if measured against income growth, 20 Jun 2013

[2]
• URA property price index is from URA, averaged over four quarters
• Eight variations of household income from Singstats
• Two variations of employment income from MOM

[3]
2011 median URA private property price is obtained by extracting all private property transactions including executive condominiums from URA for that year. From the 2011 median price, median prices for all other years approximated through direct proportionment via the URA private property price index.

[4] 9th Annual Demographia International Housing Affordability Survey: 2013

A median housing price to median household income ratio above 5.1 is considered severely unaffordable.

[5]
• Median HDB resale price for 2009 Q4 is obtained by extracting all transactions for that quarter from HDB
• Quarterly HDB resale price index compacted into yearly HDB resale price index by averaging the price indices of all four quarters for each year
• Median HDB resale price for each year approximated through comparison of each year’s average HDB resale price index with the HDB resale price index for 2009 Q4

Not true Singapore was left-of-centre in the 60s, 70s and 80s

July 23, 2013

I refer to the 11 May 2013 Straits Times article “Are Singaporeans ideological prisoners by Mr Kishore Mahbubani [1].

Mr Mahbubani claimed that the decision to build HDB flats in the expensive good class bungalow area of Holland Village and on the very expensive reclaimed land in Marine Parade best symbolised Singapore’s clear left-of-centre ideology in the 1960s, 1970s and perhaps the 1980s.

Holland Village

The Holland Village HDB flats were part of the Queenstown Neighbourhood VII expansion into Buona Vista which included the areas of Dover, Ghim Moh and Holland Village. Details of the expansion reveal that the area wasn’t the so-called good class bungalow area as claimed by Mr Mahbubani but 88 acres of graveyard located off Commonwealth Avenue, North Buona Vista Road, Eng Hoe Road (no longer exists) and Holland Road and the rear of Holland Village comprising 6,500 graves that yielded 5,000 flats [2]. Just because Holland Village is a good class bungalow area today or that there were some bungalows nearby then doesn’t mean the graveyard site on which Holland Village HDB flats were built was a good class bungalow area then.

Other evidences pointing to the Holland Village then not being the good class bungalow area it is today:

• Blocks 11 and 12 of Holland Avenue sit on a hill which used to be a cemetery [3]
• Holland Village was very filthy [4]
• Holland Village was a dumping ground and a rundown area before the cleanup of 1979 [5]

Marine Parade

The Marine Parade HDB estate occupies 42 of the 1,525 hectares of land that arose from the East Coast Reclamation Scheme which cost $613 million in total [6]. By simple proportionment, the land on which Marine Parade HDB estate sits on cost $16.9 million. The estate itself cost $124.79 million to build [6] so the total cost of Marine Parade HDB estate including land was $141.7 million. The estate housed 8,015 flats with 3-room and 5-room flats priced at $13,500 and $35,500 respectively [6]. Assuming an average price of $24,500, the 8,015 flats yielded a total of about $196 million for the government. The government thus took back more from the people than it spent to build the Marine Parade HDB estate, hardly a symbol of left-of-centre government ideology then. Cost recovery and accumulating budget surpluses have always been important tenets of our governments since Day 1. We have been right-of-centre since Day 1 and have never ceased to push more right ever since.

This is further supported by the following chart which shows that where data was available between 1976 and 1989, Singapore’s Gini coefficient had been amongst the highest of developed nations [7].

GINI

[1] Straits Times, “Are Singaporeans ideological prisoners?”, 11 May 2013, Kishore Mahbubani

[2] Straits Times, New plan to expand Queenstown, 25 Mar 1968, page 5

Queenstown – Singapore’s biggest satellite town – is to be enlarged. Plans are being drawn up to clear an area of 88 acres of graveyard near the estate for public housing. The area is located off Commonwealth Avenue, North Buona Vista Road, Eng Hoe Road and Holland Road and the rear of Holland Village. There are about 6,500 graves. The Housing and Development Board and the Yin Foh Fui Kuon Association, will exhume them. A Government spokeman said today: “This area has been earmarked for the development of another self-contained neighbourhoold with about 5,000 units of flats to be known as Neighbourhood VII Queenstown.” The association has been given back another 41 acres near the same area for a proposed burial ground and a proposed memorial hall and car park. The development of these 41 acres is being carried out by the association with assistance from the board.

(More details of the reburial site can be found here http://poskod.sg/Posts/2012/11/30/An-Oddly-placed-Cemetery)

[3] http://www.hollandproperty.com.sg/holland-village/

Blocks 11 and 12 of Holland Avenue sit on a hill which used to be a cemetery

[4] Straits Times, Village Filth, 14 Aug 1965, page 10, M Crowley

I do not think that I have before seen such an accumulation of downright filth concentrated in so small an area of human habitation and commerce as that existing around the market stalls and shelters of Holland Village. Can something be done by the public health authorities to clean up this area with its source of potential disease and infection?

[5] Straits Times, The clean, clean grass of home… 15 Aug 1979, page 12

This back lane in Holland Village is now a pleasant place to play in, as these children will testify. All thanks to a recent clean-up operation started by the Ministry of the Environment. Some time ago, it was an unofficial dumping ground where unwanted furniture, discarded planks, wooden poles and an old window were part of the scene as the “before” picture shows. Then the campaign to spruce up such run down areas was started by the ministry which called on the residents to lend a hand.

[6] Singapore Infopedia – Marine Parade
http://infopedia.nl.sg/articles/SIP_1699_2010-08-06.html

By 1985, 1,525 hectares of land including the recreational beachfront of the East Coast had been added to the coastline, enlarging it by some 18 kilometres. The reclamation works cost around S$613 million.

The first 1,038 flats at Marine Parade estate were opened for balloting in March 1974. Three-room units were priced at S$13,500, and five-room ones at S$35,500. By 1976, the estate was completed at a cost of S$124.79 million. There were a total of 57 blocks of 8,015 flats and 99 shops, alongside office spaces, recreational and community facilities across 42 hectares, accommodating around 40,000 residents.

[7] World Income Inequality Database
http://www.developmentdata.org

Public has sufficient info to make judgement

July 16, 2013

I refer to the 16 Jul 2013 Straits Times letter “Public needs info to make judgment” by Mr Anthony Lim [1].

Mr Lim wants WP chief Low Thia Khiang to make available details of his investigation into the Aljunied hawker centre cleaning issue. But Mr Low has already said that all pieces of information concerning the case are already in the public domain and these are indeed quite sufficient to establish the essential facts of the case.

Mr Lim sees a need to clarify whether or not the town council has decided to carry out annual spring cleaning. But it was already clear from Ajunied Town Council’s annual spring cleaning schedule that annual spring cleaning won’t take place for the affected Blk 538 until the end of Oct 2013 [2]. Somehow the hawker centre decided that the spring cleaning from 4th to 8th Mar 2013 will be the annual spring cleaning and this was somehow not communicated clearly to Aljunied Town Council who ended up believing this was a quarterly spring cleaning with additional requirement for high area cleaning. The fact that there was to be a five-day hawker centre closure does indicate that high areas will be cleaned. But it doesn’t indicate Aljunied Town Council’s understanding that this will be an annual spring cleaning rather than a quarterly spring cleaning with add-on request for high area cleaning. One cannot blame Aljunied Town Council for levying additional charges for high area cleaning for the 4th to 8th Mar 2013 spring cleaning if it thought this to be an additional requirement over and above the high area cleaning to be carried out for the planned annual spring cleaning towards the end of Oct 2013.

Mr Lim is of the opinion that if WP feels aggrieved it should take legal action against Mr Bala. But the sad fact as far as anyone can remember is that all legal proceedings between the PAP and the opposition have always ended in favour of the PAP. This is not to suggest that our legal system is biased in any way as that suggestion is itself illegal as far as one understands. However, without looking into the reasons why the PAP always triumph over its opponents in court, but just looking only at the statistical record of such legal proceedings, one will, even if one has full confidence in the legal system, be inclined to think that based on the statistics, for whatever underlying reasons, one is doomed to fail if one decides to take on the PAP in court. It is therefore understandable why WP has wisely chosen not to take legal action.

On the other hand, if Mr Bala has, as he claims, incontrovertible evidence that WP has sought to illegally double charge the hawkers for the cleaning of their hawker centre, then why hasn’t he taken legal action to incriminate WP of such wrong doings? Why hasn’t he called in the CPIB for a full investigation? It seems that Mr Bala has nothing but hot air to show for his so-called incontrovertible evidence.

Mr Lim is also of the opinion that politician integrity is an important national issue worthy of debate in parliament. However, if politician integrity is really at stake, shouldn’t the CPIB and the public prosecutor be brought in for a thorough investigation? The fact that neither the CPIB nor the public prosecutor have been called in suggests there is really no big integrity issue as far as the WP side is concerned.

[1] Straits Times, Public needs info to make judgment, 16 Jul 2013, Anthony Lim

THE Workers’ Party has called on the public to “make its own judgment” on several occasions (“WP: Unproductive to continue arguing”; Sunday).
As a member of the public and a Singaporean, I wish to make an informed judgment based on proper understanding of the hawker centre cleaning saga.
To help me do so, I would need clarity on the following:
• WP chief Low Thia Khiang said last Wednesday that there was no need for further investigations into complaints related to hawker centre cleaning in Aljunied GRC (“Low: No need for further probe into hawker centre cleaning row”; last Thursday).
This means the party must have conducted an investigation. For the purpose of transparency and to facilitate proper understanding, it should make the details of the investigation available for public scrutiny.
• In Parliament last Tuesday, Mr Low attributed the dispute to a misunderstanding between the town council, hawkers and National Environment Agency over quarterly spring cleaning versus annual cleaning.
A day later, he said town councils have the prerogative to decide on annual cleaning schedules for markets.
There is a need to clarify if the town council had decided to carry out annual cleaning or otherwise at the two Bedok hawker centres.
From what was reported, the five-day closure at one hawker centre would have indicated that annual cleaning was being carried out, for which high areas had to be cleaned.
• The WP MPs have said that Environment and Water Resources Minister Vivian Balakrishnan made serious allegations against their integrity.
If they are so aggrieved, and since Dr Balakrishnan has waived his parliamentary privilege, why have they not taken legal action to protect their integrity?
And now that Prime Minister Lee Hsien Loong has mentioned that what Dr Balakrishnan said in Parliament was also the Cabinet’s position, there is an even greater need for the WP leadership to prove its position in order for the public to make the right judgment.
Mr Jeffrey Law Lee Beng (“Discuss national issues in Parliament”; last Saturday) said Parliament should debate national issues. Politicians’ “integrity” is a national issue – and a very important one that may decide the future of Singapore.

[2] Aljunied Town Council annual cleaning schedule 2013

Slower pace of life need not come with trade-off

July 16, 2013

I refer to the 13 Jul 2013 Straits Times report of what Mr Shanmugam said at an NUS forum [1].

Mr Shanmugam said that if Singaporeans want a slower pace of life, they must accept a trade-off in living standards. The following table shows many OECD countries with a slower pace of life and a higher standard of living supported by higher wages adjusted for purchasing power parity (consumption) [2]. These OECD countries demonstrate it’s possible to both enjoy a slower pace of life and a higher standard of living.

Country Average annual hours worked per worker (2000-2011) PPP (consumption) adjusted average annual wage 2000-2011 (2011 USD) PPP (consumption) adjusted average annual wage per hour worked 2000-2011 (2011 USD)
Luxembourg 1,619 $51,512 $32
Netherlands 1,398 $44,473 $32
Switzerland 1,644 $50,048 $30
United States 1,799 $52,212 $29
Norway 1,422 $40,340 $28
Belgium 1,563 $44,296 $28
Ireland 1,635 $45,910 $28
Germany 1,428 $39,388 $28
Denmark 1,572 $42,274 $27
United Kingdom 1,670 $43,529 $26
Australia 1,720 $43,822 $25
France 1,489 $36,225 $24
Austria 1,765 $42,062 $24
Canada 1,738 $40,558 $23
Sweden 1,613 $35,009 $22
Finland 1,708 $34,492 $20
Spain 1,694 $32,367 $19
Japan 1,775 $33,139 $19
Italy 1,813 $32,911 $18
Israel 1,948 $30,593 $16
Korea 2,337 $32,984 $14
Singapore 2,406 $32,361 $13
Greece 2,065 $27,741 $13
Portugal 1,768 $22,911 $13

Mr Shanmugam also said that Taiwan, South Korea, Singapore and China succeeded post World War 2 because of good leadership and political stability. The following table shows that Taiwan, South Korea, Singapore and China have widely varying scores for political stability and government effectiveness (proxy for good leadership) [3]. Political stability scores ranged from 72.2% for Singapore to 40.4% for China. Government effectiveness scores ranged from 92.8% for Singapore to 50.4% for China. The fact that all succeeded despite such wide ranging scores suggests something else other than good leadership and political stability had been more critical to their collective success and development.

Country/Territory Average political stability score (1996 – 2011) Average government effectiveness score (1996 – 2011)
SINGAPORE 72.2% 92.8%
HONG KONG SAR, CHINA 68.4% 82.2%
TAIWAN, CHINA 63.2% 70.2%
MACAO SAR, CHINA 63.4% 69.6%
KOREA, REP. 56.0% 69.0%
CHINA 40.4% 50.4%

[1] Straits Times, Slower pace of life comes with trade-off, says Shanmugam, 13 Jul 2013

[2]

• Only non-ex-communist OECD countries compared
• Annual wage of OECD countries in local currency obtained from OECD data
• Annual hours worked per worker for OECD countries obtained from OECD data
• Monthly wage of Singapore obtained from Singstats and International Labour Organisation, then multiplied by 12 to obtain annual wage
• Weekly hours worked for Singapore obtained from Ministry of Manpower data, then multiplied by 52 to obtain annual hours worked
• Purchasing power parity (consumption) adjustment factor obtained from World Bank for both OECD countries and Singapore

[3] The Worldwide Governance Indicators, 2012
Original scores range from -2.5 to 2.5 but converted to %

Better to be shrewd than to claim to be shrewd

July 16, 2013

I refer to the 13 Jul 2013 Straits Times article “To do good, be shrewd” by Mr Kishore Mahbubani [1].

Towards the end of his article, Mr Mahbubani wrote:

I can anticipate the reactions of many readers to this article.
Many will say: “How shrewd of Kishore to use this haze to raise money for the NUS.”
That is precisely the point of this article: To do good, you have to be shrewd.

Mr Mahbubani has probably never heard of the saying self-praise is no praise. If he had been truly shrewd, he would have handed out books in Bahasa Indonesia explaining the dangers of the haze to 10- year-olds after the 1997 haze, instead of just saying it now. He would have bought ample masks for distribution to Singaporeans and affected Indonesians towns instead of just saying it now. In short, he could have been shrewd instead of just claiming to be shrewd.

[1] Straits Times, To do good, be shrewd, 13 Jul 2013, Kishore Mahbubani

Population and economy can be separated

July 16, 2013

I refer to the 8 Mar 2013 Straits Times report of Mr Edwin Tong’s parliament speech [1].

Mr Tong insisted that population strategies must be related to the economy. Implicit in Mr Tong’s thinking is a population driven economic strategy. But many First World nations / territories sustain strong economies without a population driven strategy. Hong Kong for example outgrew us economically between 2007 and 2011 with a much smaller population growth [2].

Country Name per capita GDP growth 2007-2011 (2005 PPP USD) Population growth 2007-2011
Singapore 7.9% 13.0%
Hong Kong SAR, China 9.1% 2.2%

Mr Tong also took issue with Worker Party MP Lee Li Lian’s suggestion for more affordable foreign domestic workers because it will increase the number of foreign workers which didn’t square with Worker Party’s proposal for zero foreign labour growth. Mr Tong should understand that foreign domestic workers live in their respective employers’ homes and so contribute neither to housing demand nor to train and bus crowdedness, the two biggest bug bears of rapid population growth. Her suggestion was thus neither divorced from the larger picture nor a merely politically expedient one.

[1] Straits Times, Population, economy cannot be separated, 8 Mar 2013

[2] Data from World Bank

Vivian Balakrishnan failed to prove WP untruthful

July 15, 2013

I refer to the transcript of the 9 Jull 2013 parliament exchanges on the Aljunied Town Council Blk 538 hawker centre cleaning issue [1].

Mr Balakrishnan accused Aljunied Town Council property manager Mr Tai Vie Shun of denying its responsibility to clean the hawker centre high areas and for trying to ask hawkers to pay extra money for cleaning them. To prove his accusation, Mr Bala quoted three occasions where Mr Tai supposedly gave the stock answer “spring cleaning is a practice set by the NEA, not the Town Council”. Mr Bala couldn’t seem to comprehend the simple, straight forward answer given by Ms Sylvia Lim that Mr Tai was on those three occasions referring to quarterly spring cleaning which, unlike the annual spring cleaning, doesn’t include high area cleaning. This is supported by the Aljunied Town Council’s email correspondence with NEA which at no instance pointed specifically to this being an annual spring cleaning [2].

Mr Bala then cited Aljunied Town Council contractor ATL Maintenance Pte Ltd’s quotation of $7,200 delivered by hand on 19 Feb 2013 as evidence tantamount to double charging the hawkers. Again, Mr Bala failed to consider that the ATL quote was for high rise cleaning consistent with the impression that this was an additional request for high rise cleaning on a quarterly spring cleaning occasion. Mr Bala claimed that if Aljunied Town Council had been merely confused, the quotation would have read “erection of scaffolding for access to the ceiling” rather than the entire scope of work. But high rise cleaning doesn’t just involve scaffolding erection. It must also involve the entire scope of cleaning the high rise areas using the scaffolding.

Finally, Mr Bala pointed out that the hawker centre was closed for 5 days, a supposedly clear indication that it was for an annual spring cleaning, not a quarterly spring cleaning. Again, Mr Bala failed to consider Aljunied Town Council’s consistent position that Mr Tai believed that this was a quarterly spring cleaning during which high rise areas will also be cleaned which of course would necessitate 5 days. The fact that it was 5 days doesn’t prove that Mr Tai therefore believed it was an annual spring cleaning rather than a quarterly spring cleaning during which the hawkers also requested for high rise cleaning. This is supported by Aljunied Town Council’s annual spring cleaning schedule for Blk 538 which was slated for the last week of Oct 2013, not Mar 2013 [3].

All of Mr Bala’s so-called evidences can be viewed from one of two perspectives – either annual spring cleaning or quarterly spring cleaning with special request for high rise cleaning. He has not provided incontrovertible proof that Mr Tai or the Aljunied Town Council must have thought it to be the former rather than the latter case. The fact that a quotation was requested for the cleaning of high rise areas would have reinforced the idea that this was a special request for high rise cleaning on a quarterly spring cleaning occasion, a request which Mr Bala has denied. However, if there had been no request for the quotation, why would the quotation read “Thank you for inviting us to quote” [4]?

Given the consistent testimonies of Ms Sylvia Lim and Mr Pritam Singh that do not contradict any fact presented by Mr Bala, Mr Bala has no strong basis to accuse them of making untrue statements to conceal any supposed extra charging of hawkers or to say that their public denials were false and untruthful. If Mr Bala has full confidence in the evidences that he has gathered to incriminate Mr Tai and the Aljunied Town Council of illegally double charging the hawkers of Blk 538, he should immediately call the CPIB in for investigation or get the state prosecutor to prosecute Ms Lim and Mr Singh immediately. The fact that Mr Bala hasn’t done so yet suggests that his so-called evidences are far from being water tight.

[1] http://app.mewr.gov.sg/web/contents/contents.aspx?contid=1850
Transcript of Supplementary Q&A for PQ1238 on the Role Of Town Councils in the Maintenance and Cleaning of Hawker Centres under their charge, 9 July 2013

[2] Email correspondences between Aljunied Town Council and NEA

Email-Correspondence-between-NEA-and-AHPETC

[3] Aljunied Town Council annual spring cleaning schedule

Annual spring cleaning schedule

[4] Quotation for high rise cleaning of Blk 538
ATL quotation for high rise cleaning Blk 538

Singapore is authoritarian

July 13, 2013

Dear Washington Post Editor,

I refer to the 9 July 2013 letter by Mr Jerome Lee [1].

Singapore is widely regarded as an authoritarian state [2]. Since authoritarianism is much closer to autocracy than to democracy, the autocracy label for Singapore is therefore not that unreasonable.

Singapore scored a dismal 5.88 out of 10 in the 2012 Economist Intelligence Unit’s Democracy Index which puts us in the category of a hybrid regime that bears the following description: “Elections have substantial irregularities that often prevent them from being both free and fair”. Mr Lee’s assertion of free and fair general elections in Singapore is somewhat contradicted by EIU’s classification of Singapore as a hybrid regime.

One example of Singapore election unfairness is the Group Representative Scheme (GRC) where multiple constituencies are lumped together and contested as one. The dubiousness of the GRC rationale has been confirmed when Worker Party’s female candidate Ms Lee Li Lian beat PAP’s male candidate Dr Koh Poh Koon in the recent Punggol East by-election, debunking former Minister Mentor Lee Kuan Yew’s explanation that GRCs were needed because they could not get single minority candidates or women elected [3].

No amount of variation in democracy all over the world can justify one that exercises absolute control over the press and the media. What else other than military juntas and the communists would impose absolute control over the press and the television media? Reporters Without Borders ranks Singapore 149th out of 179 nations in press freedom this year. Freedom House classifies the Singapore press as being not free.

History and tradition are no impediments to democracy. Taiwan and South Korea were authoritarian in the past but have become much more democratic now. Ethnic mix too is no impediment to democracy as examples abound of nations with healthy mix of races that are democratic as well. The table below shows many nations with comparable ethnic and cultural fractionalisation as Singapore but that have better Democracy indices than Singapore [4]. Perhaps the country most similar to Singapore in history, traditions, ethnic and religious mixes is Malaysia; yet Malaysia ranks and scores better than us in the Democracy Index.

Country Democracy Index rank Democracy Index overall score Ethnic fractionalisation Cultural fractionalisation
New Zealand 5 9.26 0.363 0.363
Switzerland 7 9.09 0.575 0.418
Canada 8 9.08 0.596 0.499
UK 16 8.21 0.324 0.184
Mauritius 18 8.17 0.632 0.448
USA 21 8.11 0.491 0.271
Belgium 24 8.05 0.567 0.462
Spain 25 8.02 0.502 0.263
Botswana 30 7.85 0.351 0.161
South Africa 31 7.79 0.88 0.53
Chile 36 7.54 0.497 0.167
Israel 37 7.53 0.526 0.246
India 38 7.52 0.811 0.667
Slovakia 40 7.35 0.332 0.293
Cyprus 41 7.29 0.359 0.359
Lithuania 42 7.24 0.338 0.259
Panama 46 7.08 0.507 0.168
Latvia 47 7.05 0.585 0.441
Trinidad & Tobago 48 6.99 0.647 0.38
Croatia 50 6.93 0.375 0.185
Mexico 51 6.9 0.542 0.434
Indonesia 53 6.76 0.766 0.522
Bulgaria 54 6.72 0.299 0.25
Thailand 58 6.55 0.431 0.431
Romania 59 6.54 0.3 0.265
Peru 61 6.47 0.638 0.506
Malaysia 64 6.41 0.596 0.564
Moldova 67 6.32 0.51 0.401
Papua New Guinea 67 6.32 1
Zambia 70 7.92 0.726 0.189
Namibia 72 6.24 0.724 0.589
Macedonia 73 6.16 0.535 0.432
Senegal 74 6.09 0.727 0.402
Malawi 75 6.08 0.829 0.294
Guyana 76 6.05 0.62 0.46
Ghana 78 6.02 0.846 0.388
Benin 79 6 0.622 0.4
Singapore 81 5.88 0.388 0.388
Guatemala 81 5.88 0.493 0.493
Tanzania 81 5.88 0.953 0.564

The table above also shows that better democracy has been achieved in continents other than the West. Democracy is not a particularly Western ideology imposed on us but a universal ideal and virtue aspired by people all over the world hindered only by existing power structures that have vested interests to subjugate democracy in order to entrench local elites.

[1] Washington Post, Singapore is no autocracy, 9 Jul 2013, Jerome Lee

[2]

• Max Singer, The History of the Future: The Shape of the World to Come Is Visible Today

Page 64 – Of the more than twenty modern countries today, only one of them, Singapore, is not yet democratic.

• Fanie Cloete – At Full Speed the Tiger Cubs Stumbled: Lessons from South East Asia about sustainable public service delivery

The single most glaring negative feature of the Singapore system is probably the de facto authoritarian or controlling nature of the political system.

• Diane K. Mauzy and R. S. Milne, Singapore Politics Under the People’s Action Party

However, certain draconian laws, controls on political participation, and measures limiting civil and political rights and freedom of the press, mean that Singapore is, to some extent – critics vary on the degree – an authoritarian state.

• Lily Zubaidah Rahim, Singapore in the Malay World: Building and Breaching Regional Bridges

Page 118 – While Northeast Asian developmental states of Japan, South Korea and Taiwan have liberalised their political systems, Singapore has remained an authoritarian one-party dominant state since independence.

Page 80 – … a Singaporean national identity that is rooted in the culture of fear, paranoia and insecurity – a culture engendered and exploited by the authoritarian PAP government.

• Roy C. Nelson, Harnessing Globalization: The Promotion of Nontraditional Foreign Direct Investment in Latin America

Page 28 – Singapore is an authoritarian regime

Page 216 – Singapore’s authoritarian political context hindered the EDB’s long-term prospects to attract increasingly knowledge-intensive investment.

• Howard J. Wiarda, Cracks in the Consensus: Debating the Democracy Agenda in U.S. Foreign Policy, page 30

Some regimes, like that of Prime Minister Lee in Singapore, have maintained authoritarian controls longer than could be justified by internal or external threats to stability.

• Michael Hill, Kwen Fee Lian, The Politics of Nation Building and Citizenship in Singapore, page 10

The culture of political management in Singapore is authoritarian and interventionist.

• Harold A. Crouch, Domestic Political Structures and Regional Economic Co-Operation

Only in Singapore is the working class large enough to form a potential base for a major opposition movement but there it has been subjugated through both repression and the take-over of the trade union movement by government officials.

The Singapore government has thus created a situation where its survival does not depend on its ability to meet particular mass demands. It has combined limited but effective repression with indirect control of some potential opposition forces and the undermining and intimidation of others.

• Zhang Yumei, Pacific Asia: The Politics of Development, page 7

Indonesia and Singapore were at best pseudo-democracies dominated respectively by the military and a Leninist-style political party.

• Christopher Lingle, Singapore’s Authoritarian Capitalism: Asian Values, Free Market Illusions and Political Dependency

From a perspective gained from his service as a former Senior Fellow at the National University of Singapore, Dr. Lingle identifies Singapore’s authoritarian capitalism as combining a selective degree of economic freedom and private property rights with strong-armed control over political life.

[3] 2006 televised dialogue – Why My Vote Matters – A Dialogue With Minister Mentor Lee Kuan

Ken Kwek: You have also erected all kinds of barriers of entry for the opposition.

Sue Ann Chia: And one barrier is the GRC …

LKY: First why do we have GRCs? Because we could not get single minority candidates or women elected. In the early elections, just being a PAP candidate got you elected. But after a while the electorate got wise and smart, it says oh we’ll have a PAP government, I don’t like this. Why an Indian? He can’t speak my Teochew or Hokkien. I choose Chinese.

Ken Kwek: Mr Lee but that’s not true. I mean in 84 you had people like Abbas Abu Amin, 88 Abdullah Tarmugi, strong minority candidates have never been absent

LKY: That was with the PAP in complete control. That generation voted for the PAP.

LKY: You watch the candidates that we are fielding in single wards. Do we field a minority? Do we field a woman? No. You watch the opposition. Will they have a woman or a minority challenging a Chinese male? No. Because they know that on the ground, they cannot win.

LKY: These are basic, visceral, emotional biases. I don’t like this MP because he can’t understand me, he is Malay and I’m not a Malay and the Malay voters want a Malay MP. It’s a reality.

[4] Ethinc and cultural fractionalisation data taken from the paper “Ethnic and Cultural Diversity by Country” published in “Journal of Economic Growth” in 2003 and written by James D Fearon, Department of Political Science, Stanford University

Good quality of life need not come at high cost of living

July 10, 2013

I refer to the 4 Feb 2013 Straits Times letter “High cost of living comes with good quality of life” by Ms Tan Lin Neo [1].

Ms Tan found Singaporeans’ lament on high cost of living puzzling given the hundreds and thousands who throng condominium show flats and travel fairs. While hundreds and thousands may seem like large numbers, they are just 0.01% and 0.1% respectively of the Singapore population. The good life of the 0.01% or 0.1% should not be misconstrued as representing the good life of all Singaporeans.

Ms Tan took issue with Singaporeans who complain about high HDB prices but yet don’t mind selling their flats at high prices. But who in the first place sold Singaporeans the asset enhancement drug that got Singaporeans hooked?

Ms Tan asserted that high cost of living comes with living in a First World country with good quality of life while low cost of living means dirt roads, poor housing and low quality amenities. But there are many countries and cities that combine better quality life with lower cost of living.

For example, International Living’s 2011 Quality of Life Index listed 93 out of 192 countries with better (or same) quality of life as Singapore but with lower (or same) cost of living as Singapore.

Country Quality of Life Final Score Cost of Living (higher score means lower cost)
United States 86 76
New Zealand 76 69
Malta 76 68
Belgium 75 65
France 75 58
Monaco 75 47
Japan 74 61
United Kingdom 74 60
Austria 74 58
Germany 74 50
Portugal 73 72
Andorra 73 61
Australia 73 55
Italy 73 54
Netherlands 73 52
Hungary 72 79
Argentina 72 73
Slovenia 72 66
Norway 72 53
South Korea 71 76
Uruguay 71 67
Iceland 71 65
Spain 71 62
Greece 71 59
Ireland 71 51
Denmark 71 48
Poland 70 67
Czech Republic 70 64
Canada 70 61
Bulgaria 69 80
Estonia 69 76
Latvia 69 67
Finland 69 57
Sweden 69 49
Lithuania 68 70
Croatia 68 54
Mexico 67 77
Slovakia 67 70
Israel 67 56
Liechtenstein 67 50
Taiwan 66 75
Brazil 66 73
Antigua & Barbuda 65 80
Ecuador 65 78
Costa Rica 65 73
Romania 65 73
Bahamas 65 66
Cyprus (Greek) 65 61
Panama 64 78
Albania 64 75
Saint Kitts & Nevis 64 64
Barbados 64 57
Paraguay 63 84
Colombia 63 72
Jamaica 63 69
Chile 63 68
Cayman Islands 63 65
Mauritius 62 74
Serbia 62 70
Bolivia 61 88
Marshall Islands 61 86
Bosnia-Herzegovina 61 76
Dominica 61 74
Macedonia 61 70
Turkey 61 68
Tunisia 60 79
Dominican Republic 60 76
Botswana 60 76
Namibia 60 74
Ukraine 60 67
Morocco 60 64
South Africa 60 57
Trinidad & Tobago 60 55
Cuba 59 86
Lesotho 59 84
El Salvador 59 82
Malaysia 59 80
Guatemala 59 76
Belize 59 75
Moldova 59 73
Grenada 59 65
Macau 59 47
Kiribati 58 83
Thailand 58 77
Georgia 58 76
Bahrain 58 53
Bhutan 57 86
Suriname 57 78
Cape Verde 57 78
China 57 73
Tonga 57 72
Qatar 57 59
Singapore 57 47

The Economist Intelligence Unit listed 18 cities that are simultaneously better than Singapore in the Best City ranking and less expensive than Singapore. Its list of top 50 most liveable cities also does not include Singapore.

City EIU 2012 Best City rank EIU 2012 top 10 most expensive cities
Hong Kong 1 #N/A
Amsterdam 2 #N/A
Osaka 3 #N/A
Paris 4 6
Sydney 5 7
Stockholm 6 #N/A
Berlin 7 #N/A
Toronto 8 #N/A
Munich 9 #N/A
Tokyo 10 2
Rome 11 #N/A
London 12 #N/A
Madrid 13 #N/A
Washington DC 14 #N/A
Chicago 15 #N/A
New York 16 #N/A
Los Angeles 17 #N/A
San Francisco 18 #N/A
Boston 19 #N/A
Seoul 20 #N/A
Atlanta 21 #N/A
Singapore 22 9

Mercer’s 2012 Quality of Living index and Cost of Living Index together show 23 cities that have simultaneously better quality of living and lower (or same) cost of living than Singapore.

City Mercer quality of living 2012 rank Mercer cost of living 2012 rank (higher ranked means more costly)
Vienna 1 48
Zurich 2 6
Auckland 3 #N/A
Munich 4 #N/A
Vancouver 5 #N/A
Düsseldorf 6 #N/A
Frankfurt 7 #N/A
Geneva 8 5
Copenhagen 9 21
Bern 10 14
Sydney 10 11
Amsterdam 12 #N/A
Wellington 13 #N/A
Ottawa 14 #N/A
Toronto 15 #N/A
Berlin 16 #N/A
Hamburg 17 #N/A
Melbourne 17 15
Luxembourg 19 #N/A
Stockholm 19 46
Perth 21 19
Brussels 22 #N/A
Montreal 23 #N/A
Nurnberg 24 #N/A
Singapore 25 6

Finally, the UBS Prices and Earnings report 2011 also listed Singapore amongst the priciest of First World cities.

City Price level excluding rent City Price level including rent
Oslo 139.1 Oslo 108.9
Zurich 135 Geneva 106.5
Geneva 133.1 Zurich 105.5
Copenhagen 118.4 New York 100
Stockholm 117.5 Tokyo 94.2
Tokyo 112.6 Copenhagen 89.4
Sydney 107.7 Sydney 89.1
Helsinki 103.5 Stockholm 88.5
Toronto 102.8 Singapore 88.3
Singapore 102.4 Paris 82.8
Vienna 102 London 82.5
Paris 100.9 Toronto 82.1
Luxembourg 100.1 Helsinki 81.5
New York 100 Dublin 78.8
London 99.8 Montreal 77.6
Munich 99.7 Luxembourg 77.1
Montreal 99.4 Hong Kong 76.5
Frankfurt 98 Frankfurt 76.3
Dublin 95.7 Vienna 75.2
Brussels 93.3 Munich 75
Rome 92.8 Brussels 74.5
Lyon 92.2 Rome 74.4
Auckland 91.7 Auckland 73
Barcelona 90.9 Los Angeles 72.7
Amsterdam 88.2 Chicago 72.3
Los Angeles 88.1 Barcelona 71.1
Madrid 88.1 Miami 69.2
Tel Aviv 87.6 Milan 68.9
Berlin 87.5 Madrid 68.7
Milan 84.5 Amsterdam 68.4
Seoul 84.5 Seoul 68.4
Hong Kong 82.3 Lyon 67.2
Chicago 82.3 Tel Aviv 66.5
Athens 80.1 Berlin 64.6
Lisbon 79.9 Lisbon 62.4
Miami 78.8 Athens 60.1
Taipei 73.2 Taipei 57.3

So this is the reality reflected in many international surveys: that there are many cities and countries that have simultaneously better quality of living and lower cost of living than Singapore. It is a truth larger than the one advocated by Ms Tan which Ms Tan claimed to be the entirety. Singaporeans don’t need the government to fulfil every whim and desire, only to face up with reality entirely and responsibly.

[1] Straits Times, High cost of living comes with good quality of life, 4 Feb 2013, Ms Tan Lin Neo