It is time for change, Singapore

By James Ong

To set the record straight, I grew up a proud Singaporean and treated all the PAP leaders like heroes. Recently, I got jokingly mocked by my friends for “idolizing” and “defending” them in the past while criticizing them now. Today, I still hold one or two PAP politicians in high regard for their leadership qualities. However. that is not stopping me from wanting change.

While many are focusing on local issues and politics, I am a firm believer in the following:

No matter how much we pay our leaders, in today’s global inter-linked financial markets, there is little we can do as an open and export-driven economy, to avoid the big hit when the US inevitably collapse.

Before you continue reading, please watch this very important video below.

Politicians, Central Bankers and regulators will never tell the truth, they are have vested interest in one another whether politically or economically. Just look at G8, G20, IMF, EU, APEC etc.

Everyone is hoping that the Keynesian method of solving debt problems by creating more debt will somehow work. History has shown it has never worked. All it does is to delay healthy recessions while creating malinvestments leading to bigger bubbles and when the next crisis comes, they repeat the whole process.

Money-junkie Bankers and Power-junkie Politicians never like recessions. They like to print money and when GDP goes up, they would say they have done well and recovery in on the way, ignoring the real situation on the ground where people are losing jobs. When things go wrong, they would say “everyone got it wrong or nobody could have predicted it”

Having some understanding of how things work around the world and understanding the inevitable collapse of the US will help us look at domestic issues from a better perspective.

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1) Our Education

The primary objective of streaming, which was introduced by Dr Goh Keng Swee, is to prevent “wastage” due to high drop-out rates. Similarly, bilingualism is also introduced by Dr Goh and looking at how China and India are emerging, this policy should stay for decades to come. Instead of reviewing the need for streaming and its ill-effects on society after years of feedback from Singaporeans, the Ministry of Education tried to reduced the weightings of MTL. Whatever the policy is, parents should ultimately be allowed to choose what’s best for our children – we are no longer a fishing village but a highly diversified and educated population with different needs and ambitions.

Limitations:

• After many years of exam-based rankings and streaming, students lack the capability to understand other students who are different from them. This has a permanent ill-effect on society.
• Instead of having brighter students in the same class to help the rest, the less brighter students lack the opportunity to learn from among the best of their peers and often face discrimination.
• Due to the ranking system, parents and education professionals are so obsessed in getting good grades that moral values declined in the priority order.
• News like this is becoming common: “Elite ACS students behave like ruffians by creating din and spewing vulgarities on bus.”

Is this system undermining our push for a more gracious, all-inclusive and caring society? Is every individual given an equal playing field to excel?

Give every student true equal opportunities to achieve good results and an inclusive environment to learn from and understand one another.

Learn from Finland: Why do Finland’s schools get the best results?

‘Do we really have the inherent capacity to create, innovate, produce and drive our economic destiny that smaller, developed countries such as Sweden, Finland or the Netherlands have?

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2) Immigration

The 6.5 million population planning parameter was set back in 2006 or 2007. That was at the peak of the synchronized boom in global markets. Even till today, the planning parameter remains unchanged, according to Mah Bow Tan on 8 March 2010.

According to Grace Fu on 22 February 2010, we do not track the housing demands of new citizens as it is their policy not to distinguish between indigenous and new citizens. Based on the population growth rate from 2007 to 2009, we are projected to hit 6.5 million in 2015 or 2016. Without tracking their needs, how do we ensure enough supply of housing to cater to demand?

Since the sub-prime crisis, many Singaporeans have lost their jobs and when they tried to opt for lower-paid jobs, they have to compete with these foreigners. Our wages declined while cost of living kept increasing. To make things worse, millions and millions of taxpayers’ money were spent to help foreigners integrate into our society. But when Dr Lily Neo asked for a little more public assistance for the needy to have enough for three meals a day, she was snubbed by Dr Vivian Balakrishnan – “How much do you want? Do you want three meals in a hawker centre, food court or restaurant?”

Even at 5 million today, we lack housing, infrastructure and jobs for Singapore as a whole. Imagine what it would be like in 2015 or 2016 when we hit 6.5 million. Imagine what it would be like when the US collapse.

All these have created social tensions in society and the resentment of the government policies are growing rapidly.

Just to clarify, I do not resent well-mannered immigrants, after all, we are all human beings and all have families to support. The issue here is the failed immigration policy – lacking necessary infrastructure and facilities to cater to growth in population, creating unnecessary social tensions along the way.

We used to be told to “Stop at Two”. Now we are taking the unpopular shortcut to grow our population through immigration. Completely erratic…

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3) Our Public Housing

As the problems are widely covered by Gerald Giam, Goh Meng Seng, Leong Sze Hian, Ng Kok Lim, Tan Kin Lian and Andrew Loh, among many others. I shall not repeat what was already covered.

According to HDB annual report, supply was only about 36% of demand from 2006 to 2008 while at the same time, stock of unsold flats diminished. To make things worse, the increased supply recently are only baby steps considering the huge cumulative pool of new buyers who did not get any flats due to various reasons and considering we are still planning for 6.5 million.

All these problems were created by Mah Bow Tan and he is surely not the right person to fix things. Having said that, whoever taking over will be faced with the wrath of flat-buyers who bought at peak prices while trying to make things right.

It should be clear that as unpopular as it may be, the current system is not sustainable and we have to take the bitter medicine to make the system healthy again.

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4) Our Financial Reserves

As of 2009. about 20% of our savings are still invested in the western world, where most of them are highly in debt and going bankrupt. With the collapse of the US empire, our savings will be diminished by a large extent. Should countries go to war in future, it would be the nail in the coffin as we are still very underweight on commodities.

Despite all the losses, Temasek Holdings have spent a total of $45 billion in Administrative Expense, from 2004 to 2009, averaging $7.5 billion annually for a staff size of 380.

In 1993, President Ong Teng Cheong was tangled in a dispute over the access of information regarding Singapore’s financial reserves. The government said it would take 56 man-years to produce a dollar-and-cents value of the immovable assets. President Ong discussed this with the accountant general and the auditor general and eventually conceded that the government only had to declare all of its properties, a list which took a few months to produce. Even then, the list was not complete; it took the government a total of three years (instead of fifty-six) to produce the information that President Ong requested.

We could well be following the US footsteps of being a big creditor nation to big debtor nation, should things remain unchecked.

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5) Our Workers

While Ministers continue to be the highest paid in the world, Singaporean workers are told to be Cheaper, Better and Faster. Our wages account for less than half our GDP while in contrast, wages are more than half of the GDP of developed nations.

Taken from an article published on Straits Times: “First World Country, Third World Wages?”

In March last year, economist Linda Lim said Singapore’s economic growth model has tried to ‘do too much, and achieved too little’ in delivering returns for Singaporeans, relative to foreign firms and foreigners. She cited the low wage share (41 per cent in 2007) and high share of profits, interest and dividends (more than 50 per cent). Foreign share of domestic production and income has also increased.

Similarly, a survey by Swiss bank UBS on prices and earnings last year showed a sobering picture for Singapore workers. On a list of 73 cities, Singapore is the 24th most expensive city – moving up eight spots from the previous survey in 2006. It is costlier than Chicago, Hong Kong and Sydney. But when it comes to wage levels, Singapore slipped two notches to 40th position. It is just one rung above Moscow, which is way down the ‘expensive cities’ list at No. 56 – or 32 places below Singapore.

With prices rising more than wages, Singapore workers cannot afford to buy as much as people in many other cities. Purchasing power in Singapore declined 10 spots to 50th place, behind cities like Bratislava in Slovakia, Johannesburg in South Africa and Kuala Lumpur in Malaysia. While some observers question the accuracy of such comparative studies, one inescapable conclusion is that wage increases have not been on a par with economic growth.

Mr Bhaskaran concludes: ‘Whether we are a First World economy depends not just on our wage levels but on a whole array of other factors. ‘Do we really have the inherent capacity to create, innovate, produce and drive our economic destiny that smaller, developed countries such as Sweden, Finland or the Netherlands have? When we have that inherent capacity, then we can say we are First World.’

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“Poll by Institute of Policy Studies showed that voters want greater opposition voice and a check and balance system in Parliament.

…The system as it holds now, with all its merit, the limitation is that where you have on average 30-40% of your electorate voted opposition, to have only as many as 4 opposition members in parliament does not reflect that… so the proportionality of representation in Parliament is lacking…” - Dr Gillian Koh, Institute of Policy Studies

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“When we see men of a contrary character, we should turn inwards and examine ourselves.”
Character Quotation by Confucius

We don’t FIX the opposition, we need their views so we can examine ourselves. My dear PM, true leaders don’t BUY supporters. We WIN supporters over.

We can make public housing affordable again

WP Forum Speech: We can make public housing affordable again

This is the speech I delivered at the Workers’ Party public forum, Youthquake, on 15 May 2010.

The drastic increase in the cost of public housing over the past 20 years, and in particular the last two years, has caused a financial squeeze for many Singaporeans, particularly young couples who desire to own their own homes when they get married.

In just the last two years since 2007, the median price of resale flats has risen almost 44 per cent.[1] This has far outpaced inflation and wage increases. The resale flat cash-over-valuation (COV) has shot through the roof. In the fourth quarter of last year, the median COV was $24,000[2].

The sky-high property prices threaten severe long-term effects for Singapore’s future. Many young people delay getting married because of insufficient savings to place a down payment for their first flat, which has a knock-on effect on our birth rate and our ability as a nation to replace ourselves in the next generation. Others simply pack up and leave for other countries where they can buy a landed property with a garden plus a car, all for the price of a “squeezy” HDB flat.

Most of those who remain will likely have to spend their entire working lives paying off their home loan. After the 30-year loan is paid off, they have exhausted their retirement savings and whatever they do have is locked up in their only “asset”. Unfortunately their home is not really an asset since most of them can’t sell it without losing the roof over their heads, and they would also have to pay an arm and a leg for another equivalent property to stay in.

It is clear that something needs to be done to lower the price of HDB flats to make them truly affordable to the average Singaporean. However, the solution to this problem is not easy. Whatever measures are put in place to reduce the price of flats for buyers could inadvertently disadvantage existing home owners who bought high and may end up selling low.

I have a few proposals on how we can lower the cost of public housing for Singaporeans, without causing excessive asset depreciation for current home owners. They are aimed at making prices of new or resale flats affordable for first time homeowners in the middle to lower income brackets.

Read More: Click here

Letter to Mah Bow Tan

Dear Mr Mah,

I refer to your interview by Straits Times as reported on 7 Apr 2010.

You said that from 1999 to 2001, household incomes rose while home prices fell. However, you omitted to say that immediately after that, from 2001 to 2003, household incomes fell while home prices rose. In fact, given the roller coaster prices, a person who bought in 1999 would have paid more than someone who bought just two years later in 2001. Another person who bought two years after that, in 2003 would also have paid more than the one who bought in 2001 even though it might be the same flat. Because of roller coaster prices, people have ended up paying more for nothing either by buying too early or too late. Is this state of affairs desirable? Are you encouraging couples to time their marriage according to property cycles?

You said household incomes and home prices inched up in tandem from 2001 to 2006. That’s not true, using 2001 as the starting base, from 2001 to 2006, home price indices have consistently been higher than their corresponding household income indices.

You said both indicators rose sharply from 2006 to 2008. Again that is not accurate. Using 2006 as the starting base, from 2006 to 2008, home prices have again outstripped household incomes and by quite a large margin too.

Therefore, what you say is not true. If we break up the decade as you have done so, we find that prices have not moved in tandem with income over the last 10 years. In fact, if we use 2001 as the starting base, home price indices have always been higher than their corresponding household income indices.

You concede that there is some housing demand due to PRs but you have not acknowledged the fact that the great majority of PRs who are renting units or rooms are also contributing to housing demand. You said improving economy leads to higher prices but last year was recession year and prices went up just the same. In fact, during the SARs year of 2003, home prices also went up. These are some of the examples that invalidate the factors you attribute for the huge increase in prices.

You ask whoever can do a better job to come forward. Whoever comes forward, it would be difficult for him to do any worse than you already have.

You said so many things have changed over the last four decades so you don’t want to compare with 40 years ago. You are right, 40 years ago, we had Goh Keng Swee which was why flats were cheap. 40 years later, we have you and now flats are so expensive.

You said 12,000 flats are sold every year but Ms Chua Mui Hoong of Straits Times once calculated that there is a potential 95,600 buyers of HDB flats. The large discrepancy between supply and demand is simply too glaring not to be noticed.

You said the average HDB mortgage is ‘healthy’ because it meets ‘international’ standards. But a recent study by NUS revealed that our housing price to income ratio is comparable only to some of he most expensive cities in the world like Hong Kong and London. Also, time and again, the statistics you provide show that despite meeting ‘healthy’ international standards, buyers of 3-room flats typically have nothing left over whatsoever for retirement. No wonder they are forced to sell their flats back to the government for retirement.

It is clear that you did not tell the entire truth and for some people, that is akin to lying. You do not need to fudge figures to tell lies, you just need to selectively pick figures to distort the truth.

Stop blaming Singaporeans’ rising expectations. Stop blaming Singaporeans for your own inadequacies. Start recognising that prices have indeed went out of control.

No point repeating your grandmother story about your past. The more you speak about your past, the more it contrasts with your current wealth and status, the more it portrays you as someone who has rossed the river and then burnt the bridge.

You said people of your generation started small but upgraded later. It was precisely because prices were much lower then that the burden wasn’t so great so that the realisation of a home was much easier. But with each upgrade comes higher prices with the burden of the upgrade falling upon the shoulders of the next generation. That burden keeps piling and piling onto future generations until it has become totally unbearable. This is like the ponzi scheme that cannot be sustained indefinitely.

You said it is unfortunate that buyers want their ideal flat the moment they get married. Lim Kim San never had qualms about that. He built so many flats so quickly it really puts you to shame.

You said HDB has made many hard choices over the last four decades that have been proven right. With that, you are basking in the lime light of your predecessors. Ask yourself, what have you ever done right as a minister?

You said without a home, we wouldn’t do national service, we wouldn’t fight for Singapore. But you look at the PRs with a home here. Would they do national service? Would they fight for Singapore? So having a home doesn’t necessarily mean that they would therefore serve NS and fight for Singapore.

You said the HDB looks after the whole life cycle. But it is doing a terrible job keeping prices affordable. If the price is affordable to begin with, then there will be no need to sell the flat back to the government, there will be no need for the whole life cycle.

You remind Singaporeans that we used to live in kampungs. Perhaps for some who have found HDB flats exobitantly pricey now, they might prefer to stay in kampungs if that meant much cheaper housing. You said life doesn’t hand things to us on a silver platter. But you and your HDB have been handing Singaporeans IOUs that make us pay for the rest of our lives without having to keep our homes in the end for
some.

Thank you

Ng Kok Lim (Source: Temasek Review)

Should we do away with Streaming in schools?

As I understand, streaming in schools proved to be an excellent idea by the late Dr Goh Keng Swee, transforming a population with low education into a highly educated one. Dr Goh was quoted as saying it was necessary to reduce “wastage” from drop-outs back then.

Now education levels are greatly increased and drop-out rates extremely low – due to Dr Goh’s vision, should we still keep the streaming policy now that we have achieved what Dr Goh set out to achieve?

I have no vision like Dr Goh, but when my neighbors’ kids got into a fight recently, the “A” class kid scolded the other “stupid” just because he is from the “E” class. I am sure other Singaporeans can quote many such examples.

This attitude can also be found online, where graduates or the privileged turns healthy discussions on various issues into name-calling events.

Even in Parliament, young Ministers you-know-who, have the same condescending attitude.

Should we learn from Finland? Where smarter kids mingle with everyone else and help one another. This should be the basic guiding principle to create a more gracious society.

Not one where the privileged go at everyone else, creating tensions everywhere simply because people lack the ability to understand one another after all those years of streamings and rankings.

Do away with streaming, please!

I’m very disappointed with the MOE for attempting to reduce MT weightage when this is what makes Singaporean workers valuable – Being able to excel in China, India, globally. Instead, I really hope to see MOE do away with streaming because of it’s ill-effects on mindsets. After all these years of feedback, even movies were produced, yet nothing has been done.

Read Also: Why do Finland’s schools get the best results?

PM Lee says no guarantee crisis won’t happen again

“Before this crisis, nobody had heard of sub-prime and the next time you have a crisis you can be sure it will come from some place we have not heard of yet.” – PM Lee HL, Channelnewsasia, 14 May 2010.

If you are the best paid politician in the world, what do you say when something goes wrong?

• Nobody heard about sub-prime before this crisis (according to PM Lee HL)? OR
• Everyone got it wrong (according to  Tharman Shanmugaratnam)? OR
• Nobody, no matter how prescient, no matter how clever, would have been able to predict that this is what is going to happen this year. All of us were caught off-guard…I did not expect the prices to go up (according to Mah Bow Tan)?

Read Also: Accountability

Ron Paul in 2003 warned that Freddie Mac and Fannie Mae would bankrupt the US. Peter Schiff, in 2006, warned that sub-prime bubble would burst and the economy would collapse.

Warnings were sent out but nothing was done. Why? Instead, our heard earned savings continued to be pumped into bankrupt American banks and when things go wrong, we say everyone got it wrong or look, we lost money but not as much as others?

When the next crisis comes, according to PM Lee, we can be sure it came from some place we have not heard of? Marc Faber, Jim Rogers, Peter Schiff, Ron Paul, Gerald Celente all made the SAME predictions on the next crisis!

According to Marc Faber, the next big crisis will be Sovereign Debt Crisis. He has already accurately predicted the fall of PIIGS and its effects on the Eurozone. He is now predicting a significant slowdown in China, especially in the real estate sector, even a crash, before April 2011.