The Singapore Business Model

The SDP opposes plans to close five wet markets in Singapore to be replaced with supermarkets. This will increase the cost of doing business and raise prices of produce and other foodstuff.

Supermarket chain Sheng Shiong announced that it was buying over five wet markets in various housing estates and converting them into air-conditioned market facilities. The plan has sparked off unhappiness among Singaporeans.

The Singapore Democrats are concerned that such a conversion will mean that the stallholders will end up having to pay more for operating in the new facilities. The higher costs will be passed on to the shopper and add to the already high cost of living of Singaporeans.

At a time where inflation is already outstripping wages, such a move is reprehensible. It will only lead to more difficulties for the people.

If the idea is to create a one-store supermarket, the vendors will lose their independent livelihoods and may end up becoming workers of the supermarket. They will then have to compete with foreign workers which means that their income will be drastically reduced.

For these reasons, the Singapore Democrats are opposed to HDB approving the sale of the wet markets to Sheng Shiong. Among the five markets that are affected are: Choa Chu Kang Street 62, Choa Chu Kang Avenue 1, Serangoon North Avenue 3, Bukit Batok West Avenue 8 and Fajar Road.

The SDP will take the case to Singaporeans especially the residents at the Bukit Panjang constituency where we contested in the last general elections.

In our regular and on-going visits to the estate, we will draw attention to this unthinking and uncaring move, and will call on residents there to reject the politics of greed and profit-making at the expense of the economic well-being of the people.

We will ask the residents to oppose the sale of the wet market at Fajar Road and in so doing keep prices of foodstuff and other essentials from going up even further.

Singaporeans must put a stop to this hawking of the people's interests to the highest bidder. This has caused much hardship for the people as prices continue to escalate beyond our means.

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I agree with SDP that the government's system of allowing private vendors to bid for and operate basic facilities, amenities and services such as hawker centres, markets, carparks, traffic and parking warden services, postal services, factory spaces, building of public flats, etc.

These private bodies, whose sole prerogative is profit-making, only act as an additional cost layer that inflates prices to the lay consumers while providing minimal or no value-add. They also usually charge a premium to merely act as middle-men to resell the facilities to the final retailers.

Anecdotal evidences indicate that they do not provide a higher quality of services than that of the statutory boards or ministries who used to run these.

If the statutory boards and ministries profess themselves to be bodies of efficiency and cost prudence, then they should not take an easy way out by devolving basic responsibilities to private vendors.

If the statutory boards' and ministries scope of responsibilities have been reduced over the years, then there should be a corresponding reduction in budget allocated to them.

SDP should be commended if it can keep tab on how the government allows the private sector to encroach on basic services to the people. This article itself represents a measure and balanced approached taken by the party without innuendos and undue politicking. Kudos and keep it up.

Comments by BryanT

On a similar note: Third-party service provider business model enslaves the common worker.  Business owners have to out-bid their rivals to secure the contract at cut throat prices. As a result, workers (rank and file) terms of employment are most often unfavorable (Long hours and at low pay). Supervisors and managers have to juggle between the interest of their employer and their client. On the one hand, managers have to ensure the company make a profit and on the other, fulfil the demands of the client, of which the company is held bond by the terms of the service contract.

Where and who to squeeze? The lowly educated, out of options common worker. "You don't want this job?", "I can easily find foreign workers to fill in you know..."

Business owners need to maintain profit which leads to manpower and material constraints, which put the manager/supervisors in a precarious situation which, eventually (one of these days) leads to a breach of service contract. Lowered service quality impact the client  "business". In the case where the public is the end consumer, growing dissatisfaction ensue.

And where does all the profits go to?

While the rest of us are mirred in the blame game, workers blaming fellow workers (and even blaming foreign workers for taking away our jobs), the owners of capital (are government owners of capital?) are laughing to the bank.

05 October 2009

High Falutin

Dr Wong Wee Nam

Like the majority of Singaporeans, I learned to say the National Pledge when I was in school. Since then I think I have lived by the vow that I had made. I am still committed to building a democratic society as I am to speaking out against injustice and inequality. To me a pledge is a solemn promise or a vow. It is not like a New Year’s resolution that you make on the first day of the year and forget it immediately the next day.

When Mr S Rajaratnam crafted the National Pledge, I don’t think he meant it to be just a New Year’s resolution. I believe he wrote it with conviction. It is not just an aspiration to be desired but a goal to be attained.

The words in the National Pledge meant a lot to me as it was to the founding fathers of Singapore. After being suffocated by the turbulent years in Malaysia, all Singaporeans wanted was to breathe the air of freedom.

We had lived through authoritarianism. We were ruled by a government with such an overwhelming majority that it could easily, and did, brow-beat its opponents. We lived under a government with a more than two-thirds majority that could push through any law it wanted. It was a government that cared more for its political base than the general population.

Singaporeans were made to feel like second class citizens and we could do nothing about it. True, there were elections but that does not mean there was democracy, even though all the constituencies were single-seat constituencies.

The Press and the Media at that time were so biased and pro-Alliance that if there had been a ranking at that time, they would have ranked more than 150th. Sounds familiar doesn’t it?

Fortunately, the situation was slightly better for the opposition then because the PAP in Singapore, at least, had the resources to counter the Malaysian government’s propaganda with Singapore’s own Radio and Television station and a government publication called the Mirror.

As a result, the separation from Malaysia came as a relief and the pledge was designed as a vow so that Singaporeans would not be subjected to the same conditions that we had broken away from.

Thus, the National Pledge is not just about protecting any racial minority. It is also about working towards social and economic justice. More so, it is about doing away with an authoritarian system and building a more democratic society.

Having gone through that period as an opposition political leader, one can understand why Mr Rajaratnam wrote those words and the spirit with which he crafted them.

As an ordinary young citizen who had lived through the period, I am, like all other Singaporeans, able to embrace the ideals behind the National Pledge.

After having lived under a government that bases its policies on the supremacy of race, language and religion, words like “regardless of race, language or religion” are like water in a dry season. After having lived under a system of injustice, inequality and a government-controlled media, we wanted change and more political freedom.

This is the reason why the pledge says we must strive to build a democratic society based on justice and equality. That is also why we believe, as the craftsmen then believed, that it is through democracy, justice and equality that we can bring happiness, prosperity and progress for our nation.

44 years on, times have changed. The National Pledge appears to have lost its original spirit. For every day of their school lives, young Singaporeans recite the Pledge over and over again. However, do they care to understand the meaning of democracy, justice and equality? When we were in Malaysia, these concepts were so important to us that we had a series of radio courses teaching us these concepts. Why are these concepts now not important enough to be taught to the young?

Thus it is a shame that after years of repeating it, one-third of Singaporeans still are unable to say it correctly, let alone understand the spirit behind the Pledge.

Whether the Pledge is recited at 8.22pm on National Day by everyone together or repeated everyday alone by oneself, it is meaningless if we do not believe in what we say.

How can we strive to build a democratic society based on justice and equality when the general population is so apathetic, the climate of fear still exists, the level of the political playing field uneven, the media is still state-controlled and when our leaders of a party, whose founding fathers introduced the Pledge, do not believe that democracy is the formula for happiness, prosperity and progress?

How can we talk about justice and equality when there is such a large income disparity after 44 years of pledge-reciting?

What is the meaning of putting our fists onto our heart and saying a vow when we are not likely to walk the talk?

Ten days before National Day, a telling phenomenon took place at the National Stadium. 50,000 fans converged on the National Stadium all dressed in Red. Many, if not all, had said the National Pledge in school. Unfortunately, they were not there to have a pre-National Day celebration. Neither were the majority there to support the National football team that was playing Liverpool. Instead they were there to support the Liverpool team, to turn the National Stadium into Anfield and to sing the Liverpool anthem, “You’ll Never Walk Alone”.

This may be a football match, but the display by the fans is a symptom of a national disease. I watched Manchester United played against Hangzhou Greentown. The Chinese supporters were cheering their team (even though not a National one) even when they were 6 nil down. And when their team scored the two consolation goals, they cheered as if they had won the match.

Alas, pledge or no pledge, Singapore has still a long way to go to achieve nationhood. I weep.

So besides Harry, there are others " who had lived through that period " ...

22 August 2009

Gut... feel.

Paul Krugman

Same.

sigh.

20 July 2009

Lions of Singapore

Funny Money

Larry Haverkamp

Creating Something from Nothing

DID you know that governments can create money from nothing? It is almost like creating matter from a vacuum and happens all the time.

It works like this: Suppose George finds an old brick, paints it gold and convinces his bank to accept it as a $1,000 deposit.

The bank retains 10 per cent ($100) and loans $900 to Pete who uses it to buy a flat-screen TV from Carolyn Cable.

She deposits the $900 in her bank which again holds back 10 per cent ($90) and lends out the rest ($810).

This continues until the new loans decline to $0. I added them up and it totals $10,000. (Trust me.)

Incredibly, George's gold brick was phoney but it managed to create $10,000 in real money. Economists call it 'printing money' and governments do it too. The only difference is that instead of a phoney gold brick, central banks write a $1,000 cheque backed by money it doesn't have.

Commercial banks are in on the scheme and agree not to cash the central bank's cheque, but to treat it like real money and lend it out immediately. The loans create $10,000 of new money in the process I've described above.

Central banks, especially in the US, have been doing this at a record pace recently.

In recessions - like now - it works well. It's free money, makes people feel richer and helps pull an economy out of its slump.

The only worry is inflation, but that's unlikely. If prices rise too fast, central banks can shrink the money supply by doing this same process in reverse.

Spend more to make more

An equally popular device is for countries to spend their way out of recession.

When you and I spend, we become poorer. But a country can spend, say, $1 billion for a bridge and generate new wealth that exceeds the cost of the bridge.

Does it mean the country gets a free bridge simply by spending the money to buy it? Incredibly, yes.

It is called 'stimulus spending' and is effective in boosting self-contained economies like the US, China and India.

Unfortunately, it doesn't work well for small open economies like ours. Most of our spending - about 60 per cent - flows out of the country to pay for the imports we need to survive.

An easy way to rid debts

LET'S say George visits from America and passes an art gallery in Ang Mo Kio.

He spots a lovely painting of a naked girl and asks the owner, Terrance, 'Is this pornography or art?'

Terrance says it's art so George whips out a $1,000 note as a deposit.

When George leaves the store, Terrance grabs the money and runs over to settle a $1,000 debt he owes to his daughter's tuition teacher, Ms Tay.

Ms Tay has a gambling problem and gives the $1,000 to her brother, Desmond, to repay money she had borrowed to play 4-D.

Desmond says, 'Thanks Sis' and uses the money to pay Calvin at Cool Computers where he had purchased a notebook on credit.

Calvin uses the $1,000 to pay Eric Wong for fixing his car six months ago.

Eric is a full-time mechanic and part-time art lover. He takes the $1,000 to his art dealer, Terrance, where this story began. He pays the final instalment on a picture he bought last year.

The next day, George shows up with his wife and - too bad - she won't have that naked girl in her house. Terrance has no choice but to refund George's $1,000 deposit.

Think about it. George left a $1,000 deposit and took it back the next day.

No income or profit was generated. Somehow, however, it has caused $5,000 of debts of five people to be repaid. All can now look optimistically toward a debt-free future.

Is this a solution to the world's financial crisis? Can we do the same to eliminate a few trillion dollars of worldwide debts?

It's food for thought.

09 June 2009

Now, where's Larry when i was in school ?

By Larry Haverkamp

From: The ElectricNewPaper

Who really knows when the recession will end ?

EVERY now and then, we need to take a step back and look at the big picture.

The world's wealth, for instance, stands at around US$200 trillion (S$300 trillion). That is the value of everything everyone owns.

Two years ago, it was higher - US$250 trillion - but we lost US$50 trillion in the financial crisis.

By the way, 1 trillion is a really BIG number. It is 1,000 billion, which is four times everything we make in a year - four times Singapore's GDP. The question of the day is: 'When will this recession end and GDP grow again?'

The official answer is: 'World economies will see gradual improvement from the middle of next year.'

The unofficial answer is: 'Who knows?' This recession is different from anything we have seen in the past. It is a beast that comes at us in the night.

Times have changed

In the US, it used to be easy to get a '100 per cent no-doc home loan'. The homeowner would put down no money of his own and provide no documentation.

If a bank was impolite enough to ask, 'Do you have a job?', the borrower could say, 'Excuse me. Are you prying into my personal life?'. The bank would then back off.

Nowadays, US home loans require a down payment of at least 20 per cent, up from 0 per cent two years ago.

Company loans are tough to get too, which has brought some businesses - especially in exports - to a near standstill. On the positive side, less debt means lower risks, so we will see fewer defaults in the future.

The problem is if a home or office building can't get financed, it won't be built. The same for a factory. Fewer things get made and GDP grows slowly, if at all.

It means, for the first time in history, our children may end up with lower living standards than their parents. We may have to go back to living 'the simple life'.

That was the name of Paris Hilton's reality TV show. Perhaps she can show us how to do it.

Good v bad risk

US$200 trillion in world wealth is small compared to the new centrepiece of this recession:

Derivatives

They are US$1,232 trillion, which is - get ready - US$1.232 quadrillion. A quadrillion is 1,000 trillion, or 1 followed by 15 zeros.

By the way, did you know that a googol is 1 followed by 100 zeros? That's huge.

Back to derivatives.

In June 1998, the underlying value of privately traded (over the counter) derivatives was US$75 trillion. Ten years later, it had grown to US$684 trillion. The other half of the story is exchange traded derivatives like futures and options. These come to US$548 trillion, bringing the grand total to US$1,232 trillion or US$1.232 quadrillion as of June 2008.

Here's how they work

Derivatives make it possible to bet on the rise or fall of interest rates, currencies, oil, food, metals and more.

Instead of buying gold, for example, you can make a bet with a counterparty that gold prices will go up. It is speculation (gambling) and it creates a new risk that wasn't there previously.

Derivatives can also reduce risk through hedging.

Do they reduce risk through hedging (good) or increase it through speculation (bad)?

We can get a hint by looking at the value of all derivatives. As explained, it stands at US$1,232 trillion, which is six times the US$200 trillion value of the world's wealth. It shows that something besides innocent hedging is going on since there is not that much wealth in the world to hedge. Speculation is likely.

This speculation is crowding out 'good' risk. For example, a bank giving a car loan produces risk, but it is productive since it results in someone owning a car. It boosts GDP. (Good.)

Derivatives speculation also produces risk but it is not productive. It does not add to GDP or the world's wealth. It only shifts it around through counterparty bets that are won and lost. (Bad.)

The move from productive to unproductive risk is a new development. It is a dark force that is unique to this recession.

01 May 2009

Trickle-down Economics

Read At the Polls, Icelanders Punish Conservatives.

...“It is the same poisonous philosophy that we had here, based on a lack of moral awareness and greed, and people who thought nothing of flying Elton John into Iceland for their 50th birthdays and paying him 70 million Icelandic kronur,”

Steingrimur Sigfusson, Iceland interim finance minister.

Photographs of bankers who left Iceland after the financial crisis have a new use in the restroom of a bar in Reykjavik, the capital.

27 April 2009