Tuesday, September 8, 2015

Singapore GE 2015

Rises from ash, Dominance and Fall from grace.

Remember this 3 stages by hard as they repeat again and again in few thousands years of human history.  We have completed the first two stages (from 60's to 90's) and now in the final stage.  Don't be shocked or try to deny it or prevent it from happening.  You can't do anything to change it !  Like it or not, the one that brought Singapore success 50 years ago still following the script only.

Come September 11, 2015, Singapore will decide who will be the next political party to run the country.  Again like it or not, that result should not spring any surprise but that doesn't mean good, so don't be too happy if you are the supporter of the eventual ruling party.

Since 2010, doubts have started to surface whether the ruling party is running out of ideas to guide the nation forward (both economic growth and resolving domestic and social issues) and till present, there is no strong evidences to negate those doubts.

From the macro perspective, global economy has started a fundamental shift in the 80's when China after a decade of Culture Revolution decided open up to outside world and develop its economy.  Well a country with a land area of 9.6 million km2 and a population of 1.36 billion, that impact is not something that can be ignored globally.  Ironically, that was Singapore last worth mentioned so-called vision from the ruling party as Singapore was one of the main consultant for China to build up its economy by largely mirroring Singapore successful economic model of ramping up the manufacturing sector and relying on exports to boost growth (a model that brought us to become one of the more advanced economy in South East Asia).  With the factor of "The right person in the right place at the right time" (天时地利人和) -- First in the knowledge of China developing, in the same Asia continent with only 8 hours flight separating it and the dual languages ability of Singaporeans to provide the link between China and the West, Singapore rode the wave of success from China till early 21st century with China eventually became the world 2nd largest economy.  The next shift was the maturing of internet technology in the late 20th and early 21st century.  Unfortunately, that was something not within the vision 50 years ago.  Nobody in those years knew what internet was and how it could change the life of people and global economy.  The latest shift was in 2010 when China decided to reform its economic model of heavily relying on manufacturing and export to a more consumer and services oriented model so that they could achieve a slower but quality and sustainable growth in the long run.  Regrettably, Singapore failed to pick up those fundamental shift promptly, made changes responsively and we ended up in a stage of still adopting an outdated but filled with flaws model to grow the nation.  When both China and US economy were still in a better shape last year, Singapore saw minimum benefits from it (which is not supposed to) but the recent slow down in China economy, we took hit and we are now one leg into technical recession.  Even as a net oil importing nation, the plunge in crude oil price since 4Q of 2014 failed to boost economy growth for Singapore which it supposed to be.

The proposed policies so far to bring us forward are increase the population size to 6.9m and increase the productivity of the workforce.  Questions were raised wondering will those really work ?  Firstly, how the 6.9m figure was derived, why we need that population size, how to accommodate that size when our land area is only 718.3 km2, what benefit can we expect from that size and what will happen if that turns out to be a mistake (you can't chase people out of the country to reduce the size right ?).  Those series of questions so far failed to get any convincing answers.  Next, for increasing productivity, if that is a prime policy, it should be implemented 10 years ago instead of importing foreigners in.  What if other nations also increase their productivity level then where is Singapore competitive edge again ?  The top-down approach of relying on external factors to grow the economy and later transcend down to make sure everyone benefit from it also didn't quite work out as it should be.  Our SMEs, the backbone of the nation businesses still very much underdeveloped when a very large majority of the workforce is with the civil sector and GLCs.

From the micro perspective, Singapore economic model in layman description is like a football team with speedie wingers, creative playmakers and lethal strikers (export, tourism, manufacturing, GLCs, etc).  Upon weak opponent (good economic condition), can easily ram in dozen of goals to make the scoreline very impressive but when matches up against a tough opponent (bad economic condition), we can't score goals and our midfield and defense (SMEs, agriculture, construction & retails sectors, etc) either missing or too weak that allow opponent to over run easily leaving us with the goalie (national reserve) as the last line of defense to save us for the day.  That is definitely something unacceptable !  Even Sun Tzu in his Art of Wars did not ignore the importance of defense and yet we do.  Global economy still remain fragile and out of sync as global leaders and Central Bankers still trying to find the right click to synchronize everything.  It has already happened for the past 7 years and now still no resolution.  It is uncertain when and how long it will take to finally get it resolve.  During these periods (if it takes a decade), global growth will be affected and Singapore is not immune to it.  This is the time that the economic defensive pillar (the defense and midfield of the football team) should come into picture as it will help to cushion the hit though cannot totally avoid it.  If instead we continue to push ahead measures to boost growth only and overlooking the strengthening of the defensive aspect then we will not be making much progression in the long run.  The growth cannot totally translate into the targeted benefits to the people and the people with the lack of the defensive cushion will even struggle more.  Effects like widening of incoming gap, unable to cope with rising cost of living and those already fallen behind fall even deeper will start to surface one by one.

For other domestic and social issues like rising cost of living, education system, health care system, CPF, infrastructure, etc, I won't be getting into detail as those ain't new issues and already being hotly debated in GE 2011.  Changes might have been made (after making so much noises then they realized they got it wrong) but still not good enough.  One issue I want to highlight here is the low fertility rate issue.  We are still way below the ideal of 2.1 despite the baby bonus scheme being more than 10 years old (in between enhancement was made to benefit 3rd and 4th newborn).  Now we will be seeing more improvement to the scheme but will it work ?  Well we might take another 20 more years to eventually hit the 2.1 target and I don't consider that as a success as we practically wasted 30 years to get it right.  Imagine for every 1 year we produce a shortfall of 10,000 babies then 30 years will be 300,000 of babies and that is not a small size that can be ignored.  Instead of finding the root causes (resulting from combination of past policies) and apply the appropriate solution (对症下药), we are just taking the easy way out.  Not producing enough babies is never all about money !

All those little signs are pointing to the fact that slow in reacting to changes and a lack of ideas to get the correct solutions.  That definitely is not something going to be good given that now after celebrated SG50, we are talking about SG100.  If we still continue to be what it is now, I'm afraid there will be nothing to look forward to 50 years later.  We need to get all the correct people regardless of political parties to run the country and definitely not those being specifically groom in the system (which the current education system is playing a big role in it) as they can never be able to see and think outside of the box (group think as some might label it).  Those method can never produce a true leader with vision but rather just a pseudo leader.

Technically speaking, there will be 3 possible outcome in the coming GE.

1. A coalition Government will form when not a single political party manages to win more than 50% of the 89 Parliament seats and there exist more than 2 political parties in the Parliament.  The word coalition might have scared off most of you but hey everything have its pros and cons.  Don't just look at the cons and ignored the pros.  True that policies might not be passed easily in the Parliament and at times it might end up with deadlock in which no solution will be proposed.  However, the positive aspect of it is we will have all the possible solutions being proposed to debate on.  This will start to wake up the complacency, taking everything for granted and very into comfort zone Singaporeans to start to contribute to build a better future.  Who know maybe such a situation will lead a mini crisis and a true leader with vision will be born (时势造英雄).  No pain no gain and we definitely need that badly and urgently now.  If we are mentally prepared for such a scenario, it might not be that bad.

2. A 2 or multi parties system in which the ruling party winning more than 50% of the Parliament seats but fall short of the 2/3 mark.  As such, non-controversial bills still can be passed as they only required more than 50% of aye votes while the controversial bills are not after failing to obtain 2/3 aye votes.  This on the surface might be the best scenario as we will not be getting a new Government that might rock the stability of the nation but be warned that any good proposals by opposition parties can be shot down easily and at the end of the day still don't benefit the nation as a whole.

3. A 2 or multi parties system but with ruling party winning at least 2/3 of the Parliament seats meaning the opposition is simply the minority and serve no impact at all when deciding on policies for the nation despite all those debates.  This simply is back to square one for Singapore and it is the worst outcome of the 3.

What Singapore needs now is change, dare to change and not afraid to change.  Put the nation interest above any of the political parties and remember Singapore is Singapore and not a specific political party.

A last piece of advise, regardless what's outcome of GE 2015, better look after yourself, build up your own safety net and not leaving everything to the Government, rocky very rocky road ahead !

Change itself is not destructive but not knowing, ignoring or failing to keep pace with it is ! 

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