Monday, May 31, 2010

Euro woes: A crisis waiting to happen

May 31 2010

THE crisis in Greece and the debt problems in Spain and Portugal have exposed the euro's inherent flaws. No amount of financial guarantees - much less rhetorical reassurance - from the European Union can paper them over. After 11 years of smooth sailing since the euro's creation, the arrangement's fundamental problems have become glaringly obvious.

The attempt to establish a single currency for 16 separate and quite different countries was bound to fail. The shift to a single currency meant that individual member countries lost the ability to control monetary policy and interest rates in order to respond to national economic conditions. It also meant that each country's exchange rate could no longer respond to the cumulative effects of differences in productivity and global demand trends.

In addition, the single currency weakens the market signals that would otherwise warn a country that its fiscal deficits were becoming excessive. And when a country with excessive fiscal deficits needs to raise taxes and cut government spending, as Greece does now, the resulting contraction of GDP and employment cannot be reduced by a devaluation that increases exports and reduces imports.

Why, then, is the United States able to operate with a single currency, despite major differences among its 50 states? There are three key economic conditions - none of which exists in Europe - that allow the diverse US to operate with a single currency: labour mobility, wage flexibility and a central fiscal authority.

When the textile and shoe industries in America's north-eastern states died, workers moved to the west, where new industries were growing. The unemployed workers of Greece, Portugal and Spain do not move to faster-growing regions of Europe because of differences in language, history, religion, union membership, etc. Moreover, wage flexibility meant that substantially slower wage growth in the states that lost industries helped to attract and retain other industries. And the US fiscal system collects roughly two-thirds of all taxes at the national level, which implies an automatic and substantial net fiscal transfer to states with temporarily falling incomes.

The European Central Bank (ECB) must set monetary policy for the euro zone as a whole, even if that policy is highly inappropriate for some member countries. When demand in Germany and France was quite weak early in the last decade, the ECB reduced interest rates sharply. That helped Germany and France, but it also inflated real estate bubbles in Spain and Ireland. The recent collapse of those bubbles caused sharp downturns in economic activity and substantial increases in unemployment in both countries.

The introduction of the euro, with its implication of a low common rate of inflation, caused sharp declines in interest rates in Greece and several other countries that had previously had high rates. Those countries succumbed to the resulting temptation to increase government borrowing, driving the ratio of government debt to GDP to more than 100 per cent in Greece and Italy.

Until recently, the bond markets treated all euro sovereign debts as virtually equal, not raising interest rates on high-debt countries until the possibility of default became clear. The need for massive fiscal adjustment without any offsetting currency devaluation will now drive Greece and perhaps others to default on their government debt, probably through some kind of International Monetary Fund-supported debt restructuring.

The euro was promoted as necessary for free trade among the member countries under the slogan 'One Market, One Money'. In reality, of course, a single currency or fixed exchange rate is not needed for trade to flourish. The US has annual trade turnover of more than US$2 trillion (S$2.8 trillion), despite a flexible exchange rate that has seen sharp ups and downs in recent decades. The North American Free Trade area increased trade among Canada, Mexico and the US, all of which have separately floating exchange rates. Japan, South Korea and other major Asian trading countries have flexible exchange rates. And obviously, only 16 out of EU's 27 member states use the euro.

Despite its problems, the euro is very likely to survive the current crisis. But not all of the euro zone's current members may be there a year from now. In retrospect, it is clear that some of the countries were allowed to join prematurely, when they still had massive budget deficits and high debt-to-GDP ratios. Moreover, some countries' industrial composition and low rates of productivity growth mean that a fixed exchange rate would doom them to large trade deficits.

For the rest, some mechanism of enhanced surveillance and control may be adopted to limit future fiscal deficits. But even with a smaller group of member countries and some changes in budget procedures, the fundamental problems of forcing disparate countries to live with a single monetary policy and a single exchange rate will remain.

The writer, a professor of economics at Harvard University, was chairman of former US president Ronald Reagan's Council of Economic Advisers.

PROJECT SYNDICATE

Friday, May 28, 2010

Will Japan go the way of Greece?

May 28, 2010
EURO CRISIS

By Heizo Takenaka

THE Greek fiscal crisis has sent shock waves through markets around the world. In just two years, Greece's budget deficit jumped from 4 per cent of its gross domestic product (GDP) to 13 per cent. Now other European Union countries seem under threat, and the European Union and the International Monetary Fund are trying to stem the crisis before another nation trembles.

But the problem of excessive government debt is not confined to the EU. Indeed, Japan's debt-to-GDP ratio is around 170 per cent - much higher than Greece's 110 per cent. But despite the grim parallel, the Japanese government does not seem to think that it needs to take the problem seriously.

Last year's general election brought regime change to Japan. Mr Yukio Hatoyama's Democratic Party of Japan (DPJ) thrashed the Liberal Democratic Party, which had governed the country almost continuously for 50 years. But the Hatoyama government has ignored macroeconomic management and has abolished the policy board charged with discussing economic and fiscal policy.

Instead, the government has focused on increasing spending to meet its electoral promises, including a huge amount of new grants to households and farmers. As a result, the ratio of tax revenue to total spending this fiscal year has fallen below 50 per cent for the first time in Japan's post-war history. If the government continues on this path, many expect next year's budget deficit to widen further.
Despite the weakness of Japan's fiscal position, the market for Japanese government bonds (JGBs) remains stable, at least for now. Japan had a similar experience in the 1990s, the country's so-called 'lost decade'. Japan's budget deficit soared after the country's property bubble burst, causing economic stagnation.

But JGBs were mostly purchased by domestic organisations and households. In other words, the private sector's huge savings financed the government's deficit, so there was no capital flight from Japan, as there has been in Greece, despite the desperate budget situation.

But the situation has deteriorated recently, for two reasons. First, the total volume of JGBs has become extremely high relative to households' net monetary assets, which stand at roughly ¥1,100 trillion (S$17 trillion). In a mere three years, total JGBs will exceed this total. This suggests that taxpayer assets will no longer be able to back government debt, at which point confidence in JGBs is likely to shatter.

Second, Japanese society is ageing - fast. As a result, the country's household savings rate will decrease dramatically, making it increasingly difficult for the private sector to finance budget deficits. Moreover, an ageing population implies further pressure on fiscal expenditure, owing to higher pension and health-care costs, with all of Japan's baby boomers set to reach the age of 65 in about five years. The increase in social-welfare costs is expected to start around 2013, three years from now.

Given these factors, the JGB market will face serious trouble in the years ahead. After averting its eyes since coming to power, Japan's new government has finally started talking of tax hikes. One possibility is an increase in the consumption tax, which currently stands at 5 per cent - low in comparison with other industrialised countries.

But tax hikes alone will not close Japan's fiscal black hole. What is most needed is consistent and stable macroeconomic management.
Such management is possible. Between 2001 and 2006, then-Prime Minister Junichiro Koizumi aggressively tackled Japan's fiscal problems. Mr Koizumi sought smaller government and set clear numerical targets for fiscal consolidation, including a balanced budget in 10 years.

Surprisingly, Mr Koizumi was almost successful. Japan's primary deficit of ¥28 trillion in 2002 was reduced to only �6 trillion by 2007. If this effort had been continued for two more years, a primary budget surplus could have been realised. But Japan had three prime ministers in three years, and a populist trend in fiscal expenditure took hold.

What is needed most now is for the DPJ government to restore comprehensive economic management. A tax hike is only part of that. Without a strategy for growth, an effort to reduce government spending, and a policy to stop deflation, a tax hike will not be enough. Indeed, some economists fear a fiscal crisis could erupt even after a tax hike is passed.

Once that happens, the impact on the world economy will be huge. After all, Japan remains the world's second largest economy, accounting for about one-third of Asia's GDP, and 8 per cent of global output.

In some countries, lower military expenditures and interest rates have helped to improve a weak fiscal position. But in Japan's case, military spending is already low, as are interest rates. This suggests that fiscal rescue will be extremely difficult if and when trouble starts - underscoring the urgent need for political leadership now.

The writer was a minister under former prime minister Junichiro Koizumi. His portfolios included economics, financial reform and internal affairs and communications. He is currently director of the Global Security Research Institute at Keio University, Tokyo.


PROJECT SYNDICATE



[The norm seems to be for government to be short-sighted and to make populist policies to win elections and stay in power all the while mortgaging the future of the country. The democratic process seems to promote such short-sightedness, and encourage populist vote-buying. There should be a recognition that there are longer term issues that governments need to address, and that short terms goals or policies may be at odds with long-term security and well-being. And the democratic (or other political processes) should be tweaked or revised to address long term views.]

Tuesday, May 11, 2010

'Fairer' voting system is not always a better one

May 10, 2010

Political haggling will be the norm in UK under any new system
By Jonathan Eyal

THE inconclusive outcome of Britain's general election has prompted strong demands for radical change in the country's voting system.

An opinion poll for London's Sunday Telegraph indicated yesterday that half of all Britons wish to see a 'fairer' voting method.

Electoral reform is also the key objective of the third-placed Liberal Democrat Party, now being wooed by both Labour and the Conservatives in their bid to form the next government.

'It's in the interests of everybody in Britain for us to use this opportunity to usher in a new politics after the discredited politics of the past,' Liberal leader Nick Clegg told demonstrators in London over the weekend.

So it appears that the centuries-old first-past-the-post voting system that Britain exported to many of its former colonies - including the United States, India and Singapore - may be jettisoned. But the British will soon discover that reaching a consensus as to what should replace it is going to be difficult.

Britain's current voting procedure has the virtue of simplicity. The candidate who tops the poll in a constituency becomes an MP, and the party with the largest number of MPs forms the government.

The drawbacks are equally well- known. A party that regularly comes second in constituencies can garner a substantial number of votes, yet few seats. This has been the fate of Britain's Liberal Democrats, who won almost a quarter of the ballots last week, but only 9per cent of the seats.

And since constituency sizes vary, parties can win small ones with fewer votes. Last Thursday, the Labour party earned a parliamentary seat for every 33,000 votes it received, while the Conservatives needed over 35,000 votes.

For decades, such drawbacks were ignored because the British method resulted in the swift installation of solid governments. Hours after votes were counted, the new prime minister was in office, and he or she could generally expect five years of uninterrupted rule.

Not this time, however, since no party gained an overall majority. Unsurprisingly, therefore, the Liberal Democrats believe that the system is 'broken beyond repair', as Mr Clegg puts it.

But the alternatives are not obvious. There are plenty on offer, to be sure: from the simple allocation of parliamentary seats according to the proportion of votes each party wins, to elaborate procedures allowing voters to decide on a slate of candidates, choosing them in order of preference.

But none of these systems is completely fair. All produce 'wasted' votes that are either discarded or redistributed, regardless of people's intentions. And most will result in coalition governments, with small parties calling the tune. This is the case with Germany's Free Democrats, who have been in government for generations as the junior partner of either the Christian Democrats or the Social Democrats, despite never having attracted more than a fraction of the votes.

It's clear why Britain's Liberal Democrats aspire to a similar position. But it's more difficult to see why Labour or the Conservatives - who have taken turns in running Britain for almost a century now - should oblige.

Labour - which, in terms of parliamentary seats, suffered last Thursday its biggest electoral defeat since 1931 - is desperate to remain in office. Prime Minister Gordon Brown seems to be dreaming of a permanent coalition with the Liberal Democrats, which is ideologically closer to Labour, and has offered an immediate referendum on electoral reform.

It would seem an attractive offer for the Liberal Democrats, except that together the two parties would still not be able to muster a majority. Furthermore, whether the unpopular Mr Brown can head a coalition government remains doubtful.

A Lib-Lab 'progressive alliance', however, if it takes shape, may result in the Conservatives being kept out of power for generations. For precisely this reason, the Conservatives reject electoral reform. Instead, they offer a few changes, such as the creation of equal-sized constituencies, an elected upper chamber to replace the current House of Lords, and a 'commission' to discuss further reform.

The Liberal Democrats are not impressed. But the Conservatives are betting that the debate on electoral change will peter out. And they may be proven right.

For, although large numbers of Britons now support electoral reform, many remain puzzled as to why, days after the latest election, they still don't have a new government.

The simple answer is that secret haggling sessions between politicians will become the norm under any new electoral system. In a perverse way, Britain is already experiencing all the problems of a new electoral system - well before there are any changes.

So the Liberal Democrats have to tread carefully. If they insist on electoral reform as a precondition for supporting any new British government, they risk annoying the electorate. But if they support a government without getting a promise of electoral reform, they could end up with nothing.

A possible compromise may include a Conservative promise not to hold an early election. This could reassure the Liberals that electoral reform may be attempted at a later stage.

In effect, Conservatives and Liberal Democrats are hoping to wear each other out, with neither side sure of its chances.

jonathan.eyal@gmail.com

Monday, May 10, 2010

Goodbye, Tooth Fairy politics

Baby boomers will have to accept deep cuts to their benefits and pensions so their children can have jobs
May 10, 2010
by Thomas L Friedman

Sitting in America, it's hard to grasp the importance of the British elections and the Greek riots. Nothing to do with us, right? Well, I'd pay attention to the drama playing out here. It may be coming to a theatre near you.

The meta-story behind the British election, the Greek meltdown and our own Tea Party is this: Our parents were "The Greatest Generation", and they earned that title by making enormous sacrifices and investments to build us a world of abundance.

My generation, "The Baby Boomers", turned out to be what the writer Kurt Andersen called "The Grasshopper Generation". We've eaten through all that abundance like hungry locusts.

Now we and our kids together need to become "The Regeneration" - one that raises incomes anew but in a way that is financially and ecologically sustainable. It will take a big adjustment.

We baby boomers in America and Western Europe were raised to believe there really was a Tooth Fairy, whose magic would allow conservatives to cut taxes without cutting services and liberals to expand services without raising taxes.

The Tooth Fairy did it by printing money, by bogus accounting and by deluding us into thinking that by borrowing from China or Germany, or against our rising home values, or by creating exotic financial instruments to trade with each other, we were actually creating wealth.

Greek politicians used the easy money and subsidies that came with European Union membership not to make themselves more competitive in a flat world, but more corrupt, less willing to collect taxes.

Under Greek law, anyone in certain "hazardous" jobs could retire with full pension at 50 for women and 55 for men - including hairdressers who use a lot of chemical dyes and shampoos.

In Britain, everyone over 60 gets an annual allowance to pay heating bills and can ride any local bus for free. That's really sweet - if you can afford it.

But Britain, where 25 per cent of the government's budget is now borrowed, can't any more.

Britain and Greece are today's poster children for the wrenching new post-Tooth Fairy politics, where baby boomers will have to accept deep cuts to their benefits and pensions today so their kids can have jobs and not be saddled with debts tomorrow.

Mr David Willetts, a British Conservative candidate told me that the Tories' most effective campaign ad was a poster showing a newborn baby under the headline: "Dad's eyes, Mum's nose, Gordon Brown's debt." Beneath was the caption: "Labour's debt crisis: Every child in Britain is born owing £17,000 ($35,000). They deserve better."

What is most striking about the British election, said The Economist's John Micklethwait, was that it may be the first Western election "based on pain".

All the leading candidates warned voters that "cuts are coming", but none were even close to honest about how deep.

Here is how The Financial Times described it: "The next government will have to cut public sector pay, freeze benefits, slash jobs, abolish a range of welfare entitlements and take the axe to programs such as school building and road maintenance." Too bad no party won a majority mandate in the British elections to do this job.

After 65 years in which politics in the West was, mostly, about giving things away to voters, it's now going to be, mostly, about taking things away.

Goodbye Tooth Fairy politics, hello Root Canal politics. The New York Times

Sunday, May 9, 2010

The skinny on fat and heart risk

May 8, 2010
DAEDALUS

By Andy Ho

A RECENT story in the Scientific American magazine highlights a just-published study that found 'no association between the amount of saturated fat consumed and the risk of heart disease'.

Data from several studies had been pooled together to compare what people reported about their daily food intake with their likelihood of developing coronary heart disease (CHD).

However, nutritional studies based on self-reporting are always difficult to do well. This is because people, especially if they have weight problems, tend to be biased in their recall of what they eat. Pooling such errors together could magnify results even further.

After all, rigorous epidemiological studies have repeatedly shown that a high intake of saturated fats (and a special type of it called trans fats) is associated with heightened CHD risks. Saturated fats in red meat, dairy products and tropical oils are the main dietary causes of raised cholesterol levels.

A 2007 Lancet study pooling data on almost 900,000 subjects from 61 studies confirmed that as blood cholesterol levels rise, the incidence of CHD rises exponentially, and so too does the mortality rate from heart ailments.

The Scientific American report thus goes against well-attested facts. Next, it tries to show that not only are 'saturated fats... not so bad (but) carbohydrates could be worse'. The claim is that the real culprit in CHD is carbohydrates - starchy foods such as bread, rice, potatoes, pasta, noodles and so on.

That is the gospel of Dr Atkins' New Diet Revolution (2001). The bestseller led to a fad diet that Hollywood celebrities still rave about. The Atkins diet blames carbs for the world's obesity epidemic, and hence CHD.

Carbs, it argues, cause the body to overproduce insulin, a hormone that provokes hunger pangs, which leads to more eating. As insulin induces body cells to store excess carbs as fat, the kilos mount. So cut the carbs, insulin levels stay low, and less fat is stored.

In actual fact, proteins and fats both stimulate insulin production. Any excess of carbs or proteins or fats is stored as fat. That excess fat, whatever its origins, cranks out bioactive molecules (such as interleukin-6 and leptin). These molecules promote damage to the internal lining of arteries, which fosters atherosclerosis. This is why the obese face higher CHD risks.

This means an excess of proteins or fats is as bad as an excess of carbs, and vice versa. The Atkins scheme is wrong when it advises a diet of unlimited portions of protein and fat - pork chops, beef steaks, lard, butter - so long as virtually no carbs are consumed.

The Scientific American story quotes a 2008 study showing that Atkins dieters 'lost twice as much weight' as those on conventional low-fat diets. Indeed, several other studies have confirmed that Atkins does lead to more weight loss than the standard low-fat diet - at least initially. But this is not because of the carbs restriction per se.

Since protein satisfies one's appetite, there is little craving for carbs. Because the carbs reduction is so drastic, one's overall caloric intake falls compared to one's baseline. It is this reduced calorie intake that sustains later weight loss after the initial period in an Atkins scheme.

The body stores some carbs as glycogen in the liver and muscles. In the initial period of Atkins, with no carbs available, glycogen is burnt off to supply one's energy needs. But every gram of glycogen is bound to three grams of water. Thus, when glycogen is broken down, a lot of water gets excreted as well.

Continuing with the diet, a body deprived of carbs soon resorts to oxidising its own store of fat to help meet energy needs. This leads to the production of ketones, molecules with the ability to increase urine production.

Thus by causing water losses through both routes, a low-carb diet rapidly leads to a dramatic weight loss. This early weight loss and the diet's unusual character make Atkins an effective weight-loss diet.

However, it has now been consistently shown in many studies that Atkins does not outperform other diets in the long run. Several rigorous studies have found greater weight loss through Atkins than conventional diets in the first six months, but no significant weight difference over 12 months.

Studies do show that Atkins lowers one's triglycerides, fats also involved in CHD, and that it raises (good) HDL cholesterol. Critically, however, Atkins raises (bad) LDL cholesterol.

In fact, bad cholesterol typically decreases with weight loss in all diets - except low-carb ones. This is probably because of the extremely high intake of saturated fats through unlimited meat consumption permitted in Atkins.

It is now established that, when it is starved of carbs, the body overproduces methylglyoxal, a chemical that causes blood vessel and tissue damage. Heart rhythm problems have also been noted.

So is Atkins safe over the long run? Recently, two huge European studies that had followed dieters over a decade were published. In both studies, people who had been on low-carb, high-protein diets for years faced significantly higher risks of dying from CHD.

More deaths from cancer were also noted in one of the two studies. Taking too little grain, fruit and vegetables for years may have led to a higher incidence of cancer.

In sum, extended periods of carb deprivation could shorten lives. A low-carb diet and the consumption of excess saturated fats might be equally bad for one's health.

andyho@sph.com.sg

[All diets other than a balanced diet with regular and adequate exercise are just fads. You can't cheat nature and you can't cheat death. ]

Monday, May 3, 2010

Chinese Malaysians asking for too much

Apr 30, 2010

By Zaini Hassan

WHAT else do Chinese Malaysians want? Let us put aside the reasons why they do not support the current government in Kuala Lumpur. Let us study first what else they want.

For that, we have to go back to history. The Chinese came to Malaya to seek opportunities. They had lived a hard life in mainland China for hundreds of years. Like the whites who migrated to the American continent because it was the land of opportunity, the Chinese migrated to Malaya to make their fortunes in this bountiful land.

The strategy of their forebears has borne fruit. The Chinese have attained what they wanted. They now live in the lap of luxury in this land of opportunity called Malaysia.

In fact, it is not only in Malaysia that they have attained what they wanted. They have even gained full control of Singapore.

Singapore is not their original country. The Singapore Chinese and the Malaysian Chinese were originally boat people. The difference is that those who landed in Singapore managed to gain full control of Singapore, but those who landed in Malaysia did not manage to control Malaysia.

In Malaysia, the Chinese live in peace with the Malays, the indigenous people and the Indians. In comparison, in Singapore, the Chinese control politics and the Government. In Malaysia, the Malays still control politics and the government.

The systems of both governments are the same, but it is vice versa: The Malays dominate in Malaysia while the Chinese dominate across the Causeway.

In contrast, the Malays in Singapore and the Chinese in Malaysia are very different. The Malays in Singapore lead ordinary lives while the Chinese in Malaysia lead lives that are 'more than ordinary'.

In fact, former Malaysian prime minister Mahathir Mohamad once stated that if all the Chinese-owned buildings in Kuala Lumpur were lifted from the map, only the buildings in Kampung Baru, a Malay area, would remain in the city.

All the other buildings are owned by Chinese Malaysians. The well-known shopping centres in Malaysia are owned by the Chinese.

The Chinese Malaysians are fantastic. They control all the cities and major towns in peninsular Malaysia, as well as Sabah and Sarawak.

They produce the largest number of, and the most successful, professionals. The school system of the Chinese Malaysians is the best among similar school systems in the world.

The Chinese account for most of the students studying in the best private colleges in Malaysia. The Malays can gain admission into only government-owned colleges of ordinary reputation.

With regard to corporate and private organisations, it is the Chinese who dominate. The Malays number just a few; most of them are low-level employees.

In fact, knowing Mandarin is a pre-requisite for applying for jobs in these organisations.

Finally, an annual survey by the Malaysian Business magazine has found that eight of the 10 richest people in Malaysia are Chinese. The following is the list of the 10 richest people in Malaysia:

# Mr Robert Kuok Hock Nien

# Mr Tatparanandam Ananda Krishnan

# Tan Sri Lee Shin Cheng

# Tan Sri Teh Hong Piow

# Tan Sri Lim Kok Thay

# Tan Sri Quek Leng Chan

# Tan Sri Syed Mokhtar Al-Bukhary

# Puan Sri Lee Kim Hua

# Tan Sri Tiong Hiew King

# Tan Sri Vincent Tan Chee Yioun

This is the reality in Malaysia, my beloved country. Is the current government, which has been in power for 52 years, cruel and totalitarian? What else do the Chinese Malaysians want?

I think I know, and I think you know too.

This column first appeared in Utusan Malaysia on April 28.

[This article provides insights as to the perspective of some if not most of the Malays in Malaysia. Their view of history, their view of the Chinese and other immigrants as interlopers and invaders, and their sense entitlement and privilege.]

Saturday, May 1, 2010

I wasn't criticising S'pore, says US envoy

Apr 30, 2010

New ambassador says remarks on freedom not an attempt to meddle
By Jeremy Au Yong

COMMENTS he made about Singapore's political freedom two months ago had annoyed many here.

So Mr David Adelman, on his first day on the job as United States Ambassador to Singapore, spent much of his first meeting with the Singapore media mending fences.

Speaking at a press conference yesterday, he stressed repeatedly that his earlier remarks - on how he would use public diplomacy to promote political freedom in Singapore - were not an attempt to interfere in local politics.

He had earlier presented his credentials to President S R Nathan at the Istana.

The 45-year-old former state senator of Georgia said his statement was simply an expression of his pride in the American system. It was not a specific comment about Singapore.

He said: 'My comment is a comment that could be made by any ambassadorial nominee to virtually any post across the world, which is, we value the United States, our press freedoms, our freedoms of assembly and our multi-party democracy and we believe it's a great example of a working democracy that has been... a constructive force around the world.'

The contentious remarks were made in February at his nomination hearing. Asked if he intended to engage Singapore on the issues of democracy and press freedom, he had said: 'Make no mistake, currently Singapore is not a multi-party democracy, and I intend, if confirmed, to use public diplomacy to work towards greater press freedoms, greater freedom of assembly and ultimately more political space for opposition parties in Singapore to strengthen Singapore into a multi-party democracy.'

The statement riled many Singaporeans, with some writing in to The Straits Times Forum Page criticising what they saw as an attempt to interfere.

Responding, Mr Adelman said local politics would be for Singaporeans to decide.

Was he backtracking? Not at all, he said yesterday. 'I don't see the comments as being incongruent. We have no interest in interfering in the domestic politics of Singapore. That is for Singaporeans to decide for themselves.'

He also made it clear that his comments did not imply any long-held view of Singapore politics. He said he has had no contact with Singapore opposition members and was simply replying to a questioner who quoted surveys showing Singapore's low ranking when it came to political and press freedom.

[All he was doing was interviewing for a job. So you give the model answer in order to get the job.]

He stressed his top priority as ambassador would be trade, not politics. 'Trade and commerce will be the very top of my agenda. We will continue to promote fair trade policies as evidenced by the decision to actively engage in the TPP negotiations,' he said, referring to the Trans-Pacific Partnership, a four-nation free-trade agreement that the US is in talks to join.

Mr Adelman paid tribute to the friendship between the two countries and praised Singapore for its contributions worldwide. These include military contributions to troubled regions like Afghanistan, and humanitarian aid to Haiti.

He said: 'I want to be very clear here, Singapore has been a very constructive force throughout the world, and the US and Singapore are great friends.'

He added that US President Barack Obama had instructed him to get to know the 'high and humble' in Singapore.

The ambassador, who arrived three weeks ago, also said he, his wife and three children had been enjoying their time so far, getting to know Singaporeans and eating at hawker centres.

His favourite hawker food so far: nasi lemak at Adam Road.

[And so our media forgives him and provides us with a hook to get to like him and accept him - with a local food. I wonder if our foreign policy will be tagged this way: The US envoy - good friend. Likes Nasi Lemak. The British High Commissioner? The best! Likes durian. The Romanian diplomat? Bastard. Doesn't like local food. The mere aroma of durians make him retch. His favourite food is caviar and foie gras. Bastard.]