Saturday, June 30, 2012

In love with the little red dot

Jun 29, 2012

Ten years after giving up Belgian citizenship to become a Singaporean, Singapore Diamond Exchange chairman and Singapore FreePort co-founder Alain Vandenborre tells Susan Long why he is more smitten than ever with Singapore.


AS THE euro crisis deepens, Mr Alain Vandenborre's European friends, who once asked why in the world he would renounce his Belgian citizenship to become a Singaporean, are now seeking his help to relocate here too.

At least half a dozen have called him this past year and these include top-brass finance professionals who sit on global boards.

'Nobody questions any more, 'Why are you doing this?' Instead, they are all asking, 'How can I become a citizen?'' says the 51-year-old venture capitalist and entrepreneur, who has lived and worked in six countries, including Germany, Holland, France and China.

Each time, he hangs up the phone and 'smiles a little smile' to himself.

Love, he believes, has led him to all the right places. It was love, not low tax rates or 'any business consideration', he maintains, that made him apply for a chilli-red passport.

He first arrived here in 1995, on a short working trip as head of international development of French multinational GDFSuez. He was so smitten by the people, culture and values that he brought his family here to live in 1997.

After much soul-searching, deep discussions with Singapore's politicians and senior civil servants, reading all the seminal local history and policy books, and sitting in almost every parliamentary session for three years to understand the system up-close, he made up his mind.

He renounced his loyalty to Belgium and, with tears in his eyes, took up Singapore citizenship in 2002. He has since penned two books on why he took the plunge.

The first book, Proudly Singaporean, published in 2003, details his love story with Singapore and quotes chapter and verse from various ministers' speeches on the country's trials and triumphs.

His second, The Little Door To The New World, published in 2005, is a reply to his Western friends who told him he had 'made the wrong bet' and that Singapore would disappear with the ascent of China and India. It is a treatise on how Singapore will survive as long as it represents stability in a volatile world.

Of course, his great love exacted a cost.

After he traded nationalities, his son from his first marriage, who was then 15, gave him the cold shoulder. That was 10 years ago. Today, the 25-year-old is an aspiring politician who works for the Belgian Senate in Brussels. He was inspired to study political science, after sitting in the public gallery of Parliament with his father whenever he visited Singapore during his holidays. Every Aug 9, he now hangs the Singapore flag on his window.

'Like most young Europeans now, he is thinking whether he should move here for work,' says Mr Vandenborre, who also has a daughter, 22, from his first marriage, who is studying in Liege.

For the past 20 years, he has been married to Laurence, an art therapist and permanent resident here with Belgian citizenship. They have two sons aged 15 and 16 attending United World College here.

He will leave it to them to decide whether to do national service. 'We are a very democratic family. We try not to impose on our children our own systems and beliefs,' he says.

But for himself, he no longer 'feels safe' on the streets of Belgium or France. Recently, he was in Brussels, waiting for a meeting in a bank, and after 10 minutes of reading news ribbons on the Bloomberg screen - on job cuts, plunging stock prices, bank defaults and political impasse - he felt so depressed, he just wanted to get back on a plane home.

'I think that's what some people have lost in Europe now - a sense of belonging to their country because the system is falling apart.'

Luring the ultra-rich

OVER the past 10 years, he has put his money where his heart is. He is constantly thinking of new ways to draw the world's wealthy - many of whom park their money here - to Singapore's shores to 'interact with the system and values' he so adores.

In 2010, he unveiled the Singapore FreePort, a sleek, state-of-the-art steel, glass and concrete high-security facility, which looks like a setting for a sci-fi movie, in Changi North Crescent.

Modelled after the Swiss freeports in Zurich and Geneva, it offers wealthy collectors tax-free storage, as well as a place to display and sell their art, jewellery, antiques, vintage cars, carpets, wines, cigars and other collectibles. The 250,000 sq ft facility operates in its own duty-free zone next to Changi Airport, where the ultra-rich jet in, then pull up in chauffeured cars to 'visit' their Picassos.

It was built as a monument of his love for the little red dot, which he wants to propel beyond being just another offshore financial centre. Its intent is to attract a steady flow of the mega-rich, who would 'otherwise have little reason' to come to Singapore.

'Singapore has had too many wealth managers but too few wealth creators. It can't be a permanent magnet for wealth unless it has wealth creators and physical things that attract the wealthy,' he says, partially quoting one of his mentors, ex-permanent secretary Ngiam Tong Dow.

He notes that the difference between Hong Kong and Singapore, as far as wealth management is concerned, is that Hong Kong - a gateway to China - is comfortable with just being a large financial centre. 'In Singapore, we try to get people to come here and interact with our system and economy. It's not good enough to park funds to be managed here. We want you to invest in the economy and send your kids to school here,' he says.

'The FreePort concept helps because if you have money that is being remotely managed in a bank here, you might not come. But if you have a collection of artworks here, you will.'

At the end of last year, he took things up a notch and said it with diamonds.

Together with a few American and Israeli partners, he started an exclusive tender house, the Singapore Diamond Exchange, to get high net-worth investors with at least US$250,000 (S$322,000) to bid for the sparkling stones.

He is banking on the price of diamonds doubling over the next 15 years or so, because demand is growing at double digits annually, especially in China and India, but no new mines are being explored.

'It is a tangible asset and much less volatile than any other commodity or the stock markets,' he says, noting that nobody has succeeded yet in building up the precious stone as an investment product. 'It is a tremendous opportunity for Singapore to become the first market to do this.'

Over the past three years, he has also been working with government agencies here to transform an 'iconic heritage building here into a public art space', but is unable to say more till plans are firmed up later this year.

Living laboratory

FIFTEEN years on, he remains as 'driven by passion' and more besotted with Singapore than ever. It remains his muse and the ultimate 'living laboratory' to him. 'There is a mindset to look at every little idea as something with the potential to become a breakthrough,' gushes the man who was involved in the 2003 Economic Review Committee.

He cites himself and his wife, who have separately pioneered projects here, as 'living examples' of that. His wife has been a volunteer art therapist at Changi Prisons for the past 10 years, giving inmates an outlet of expression to deal with anger management and self-esteem issues.

They are now about to launch the Red Pencil, an international humanitarian art therapy foundation here which will help fund, train and deploy art therapists to Singapore hospitals to help long-term hospitalised or abused children, as well as attend to traumatised children in regional natural disasters together with the Singapore Red Cross.

This would have been tough to push through in the moribund Europe they left, with its crumbling welfare system and political deadlock, which 'has become heavy luggage to carry', he says.

But is his success because he has the ear of those in high places here? 'It's probably easier for me as someone new who comes from outside to be heard than a Singaporean voice,' he admits.

But he recounts how, when he first mooted the FreePort idea in 2005, his good friends here told him 'it will never happen'. He was requesting landmark concessions - land on the airport, free-trade zone status and simplified customs procedures for his high net-worth clients - from the Government. To his surprise, it listened, and agreed.

'So I think if you really come with an innovative idea, whether you're a new citizen or one born here, it doesn't matter,' he says. 'No one should believe I can cross every door at any level in the political sphere just because my name is known.'

But what he does loathe is the term 'foreign talent'. One of the reasons he took up citizenship was to stop that label being pinned on him. 'If I am a talent in any way, I am a local talent. I never liked this concept because it undermines the mindset of the people of Singapore,' he says.

Serial entrepreneur

HE OFTEN carries a little stone in his pocket which his Mum, now 77, who lives in Belgium, gave him. She had two rounds of brain surgery after an accident and recovered within three months through sheer willpower.

'When she was in hospital fighting for her life, I was sending her my mental energy through the stone,' he says. And when he feels down, he touches it to remind himself to 'think positive'.

At 15, the younger of two children of vegetable shop owners in Belgium lost his father to a traffic accident. Henceforth, he had to take care of himself and fund his own studies, which built up his adversity quotient. His hands bled from trimming trees as a forestry worker and waiting tables, which were his weekend jobs.

At 17, he went to the University of Liege where he studied astrophysics and won the National Young Scientist Award for developing a system that transmitted the Fifth Beethoven Symphony through a laser beam in 1977.

He went on to earn degrees in telecommunications engineering, finance and business administration from the universities of Brussels and Paris, with the help of scholarships.

In 1986, he started his first microelectronics company at 26, developing new laser direct writing technologies, sold it by 1990, then worked 10 years for various large multinationals overseeing banking and financial services operations in Asia, as a corporate strategy adviser and later chief financial officer.

After living here three years, he was inspired to return to his entrepreneurial roots. Among his successful ventures, he became a business angel to the late Chinese classical painter Chen Yifei in the China fashion market, and co-founded the private art dealership Ravenel Art Group based in Taipei, Hong Kong and Shanghai. But he confesses he has taken some big hits too and seen at least four companies go bust.

As such, his one criticism of Singapore is that it's not a forgiving country for those who fail. They become 'poster boys for the wrong reason'. But the keen equestrian has this advice: 'No matter how many times you fall from the horse, get back up as soon as possible so the fear of failure will not impede you.'

A little inequality is a good thing

Jun 30, 2012
politics 360

It provides a spur to work harder, but must not get in the way of social mobility

THIS may not sit well with many, but some inequality is good for society.

Inequality keeps a people striving to improve their lot in life. Sometimes too little inequality, with too many benefits, can be a disincentive to try harder.

Some have held up the Nordic countries as models of how economic dynamism and equality can go hand in hand.

But others disagree.

A study in 2006 by the Organisation for Economic Cooperation and Development found that higher unemployment benefits and higher taxes led to higher rates of unemployment.

Sweden's relatively more generous unemployment insurance benefits for low-income workers, who draw 80 per cent of their last salary, have also led to longer unemployment spells for these workers than in neighbouring Norway.

And what does it do for motivation when the more skilful architect makes only $2,000 a month more than the garbage collector?

Could these policies have had an impact on the youth unemployment rate in Sweden, which at 28 per cent is the second-highest in Europe, after Spain?

That is why Sweden's government has embarked on policy reforms to incentivise work by reducing income taxes, and to disincentivise unemployment by cutting back on the amount of time for which unemployment benefits are paid out.

American historian Tim Stanley of Oxford University says economic inefficiencies due to the pursuit of equality are real.

'We might speculate that a society that squeezes out personal ambition in favour of societal cohesion is bound to undermine a person's sense of autonomy and freedom,' he wrote, arguing against those in Britain and the US who have called for higher taxes and more social spending, like those in Nordic countries, to mitigate growing income disparity.

He added: 'The sad fact is that sometimes, the relentless pursuit of fairness in outcome imperils the creation of an atmosphere of opportunity. None of the (Nordic) countries are defined by the rags-to-riches meritocratic idealism that America aspires to.'

Singapore's political leaders have issued similar warnings. In his Budget speech last year, Deputy Prime Minister Tharman Shanmugaratnam said: 'The over-generous social entitlements (of developed countries) have progressively reduced the work ethic over time. Some of these developed countries are now undertaking painful reforms to gradually recover their economic dynamism.

'Our approach must, therefore, remain centred on opportunities, not entitlements. This is why we are focusing on helping the low-income group through education, employment and home ownership.'

While it may be easy to dismiss Mr Tharman's words as political rhetoric to justify lean fiscal spending, the evidence does back him up.

The key point here is the choice between equalising outcomes and opportunities. Which socio-economic system does Singapore value more?

Singapore's approach so far has been much closer to that of the US than the Nordic countries.

As an immigrant society, Singapore's history is one of men and women who arrived here with very little and laboured to make good.

One quality many Singaporeans seem to share is a desire to chase a higher status in life, resulting in a culture of 'keeping up with the Tans' perhaps.

But underlying any system must be a balance between equity and aspiration. For most of its short history, Singapore has managed to find that balance.

The concern now is that in the last 10 years, inequality has risen to such an extent that it may be hurting the ability of people at the bottom and the middle to move up.

Economist Joseph Stiglitz has sounded a warning of the same trend in the United States. In his upcoming book The Price Of Inequality, the Nobel Prize winner says too much inequality leads to a perception that the system is unfair, and to widespread mistrust of a government.

In Singapore, the Prime Minister himself has red-flagged social stratification as 'sharper than before', observing that 'the children of successful people are doing better, the children of less successful people are doing less well'.

The Government has moved to address the growing income gap through new measures to raise incomes at the bottom. These include higher income supplements and training support for low-wage workers, permanent help through GST vouchers and more health-care subsidies.

There is room for more to be done, but the experience of Sweden should give us pause, in view of the complexities of increasing benefits and equalising incomes.

While a government should certainly be compassionate, it should not take upon itself the role of equalising outcomes. The link between rewards, effort and talent needs to stay. It is what keeps members of a society competing and striving to improve - qualities that have helped Singapore to stand out.

What a government needs to do is to keep finding ways to provide opportunities so that members of every generation have a chance to move up.

I do not doubt that Singapore can both grow the pie and strike a better balance in sharing it. But it requires immense political and social will to keep experimenting, and to keep seeking better solutions even as there is fallout from mistakes that may be made along the way.

Just as Sweden has continuously improved its model, so must Singapore continue to evolve its own.

Thursday, June 28, 2012

The unhealthy politics of healthcare

America Divided

by Clive Crook

Todayonline Jun 28, 2012

Respectable opinion takes it for granted that you cannot have too much politics. The model citizen of a healthy democratic nation is above all "engaged" - informed, with strongly held views that he or she advances at every opportunity. Less politics means a passive, apathetic electorate. More politics must be good.

The United States, if you ask me, casts doubt on this truism.

Here is a country divided. The split is not just between Democrats and Republicans, between centre-left and hard right. The US is also divided between a political class and an apolitical class.

On one side, opinion shapers, policymakers and party disciples, engaged to the fullest; on the other, the bored and disenchanted, who have looked at the deeply committed and given up on Washington and all its works.

Here is the point, though: The sickness in US democracy lies less with the disengaged, whose boredom is forgivable, than with the model citizens who are all politics all the time.

As a practical matter, the disconnect is aggravated because American politics goes beyond Congress and the White House.

The civil service is also thoroughly politicised. Political appointees go several layers down across every agency of the executive. Even US courts are politicised.

This week, the highest court in the land - four conservatives, four liberals and a swing vote - will pronounce on the design of the country's health-care system.


Compared with that of other advanced nations, US civil society has a relatively shallow layer of non-aligned technocrats.

Its think-tanks, its economists, its scientists, its Supreme Court justices, almost everybody in the news media, almost everybody with an opinion about anything, take sides.

Any member of the political class with a firm view on campaign finance will probably have one on public borrowing, stem-cell research, incarceration, climate change, states' rights, you name it - and, strangely enough, all these views will probably conform to one of just two available conceptions.

Tell me whether the individual health insurance mandate is permissible under the Commerce Clause, and I'll tell you what you think about fiscal stimulus.

Total engagement, you could call it - and the result is total paralysis.


Of course, engagement did not have to mean faction, a distinction that the country's Founding Fathers understood very well.

But faction, sorting by party, is what we have got, and how. That is what political engagement means in the US. It has permeated every fibre of government and it is making the country ungovernable.

Granted, this pessimistic line of analysis has to contend with the standing of the US as the richest and most powerful country in the world. Maybe there is something to be said for all politics, all the time?

Actually, there is: That kind of government, together with a constitution that disperses power, either achieves dull centrist compromise or fights itself to a standstill - and in ordinary times, government limited by factional dispute and institutional friction works pretty well.

Moreover, since the Civil War, American patriotism has always united the country at moments of real peril. When this country aligns its efforts and resolves to do something, watch out.

The weakness of the system is in facing issues that are less dramatic, slower-acting and more complicated - but nonetheless capable of undermining the country's success and threatening its long-term prosperity. Healthcare, for instance.


The US healthcare system is a disaster. It fails in basic respects and at the same time is a crippling burden on the economy.

It costs nearly a fifth of the country's entire output - vastly more than what any other advanced economy spends. Yet, it cannot even guarantee coverage for all its citizens.

The Obama administration was absolutely right to confront this issue, and to make universal coverage the principal goal of the reform.

In my view, the Affordable Care Act takes big steps in the right direction.

I hope the Supreme Court upholds the law. But whatever the court decides, the reform is far from the whole answer.

Incentives in the proposed new system are still grossly misaligned. The measures to control costs are too timid.

In this case, you cannot say a more centrist approach would have worked better. President Barck Obama's reform is centrist to a fault. Its most controversial element - the mandate requiring people to buy insurance - is a Republican idea.

The complexity of the plan, which is its chief weakness, arises from the administration's goal of leaving existing insurance arrangements mostly in place. The President's pledge not to raise taxes was also intended to reassure.

In effect, Mr Obama promised historic reform without perceptible change. If voters found that prospectus hard to believe, you cannot blame them.


The problem was not too little centrism, it was too much politics - in the following sense.

Reforming healthcare self-evidently involves intensely political choices, but the issues are not exclusively political.

Getting to grips with such a complex issue also demands a widely accepted body of analysis. Never in control, but somewhere in the picture, must be the trusted non-aligned expert.

In this respect, the popularity of Mr Daniel Patrick Moynihan's saw that "everyone is entitled to his own opinions, but not to his own facts" is all too revealing. There is more to knowledge than facts, and more to wisdom than opinions. Those two categories do not exhaust the intellectual space.

Getting to grips with a policy question - especially one as complex as healthcare - requires not just facts and opinions, but also a body of agreed knowledge, of findings and understandings, to serve as a basis for discussion of choices. It requires disinterested analysis.

In the US, I am wondering, does any such thing still exist?

Ultimately, fixing the healthcare system will require a supporting consensus among the public. Without that, even if Mr Obama's reform is not repealed outright, it risks being strangled by a hostile Congress.

If the reform was popular in the country, it would have bipartisan support in Washington, and the Supreme Court would not even be thinking about overturning it.

Persuading the apolitical is vital, but it will not be easy as long as every expert is a partisan, every guide to policy an activist, every judge a politician and every pundit a team player.

Memo to the American political class: For democracy's sake, let us have a bit more thinking and a bit less engagement. BLOOMBERG

Clive Crook is a Bloomberg View columnist.

Tuesday, June 26, 2012

The Rise of Popularism

June 23, 2012

The New York Times

TRAVELING in Europe last week, it seemed as if every other conversation ended with some form of this question: Why does it feel like so few leaders are capable of inspiring their people to meet the challenges of our day? There are many explanations for this global leadership deficit, but I’d focus on two: one generational, one technological.

Let’s start with the technological. In 1965, Gordon Moore, the Intel co-founder, posited Moore’s Law, which stipulated that the processing power that could be placed on a single microchip would double every 18 to 24 months. It’s held up quite well since then. Watching European, Arab and U.S. leaders grappling with their respective crises, I’m wondering if there isn’t a political corollary to Moore’s Law: The quality of political leadership declines with every 100 million new users of Facebook and Twitter.

The wiring of the world through social media and Web-enabled cellphones is changing the nature of conversations between leaders and the led everywhere. We’re going from largely one-way conversations — top-down — to overwhelmingly two-way conversations — bottom-up and top-down. This has many upsides: more participation, more innovation and more transparency. But can there be such a thing as too much participation — leaders listening to so many voices all the time and tracking the trends that they become prisoners of them?

This sentence jumped out from a Politico piece on Wednesday: “The Obama and Romney campaigns spend all day strafing each other on Twitter, all while decrying the campaign’s lack of serious ideas for a serious time. Yet at most junctures when they’ve had the opportunity to go big, they’ve chosen to go small.”

Indeed, I heard a new word in London last week: “Popularism.” It’s the ├╝ber-ideology of our day. Read the polls, track the blogs, tally the Twitter feeds and Facebook postings and go precisely where the people are, not where you think they need to go. If everyone is “following,” who is leading?

And then there is the exposure factor. Anyone with a cellphone today is paparazzi; anyone with a Twitter account is a reporter; anyone with YouTube access is a filmmaker. When everyone is a paparazzi, reporter and filmmaker, everyone else is a public figure. And, if you’re truly a public figure — a politician — the scrutiny can become so unpleasant that public life becomes something to be avoided at all costs. Alexander Downer, Australia’s former foreign minister, remarked to me recently: “A lot of leaders are coming under massively more scrutiny than ever before. It doesn’t discourage the best of them, but the ridicule and the constant interaction from the public is making it more difficult for them to make sensible, brave decisions.”

As for the generational shift, we’ve gone from a Greatest Generation that believed in save and invest for the future to a Baby Boomer generation that believed in borrow and spend for today. Just contrast George W. Bush and his father George H.W. Bush. The father volunteered for World War II immediately after Pearl Harbor, was steeled as a leader during the cold war — a serious time, when politicians couldn’t just follow polls — and as president he raised taxes when fiscal prudence called for it. His Baby Boomer son avoided the draft and became the first president in U.S. history to cut taxes in the middle of not just one war, but two.

When you have technologies that promote quick short-term responses and judgments, and when you have a generation that has grown used to short-term gratification — but you have problems whose solutions require long, hard journeys, like today’s global credit crisis or jobs shortage or the need to rebuild Arab countries from the ground up — you have a real mismatch and leadership challenge. Virtually all leaders today have to ask their people to share burdens, not just benefits, and to both study harder and work smarter just to keep up. That requires extraordinary leadership that has to start with telling people the truth.

Dov Seidman, the author of the book “How” whose company LRN advises C.E.O.’s on leadership, has long argued that “nothing inspires people more than the truth.” Most leaders think that telling people the truth makes that leader vulnerable — either to the public or their opponents. They are wrong.

“The most important part of telling the truth is that it actually binds you to people,” explains Seidman, “because when you trust people with the truth, they trust you back.” Obfuscation from leaders just gives citizens another problem — more haze — to sort through. “Trusting people with the truth is like giving them a solid floor,” adds Seidman. “It compels action. When you are anchored in shared truth, you start to solve problems together. It’s the beginning of coming up with a better path.”

That is not what we’re seeing from leaders in America, the Arab world or Europe today. You’d think one of them, just one, would seize the opportunity to enlist their people in the truth: about where they are, what they are capable of, what plan they need to get there and what they each need to contribute to get on that better path. Whichever leader does that will have real “followers” and “friends” — not virtual ones.

Sunday, June 24, 2012

Comparing apples, oranges and S'pore

Jun 24, 2012

By John Lui

Whether the issue is the culling of wild boars, or the falling birth rate, or whether Sticker Lady is an artist or a vandal, or if the capping of mobile data usage is fair to users, there is a type of statement that is becoming much too familiar.

'This is why Singapore will never breed true creativity/a Steve Jobs/an artist like Banksy/ an affinity for nature. Our nation will never be a centre for excellence in high tech/the arts/making babies,' says the Angry Bunch.

And inevitably one or both sides use a uniquely Singaporean rhetorical tool: Comparing Singapore with another country.

Whenever I read that, I weep manly tears.

In a battle of wits, throwing out a national comparison is like flicking peanut shells at someone charging at you with a billiard cue, because there is a chance he may drop dead from a fatal allergic reaction. It is not an effective weapon.

For example, one side may say: 'Save the wild boars. In other countries, these animals are respected. Nay, loved!'

When I read that, I think of various unkind responses, among them, 'Why not you move there?' to 'In one country, they thought Kim Jong Il was a great leader and a snappy dresser' to 'Give those wild boars passports and get them to the airport, pronto!'

And that is just the least of it. At worst, you could end up scoring an own goal.

The Infocomm Development Authority (IDA) wrote to The Straits Times Forum page recently to explain that it does not interfere in commercial decisions, such as the one made by SingTel (and later, StarHub) to limit the amount of free data on mobile price plans. The IDA said that what SingTel was doing was part of a 'growing trend... by operators worldwide'.

Yes, it really makes me feel good to know that I will be soon enjoying the same amount of pain as users in the United States. Here I was, feeling really left out of the party!

Another reason why comparing Singapore with another country hardly ever works as a tool of persuasion is that it causes a lively debate to degenerate into the dullest social anthropology lecture ever.

One side will sell the virtues of another country's public transport or economic system. The other side will reply with the thing that kills a great, entertaining argument stone dead: statistics. A dull parade of numbers will be trotted out to show how that country's system could never work here.

Because countries tend to be large objects with long histories, containing many people doing different things, both sides will be able to find and fling statistics and facts at each other ad nauseam.

If that kind of debate were held in a hall, the audience members would have by then taken out their phones for a quick round of Draw Something.

But it can get much, much worse.

Someone will make a connection between a country doing Y, which resulted in X. According to my own meticulous statistical research (i.e. I Googled it), people who see cause-and-effect links between two national-scale events tend to be wrong 96.8 per cent of the time.

Saying that Singapore will never produce a Banksy because of harsh punishments for vandalism, or that we will never cure the problem of the low birth rate because of a lack of workplace benefits is a bit like saying that unless we make a ritualistic sacrifice of a cow now, the sun will not rise tomorrow.

Just because X follows Y, it does not mean that Y caused X to happen. Before we can say whether the Singapore environment can produce a Banksy or a Steve Jobs, do we even know what it is that gave Jobs his 'Jobsness', or gave Banksy his 'Banksiness'? Unless we can define their X factor, how can we hope to nurture it in people?

It is the same with encouraging a higher birth rate. Some think we will be awash in babies if we hand out days off like chicken wings at a barbecue. Two hundred years ago, my female ancestor in China probably gave birth to another ancestor, her 24th child, then awarded herself a sinfully extravagant two-hour vacation before picking up her shovel and going back to the rice fields.

Let's accept that Singapore is unique. We are not one race, our most spoken language comes from across the ocean and when we are stuck in a motionless blacked-out train carriage, we sit quietly texting our bosses that we may be a bit late. We are better than unique. We are weird and wonderful. So why compare?

Myths in the go-slow debate

Jun 17, 2012

Taking economy out of the fast lane may not be all it seems

By Chua Mui Hoong

Singapore is embarked on a national conversation about the model and pace of growth. But sometimes, the debate seems to be at cross purposes.

Take the issue flagged by Prime Minister Lee Hsien Loong on whether Singapore should go for strong growth when it can, or opt for a slower pace. He recently told members of the Economic Society of Singapore: 'I know that some Singaporeans welcome the prospect of slower growth. Some want us to slow down even below our economy's potential.

'They argue that we already have enough material success, and should give less weight to economic factors, and more to social considerations. And that we should spend more on ourselves, and put aside less for the future.'

There are two different questions here. The first is: what pace of growth do we want for Singapore? The second is distributive: what level of social spending can Singapore afford?

The answer to the first is surely obvious: As much growth as we can get, while we can, in a way that does not make life difficult for the more vulnerable.

Past framing of the issue as one between 'growth at all costs' and 'slow growth' is an injustice to both camps. In fact, the debate is riddled with three mutually distorting myths.

Slow growth, less stress

The first myth is that slower growth equals lower stress.

Slower pace of life, fewer foreigners to compete for jobs with locals, cheaper housing with lower demand - what's not to like, then, about slow growth?

But slower growth also means the economy will shrink, some businesses go bust, workers lose jobs. It is the vulnerable workers who will bear the brunt of a shrinking economy: the elderly worker, the middle- aged technician or saleswoman who has worked 20 years in the same small company that folded and may not get another good position. When you lose your job in your 40s or 50s, chances are high that you end up permanently under-employed. You may still get a job, but at lower pay, with reduced benefits and on contract, with reduced hours.

Without a national survey, I cannot say how many Singaporeans seriously want the country to opt for a slow growth path. Those who already have means may find a leisurely pace of life intellectually and emotionally appealing. But the average Singaporean heartlander is still at an aspirational phase: he wants a good job, pay rises, a nice home and prospects for his children.

I am willing to venture most Singaporeans, if asked, would be quite happy with going for growth while the country is able. So long, that is, as they share in the benefits of growth.

Fast growth is unequal, so slow is good

This leads me to the second myth in this debate: the idea that fast growth breeds inequality, and therefore slower growth is better.

It is true fast growth exacerbates inequality. When the economy booms, those earning $100,000 a year may find their income tripling as performance bonuses stack up. Those earning $1,000 a month may get a $50 pay rise. The gap between the top and bottom incomes yawns wider.

But the solution is not to stave off growth. Size and distribution are different concerns. You go for a larger pie first, and then you figure out how to slice it more fairly.

Going slow is a choice

The third myth is the notion that Singapore can choose to go slow or grow fast.

In fact, the choice will be made for us. As PM Lee noted, slow growth is unavoidable. You do not need an economics degree to understand that Singapore's mature economy is at a very high base, which means future growth will be slower. Its limited land and labour also constrain growth.

This is an accepted premise by all sides in this discussion. It is therefore important to understand what critics of 'growth at all costs' are lamenting. They are not saying Singapore should slacken. In essence, they are saying fast growth should be conditional on benefits being spread equitably, and on maintaining quality of life. So there is no point in going for fast growth of say 8 per cent if:

  • The benefits only go to those at the top, say, if incomes grow 8 per cent or more for those at the top, while the majority see their wages stagnate or even drop.
  • Wage rises are wiped out by rising prices. If cost of things like health care, transport and food go up by more than 8 per cent, workers end up worse off than before.
  • Growth worsens quality of life - for example if you need to bring in so many foreigners to grow 8 per cent that the city gets overcrowded, and housing costs go up beyond your affordability.

In other words, it is the impact of high growth, unmitigated by social policies, that is being faulted.

This is not the same as saying slow growth is preferred over fast growth. Rather, it is about saying: Go for growth that is balanced and sustainable, with benefits shared with the majority. If the alternative to 8 per cent growth is growth of 4 per cent, with real wage increases across the board and enough foreigners to fill jobs yet keep Singapore's pleasant living environment, then maybe Singapore should go for 4 per cent, this camp will say.

But in the end, these are hypothetical numbers. Economic growth is a function of inputs: with zero or minus population growth and low productivity, even slow growth will be a challenge. In this set-up, the debate over fast or slow is academic. As a price-taker in a globalised, cut-throat, capitalist world, tiny Singapore would be wise to take its growth when it can, and share the fruits of growth equitably.

Since a slower pace of growth is inevitable, I find it more meaningful to talk about how to prepare better for a world when jobs are harder to come by and incomes stagnate or even fall.

My own view is that our social safety nets have too many holes. The emphasis on self and family as the first line of defence against the usual life risks of unemployment, disability or disease worked well when real incomes grew steadily; the old age support ratio was high, with many young working folks per elderly person; and each successive generation was better educated, drew higher pay and could support their ageing parents.

Each of those three assumptions has broken down. Real incomes at the bottom and middle have see-sawed in the last two decades; the old age support ratio will plunge from six working adults per elderly today to two in 2030; and today's young born in the 1990s will start work and form families amid soaring asset prices, no longer assured of having a better life than their parents born in the 1960s who started on a much lower base.

There is an urgent need to rethink assumptions underlying Singapore's social policy approach, and do the hard policy work of coming up with alternatives, and the even harder political work of convincing people to buy into new kinds of social security programmes that share risks in a different way.

[So we should ask the empowering question: How can we have growth and a more equal distribution of the benefits.]

Wednesday, June 20, 2012

Is NIMBY flak an excuse not to engage?

by Eugene K B Tan and Patrick H M Loh

Jun 19, 2012 TODAYONLINE

The "Not In My Backyard" syndrome, or NIMBYism, has been very much in the news recently.

It has been singled out as the reason for the strong opposition to plans for a variety of facilities and amenities such as a nursing home (Bishan Street 13), a rehabilitation centre (Jalan Batu), an eldercare centre (Woodlands Street 83) and studio apartments for the elderly (Toh Yi Drive).

Are these "oppositionists" merely mindless NIMBY enclaves demonstrating reflexive opposition? Or is attributing such resistance to NIMBYism too simplistic, and an easy way out to dismiss such opposition?

Ordinary citizens should have a say in what happens in their community, for several reasons.

It contributes to active citizenship and a stronger sense of ownership of one's environment; town Councils were created in 1988 for that explicit purpose of getting residents involved in their own communities.

And while bureaucrats may know what is needed at a national level, they may lack the ground knowledge of how best to implement national-level initiatives at the precinct level.


In all four recent events, we see a well-coordinated effort by an apparent vocal minority to challenge and resist the location and construction of the amenities.

In the Jalan Batu case, this has motivated another group (often described as the "silent majority") to welcome the proposed rehabilitation centre. We should not be surprised by this robust debate in which different groups contest each other based on their competing, and sometimes conflicting, needs.

Indeed, this contestation will probably be the norm going forward. This means that there is an urgent need to develop the rules of engagement lest these differences of views result in divisiveness and confrontation. Respect, civility and lawfulness will be necessary.

But, it would seem, the dialogue sessions organised to discuss the relevant issues were characterised in some media reports as one group trying to railroad the other group.

While we cannot expect a total meeting of the minds - especially when participants have diametrically opposite start- and end-points - it would be a pity if participants and organisers alike proceeded with closed minds. Then a valuable platform to better understand and address the issues, concerns and fears would be lost - and deeper misgivings of the other party fostered instead.


To be sure, some NIMBYists were vocal and strident, making their presence felt at the dialogue sessions.

These residents are selfishly concerned with how such amenities might be detrimental to their property value and their enjoyment of the neighbourhood.

Often, their fears are fuelled by misperception and a lack of understanding of the proposed amenities or how they would fit into the community.

Then, there are the usual stereotypes and mischievous falsehoods perpetuated about such amenities. For instance, we hear of how people mistakenly associate nursing homes with hospices.

Neighbourhood communities also tend to prefer the status quo and be over-protective of their self-interests. But in this process, people may fail to consider the adverse consequences of their opposition, and end up limiting the possibilities for adaptive change to meet the community's evolving needs.


Singapore is rapidly ageing and the need for such amenities will only grow. We will all grow old one day; more of us are also growing old with fewer kin.

We will need to integrate such amenities into our immediate environs. Singaporeans ageing in situ, within the communities where they live, is the way to go - unless, as a society, we have become so callous that we treat the elderly as the 'new lepers' who ought to be consigned to the fringes of our urban landscape.

We should endeavour to see such amenities not as alien impositions on a settled community, but as contributing to its larger well-being.

It is crucial for the relevant government agencies to educate Singaporeans on the growing need and importance of facilities such as eldercare centres and studio flats. They should make more thorough efforts to enlighten people about the national plan for the entire spectrum of step-down care facilities and other community resources.

However, at the moment, the consultations and dialogues seem very much pro forma and ad hoc.

They fuel the common perception that the decision to situate these amenities, even if deferred, will eventually materialise. The authorities need to go further, to explain how decisions are arrived at and the trade-offs with each option.


As it stands, some local groups feel that they are being made to bear an unequal burden in these national initiatives. It is worth probing into and appreciating the source of their opposition.

We should not be surprised if some of this opposition stems from the feeling that there was a lack of genuine consultation and that their concerns were not addressed.

Such oppositionists are resisting the "done deal" mindset and want to ensure that their rights and interests are accorded due regard. Some of their concerns may be reasonable - for example, who would want more traffic in their area? Their voices should not be ignored, since addressing their concerns will help secure continual buy-in for the decision.

That is why accusing all oppositionists of NIMBYism is too simplistic and convenient, in our view. We should not be too quick to judge or to worry over a supposed moral crisis in our society.

Yes, certainly NIMBYism does exist - given Singaporeans' patent concern with the market value of their property, their most prized asset. And we should ensure this growing obsession with material value does not crowd out civic values, norms and practices.

However, given the vital nature of the amenities to be built, the genuine engagement of all stakeholders - including NIMBYists - is necessary so that these amenities are seen as a valuable community resource, and that everyone would be worse off without them. There should be a sustained effort to engage and win over the oppositionists.

How the decision-makers consult and engage is critical. Blaming NIMBYism simply short-circuits the buy-in process.

Eugene K B Tan is Assistant Professor of Law at the Singapore Management University and a Nominated Member of Parliament. Patrick H M Loh is Adjunct Professor of Strategy and Organisation at SMU and vice-chairman of The Citizens' Consultative Committee in Mountbatten Constituency, where Jalan Batu is located.

[There is a valid argument here: that powers-that-be should not use NIMBY as an excuse not to engage, not to explain, or not to persuade and convince. HOWEVER, there is no evidence that this has been done. It is NOT the case that in every issue where there has been opposition, the default mode was to shout "NIMBYism!".

Strawman argument.]

Witnessing the birth of a superpower

by Jonathan Watts

Jun 20, 2012 TODAYONLINE

When I moved to Beijing in August 2003, I believed I had the best job in the world: Working for my favourite newspaper in the biggest nation at arguably the most dramatic phase of transformation in its history.

In the past decade, it has given me a front-row seat to watch 200-odd years of industrial development playing at fast forward on a continent-wide screen with a cast of more than a billion. That said, I am glad my daughters were young and easy to please back then or we might well have taken the first plane out of the country.


We had come from Japan - a democratic, comfortable, polite, hygiene-obsessed, orderly, first-world nation - to the grim-looking capital of a developing, nominally communist country that looked and sounded like a giant building site.

It required an adjustment of preconceptions. The mix of communist politics and capitalist economics appeared to have created a system designed to exploit people and the environment like never before. And it was changing fast.

As swaths of the capital were being demolished and rebuilt for the Olympics, there was an exhilarating (and sometimes disorientating) sense of mutability. Everything seemed possible.

My focus has been on development and its impact on individuals and the environment. In 2003, China had the world's sixth-biggest GDP. On current course, it will replace the United States as No 1 within the next 15 years.

The primary driver for change has been the movement of people. Over the past nine years, 120 million Chinese people have moved from the countryside to the city.

This mind-boggling shift has its problems, but for the most part, China appears to have avoided the worst of the poverty, crime and ghettoes seen in other rapidly urbanising countries.

Yet it also seems more brittle, perhaps because of the other big economic engine: Infrastructure investment. There has been an extraordinary expansion of power, transport and communication networks that have linked the nation like never before, including a massive new electricity grid linking wind and solar power plants in the deserts to power-hungry consumers in cities and industrial plants.

This has been a decade of cement and steel, a time when economic development has pushed into the most remote corners of China with a series of prestige projects: The world's highest railway, the biggest dam, the longest bridge, putting a man into space, the most ambitious hydroengineering project in human history and, of course, hosting - and dominating - the Olympics for the first time.


I never expected China to be an easy place to work. For historical and geo-strategic reasons, there is a lingering distrust of foreign reporters.

Run-ins with the police, local authorities or thugs are depressingly common. I have been detained five times, turned back six times at roadblocks and physically manhandled on a couple of occasions.

Members of state security have sometimes followed interviewees and invited my assistants "out for tea", to question them on who I was meeting and where I planned to visit. The police have twice seized my journalist credentials, most recently on this year's World Press Freedom Day after I tried to interview the blind human-rights activist Chen Guangcheng in hospital.

When that happened, I debated with another British newspaper reporter about whether to report on the confiscation. He argued that it was against his principles for journalists to become part of the story.

I used to believe the same, but after nine years in China, I have seen how coverage is influenced by a lack of access, intimidation of sources and official harassment. I now believe reporters are doing a disservice to their readers if they fail to reveal these limitations on their ability to gather information.


Yes, there is often negative coverage and yes, many of the positive developments in China are under-emphasised. But I do not think it does the country's international image any favours to clumsily choke access to what is happening on the ground.

Treated like a spy, I sometimes had to behave like one. At various times, I have concealed myself under blankets in a car and met sources in the middle of the night to avoid detection.

At other times, it is Chinese journalists and officials who pull the screen of secrecy aside. Take the foot-and-mouth outbreak on the outskirts of Beijing in 2005. I was first alerted to this by a Chinese reporter, who was frustrated that the Propaganda Department had ordered the domestic media not to run the story.

Foreign ministry officials often tell me China is becoming more open and, indeed, there have been steps in that direction. But restrictions create fertile ground for rumour-mongering.

One of the biggest changes in this period has been the spread of ideas through mobile phones and social networks. The 513 million netizens in China have incomparably greater access to information than any previous generation and huge numbers now speak out in ways that might have got them threatened or detained in 2003.

Microblogs are perhaps nowhere more influential than in China because there is so little trust of the communist-controlled official media.


I will never forget the epic road trips - across the Tibetan plateau, along the silk road, through the Three Gorges and most memorably from Shangri-la to Xanadu.

Along the way, I met remarkable people with extraordinary stories. True to the oft-heard criticism of the foreign media, many were from the "dark side": A young man in Shaoguan who confessed to killing Uighur co-workers at his toy factory because of a rumour they had raped Han women; a gynaecologist in Yunnan who argued with great conviction that it had once been necessary to tie pregnant women up to carry out abortions.

Other stories literally turned up on my doorstep - such as the petitioner who arrived at my office a few weeks before I left. We had never met, but it was easy to identify Yang Zhong, who stood out a mile with his country boots, green overalls and bags crammed full of injustice. The look was all too familiar. I have lost count of the number of petitioners who have asked The Guardian to investigate land thefts, corruption cases, industrial accidents, rapes, murders and other alleged abuses of power.

Mr Yang had come from Jinshantun village in the far northern province of Heilongjiang to accuse a local forestry chief of illegal logging in one of China's last great protected forests and for having him locked up and beaten when he dared to complain.

Weak laws and strong censorship make it difficult for such people to have their cases heard in the domestic system so they turn to foreign news bureaus.


But there were also stories of success, heroism and inspiration: The business empires built by enlightened philanthropists such as Yin Mingshan of Lifan auto, the Internet fortunes accrued by entrepreneurs such as Jack Ma of Alibaba and Robin Li of Baidu.

Compared with nine years ago, people in China have more freedom to shop, to travel and to express their views on the Internet. The Communist Party tolerates a degree of criticism,but step over the invisible line of what is acceptable and the consequences are brutal.

In my first years in China, I interviewed several outspoken opponents - Liu Xiaobo, Gao Zhisheng, Hu Jia and Teng Biao. I was impressed back then that they were at liberty to speak out. It seemed like the act of a confident government. But all of them have subsequently been locked up and, in at least two cases, tortured.

The blame for that surely lies with the authorities. But I have sometimes felt pangs of guilt. I first interviewed Ai Weiwei in the summer of 2007 for an Olympic preview. He was one of the creators of the "Bird's Nest" stadium and I was expecting him to tell me how proud he would be when it was unveiled at the opening ceremony.

Instead, he told me he would not attend in protest at the "disgusting" political conditions in the one-party state and then launched into a withering assault on propaganda. It was the first time he had expressed such views to the foreign media - a great scoop, but also one fraught with risk.

At the end of the interview, I cautioned him: "Are you sure you want to say this? It could get you into a great deal of trouble with the authorities."

"Absolutely," he replied. "I only wish I could say it more clearly."

Despite that confirmation and the similarly critical comments he subsequently made to other media organisations, I felt partly responsible when Weiwei was detained last year.


Whether the repression is getting better or worse has been a constant question with few clear answers. My feeling is that China has become a less tolerant country since 2008.

That was a coming of age of sorts, when China stopped seeming like a work in progress and started looking and behaving like a superpower.

On the Beijing skyline, the scaffolding and cranes had been replaced by stunning architectural wonders. The ever-present sentiments of victim-hood and nationalism found powerful outlets in the Tibetan uprising, torch relay protests and the Sichuan earthquake.

Meanwhile, those who had supported moves towards a more open, liberal, internationalist China saw the value of their political stock plunge almost as fast as the Dow Jones index in the global financial crisis.

In the four years since, China has become a more modern and connected nation, but - despite the official hubris - it also seems more anxious that the uprisings in the Middle East and North Africa may spread.

The government now spends more on internal security than defence of its borders.

Little wonder. This has been an era of protest in China. Academics with access to internal documents say there are tens of thousands of demonstrations each year.

The reasons are manifold - land grabs, ethnic unrest, factory layoffs, corruption cases and territorial disputes.

But I have come to believe the fundamental cause is ecological stress: Foul air, filthy water, growing pressure on the soil and an ever more desperate quest for resources that is pushing development into remote mountains, deserts and forests.


This is not primarily China's fault. It is a historical, global trend. China is merely roaring along the same unsustainable path set by the developed world, but on a bigger scale, a faster speed. The worst problems are found in the countryside: "Cancer villages", toxic spills, health hazards from air pollution and water and the rapid depletion of aquifers under the north China plain - the country's bread-basket.

The implications are global. China has become the biggest greenhouse-gas emitter. For me, the most profound story of this period was the demise of the baiji - a Yangtze river dolphin that had been on earth for 20 million years but was declared extinct in 2006 as a result of river traffic, pollution, reckless fishing and massive damming.

I switched my focus to environment reporting. It was not just the charismatic megafauna and the smog, though the concern about air quality never went away.

As I have noted at greater length elsewhere, I had come to fear that China may be where the 200-odd-year-old carbon-fuelled, capital-driven model of economic development runs into an ecological wall.

Developed nations have been outsourcing their environmental stress to other countries and future generations for more than two centuries.

China is trying to do the same as it looks overseas for food, fuel and minerals to satisfy the rising demand of its cities and factories.

I sympathise with China. It is doing what imperial, dominant powers have done for more than two centuries, but it is harder for China because the planet is running short of land and time.


With their engineering backgrounds, President Hu Jintao (a trained hydro-engineer) and Premier Wen Jiabao (one of China's leading experts on rare earth minerals) are probably better aware than most global leaders about the challenge this poses.

While there has been almost no political reform during their terms of office, there have been several ambitious steps forward in terms of environmental policy, such as anti-desertification campaigns, adoption of carbon targets; eco-services compensation, and increased monitoring of PM2.5 (fine particulate matter) and huge investments in eco-cities. The far western deserts of China have been filled with wind farms and solar panels.

That is the most hopeful story of this grey era. If China could emerge from the smog with a low-carbon economy, it would be a boon for the world.


In the future, I believe the most important political division will not be between left and right, but between conservers and consumers. The old battle of "equality versus competition" in the allocation of the resource pie will become secondary to maintaining the pie itself.

But the transition has some way to go. In the next 10 years, China is likely to build more dams than the US managed in its entire history, and it plans to construct about 20 new nuclear power stations.

But even with this huge expansion of non-fossil-fuel-based energy, if the economy continues to grow at its current pace, China will require about 50 per cent more coal than it currently burns.

I expect there will be a slowdown before then as overseas markets contract and domestic investment suffers from the law of diminishing returns.

Meanwhile a new leadership - almost certainly to be headed by Xi Jinping and Li Keqiang - will take the helm at this autumn's party congress. They will have their work cut out. While the Hu-Wen era was one of construction, Xi and Li will have to put more effort into maintenance.

This will require more than the creation of wealth and construction jobs; it will require a system with greater flexibility, efficiency and a new set of values. I expect that transition will be more turbulent than anything seen in the past 10 years. But success or failure, I believe it will remain the most important story in the world.


Regardless of Beijing's choking smog, traffic and politics, it will be hard to match living and working in China.

On my final weekend in China, I went to Weiwei's grey-walled home in the Caochangdi art district. He was with his wife, two aides, a film crew and two lawyers, but as gregarious and mischievous as ever.

"It's hot. Let's take our clothes off," said Weiwei, who proceeded to strip to the waist. I was too shy to follow suit.

I could not stay. The China story was moving on again. News had just come in that Chen Guangcheng was at Beijing airport, about to board a plane to the US. After six years of house arrest and prison, he was finally flying to freedom.

I said my goodbyes and wandered home to write up what felt like an uplifting article to finish on. I knew though, that it was not really the end.

For all the hardship Chen endured, I guessed he would miss China. I certainly will.

This is a peak and perhaps one for mankind. THE GUARDIAN

Jonathan Watts will be based in Rio de Janeiro as The Guardian's Latin America correspondent from next month. The is an abridged version of a longer article.

Sunday, June 17, 2012

Growth for Singapore - Concerns and Considerations

Jun 16, 2012
Growth Potion No. 4?
The Prime Minister's defence of the pursuit of growth has stirred fresh debate on the right mix of economic gain and social welfare. In the first of a two-part series on economic growth, Political Correspondent Robin Chan delves into the issue.

SINGAPORE'S seeming ability to grow against the odds has been a hallmark of its economic development.

To spur growth, the Government has consciously driven change, in the 1960s through industrialisation, in 1985 - post recession - by making wages more flexible and cutting direct taxes, and then again in 2003, when it launched its third economic 'paradigm shift'.

From 1997 to 2003, the economy suffered a series of setbacks that included a debilitating Asian financial crisis, the post-Sept 11 gloom, a bust and the Sars public health crisis.

By 2003, the city state's economy was at a turning point, triggering a third paradigm shift centred on innovation and entrepreneurship as well as deregulation and liberalisation.

In a speech at the Economic Society in 2003, then Deputy Prime Minister Lee Hsien Loong asked for support for the latest round of restructuring, saying 'no system works forever'.

As National Development Minister Khaw Boon Wan explained recently, post-Sars, Singapore's economy was down in the doldrums. Unemployment hit 5.5 per cent in September 2003, which meant close to 100,000 people out of work, many of them for more than six months.

The Government looked hard for investments to create jobs, Mr Khaw said, but at first, these proved elusive. When the investments finally came, they came 'suddenly' and 'in a bunch'.

The Government made a call to 'take them', he said, even though it knew there would be both positive and negative consequences. New investments in pharmaceuticals, petrochemicals and casinos poured in. They were worth billions and created jobs. The economy added 124,500 jobs in the first nine months of 2006 - a major turnaround from just three years before.

But problems also surfaced - a growing income divide and the strain on infrastructure, from transport to housing.

That in turn has prompted some economists to ask if Singapore should still seek to grow as fast as it can when it can, or choose to grow slower because social equality is more important than economic gain.

The cost of growth

FIVE years ago, in 2007, private-sector economist Chua Hak Bin circulated a paper to economists to highlight a shocking new development - rising income inequality at a time of high economic growth.

The paper was initially met with scepticism from some. Dr Chua, now an economist at Bank of America Merrill Lynch, said there was discomfort over the questioning of Singapore's growth model, which had long been hailed 'as a success story'.

His paper contained data which showed wages for the lower-income groups falling, while those at the top soared.

Between 2004 and 2006, economic growth averaged 7.6 per cent a year, while the unemployment rate fell from 4.8 per cent to 2.7 per cent. Tax rates and employer Central Provident Fund contribution rates were also slashed to boost business growth.

But the bottom 30th percentile of income earners saw their incomes fall an average of 2.4 per cent a year from 2000 to 2005, as the top 30th percentile saw a 2.5 per cent average rise each year.

Dr Chua's paper quoted Prime Minister Lee as saying at the 2006 National Day Rally: 'When the conditions are good and the sun is shining, we should go for it, as fast as we can, as much as we can.' That signified a shift to an 'aggressive pro-growth attitude', Dr Chua said in his paper.

But that approach was creating a two-speed dual economy, Dr Chua pointed out - with a fast track for the rich and a slower one for the poor.

'Growth at the time was incredible, reaching 7 per cent to 8 per cent each year, but yet there was also a sense that it wasn't being well-shared, and that productivity growth was low, even negative,' he said.

'That is when it became stark.'

That paper was one of the earliest warnings of the dangers of Singapore's fast growth and liberal foreign worker policy.

Soon, more and more economists started talking about income inequality and over-reliance on foreign workers, even as Singapore's high-speed growth continued to win it praise worldwide.

It was one of 13 economic success stories studied by the Commission on Growth and Development led by Dr Michael Spence, a Nobel-prize winning economist, in 2008.

That same year, University of Michigan business school professor Linda Lim crudely surmised that the Government must have 'growth fetishism'.

She said Singapore's growth model has 'tried to do too much, and achieved too little', citing its desire to bring in many investments across different sectors. She pointed out that median income had stagnated, as the wage share of gross domestic product was at a very low 41 per cent, with the bulk of GDP going to firms in the form of profits.

The next year, Ang Mo Kio GRC MP Inderjit Singh said the Government should not pursue 'growth at all cost', a line he has advanced time and again despite it earning him a rap from Finance Minister Tharman Shanmugaratnam in 2008.

Mr Singh was worried that bosses of small and medium-sized enterprises (SMEs) were being hurt by rapidly rising costs and ordinary Singaporeans were seeing their wages stagnate due in part to the availability of cheap foreign labour.

But Mr Tharman said unequivocally in the Budget debate that year that the solution to income inequality cannot be to slow growth down. 'Our growth strategy in the past decade, was not wrong-headed. It illustrates the very real trade-offs we face in practice when deciding whether to allow the economy to grow rapidly and above its potential for a period,' he said.

'To do so indefinitely will lead to overheating. But it would have been ill-judged to prevent businesses from expanding in the name of avoiding rapid growth, even after having suffered a period of very weak growth in early years.'

But as inequality rose, the notion of 'inclusive growth' increasingly came to the forefront of discussions on economic strategy. Then Acting Manpower Minister Gan Kim Yong headed a sub-committee to look at exactly how to achieve that, as part of the Economic Strategies Committee, and it became a key plank of the Budget.

The debate has continued till today. Earlier this year, six economist penned a 41-page paper calling for a new social compact 'that achieves a better balance between growth and equity'.

Earlier this month, PM Lee defended the pursuit of growth, saying: 'Growing too fast generates growth pains and stresses and strains; growing too slow produces many other serious headaches.

'Without growth, we have no chance of improving our collective well-being. Far more countries worry about growing too slowly, than growing too fast. For Singapore, slow growth will mean that new investments will be fewer, good jobs will be scarcer, and unemployment will be higher.'

Picking up this line of thinking, National University of Singapore economists Tan Kee Giap and Tan Kong Yam argued recently that strategies to sharpening Singapore's international competitiveness and plug into the globalisation process 'are the only ways to maintain Singapore's first world living standard'.

'Slower growth is certainly not the way to ease social strains,' they added.

Why slow growth?

THE Government equates slow growth to losing out on opportunities for investments and good jobs - a vicious cycle that could even lead to a 'loss of optimism', said the Prime Minister.

But to others, such as Economic Society vice-president Yeoh Lam Keong, slow growth is dynamic, high-productivity growth.

It requires growth in skills, and mechanisation, and will lead to rising real median wages. But such higher-quality growth tends to be at a lower speed than low- skilled, cheap labour driven growth. Even the most productive, developed countries tend to be limited to 2 per cent to 3 per cent of higher-quality growth, he noted.

To incentivise such growth, labour force growth must be low - 0.5 per cent to 1 per cent a year, he said.

'If labour force growth is higher, then productivity growth tends to be depressed so you might end up with faster growth of say 4 per cent to 6 per cent, but with 1 per cent productivity growth or less,' he argued.

The Government has already taken steps to slow the inflow of foreign workers through lower dependency ratios, higher foreign worker levies and changes to S-pass and employment pass rules.

Manufacturing firms will see their DRCs - the maximum share of foreign workers in a firm's workforce - fall from 65 per cent to 60 per cent. In services, the ratio is being cut from 50 per cent to 45 per cent next month.

The phasing in of higher foreign worker levies started last year and will mean employers having to pay from $150 to $330 more per worker by next year.

The Government has shifted its position, but while it tries to boost productivity and limit foreign worker inflow, it also needs to manage the fallout. Businessmen and SME bosses in particular are feeling the pain and there is a risk that if the change is too abrupt, many firms will shut and leave Singaporeans out of jobs.

Mr Yeoh is of the view that the labour force should 'grow at its natural demographic rate, supplemented judiciously by skilled immigration plus a reasonable productivity growth'.

To others, slow growth means picking and choosing where and when to grow.

Mr Inderjit Singh suggests 'a balanced growth' strategy, which means looking more closely at the costs of growth and deciding when not to pursue growth opportunities. 'I think we are at a stage of development where we can be a little selective, although not everything may be in our control,' he said.

Former Singapore Exchange chief executive Hsieh Fu Hua suggests more help for domestic-oriented sectors such as restaurants and other non-exportable services, where wages tend to stagnate. 'We don't need to compromise on our growth engines. But we should make sure our other engines that were sputtering will get revived and get their own space,' he said.

So, for example, a hawker centre might not have the same economic value as a shopping mall, but it is an important part of the local economy and can be supported and promoted by easing its land and rental costs, he added.

Economic Society vice-president Donald Low said 'the mantra that we should grow first then worry about redistribution later, while appropriate for a previous era, is probably less so for today's context'.

Internationally, 'the prevailing economic wisdom' of the previous decade was that there is a global war for investments and talent, he said, and countries had to slash income taxes and trim social safety nets to make themselves attractive.

But now, there is a growing realisation that welfare spending, can ease the pain of economic restructuring and globalisation. Investing more in education and training to improve social mobility, for example, can help local workers adjust to more foreign competition and greater economic uncertainty, he said.

On Singapore's approach, he said: 'With the exception of Workfare... the paradigm is still very much that of a trade-off: that measures to increase social equity usually or even necessarily entail lower growth. This paradigm also explains the Government's general reluctance to take a more aggressively redistributive approach to public spending.'

Ultimately, growth is more about the choices made to get to it than the final number in and of itself, the economists said.

The Government has acknowledged the need to step up social spending significantly as the population ages and health-care costs rise.

Over the last five years, social spending rose from $13 billion in 2006 to $21.5 billion last year.

This will rise further, with plans to double spending in health care, and to increase the social safety net with a permanent GST Voucher scheme to help low-income households as well as to raise subsidies for medical care.

It has moved on this front despite its perennial worries about how financially viable a liberal system of social handouts might be, especially since these cannot be reversed easily.

The Prime Minister warned in his speech that more spending will require new revenues and higher taxes, a cost that many may not be prepared to pay. The hue and cry over the hike in GST from 5 per cent to 7 per cent in 2007 is a case in point.

Even so, economists point out that public spending is a conservative 17 per cent of GDP, much lower than many developed nations.

And there are those who argue that there are ways to increase public spending without raising taxes, such as tapping more of the net investment returns from the reserves. And a rise in taxes, say to 25 per cent or 30 per cent, justified by a need to help the less well off, might well be politically acceptable to the public, even if it does raise questions about economic competitiveness.

Citigroup economist Kit Wei Zheng said: 'The problems of the last five years brought out a deeper, broader issue related to the social compact and the political economy. These go beyond the realm of economics but penetrate to the fundamental, perhaps ideological, question of the kind of society that we want.'

Mr Manu Bhaskaran, economist at Centennial Asia Advisors, said: 'At the end of the day, what we want is a growth strategy that puts the average man at the centre, that generates visible benefits for the average Joe, not one that relies on some unpredictable trickle-down effects.'

Same destination

IT MAY seem at times that the Government and economists are headed down different paths, but their destination is the same.

The goal of both groups is growth that is sustainable, both economically and politically.

PM Lee himself made this clear when he addressed the Economic Society nine years ago. Economic restructuring can only work, he said, 'if Singaporeans feel that the system is fair to all, and benefits everybody over the long run'.

The present debate arises because they have differing views on how best to get there.

Tough choices... or are they?
It's not just the options - the questions matter too
By Leslie Koh

TRY putting your finger on one current hot-button issue - whether foreigners, Nimby, transport or housing, and up pops the word - 'trade-offs'.

It is almost a mantra now, used repeatedly by national leaders.

Most recently, Prime Minister Lee Hsien Loong laid out the trade-offs involved in opting for slower economic growth. He acknowledged that growing too fast causes 'stresses and strains' but warned that slow growth would mean fewer new investments and good jobs.

National Development Minister Khaw Boon Wan too said the Government had made the 'tough choice' of bringing in more foreign workers in 2005 and 2006, to draw investments and create jobs, although this led to the current infrastructure crunch.

'Sometimes we have to take a decision which has both negative as well as positive consequences. We have to weigh and make the trade-offs,' he said.

Indeed, this concept of balancing 'trade-offs' appears to be the basis of how Singapore tackles these pressing issues.

Essentially, the process seems to work like this: The Government lays out the stark choices that Singapore faces; it then tries to arrive at a consensus with the citizenry on which option to take - or it persuades them that one is better than the other.

Naturally, the final answer will not always go down well. There will always be a group of people who will lose out or remain unconvinced.

As Mr Khaw said in a recent interview with The Straits Times, voters need 'to understand the larger picture and accept the need for trade-offs'. On its part, the Government needs 'to explain more, engage more, and earn the trust and confidence of the people'.

In speeches and dialogues, ministers have been explaining the tough choices that Singapore faces, and trying to convince their audience that the Government is taking the better path.

That seems to be a fair approach to ensuring consultation while avoiding the policy paralysis that would result from trying to please everyone, which some countries are experiencing.

But the approach does not seem to be working too well, as each attempt to explain the trade-offs seems to bring on a new wave of anger and criticism.

Some economists, for instance, argue that the fears of slow growth are misplaced. Others argue that economic growth does not require a growing population or more foreign workers. Yet others contend that welfare and high growth are not exclusive.

Why is this happening?

One could argue that if such dilemmas were assessed rationally, surely the majority of Singaporeans would be able to agree on a line of action to be taken, if all the trade-offs are taken into account.

Yet that does not always happen. Could it be that many Singaporeans are not so much rejecting the choices, but the decision process itself?

One possibility is that many ordinary citizens feel that they have no part to play in how the country arrives at a final decision on such matters.

Despite the numerous feedback sessions and dialogues, it might seem to some that the Government has already decided, and that while their concerns are 'taken into account', these have no bearing on the final decision.

For instance, sceptics will cite the authorities' apparent insistence that Singapore has to keep growing its population, even though many worry over the overcrowding that will result.

Another possibility is that some question if the Government has framed an issue so as to skew decision-making in a particular direction.

In some issues, you could argue that it does ultimately come down to Option 1 or 2. If an eldercare centre needs to be built, the choices are pretty much mutually exclusive: If not in my backyard, then yours. But there are instances in which the trade-offs are debatable, or the choices not so conflicting.

For example, some economists have questioned the Government's stand on the need for strong growth. They argue that a slower-growing economy can still be dynamic while allowing for better distribution of wealth.

There are other instances in which some of the basic assumptions made in laying out the tough choices have come under scrutiny. For instance, while the Government believes that immigration is a surer way of keeping Singapore's population young, some academics are adamant that birth rates can be pushed back up, with the right policies to encourage couples to have more children.

Given the resistance that the Government seems to be facing in getting people to agree on which trade-off to accept or reject, perhaps the entire approach to obtaining consensus on such issues needs to be relooked.

Could some of these pressing questions be framed differently - and not as rigid choices that come with obvious warnings that one of them is plainly the bad one?

After all, it is not always the answers to the questions that raise the greatest unhappiness; it is also what the questions are.

Or could the thinking behind these issues be presented in greater detail, rather than boiling it down to simplistic, either-or options?

Perhaps the real challenge of making tough choices - if they indeed are - is not so much about getting consensus on the solution to a problem, but getting consensus on the understanding of the problem in the first place.

For the nation's leaders, that could mean relooking the way national issues are presented and opened to debate, and the way decisions are finally made.

For when it does boil down to a few options - as many problems tend to - Singaporeans do want to have a real say in the final decision, and not be told that one of them is not really an option at all.

After all, the thing about tough choices is that no matter how tough they are, there is still a choice.

Saturday, June 16, 2012

Hold that mammogram - it may not benefit all

Jun 16, 2012
By Andy Ho

THE commonest cancer in women here is breast cancer, which also has the highest kill rate.

There are, on average, 1,556 new cases of breast cancer and 370 deaths from breast cancer annually.

The 2010 Health Ministry guidelines urge all women between the ages of 50 and 69 to have a mammogram once every two years. The 2009 United States guidelines likewise recommend the same for women aged between 50 and 74.

Ardent worldwide pink ribbon advocacy has made it sacrilegious to say this, but these guidelines are overkill. Here's why.

In April, the National Cancer Centre Singapore (NCCS) published a study begun in 1994 that had followed 28,000 women aged 50 to 64 for a decade. It reported that women of all the three major races here with a close family history of breast cancer were twice more likely to get it than a Western female. But those with no such family history were at only half the risk of a Western female.

That is because mammography leads to 'overdiagnosis' in the lower-risk group who thus 'would benefit less from it', the NCCS said. Those in the high-risk group, however, should consult their doctors on its need.

The radiologist community immediately slammed the NCCS study as 'based solely on a single round of screening mammograms as opposed to the more robust Gail (US) model, which derived data from five annual rounds of screening mammograms across 29 centres in the US'.

But if the NCCS study has a reasonable basis, it is possible that the US model could lead to serious overdiagnosis rates.

In fact, both the NCCS and radiologists may have omitted to stress an even more important consideration in the debate.

When deciding on a screening method's utility, one must distinguish between death rates caused by breast cancer per se and death rates in breast cancer patients from all causes.

This is because women who have regular mammograms are likely to have the early, non-invasive form of breast cancer called ductal carcinoma in situ (DCIS) picked up. Some experts call it a very early breast cancer but others call it a precancer.

Left untreated, DCIS generally doesn't kill. Doctors cannot predict if it will get invasive. Hence, once diagnosed, it is invariably treated, for no woman who knows there is a cancer in her breast will do nothing about it. Because virtually all women are treated aggressively, no one knows what would happen if women opted to wait and see.

Doctors know so little about DCIS because it was not diagnosed before widespread mammography. Now its incidence has grown sevenfold compared to the 1970s, when doctors began using mammograms. Hence the 'overdiagnosis' that NCCS noted which leads 'to increased risks of unnecessary treatment or over-treatment' - that is, regular mammograms tend to lead to more surgery, chemotherapy and/or radiation. But these may lead to side effects and unanticipated complications that sometimes kill the patient.

With widespread mammography, the number of cases caught at more advanced stages hasn't dropped much at all, which a good screening test picking out early cases before they progressed should lead to. Instead, screening is picking up cases that need not be treated, namely DCIS.

One can infer that DCIS is very likely being over-treated by looking at the death rates in breast cancer patients from all causes, not just from breast cancer. This way, deaths caused by these side effects of treatment are included. And only this can tell if mammography is worthwhile. In short, count all deaths in breast cancer patients, for what matters is whether the patient lives, not what she dies from.

It was only over the past decade or so that researchers have learnt to distinguish the two. But in 1963, when the first trial of 60,000 women began in the US, this crucial difference was not recognised yet, which led scientists to conclude that, overall, mammograms saved lives.

Four other large trials at the time, also unaware about this point, also found support for mammography. This oversight has been blissfully perpetuated to this day by advocacy groups and their experts (who do know better).

In a massive 2001 meta-analysis involving 470,000 women, 'breast cancer mortality rate' was found to be 15 per cent lower in patients who had regular mammography. But their 'all-cause mortality rate' was no different from patients who had not.

This suggested that mammography could have led to enough fatalities from treatment (of DCIS) that overwhelmed the benefits of early detection. The biostatistician who led this study has produced other studies to buttress this finding.

The latest study (done by other scientists) showing this effect was published in October last year in the Archives of Internal Medicine. However, this crucial fact seldom trickles down into the media or the advocacy universe.

Earlier and regular screening disproportionately picks up DCIS that likely does not need to be treated but is anyway. One post-mortem study of women dying between the ages of 40 and 50 from all causes other than known breast cancer found that 40 per cent of them had DCIS that was detected microscopically only during the autopsy.

So these women died without ever knowing they had DCIS. If they had had a mammogram in life, it would have been picked up and they would have had unnecessary treatment that might very well have killed some of them.

So mammography is useful only if used hand-in-glove with an accurate predictor of risk. The NCCS study showed that family history best predicts a woman's risk: A female here with a mother, sister or daughter who has had breast cancer is at four times the risk compared to one with no such family history. For this group, regular mammography may be justified. For the latter - which would include most women in Singapore - it would seem unnecessary.

The sensible woman would of course do regular breast self-examination and see a doctor if any symptoms appear, such as discovering a breast lump or finding discharge from the nipple. For women with no family history and no symptoms, regular mammograms may not be particularly useful.

Why do physicists bash philosophy?

Jun 16, 2012
Physicists expand the circle, philosophers help clear up the paradoxes
By Jim Holt

A KERFUFFLE has broken out between philosophy and physics. It began when philosopher David Albert gave a sharply negative review in The New York Times to a book by physicist Lawrence Krauss that purported to solve, by purely scientific means, the mystery of the universe's existence.

The physicist responded to the review by calling Dr Albert 'moronic', and argued that philosophy, unlike physics, makes no progress and is rather boring, if not totally useless. And then the kerfuffle was joined on both sides.

This is hardly the first occasion on which physicists have made disobliging comments about philosophy. Last year, at a Google Zeitgeist conference in England, Dr Stephen Hawking declared that philosophy was 'dead'. Another great physicist, Nobel laureate Steven Weinberg, has written that he finds philosophy 'murky and inconsequential' and of no value to him as a working scientist.

And physicist Richard Feynman, in his famous lectures on physics, complained that 'philosophers are always with us, struggling in the periphery to try to tell us something, but they never really understand the subtleties and depths of the problem'.

Why do physicists have to be so churlish towards philosophy? Philosophers, on the whole, have been much nicer about science. 'Philosophy consists in stopping when the torch of science fails us,' Voltaire wrote back in the 18th century. And in the last few decades, philosophers have come to see their enterprise as continuous with that of science.

It is noteworthy that the 'moronic' philosopher who kicked up the recent shindig by dismissing the physicist's book himself holds a PhD in theoretical physics.

Physicists say they do not need any help from philosophers. But sometimes physicists are, whether they realise it or not, actually engaging in philosophy themselves. And some of them do it quite well. Dr Weinberg, for instance, has written brilliantly on the limits of scientific explanation - which is, after all, a philosophical issue. It is also an issue on which contemporary philosophers have interesting things to say.

Dr Weinberg has attacked philosophical doctrines like positivism (science should concern itself only with things that can actually be observed). But it happens to be a mantle that Dr Hawking proudly wraps himself in; he has declared that he is 'a positivist who believes that physical theories are just mathematical models we construct, and that it is meaningless to ask if they correspond to reality'. Is Dr Hawking's positivism the same positivism that Dr Weinberg decries? That would be an issue for philosophical discussion.

Physicist Roger Penrose is a self-avowed Platonist, since he believes that mathematical ideas have an objective existence. The disagreement between Dr Hawking the positivist and Sir Roger the Platonist - a philosophical one - has hard scientific consequences: They take radically opposing views of what is going on when a quantum measurement is made. Is one of them guilty of philosophical naivete? Are they both?

Finally, consider the anti-philosophical strictures of Feynman. 'Cocktail party philosophers', he said in a lecture, think they can discover things about the world 'by brainwork' rather than experiment. But in another lecture, he announced that the most pregnant hypothesis in all of science is that 'all things are made of atoms'.

Who first came up with this hypothesis? The ancient philosophers Leucippus and Democritus. And they did not come up with it by doing experiments.

Today the world of physics is in many ways conceptually unsettled. Will physicists ever find an interpretation of quantum mechanics that makes sense? Is quantum entanglement logically consistent with special relativity? Is string theory empirically meaningful? How are time and entropy related? Can the constants of physics be explained by appealing to an unobservable 'multiverse'?

Philosophers have in recent decades produced sophisticated and illuminating work on all these questions. It would be a pity if physicists were to ignore it.

And what about the oft-heard claim that philosophy, unlike science, makes no progress? As philosopher Bertrand Russell (no slouch at physics and maths) observed, philosophy aims at knowledge, and as soon as it obtains definite knowledge in a specific area, that area ceases to be called 'philosophy'. Scientific progress gives philosophers more and more to do. Said Nietzsche: 'As the circle of science grows larger, it touches paradox at more places.'

Physicists expand the circle, philosophers help clear up the paradoxes. May both camps flourish.


Jim Holt is the author of the forthcoming book, Why Does The World Exist? An Existential Detective Story.

Teacher tells students: You are not special

Jun 16, 2012

Speech to graduating high schoolers nudges them to go for real achievement


BOSTON - It took someone special to tell an entire cohort of graduating high schoolers the stark truth few wanted to hear - that they were nothing special.

Mr David McCullough Junior, an English teacher at Wellesley High School in Massachusetts and the son of Pulitzer-winning historian David McCullough, did that at a recent graduation speech, sparking widespread discussion in various forms of social media.

'None of you is special. You are not special. None of you is exceptional,' he said, pointing out that a total of 3.2 million students were graduating from over 37,000 high schools around the same time as those sitting in their graduation gowns before him.

'That's 37,000 valedictorians... 37,000 class presidents, 92,000 harmonising altos... 340,000 swaggering jocks, 2,185,967 pairs of uggs,' he said.

'Even if you're one in a million, on a planet of 6.8 billion, that means there are nearly 7,000 people just like you.'

Mr McCullough implied that the students' confidence, their carefully-bolstered self-esteem, may be unearned and undeserved.

He argues they are operating under a false impression of their own centrality and vividness. As he puts it, 'hundreds gasp with delight at your every tweet'.

His address does push students to recognise real achievement.

'The fulfilling life, the distinctive life, the relevant life is an achievement,' he said, encouraging graduates to 'do whatever you do for no reason other than you love it and believe in its importance'.

Although he tries to end on a more uplifting note and move the speech back into more conventional territory of inspiration and caring about others in society, the true heat of the speech is in its critique of the emergent generation he believes is overly managed, overly protected and exquisitely nurtured.

In comments that appear to be more directed towards parents than the youth he was addressing, MrMcCullough told the students: 'You've been pampered, cosseted, doted upon, helmeted, bubble- wrapped... feted and fawned over and called sweetie pie.'

In the school's YouTube channel, Mr McCullough added: 'You see, if everyone is special, then no one is. If everyone gets a trophy, trophies become meaningless...

'We have of late, we Americans, to our detriment, come to love accolades more than genuine achievement.'

The Boston Herald reported that his words were very well received by his audience.

The teacher, a father of four, admitted he was himself guilty of the actions he pokes fun at in his speech.

Towards the end of the address, he said: 'The sweetest joys of life, then, come only with the recognition that you're not special. Because everyone is.'

[Bravo, Mr McCullough! For pointing out that achievements are more important than accolades, and an achievement unrecognised and unappreciated is still an achievement, whereas an accolade undeserved is meaningless and empty. That self-esteem built on achievements is stronger than self-esteemed built on an autistic conspiracy.]