Sunday, September 30, 2012

Public engagement: Helping citizens to 'think correctly'?

Sep 28, 2012

Deeply ingrained habits and mindsets about the public need to be shed for real engagement between the state and the public
By kenneth paul tan

THE language of public engagement is no longer foreign in Singapore's public service. Many senior civil servants speak it and do so quite eloquently.

But speaking about public engagement is quite different from carrying out public engagement.

There seems to be a gap between rhetoric and practice in Singapore. For instance, government officials recently met selectively with concerned members of the public to discuss a controversial decision to build a road through a historically significant graveyard.

When criticised for not taking the public's views seriously, the Government explained that the meeting was never meant to be a "consultation".

So it is important to ask why such a gap exists and why it might be difficult to close it.

First, the gap may exist for ideological reasons. Highfalutin descriptions of one's practice can be a nice way to obscure a rather more prosaic reality. Bureaucracy, after all, remains a necessary institution to tame and harness the chaotic energies of society and to rationalise and limit social variety as a means of establishing some measure of predictability and stability in a complex world.

To reassert control over rising democratic pressures while maintaining its legitimacy to do so, the public service may initiate public engagement exercises that are, in reality, forms of non-participation or tokenism at best.

The bottom half of the "citizen participation ladder", Sherry Arnstein famously argued, consists of efforts to manipulate, correct, inform, consult and placate citizens, a far cry from the citizen power that comes from partnerships, delegated power and citizen control.

In this sense, public engagement platitudes serve to disguise a basic reality that is resistant to change and power-sharing.

Second, the gap may exist simply because of real practical challenges that attend even the most genuine desire to engage the public. Here the gap is really between what public service leaders (and preferred public management gurus) may say their organisation should be and what the organisation at the rank-and-file level is truly capable of being.

It could take a long time before the practice catches up with the ideals expressed in the leaders' idealistic and sometimes even "revolutionary" rhetoric.

Mid-level and front-line officers, who are confronted by a different set of risks and rewards in their daily challenges, are likely to be more sensitive to the practical limitations in the day-to-day choices that they make.

Genuine public engagement is difficult to account for. The risks of failure, traditionally conceived, are high. And the work that it entails is much more complicated, troublesome, and slow in achieving results (which an officer needs to show at the end of each reporting year).

What will all of this contribute to a promising officer's career prospects? Celebratory talk at the elite levels of the civil service about inclusiveness could trivialise real concerns that anxious mid-level bureaucrats have about being able to reconcile the new-fangled rhetoric with traditional goals of efficiency, consistency and results in the practice of policymaking.

The gap between rhetoric and practice may exist because of deeply entrenched public sector mindsets rooted in Singapore's political culture, unique historical development, and the public mythologies that have nourished (or perhaps impoverished) our understanding of them.

Will a new generation of leaders in the public sector, whose horizons of experience may differ from the survivalist and developmental preoccupations of a previous generation, lead to fresh opportunities for new terms of engagement?

Although some officers speak grandly about its worth, others still find it difficult to envision a practice of public engagement beyond simply a public relations exercise; or a means of appeasing increasingly emboldened people who are essentially unreasonable and uncivil; or a necessary evil that can lead to the worst excesses of populism if not managed with care.

The elitist proclivities of the public sector, reinforced by top-level salaries that are comparable to the private sector's, are unlikely to incentivise real public engagement, since they reinforce the sense that public sector leaders, possessing superior intellect, knowledge and insight, must defend the public interest against irrational and dangerous mass populism.

The public, according to this mindset, needs to be educated to think correctly rather than present themselves as equal participants in policy formulation and implementation.

So how can we go beyond rhetoric and improve our political culture?

A deep cultural change is necessary to disencumber our minds of these rigidities. We need to return to the original spirit of pragmatism that made Singapore so successful in the first place.

Professor Neo Boon Siong has, for instance, argued for "dynamic governance" that involves "thinking ahead, thinking again, and thinking across". But culture is notoriously challenging to transform quickly.

There must also be a congruous incentive structure in place - designed not only to reward officers who take public engagement seriously and can demonstrate genuine progress in their efforts, but also to signal strongly its importance, in ways that go beyond organisational rhetoric.

We could commission studies that aim to identify appropriate indicators of successful engagement in the Singapore context, and develop tools for measuring them sensitively. We can adapt for our purposes the numerous models available around the world for evaluating public engagement.

Furthermore, there needs to be adequate training for public officers, and a repertoire of effective engagement strategies that they can adopt, so that they will have the confidence and competence necessary to engage effectively.

There are many case studies of successful and failed public engagement exercises from around the world that can provide concrete examples and inspiration.

We can begin to redesign our public administration in ways that can revitalise a sceptical public and a distrustful strong state - forging a new, complex, perhaps at times open-ended, and yet productive relationship based on an expanded mode of public rationality.

It will be a slow process, with mistakes and failures along the way: impatience for results and intolerance of failure are two habits that will have to be unlearnt.

The writer is Associate Professor and Vice-Dean (Academic Affairs) at the National University of Singapore's Lee Kuan Yew School of Public Policy and a member of the Our Singapore Committee, tasked to catalyse a national conversation on Singapore's future.

A longer version of this article first appeared in Ethos, the journal of the Civil Service College, Singapore.

Saturday, September 29, 2012

MTI and their "Foriegn Labour is Necessary" Report

Sep 28, 2012
Foreign workers and the voice of business

By janice heng

THE Ministry of Trade and Industry's (MTI) Occasional Paper on Population and Economy, released on Tuesday, seemed slightly out of character for the economic agency.

That is because the 23-page paper, which looks at the interplay between economic growth and foreign workers, was curiously light on fresh data analysis.

In contrast, an MTI article released in May was built around an econometric model and a data set covering thousands of firms. Researchers crunched the numbers to figure out if foreign firms in Singapore's manufacturing sector led to "productivity spillovers" in local firms. (Conclusion: No clear productivity impact.)

Another released in February breaks down the link between productivity and wages via a mathematical equation.

Compared with them, Tuesday's paper shed no new light on the current public debate on labour shortages and foreign workers, economists noted. "I expected them to give some sort of projection," said DBS economist Irvin Seah.

Minister for Trade and Industry Lim Hng Kiang has said, however, that the paper's aim is relatively modest. That is to merely to lay out the facts and explain to Singaporeans "the trade-offs between population and the economy".

[This may well be true, but the technocrats are again unable to speak the language of the masses. ]

To recap, the paper gets its starting point from the two main components of economic growth: growth in labour force, and productivity.

Singapore is already working on raising productivity growth, but it is labour force growth that poses a bigger challenge. The country's labour force participation rates are already very high and the population is ageing.

[Translation: Almost every Singaporean that can work is already working, and we are getting old, so we are not going to be able to have more Singaporeans working. So, we need foreign workers. Again, true. But again, not connecting with the general public.]

This is why foreign workers are needed to complement the labour pool, argues MTI. If Singaporeans decide against the import of foreign labour, they will have to contend with lower growth, which means lower real wages for workers. It will also mean costlier public services like health care, which will be hit by a shortage of labour.

Singaporeans have to choose which outcome they prefer, the paper suggests.

But since it didn't include robust analysis on real wage projections, or have data showing how slower growth would result in higher health-care prices, the paper came across less like economic analysis and more like an essay stating a point of view.

Perhaps the right way to view the paper, therefore, is to understand the context in which it is released.

The country is engaged in a wholesale review of public policy as it tries to figure out what sort of future it wants to have.

The issue of foreign labour has become particularly fraught in the last two years, with debate becoming politicised and dominated by the voices of those who oppose higher levels of inflows.

This might of course be a pushback from those who felt the last decade's pro-immigration and pro-foreign labour policies have gone too far in favouring business interests, leaving citizens to suffer the social impact of overcrowding and stiff job competition.

But there is every danger of the debate moving to the other extreme to ignore economic concerns. This prompted former Straits Times editor Leslie Fong to make a call in these pages for employers to speak up on the impact of a dwindling foreign labour force.

Seen in that light, the MTI paper provided a welcome balance in reiterating the economic imperative for foreign workers.

The Ministry of Trade and Industry is, after all, the champion of, well, trade and industry, and the ministry most seized by the need to spur growth.

There is thus merit in the ministry being open about taking a pro-business stance, and framing its paper as the economic case for continued, controlled foreign worker inflows. This is more candid than positioning the paper as a neutral background paper or mere "explanation" of trade-offs.

Businesses are already feeling the impact of a tightened flow of foreign workers. The shortage will bite deeper, given the Government's plans to build more train lines, flats, hospitals, nursing homes and eldercare centres, all of which will add to demand for more workers.

The MTI paper can thus be seen as the voice of business. Does this then mean the Government is too pro-business?

Here, it is important to understand that the Government consists of 15 ministries, each of which can be expected to have its own views and concerns on an issue, even as they all work for the good of the whole.

In a National Conversation meant for many voices, there might also be room for varied concerns within the Government itself.

As Second Minister for Trade and Industry S. Iswaran told reporters on Wednesday night, MTI is not "being prescriptive" about the population issue. "At the end of the day, it is a choice we have to make collectively, try and build a consensus around the path that we think is most suitable for Singapore looking ahead," he said.

Ultimately, a decision must be reached at the highest levels of government, in concert with the people, about the future of Singapore, including the foreign worker issue.

And MTI's paper is part of an engagement process that ensures all voices are heard.

Sep 26, 2012
Growth will stall without foreign labour: MTI

Local workforce is ageing and number will start to drop in 2020

By janice heng and toh yong chuan

THERE are limits to the growth of the local workforce in Singapore, and this will in turn hold back economic growth for the country unless foreign workers continue to be allowed in, the Ministry of Trade and Industry (MTI) has warned.

Its occasional paper, released yesterday, follows the National Population and Talent Division's July paper on population issues.

"What we're trying to do in this occasional paper is focus on the trade-off, or the relationship between population and economy," Minister for Trade and Industry Lim Hng Kiang told reporters ahead of the release yesterday.

According to the MTI paper, the local workforce will start to shrink in eight years, or 2020. This is because the number of working-age Singaporeans exiting the workforce will exceed those entering it.

One way to solve the problem is to get more locals to enter the workforce. A rise of one percentage point in the resident labour force participation rate - which is the proportion of working-age locals in jobs or looking for jobs - would add 30,000 workers.

But this cannot go on indefinitely, said MTI. Of local working-age men, for example, 92.1 per cent are already in the workforce - one of the highest participation rates in the world.

Moreover, Singapore's population is ageing, added the ministry. If not managed well, this could lead to lower innovation and productivity.

Singapore's current growth target is 3 to 5 per cent per year, of which 2 to 3 per cent is expected to come from productivity gains.

This means the local labour force must still grow 1 to 2 per cent, and attaining this with a shrinking local population means that foreigners are needed, said Mr Lim.

He noted that Singaporeans may well say that they do not need 3 to 5 per cent growth and would settle for 1 per cent. "Well, (if) that's the outcome of the exercise, then we just have to be sure that everybody goes into it with a clear mind, that they understand the trade-offs," he added.

[Stupid. Stupid. Stupid. Frame the question in this way and you can be sure that Singaporeans will say, "go slow, lah!"]

MTI also pointed out in its paper that the problem of how to deal with an ageing and shrinking workforce was not unique to Singapore. Germany is trying to attract skilled foreign workers and Japan is looking to relax foreign worker policy.

It set out five ways in which foreign workers are important to Singapore. These include filling the gap while locals are being trained for new and emerging industries, and doing jobs that locals do not want. MTI warned, however, that an overly liberal foreign worker policy could depress local wages, put stress on public infrastructure and leave Singaporeans feeling displaced.

[Stating the obvious. Or more precisely, re-stating the obvious and repeated complaints from the public. Again, stupid.]

DBS economist Irvin Seah said the MTI paper "lays out very clearly the ongoing debate" and Singapore's economic challenges, but did not shed much new light. With its technical expertise, MTI could have done a rigorous study and put numbers to scenarios.

National University of Singapore economist Hui Weng Tat felt the report did not quite prove that higher growth means better welfare for workers. He noted that some countries experienced the same real wage growth as Singapore, even though they had lower GDP growth. "The correlation is not very convincing," he said.

Wednesday, September 26, 2012

Exploiting the Prophet

Sep 26, 2012
By nicholas d. kristof

A famous photograph partly financed by taxpayers, Piss Christ, depicted a crucifix immersed in what the artist said was his own urine. But conservative Christians did not riot on the Washington Mall.

The Book Of Mormon, a huge hit on Broadway, mocks the church's beliefs as hocus-pocus. But Mormons have not burned down any theatres.

So why do parts of the Islamic world erupt in violence over insults to the Prophet Muhammad? Let me try to address that indelicate question, and a related one: Should we curb the freedom to insult religions that are twitchy? First, a few caveats. For starters, television images can magnify (and empower) crazies. In Libya, the few jihadis who killed US Ambassador Chris Stevens were vastly outnumbered by the throngs of Libyan mourners who apologised afterwards.

Remember also that it is not just Muslims who periodically go berserk, but everybody - particularly in societies with large numbers of poorly educated young men.

Upheavals are often more about demography than about religion: The best predictor of civil conflict is the share of a population that is aged 15 to 24. In the 19th century, when the United States brimmed with poorly educated young men, Protestants rioted against Catholics.

For much of the postwar period, it was the secular nationalists in the Middle East who were seen as the extremists, while Islam was seen as a calming influence. That is why Israel helped nurture Hamas in Gaza.

That said, for a self-described "religion of peace", Islam does claim a lot of lives.

In conservative Muslim countries, sensitivities sometimes seem ludicrous. I once covered a Pakistani college teacher who was imprisoned and threatened with execution for speculating that the Prophet Muhammad's parents were not Muslims. (They could not have been, since Islam began with him.)

I think a few things are going on. The first is that many Muslim countries lack a tradition of free speech, and see ridicule of the Prophet as part of a larger narrative of the West's invading or humiliating the Islamic world. People in these countries sometimes also have an addled view of how the US handles blasphemy.

A Pakistani imam Abdul Wahid Qasmi once told me that US President Bill Clinton burned to death scores of Americans for criticising Jesus. If the US can execute blasphemers, he said, why can't Pakistan? I challenged him, and he plucked an Urdu- language book off his shelf, thumbed through it, and began reading triumphantly about the 1993 raid on cult leader David Koresh's cult in Waco, Texas.

More broadly, this is less about offensive videos than about a political war unfolding in the Muslim world. Extremist Muslims like Salafis see themselves as unfairly marginalised, and they hope to exploit this issue to embarrass their governments and win public support. This is a political struggle, not just a religious battle - and we are pawns.

But it would be a mistake to back off and censor our kooks. The freedom to be an imbecile is one of America's core values.

In any case, there will always be other insults. As some leading Muslims have noted, Islam has to learn to shrug them off.

"Why should we feel danger from anything?" said one of the Islamic world's greatest theologians Nasr Hamid Abu Zyad before his death in 2010. "Thousands of books are written against Muhammad. Thousands of books are written against Jesus. Okay, all these thousands of books did not destroy the faith." A group called Muslims for Progressive Values noted a story in Islamic tradition in which Muhammad was tormented by a woman who put thorns in his path and went so far as to hurl manure at his head as he prayed. Yet Muhammad responded patiently and tolerantly. When she fell sick, he visited her home to wish her well.

For his time, Muhammad was socially progressive, and that is a thread that reformers want to recapture. Egyptian blogger Mahmoud Salem, better known as Sandmonkey, wrote that violent protests were "more damaging to Islam's reputation than a thousand so-called 'Islam-attacking films'".

He suggested that Egyptians forthrightly condemn Islamic fundamentalists as "a bunch of shrill, patriarchal, misogynistic, violent extremists who are using Islam as a cover for their behaviour".

Are extremists hijacking the Arab Spring? They are trying to, but this is just the opening chapter in a long drama. Some Eastern European countries, such as Romania and Hungary, are still wobbly more than two decades after their democratic revolutions.

Maybe the closest parallel to the Arab Spring is the 1998 revolution in Indonesia, where it took years for Islamic extremism to subside.

My bet is that we will see more turbulence in the Arab world, but that countries such as Egypt and Tunisia and Libya will not fall over a cliff. A revolution is not an event, but a process.


Framing THE Singapore Conversation

The country is about to embark on a public engagement exercise of unprecedented scale and scope. At the helm of Our Singapore Conversation are the rising stars in Cabinet. They will come face to face with thousands of citizens of diverse interests and expectations. The stakes are high. How is the start-up shaping up? Rachel Chang finds out.

Sep 15, 2012

AGAINST the backdrop of a serene Bishan-Ang Mo Kio Park, Prime Minister Lee Hsien Loong's National Day message last month was building up to something big.

After a bruising general election, a transformed parliamentary landscape and a slew of policy changes, Mr Lee wanted the country to take a breather - and go back to basics.

"We must ask ourselves some fundamental questions," he said. "What future do we see for Singapore? What kind of home do we want for our children? I believe all of us want to be proud to be Singaporeans, and to live in a successful country that meets our aspirations. What does this mean?"

To find out, he announced, a committee of younger ministers led by Education Minister Heng Swee Keat would be formed.

For some, the committee's sweeping mandate was an exciting opportunity to help shape the country's future.

Nanyang Technological University accountancy student Stanley Chia, 25, is one of the "ordinary Singaporeans" on the new committee and he is raring to go. "I have been gathering feedback from my classmates and friends and can't wait to share it with the ministers."

For others, the announcement of yet another engagement exercise landed with a thud.

"I cannot think of any other country in the world that forms as many committees," lamented former Nominated MP Viswa Sadasivan, who has sat on quite a few himself. "But there's the fundamental economic principle of diminishing marginal utility. We are seeing significant diminishing marginal utility of national committees."

Diminishing utility?

MR HENG'S committee is the third in 15 years to relook broad social policy, and to grapple with issues of identity, aspiration and national values.

What perhaps prompts scepticism is that its direct forebears - Singapore 21 in 1998, and the Remaking Singapore Committee (RSC) in 2002 - did not leave the sort of mark that the Government's economic committees are known for.

The Economic Restructuring Committee (ERC) of 2002, for example, ushered in a new tax structure, a retreat of government- linked enterprises so as not to crowd out the private sector, and even the casinos.

Its social counterpart, the RSC, made many recommendations that have been slowly realised over the last decade, like instituting a five-day work week, establishing a school for the arts, and the ceasing of prior vetting of performance scripts.

But initial attention, fairly or not, lingered more on what the Government outrightly rejected from its report. No, it would not let children pick which second language to study. No, it would not define OB markers for political discussion. No, it would not offer religious education in schools.

As for the Singapore 21 exercise, the nation's virginal foray into mass engagement, its report swiftly faded from view as the country turned its attention to a deep economic recession brought about by the Asian financial crisis.

As Ang Mo Kio GRC MP Inderjit Singh, who sat on both Singapore 21 and the ERC, sums up: "The Prime Minister didn't even bother responding to the Singapore 21 report in Parliament."

But Mr Heng, in his first statement on the new committee, made clear that he saw little connection with what had come before. For one thing, he avoided the term "committee" entirely, preferring "team", to describe the 26 men and women who will spearhead the process with him. He introduced a new phrase that will loom large in public consciousness for at least the next year. What he wanted to start, he said, was a "national conversation".

There are many aspects of the shape and scale of the exercise - officially termed Our Singapore Conversation (OSC) - that are indeed unprecedented.

It will be larger than ever before: almost 5,000 Singaporeans will be invited to focus group sessions, with thousands more engaged through new media. And that will just be in Phase 1, as citizens are asked, in small groups across 30 sessions, to ponder three questions in an open-ended, creative manner:
  •     What matters most to us?
  •     What are the values we hold in common?
  •     How can we work together to meet the challenges of the future?
It will also be unstructured, and strenuously "ground-up". Mr Heng wants to form sub-committees only in Phase 2, and these will be based on the themes that emerge from Phase 1.

This is in stark contrast to the Singapore 21 exercise, where five sub-committees each pondered a given "dilemma" - with trade-offs already baked in - such as "less stressful life versus retaining the drive," and "consultation and consensus versus decisiveness and quick action".

Unlike the previous exercises where political and community leaders engaged with citizens through a question-and-answer dialogue format, the OSC will see ministers even take on the roles of "facilitators" to the small group discussions in Phase 1.

Trained facilitators, some of whom will be civil servants, will shepherd each small group. But, at least one high-level member of the committee will be present at each focus group session, which will range in size from 50 to 150 people. When the participants break into small groups to discuss the three questions, the ministers may rove around, or even sit down with a group to facilitate and partake in the conversation.

And, in a move that has garnered the most attention, if not all positive, the OSC is more inclusive than ever before. The 26-man-strong committee or "team" has, among others, a taxi driver, a polytechnic student, and a Mandarin-speaking entertainer.

These choices have already been labelled as "token" by some online commentators - a sign, perhaps, of a major break with the past that Mr Heng's committee must grapple with.

The OSC exercise will take place against the backdrop of new and alternative media in full, fiesty bloom - what Minister for the Environment and Water Resources Vivian Balakrishnan, who headed the RSC exercise, calls "cycnicism amplified".

Already, criticism has mounted over the lack of opposition politicians on the committee, and the preponderance of People's Action Party (PAP) ones. Asked about this, Mr Heng said that the picking of committee members was "not a partisan exercise", and that opposition politicians' views would be welcome during the OSC process.

In the view of Institute of Policy Studies senior research fellow Gillian Koh, such disagreement need not be a roadblock for either side. "For those who do not wish to legitimate the process, it is well within their right to sit it out, or even set up their alternative platforms to do the same in a different way, with different groups.

"The outcomes will be different, and will in all fairness be treated differently than the official National Conversation," she adds. "But if they accept that, then they could go right ahead and run their own gig."

Not abattoir, but training ground

THERE is also disagreement over how the OSC exercise should be assessed.

The committee's ambition has been matched by outsized expectations from observers and the public, to the point where both PM Lee and Mr Heng, before the whole OSC committee even meets for the first time today, have felt the need to talk things down.

Mr Heng told reporters two weeks ago that the national conversation is not a "culling exercise" of sacred cows; it will seek instead to "reaffirm, recalibrate and refresh" national values and policies.

PM Lee also sought, a week later, to focus minds on the process, rather than the outcome: "We leave no stone unturned," he said. "But some stones, after we look at them, the original place was quite nice and we put them back."

Dr Balakrishnan, too, cautions against a "book-keeping exercise" of "how many recommendations did you get the Government to accept or how discontinuous was the change, or how many sacred cows were killed?"

The real value of such public engagement exercises, he argues, is in the space where everyone can come together to express their views, and then for a collective, coherent and consistent framework of "values, ideas and plans" to emerge: "which hopefully the majority of your population can accept and back".

To forge an overriding consensus on values that can stand above day-to-day political disagreement over discrete issues is a key priority for the OSC committee.

Equally essential to the Government, note observers, is the engagement exercise as a mechanism to profile - and baptise - its new generation of political leaders.

These mass exercises have always been headed by rising stars at the start of their political careers: the Singapore 21 committee was spearheaded by Deputy Prime Minister Teo Chee Hean and included Minister for Information, Communications and the Arts and Minister-in-charge of Muslim Affairs Yaacob Ibrahim and former Second Minister for Transport and Finance Lim Hwee Hua.

The RSC was headed by Dr Balakrishnan, and included Defence Minister Ng Eng Hen and Health Minister Gan Kim Yong.

With Mr Heng, Acting Minister for Manpower Tan Chuan-Jin, Acting Minister for Community Development, Youth and Sports Chan Chun Sing, Senior Minister of State for Education and Information, Communications and the Arts Lawrence Wong, and soon- to-be Senior Minister of State for Law and Education Indranee Rajah, the OSC committee includes the nucleus of the PAP Government's fourth-generation leadership.

Explains Dr Koh: "It is a way to give them full frontal exposure to public opinion, on not just the minutiae of public policy but points of principle and on what people value as citizens and in government."

It is also a "ready-made vehicle to let the new leaders meet the people", says National University of Singapore associate professor of law and playwright Eleanor Wong, who was on the RSC. "It'll help them figure out their own styles in the process and also helps the party leadership see who among the younger generation is good at reaching out and engaging."

"It's not a bad way to train them," she adds. "It's better than their spending the equivalent time sitting in a little room talking to one another."

The pace of change

MANY observers believe that there must be at least some major policy changes to emerge from the OSC exercise for it to satisfy the public.

"I'm all for public engagement as long as it's open-minded and results in solid outcomes. If in the end it's just tweaking around the edges, airy-fairy statements like 'Singaporeans want a harmonious society', then it will lead to deepened cycnicism," warns Mr Viswa. "People will, in the end, measure this based on concrete improvements to their lives."

Dr Balakrishnan argues that improvements will be the end result, as they were with Remaking Singapore, even if the changes do not occur straightaway - hence diluting their connection in people's minds. He points to how some of the RSC's recommendations, like giving the dependants of female civil servants the same medical benefits as those of males, are now so entrenched as to be unremarkable.

"Our efforts did not come across at that point of time as a sudden discontinuity from the status quo. But I think it encapsulated ideas, trends and an evolution of society that has been very evident in the last decade," he says.

"To me, that's a source of quiet satisfaction. It has made a difference in a quiet and effective way, and the fact is that we almost don't notice it. That's probably the way we hope change will evolve in Singapore."

In some instances, change has come about due to forces outside the scope of the committees' work. Both the Singapore 21 and RSC reports contained the recommendation, rejected by the Government twice, to "define political OB markers". This was because of the Government's tendency then to caution critics harshly that they should enter politics if they wanted to cross these markers in everyday discourse.

Now, as Holland-Bukit Timah GRC MP Liang Eng Hwa, notes, "recommendations have been overtaken by events". "People say whatever they want. It shows how fast Singapore has moved."

That rapid pace of change is, to Assoc Prof Wong, reason to consider "regularising" such exercises, and carrying one out every decade or so.

"Every mature country can benefit from a regular rethink of where it stands, a time it can take a step back and look at the fundamentals afresh," she says. "The Government might be doing itself a disservice to set it up as if this new committee will be more amazing and earth-shaking than anything that came before. Rather, let's treat it as something valuable that's just part of our political landscape."

Credit should be given to the Government for even sitting down at the table and opening the door wide, she adds, regardless of how disappointed some may be that their pet issues are not, in the end, addressed.

Recalling her time on the RSC, she says: "When Vivian called me up and asked are you prepared to serve? Funnily enough, for all my criticism of the Government, the moment he asked, I said yes. At the end of the day, we love this country, we need to move in good faith - because the alternative is worse."

Sep 16, 2012

What not to expect from the national conversation

By Dr Terence Chong

Conversations of all sorts rest on some basic expectations. You are expected to take your turn to speak. You expect to be listened to. You are expected to listen. These are the bare minimum for any conversation to get out of the starting blocks.

Wholehearted agreement is a rare yield that should not be expected as the inevitable outcome of conversations. Such an expectation can sometimes be too great a weight to bear, under which, perhaps, the Our SG Conversation, or the ‘national conversation’, has creaked.

Following the Prime Minister’s National Day Rally speech, Minister for Education, Heng Swee Keat, unveiled the formation of a nation-wide conversation. This national conversation will span a year, maybe longer, and comprise about 30 dialogue sessions, each involving 50 to 150 people. These dialogue sessions will be conducted in different languages and dialects. Complementing these sessions will be a survey of 3,000 to 4,000 citizens to be conducted at the end of this year.

There have been two types of criticisms shadowing the promotion of the national conversation.

The first type runs typically like this:  “Just another wayang exercise from the government. Yesterday the buzzword was ‘consultation’, today its ‘conversation’. Same shtick, different day”.

The second type goes like this: “No slaying of sacred cows… returning stones to their original place… no questioning of so-called “core values”, so many preconditions even before the conversation has started! Seems like the government has already decided what the perimeters are”.

Both criticisms are deeply valid and potentially damaging to the nation-building exercise. Expectations, after all, are perishable goods. When they die they return to haunt us as cynicism. If we fail to meet them often enough it would only be a matter of time before this cynicism, so much less desirable than healthy scepticism, spawns apathy and results in contempt for civic duties and activities. We would be a much poorer nation for it

To keep public cynicism at bay it is important to not to burden the national conversation with undue expectation. The warning of caveat emptor is as relevant to the national conversation as it is to buying used cars. In this light, perhaps it would be wise of us to be less suspicious and more open minded to the Prime Minister’s call for us to “manage expectations” and remind ourselves of what the national conversation is not meant to do, if only to save ourselves the bitterness of dashed hopes.

The national conversation is not meant for the government to discover issues and concerns that are occupying the minds and hearts of citizens.

To believe this is to imply that the government does not know what the ground sentiments are. Such a claim is plainly erroneous and a grave injustice to the long straggling tentacles of the People’s Association that have settled deep into the heartlands. Furthermore, from numerous public forums and dialogue sessions conducted by government leaders with students, professionals, and residents, not to mention the weekly meet-the-people sessions, Reach feedback unit, and last but not least, GE 2011, there have been plenty of opportunities for government leaders to grasp the issues stirring Singaporeans. 

The national conversation is not meant to be a consultation exercise to complement policymaking.

Consultation exercises have sharper objectives. The problem is identified, the consequences of the problem are made clear, the resources and options available are laid out on the table. Given the army of civil servants and administrative officers with the necessary data, information and statistics at their disposal to make more informed decisions, consultation is always going to be more of a public feedback exercise.  Furthermore, from the touchy-feely rhetoric on the official website (“We are defined by our shared Hope for the future, our Heart for one another, and our love for our common Home”), we seem all geared up to put Hallmark out of business.

But there is a more serious point to it. Citizens should be alert to the sway of sentimental rhetoric and the way it soars blithely over real issues such as the demolition of national landmarks as well as the numerous times “national interests” have been defined solely by the government. There may be a disconnect between feel-good rhetoric and actual policy decisions.

The national conversation is also not meant for Singaporeans to talk amongst ourselves.

I have heard some say that the national conversation gives Singaporeans the opportunity to come together to chat with the aim of getting to know each other better. Again, this is hard to reconcile because Singaporeans have always been talking to each other. Whether in coffeeshops, on facebook, online forums, or popular blog sites, there have been many self-carved spaces in which sub-national, self-regulated conversations have long been taking place. Conversations go on regardless of, many times despite, state orchestrations. It is part of the human condition.

These self-carved spaces have seen intelligent arguments, collective moaning, the occasional vitriol, and plenty of independent thinking, some sensible, some not, converge to result in a better awareness, if not understanding, of alternative viewpoints. One could argue that such self-carved spaces pack in more authentic conversations because of their grassroots origins where the undisguised angst over public policies like immigration or housing offer a more gritty and realistic response than bureaucratically filtered complaints ever could. After all, if you want to know what people in the coffeeshop are saying, you go down to the coffeeshop. You don’t bring it to you.

So, what are we to expect from the national conversation then? It would be prudent to keep our expectations low if only to open up the possibility of pleasant surprises down the road. More interesting perhaps would be how issues are defined and framed for discussion and the manner in which the government converses with its citizens. This would reveal the dynamic contours of the power-relationship between the two parties. Also of interest would be what new ideas the government would bring to the conversation. Just like we expect to be listened to, citizens will have to listen hard and critically to what government leaders bring to the conversation.

The author is a sociologist.

The Sin of Sowing Hatred of Islam

Op-Ed Contributor


New York Times, September 25, 2012

Two weeks ago, on the morning of Sept. 11, I noticed a woman wearing a traditional Muslim head covering on the packed platform of the train station in Scarsdale, N.Y. Her attention was focused on a billboard ad that announced “19,250 deadly Islamic attacks since 9/11/01” and pre-empted those who might dispute that claim with the refrain: “It’s not Islamophobia, it’s Islamorealism.” I could only imagine what she was feeling.

On another morning commute to Grand Central Terminal, I sat on the train with Yawar Shah, a Muslim friend from Scarsdale whom I met years ago at my synagogue when he would attend a bar or bat mitzvah service of his friends’ children. Yawar told me how painful these ads are to his family and what an insult they are to our community in Westchester County and to our way of life.

The American Freedom Defense Initiative is the group spearheading this provocative anti-Islam campaign. In July, a federal judge in New York ruled in favor of the group in a freedom of speech case, forcing New York’s Metropolitan Transportation Authority to place an ad that denigrates Islam in subway stations, and now, time may have run out for further appeals. It reads: “In any war between the civilized man and the savage, support the civilized man. Support Israel. Defeat Jihad.” Those ads went up Monday.

What is the message of this ad, directed at the multitude of subway riders of countless faiths and ethnicities?

By using the term “jihad” in the context of a war against savages, the ad paints Islam as inherently violent, evil and bent on overthrowing the Western democracies and their key ally in the Middle East, Israel — even though, for the vast majority of Muslims, “jihad” refers to a spiritual quest, not the more politicized idea of holy war.

Yes, these ads are lawful. But they are wrong and repugnant.

[Or to put it another way, "you have the right to express yourself, but you are wrong." To use a right (freedom of expression) to forment hatred is wrong.]
What other purpose can they have but to incite hatred against Muslims? In addition, they reinforce a terrible stereotype — presenting me and others who love Israel as people who believe themselves to be superior to Muslims. That characterization will only incite hatred of Jews, too.

Further, the group’s effort to co-opt our nation’s commitment to and support of Israel — a commitment embraced by countless millions of Americans of many faiths — suggests that if you love Israel, you must stand up for this distorted formulation of Islam. And it defines support for Israel with a false dichotomy between “civilized “ Jews and Muslim “savages.”

Israel is at the core of my identity. I am unshakably committed to Israel’s security. And I am not na├»ve about the real threats faced by Israel. We must unequivocally denounce and remain vigilant against terrorist attacks, whether from Al Qaeda, loners or states like Iran and the proxies it sponsors. But we must also defend against those who peddle hate, who would impose the sins of the extremists on more than a billion Muslims. They not only offend Muslims and those of us who value religious diversity and liberty for all; they pollute America’s own public square at a time when our society is desperate for civility and respectful discourse.

Fall in New York is always a special time for me. In addition to relief from oppressive heat, the brisk breezes of autumn herald new beginnings like the start of a new school year for our children. Fall also brings the Jewish High Holy Days, which offer America’s six and a half million Jews (of whom roughly one-third live in the New York area) a time to reflect on the past year and to rededicate themselves to a fresh start in their relationships at home, at work and with friends.

This fall, when religious hate speech appears in public places, when several mosques across the nation have been desecrated and burned, when Sikhs have been murdered, it is time for our nation to raise our voices in repudiation of all manner of hate mongering.

This Yom Kippur, we will once again read these words from Deuteronomy 11:26: “See, this day I set before you blessing and curse.” Those same choices are before us today. Let us, as a nation, reject the curse of hatred and instead choose the blessings of faith, acceptance, understanding and respect for all.

Rabbi Rick Jacobs is the president of the Union for Reform Judaism.

Tuesday, September 25, 2012

Immigrants don't steal jobs, inflexible labour markets do

Sep 25, 2012
Europe faces an unemployment crisis. But few politicians dare undertake labour market reforms which will hurt their re-election chances today, and show benefits only years later

By Jonathan Eyal, Europe Correspondent

THE numbers make for grim reading but nothing seems capable of breaking the unrelenting tide of bad news.

In the United States, jobless rates rose in more than half of its states last month, including seven of the 11 key swing states in this year's presidential election. At 8.1 per cent of the labour force, America's current unemployment is the worst it has been in decades.

Still, this pales in comparison with the 21 per cent unemployment rate recorded in Greece, or the 24 per cent registered in Spain.

Throughout the industrialised world, the plight of the jobless is not only an economic scourge, but a ticking political time bomb as well. Yet despite all the risks, politicians are still dithering, partly because the required solutions are not evident, but also because the political payoff is too remote.

The idea that the state either owes everyone a job or should be held responsible if people don't get one is relatively new. Still, it is so entrenched throughout the industrialised world as to be irrefutable. And failure is uniquely easy to quantify. If a government makes the wrong investment decisions on health or transport infrastructure, it may take years before this becomes apparent. But unemployment figures are published monthly and the slightest blip generates instant demands for a government's resignation.

No consensus has ever emerged over the core reasons for employment downturns. There is broad agreement that everything - from education and vocational training right down to trade, competition, taxation, investment and welfare - has a bearing on the problem, although the debate is hopelessly polarised by competing ideologies.

Still, some myths have been comprehensively demolished.

One is the assumption that the introduction of labour-saving devices automatically results in joblessness. Not necessarily: Britain's 19th century Industrial Revolution unleashed the biggest period of labour creation in human history.

Another myth is that in a globalised economy, jobs migrate to lower-cost countries and, once gone, are lost forever. Not true: Until a few years ago, the labour markets of most Western nations continued to grow, just as they were shedding manufacturing jobs to Asia.

And then, there is the argument that immigrants "steal" jobs from local workers. Again, no: The largest wave of immigration to Europe took place during the 1960s and 1970s, a period when the "Old Continent" continued to enjoy full employment. And Britain found work for an astonishing one million immigrants during the 1990s.

Conversely, however, a nation which has fewer job seekers because it is shrinking in size cannot necessarily expect lower unemployment. Birth rates throughout Europe are below reproduction levels but unemployment rates are at their highest since World War II.

None of this means that governments are powerless bystanders, for it is widely recognised that inflexible labour practices are major culprits. The share of social security contributions which employers have to pay are, in effect, a tax on jobs. In Germany, a company pays 17 per cent of a worker's gross salary in social charges. In France, however, the corresponding figure is 38 per cent. The result? France's unemployment rate stands at 10.2 per cent, double that in Germany.

The inability to dismiss workers in an economic downturn is another key obstacle. Germany got around this problem by pioneering legislation that allows employers to slash pay during a recession, in return for a pledge to keep employees on the payroll; in effect, workers trade the security of their earnings for employment security.

But elsewhere in Europe, this is taboo: Firing an employee in Spain is alleged to be more complex than seeking a divorce.

Trade unions do not help either. Despite their claims to "protect workers", their only interest is in defending those already in employment, rather than encourage the hiring of newcomers. That's a key reason why, on average, a fifth of those aged under 25 are without a job throughout Europe; in Greece and Spain, it's half. Even in the US, where organised labour is weaker, 17 per cent of young people have no jobs.

A faulty education system only makes a bad situation worse. Again, with the notable exception of Germany, most Western countries have abandoned any attempt to offer apprenticeships, so young people leave school with no vocational training. Half of Europe's teenagers now go to universities, but few of their degrees are in employable trades.

And then, there are the welfare payments which introduce perverse disincentives. In most European countries, it is actually more profitable to stay at home and collect unemployment benefits than take on a lowly paid job. That's why most street cleaners are still immigrant labourers, while unemployment is sky-high.

The political fallout from a prolonged period of unemployment is well known. The first result is a high degree of political volatility which precludes any serious decision making. Just ask the Spanish or Portuguese prime ministers, both of whom were recently elected with huge majorities although they had no government experience, but both of whom are already struggling to survive beyond their first year in power.

And the future can be scarier still. Long-term unemployment hits vulnerable communities hard. Even in Germany, the children of Turkish immigrants are three times more likely to be jobless.

Unemployment also increases the general sense of disenchantment with politics and breeds populist movements which reject the entire political system.

These could be fairly harmless - such as the campaigns to "occupy" public parks and financial institutions - but can also be more sinister, such as the extremist political parties now mushrooming in Europe, heirs to the fascist and communist dictatorships which destroyed the continent before.

Given such huge dangers, why are governments unable to take decisive action? Partly because the task of preserving existing jobs and that of creating new ones often require different policies which cannot be easily juggled.

But the ultimate reason for inactivity is that the political price which needs to be paid for implementing labour reforms is immediate, while the payoff can take many years to arrive.

The classic example of this is Britain's Prime Minister Margaret Thatcher who mustered the courage to tear up Britain's trade union-dominated labour market in the 1980s. It is by now largely forgotten that her country continued to suffer from a 10 per cent unemployment rate (similar to that in France today) for another decade; the real economic boom only came to Britain in the 1990s, to the benefit of the opposition Labour Party.

The same happened in Germany, where Mr Gerhard Schroeder, a socialist chancellor, was reviled for ramming through labour reforms which are now helping Dr Angela Merkel, his political opponent, to showcase Germany as one of the world's most vibrant economies.

A study completed by the Organisation for Economic Cooperation and Development, a club of rich states, earlier this year indicates that a full payoff from employment reforms takes, on average, about five years to materialise - too long for any politician.

In reality, not all countries currently afflicted by high unemployment figures are in the same predicament. The US labour market is far more flexible than Europe's. Americans are also used to moving in search of jobs and their nation has many other advantages (including that of a young population) to help it bounce back.

There is also the possibility that new technologies, such as additive manufacturing - or 3-D printing - will result in a return of jobs which once moved to Asia, the so-called "onshoring" which currently excites some US economists.

But Europe enjoys none of these advantages, and has to reinvent itself in the middle of a global economic downturn. The chances are, therefore, high that the armies of Europe's unemployed will simply continue to grow.

As the prime minister of Luxembourg, one of Europe's smallest and least-troubled countries, once memorably summed up the predicament: "We all know what to do; we just don't know how to get re-elected after we've done it."

[Good Policies Are Often Bad Politics.]

Monday, September 24, 2012

Tackling Singapore's labour crunch

Sep 22, 2012

Companies and consumers alike have no choice but to adapt to the labour shortfall that will be with Singapore for the foreseeable future. Janice Heng and Toh Yong Chuan report on the extent of the problem and possible solutions.

By Janice Heng And Toh Yong Chuan

MANY countries around the world create far fewer jobs than they have workers for.

Singapore's problem is different - it has more jobs than it can find workers for.

A report by the Association of Small and Medium Enterprises (Asme) this month sums up the situation: "There are still many jobs available out there for locals but many SMEs still have difficulty recruiting local manpower in the market and hence find it difficult to meet the foreign labour quota."

Since the end of 2009, the Singapore economy has added between 20,000 and 37,000 new jobs every three months. This is not matched by the number of locals entering the workforce.

For decades, the city state has been heavily reliant on foreign labour to top up its local labour supply. But since 2010, the Government has tightened the inflow, as foreign worker numbers had grown so large as to put a strain on public transport and housing.

The trouble is, locals shun certain jobs - namely those that are labour-intensive, low-paid and tiring.

Asme, which represent SMEs that employ two in three workers here, says: "Many locals are not committed and are unwilling to work especially in the lower-tiered jobs, such as drivers, waitresses, and so on."

Sectors that rely on foreign workers to do such jobs have been hit by tighter foreign labour policy. From July, the share of foreign workers which service firms can have has been cut from 50 per cent to 45 per cent. In manufacturing, it is now 60 per cent, down from 65 per cent. Foreign worker levies have also gone up.

But even sectors which do not rely on foreigners are feeling the strain. The security sector, which hires only locals and Malaysians, has a shortage of at least 14,000 guards now.

Dishwashers made the news when restaurant chain Sakae Sushi said it could not find locals willing to wash dishes for 12 hours a day - with breaks - and six days a week, for $3,000 a month.

And in Parliament last week, Environment and Water Resources Minister Vivian Balakrishnan said Singaporeans will have to return their trays at hawker centres and "learn to cope with fewer cleaners".He added: "There is going to be a structural and chronic shortage of cleaners in the future."

Yet more jobs

THE demand for workers is not about to dry up any time soon.

The Government's own projections point to tens of thousands of new jobs over the medium term in sectors such as transport, housing, health care and education, to meet the needs of a growing and ageing population.

With the ramp-up of flat building by the Housing Board, the total number of construction workers needed could hit 45,000 in the next few years, up from 18,000 last year.

Of similar magnitude are the needs of the health-care sector. With two more public hospitals on the way, along with more community hospitals and nursing homes, the sector will need 35,000 more staff in the next eight years. These include doctors, nurses and attendants.

Other sectors which will need thousands more workers are eldercare, childcare and hospitality.

The 200 new childcare centres to be built by 2018, for instance, will call for 1,000 more teachers.

And with 10,400 more hotel rooms expected in the next four years, the sector will need about 7,000 more workers.

In a market where labour is scarce, wages rise. Workers who can, will move to sectors that pay better. Firms too may move - in search of lower-cost labour. Indeed, more than 60 per cent of SMEs in Asme's recent survey were thinking of relocating to neighbouring countries where labour, land and raw material costs are lower.

Construction material firm Eng Seng Cement Products has already done so. It set up a factory in Kota Tinggi in Malaysia last month to make prefab concrete walls for Housing Board flats.

The firm's director Chow Hoo Choong took Insight to his sprawling factory about the size of a soccer field in Kota Tinggi. The typical daily wage of a Malaysian worker is RM40 (S$16), he said, adding: "In Singapore, a worker costs at least three times more, provided we can find them to hire."

The migration and phasing out of companies that are unable to become more productive and less reliant on labour is precisely what economists say should happen as an economy restructures, not just at the level of firms, but that of industries.

Professor Hoon Hian Teck of the Singapore Management University notes that such restructuring dates back to the late 1970s, when labour-intensive industries such as textiles made way for higher value-added ones such as pharmaceuticals.

The Singapore Business Federation's SME committee has suggested a one-off government grant to help firms relocate to lower-cost countries, while maintaining links to Singapore.

Mr Lau Tai San, a member of the committee, highlights several other interim measures that firms think will help.

They include:
  • A minimum age, say 50 years, for taxi drivers, so more younger and fitter Singaporeans will take up jobs as truck or lorry drivers, where there is a shortage;
  • Incentives such as lower foreign worker levies for companies that keep well below foreign worker quotas;
  • Allow companies to transfer their unused foreign worker quota to other firms in the same sector, so that the latter can, temporarily, have more foreign workers to ease their shortages.

"There is no shortage of ideas," says Mr Lau.

The long-term view

THE labour shortfall is here to stay.

Mr Lee Ark Boon of the Manpower Ministry (MOM), says Singapore's manpower crunch is "fundamentally a long-term issue" caused by a shrinking local labour force. "We have come to a point where our local working-age population is expected to start growing at a slower rate, and will eventually start to shrink within the next decade."

In May, the Institute of Policy Studies projected that if Singapore's total fertility rate stays at 1.24 and there are no new citizens or permanent residents, the local workforce will shrink from about two million in 2010 to 1.8 million by 2030, and below 1.5 million by 2045.

While immigration and foreign manpower add to the labour pool, the inflow has been tightened because of "social and infrastructural constraints", notes Mr Lee, who is MOM's divisional director for manpower planning and policy.

If a shrinking local workforce is not to translate into shrinking growth, either it will have to be topped up with foreign workers, or local workers must contribute more.

Asked about solutions, Mr Lee says: "The key long-term measure is to press on with economic restructuring and improving productivity."

The Government's target is for productivity growth of 2 per cent to 3 per cent a year this decade, though Acting Manpower Minister Tan Chuan-Jin said this month that remains a "stretch target".

Deputy Prime Minister Tharman Shanmugaratnam has indicated that results will come only with time, saying in April that economic restructuring would take "at least the better part of this decade" to complete.

A day later, the Monetary Authority of Singapore said Singapore might not reap the fruits of the productivity drive until "the second half of this decade".

To take a positive view, Singapore has significant scope to step up productivity. This is especially so "in the services sector, where the labour crunch is most severe", Mr Tharman said in his Budget speech this year.

For instance, Singapore's retail productivity is less than half of that in New York, Paris and London, and remains behind Hong Kong's, he said.

An economic simulation by National University of Singapore labour economist Hui Weng Tat estimated that if annual productivity growth was 3 per cent rather than 2 per cent, the demand for foreign labour in 2034 would be halved from 2.78 million - the figure it might be, given assumptions such as low total fertility - to 1.48 million.

Tapping housewives and retirees

THE productivity drive aims at making better use of every worker, which should reduce labour demand. But another, non-mutually exclusive measure is to raise labour supply - and foreign workers are not the only option.

One approach is to get more locals into the workforce.

Mr Lee of MOM says: "The Government is helping the economically inactive to go back to work and locals to work longer if they wish."

Firms are turning to retirees and housewives to fill gaps, and they are getting help from government agencies to do so.

Last month, the Singapore Workforce Development Agency and police launched a scheme to get retirees and housewives to work as security guards, by shortening their working hours.

Some SME bosses have proposed lowering the employee Central Provident Fund contributions of part-time workers, so as to boost their take-home pay and encourage more to work part-time.

The share of women and those aged above 60 in the workforce has risen in the last decade, as has the number of part-timers. The numbers are still small compared to the foreign worker population.

Economists themselves say in the light of a labour crunch that is here to stay, the questions facing Singapore go beyond economic theory.

The real questions concern the kind of society Singaporeans want, and the pace and quality of economic growth that society expects.

For Professor Basant Kapur of the National University of Singapore, how many workers - and foreign workers - are needed depends on the answers to these questions.

"After factoring in feasible growth of the local labour force, productivity growth and so on, we should ask: For any given level and composition of foreign worker inflow, what will be the resulting estimated growth of labour costs in Singapore, and what will be the resulting estimated GDP (gross domestic product) growth rate?"

That will give a better sense of the trade-offs between foreign labour inflows, costs and growth, he says. And from this, perhaps "policymakers and the public at large as part of the Singapore Conversation" can arrive at a consensus on how best to tackle the challenge of an economy with too many jobs, and too few workers.

Why F1 cannot afford to lose S'pore

Sep 24, 2012

SO HOW much did Singapore agree to pay Formula One to host its night race for the next five years?

Figures remain strictly hush-hush, but there has been at least some discount on the reported $50 million that was paid to Formula One Administration between 2008 and this year.

The Singapore Grand Prix is, after all, one race F1 does not want to lose.

And it is not just because of the waves of praise that the floodlit spectacle - one that "sends chills down the spine of any Hollywood director" wrote The Times' Kevin Eason last week - attracts from the international press every season.

Singapore remains one of F1's most potent arguments in the battle with other sports such as tennis and European football for Asian dollars.

Elsewhere in the region, apart from Japan where F1 has been almost a regular fixture since 1963, races have been struggling.

China? The Shanghai circuit cost a record US$240 million (S$301 million) to build, but that did not stop serious soul-searching on whether the still loss-making race - so unpopular with locals that spectators had to be bused in to fill up stands - should continue past 2010 before a new deal was signed.

South Korea? After just two years, organisers warned they could not afford to keep on losing money. Only after having thrashed out a lower sanctioning fee with Formula One will the race go on next month, although organisers are still predicting they will be US$26 million out of pocket.

India? The most enduring memories of its inaugural race last season was of the cancellation of the Metallica concert headlining the off-track entertainment due to "technical reasons", and four organisers being arrested for the fiasco.

Even Malaysia is considering whether to continue with its race in Sepang after its contract ends in 2015 because of declining interest despite its low ticket prices.

And then there is Singapore, with a race that has been sold out for all but one season (2009 because of the economic crisis), taking place in the heart of a modern metropolis, producing a heady mix of sporting pleasure and business deals, and primed for the European television market.

The Singapore Grand Prix is more than unique, it is a truly remarkable race.

"Sponsors love it, drivers love it, fans love it, this race has energy, it has a future, unlike some of the duds which have been added to the mix in recent years," wrote The Telegraph's Tom Cary.

Monaco may have the charm of old Europe, but Singapore is Asia's future, now.

To lose the race, in this period of European austerity and when Formula One's majority shareholder CVC Capital Partners is looking to cash in with a US$3 billion IPO in Singapore, will not be a healthy message to send to investors.

Especially when there are already concerns about the lack of a suitable candidate to fill the big shoes of Bernie Ecclestone, the 81-year-old face of the sport who has turned a past-time for the rich into a business worth US$7.6billion.

Singapore has its own reasons for keeping a race that puts it on the world's sporting map, even if the trickle-down effect to the man in the street is harder to quantify.

But for F1, Singapore is proof that a race can be a real success in this part of the world.

Friday, September 21, 2012

When consumers win, who loses?

by Richard A D’Aveni
Todayonline Sep 21, 2012

For most companies, doing what is best for consumers makes sense. But for economies, it can be dangerous.

To understand why, start by thinking of an economy as simply two groups: Producers and consumers.

Government policies can favour producers through import restrictions, low corporate taxes, low regulation and easy commercial credit.

Alternatively, they can favour consumers with free trade, low sales taxes, pro-consumer regulation and easy consumer credit. Either group can also get direct subsidies: Tax breaks and grants for companies or transfer payments for consumers.

Every economy is a mix, but usually one group gets more goodies than the other.

China is famous for its producer-oriented economy - a capitalist paradise where tariffs, government supports and generous bank loans make it easy to build a company. Consumers (and workers) have few rights and little access to credit. Experts often call on China to do more to favour its consumers.

The United States, though it had similar producerist tendencies in the 19th century, is now at the opposite extreme. Why don't economists call for the US to strike a balance? Because prevailing theory - the neoclassical economics that drives most American policy - does not recognise a conflict.


In the ideal market, companies compete so effectively that all the value they create goes to consumers, save for the minimum needed to pay for capital and labour. In theory, the choice between producers and consumers need not be made, because serving the latter supposedly ends up strengthening industries.

Unfortunately, this theory is making a lot of American consumers poorer right now. Sure, they can buy flat-screen TVs for incredibly low prices. But that's little help if they are unemployed. The effect of putting too much weight on consumers has been to make the US economy less competitive.

Its companies invest abroad not only because labour elsewhere is cheaper but also because these places favour producers, offering a better chance of success. In thoroughly globalised markets, US firms are weak fish swimming in a lake stocked with piranhas - the supercompetitors spawned by governments less concerned with stock market efficiency.


What would a more balanced economy look like?

In the past decade, the supposed welfare state of Germany shifted away from consumers. Value-added taxes went up, as did the retirement age. The revenue gains from taxes on fossil fuels and lower-value-added manufacturing went to support Germany's higher-value-added industrial goods and renewable energy sectors, in the form of vocational training and research and development.

A government in favour of free trade within the European Union worked to keep EU tariffs up on industrial goods from outside the EU. Because this prevented Asian rivals from undercutting German producers, domestic companies had the confidence to invest and keep workers employed.

Yet the tariffs were low enough that these industries could not devolve into complacent oligopolies. They had to seek growth elsewhere, and their worldwide competitiveness is a big reason Germany emerged from the Great Recession with lower unemployment and debt than those of other nations.

In the US, there have been cuts to public pensions and some lowering of business taxes. But such actions have been taken in the context of debates over government's size, not to re-balance the interests of producers and consumers. (Thus, some have argued against government spending on vocational training, though that would help producers.)

By reframing the choice and recognising that voters care more about jobs than consumption, US policymakers could create a strong economy in which producers remain healthy - because the customer is not always right.

© 2012 Harvard Business School Publishing Corp. (Distributed by The New York Times Syndicate)

Richard A D'Aveni is a professor of strategic management at the Tuck School of Business at Dartmouth College and the author of Strategic Capitalism.

Why they won’t calm down

Muslim rage
Mischief, not madness, often underlies Muslim anger

Sep 15th 2012
The Economist

TO OUTSIDE eyes it is as bizarre as it is repellent. A single event, book, cartoon, film or teddy bear, which represents nothing but its originator, who may not even be American, sparks lethal outbursts of mass protest. What, to prejudiced Westerners, could better exemplify Muslim backwardness and depravity?

The latest bloody furore was provoked by the belated release on the web of an amateurish film, probably made by a Coptic Egyptian resident in America, attacking the Prophet Muhammad as a fraud, brute and pervert. Yet the film had been available (with stunning lack of success) for months, though dubbed in Arabic more recently. Undoubtedly offensive, it could count as an incitement to religious hatred—illegal in some countries, though not in America. But it is no worse than plenty of other material only a mouse-click away.

So why the ire? In a hallmark essay in 1990 called “The Roots of Muslim Rage”, Bernard Lewis, an Anglo-American commentator on Islam, blamed a mentality twisted by history. He cited the obligation of holy war, dating from the faith’s turbulent birth and shaped by centuries of setbacks ranging from the retreat from Europe to Western imperialism, and even the challenge to Muslim male authority from rebellious children and emancipated women. The result was an inferiority complex, in which humiliation was compounded by Western ignorance.

There is also a less apocalyptic explanation. Muslims’ resentment at slights to their religion is readily aroused by reports of desecration of the Koran or books, films and pictures that include a blasphemous (ie, any) depiction of the Prophet Muhammad or of God. Yet outbursts of rage can also be stirred by political grandstanding and mischievous politicians preying on an ill-informed and aggrieved populace.

It is certainly odd, for example, that the latest film suddenly began attracting attention in the run-up to September 11th, an anniversary almost as politically charged in the Muslim world as it is in the West. It was energetically publicised (albeit in caustic terms) by two Salafist (hardline Islamist) television channels.

Most outbursts of Muslim rage bring political dividends to someone. The Ayatollah Khomeini, for example, reaped the benefits of his fatwa demanding the death sentence on Salman Rushdie for his book “The Satanic Verses”, published in 1988. Pakistani politicians gain from whipping up sentiment against Christians—and against politicians seen as soft on them.

The furore over the cartoons of the Prophet Muhammad published in a Danish paper, Jyllands-Posten , was also curious. It held a cartoon competition (about supposed Muslim intolerance) in September 2005. Protests erupted four months later, sparked by a dossier that included pictures the paper had never published. The row, which cost at least 100 lives, was a boon for those with mischief-making agendas.

Ignorance of the way the West works in many Muslim countries makes rabble-rousing easy. Protesters at the American embassy in Cairo on September 11th erroneously believed the offensive film to have been shown on “American state television”: in a place with a weak tradition of independent broadcasting, that claim is not as absurd as it might be elsewhere.

The casualties of such outbursts are not only innocent lives and lost livelihoods. The truth suffers too. A reluctance among many Muslims to accept that America could be a blundering victim of atrocities rather than a wily perpetrator meant that the 9/11 terrorist attacks on the Twin Towers were widely reported from the outset as an inside job, facilitated by Israel’s intelligence service, to stoke up Western hatred of Islam. Three-quarters of Egyptians now believe that conspiracy theory. It is a headache for their new president, Muhammad Morsi, as he plans to visit New York for the United Nations General Assembly (see next article). For many Americans, only an explicit disavowal of his past support for such theories would signal that he is a decent man worth dealing with.

Thursday, September 20, 2012

Why balanced discussions fail

Sep 20, 2012

By Cass R. Sunstein

IT IS well known that when like-minded people get together, they tend to end up thinking a more extreme version of what they thought before they started to talk. The same kind of echo-chamber effect can happen as people get news from various media. Liberals reading left-of-centre blogs may well end up embracing liberal talking points even more firmly; conservative fans may well react in similar fashion on the right.

The result can be a situation in which beliefs do not merely harden but migrate towards the extreme ends of the political spectrum. As current events in the Middle East demonstrate, discussions among like-minded people can ultimately produce violence.

The remedy for easing such polarisation, here and abroad, may seem straightforward: Provide balanced information to people of all sides. Surely, we might speculate, such information will correct falsehoods and promote mutual understanding. This, of course, has been a hope of countless dedicated journalists and public officials.

Unfortunately, evidence suggests that balanced presentations in which competing arguments or positions are laid out side by side may not help. At least when people begin with firmly held convictions, such an approach is likely to increase polarisation rather than reduce it.

Indeed, that is what a number of academic studies done over the last three decades have found. Such studies typically proceed in three stages. First, the experimenters assemble a group of people who have clear views on some controversial issue (such as capital punishment). Second, the study subjects are provided with plausible arguments on both sides of the issue. And finally, the researchers test how attitudes have shifted as a result of exposure to balanced presentations.

You might expect that people's views would soften and that divisions between groups would get smaller. That is not what usually happens. On the contrary, people's original beliefs tend to harden and the original divisions typically get bigger. Balanced presentations can fuel unbalanced views.

What explains this? The answer is called "biased assimilation", which means that people assimilate new information in a selective fashion. When people get information that supports what they initially thought, they give it considerable weight. When they get information that undermines their initial beliefs, they tend to dismiss it.

In this light, it is understandable that when people begin with opposing initial beliefs on, say, the death penalty, balanced information can heighten their initial disagreement. Those who tend to favour capital punishment credit the information that supports their original view and dismiss the opposing information. The same happens on the other side. As a result, divisions widen.

This natural human tendency explains why it is so hard to dislodge false rumours and factual errors. Corrections can even be self-defeating, leading people to stronger commitment to their erroneous beliefs.

The news here is not encouraging. In the face of entrenched social divisions, there is a risk that presentations that carefully explore both sides will be counterproductive. And when a group, responding to false information, becomes more strident, efforts to correct the record may make things worse.

Can anything be done? There is no simple term for the answer, so let us make one up: surprising validators. People tend to dismiss information that would falsify their convictions. But they may reconsider if the information comes from a source they cannot dismiss. People are most likely to find a source credible if they closely identify with it or begin in essential agreement with it.

In such cases, their reaction is not, "how predictable and uninformative that someone like that would think something so evil and foolish" but instead, "if someone like that disagrees with me, maybe I had better rethink".

Our initial convictions are more apt to be shaken if it is not easy to dismiss the source as biased, confused, self-interested or simply mistaken. This is one reason that seemingly irrelevant characteristics like appearance, or taste in food and drink, can have a big impact on credibility. Such characteristics can suggest that the validators are in fact surprising - that they are "like" the people to whom they are speaking.

It follows that turncoats, real or apparent, can be immensely persuasive. If civil rights leaders oppose affirmative action, people are more likely to change their views. Here, then, is a lesson for all those who provide information. What matters most may be not what is said, but who, exactly, is saying it.

The writer is a Harvard law professor.


[This has bearing on the Singapore Conversation. And the prognosis is not good. People are likely to come to the conversation with their views and leave with a stronger conviction of the correctness of their position.]

China: Cheap labour to cheap genius

Sep 17, 2012
By Thomas Friedman

ONE of the standard lines about China's economy is that the Chinese are good at copying, but they could never invent a hula hoop. It's not in their DNA, we are told, and their rote education system reinforces that tendency. I'm wondering about that: How is it that a people who invented papermaking, gunpowder, fireworks and the magnetic compass suddenly only became capable of assembling iPods? I'm wondering if what's missing in China today is not a culture of innovation but something more basic: trust.

When there is trust in society, sustainable innovation happens because people feel safe and enabled to take risks and make the long-term commitments needed to innovate. When there is trust, people are willing to share their ideas and collaborate on each other's inventions without fear of having their creations stolen.

The biggest thing preventing modern China from becoming an innovation society, which is imperative if it hopes to keep raising incomes, is that it remains a very low-trust society.

I've been struck at how many Chinese businesspeople and investors have volunteered that point to me over last week. China is caught in a gap between its old social structure of villages and families, which created its own form of trust, and a new system based on the rule of law and an independent judiciary. The Communist Party destroyed the first but has yet to build the second because it would mean ceding the party's arbitrary powers. So China has a huge trust deficit.

To see what happens when you introduce just a little more trust in this society, spend a day, as I just did, participating in the "AliFest" - the annual gathering of thousands of Chinese entrepreneurs who are linked together in the giant Chinese e-commerce website Founded in 1999, Alibaba says its sales this year could top eBay and combined. This happened, in part, because it has built trusted, credible markets of buyers and sellers inside China, connecting consumers, inventors and manufacturers who would have found it hard to do transactions before.

Alibaba has three major businesses: and Tmall. com, which together constitute a giant online marketplace where anyone in the world can go to buy or sell anything - from Procter & Gamble selling toothpaste to Chinese firms offering their engineering prowess. The Tao companies this year are expected to move some US$150 billion (S$183 billion) in merchandise between buyers and sellers, mostly in China.

The second is, where, if you want to make rubber sandals that play The Star- Spangled Banner, you click on Alibaba and it will link you with dozens of Chinese shoemakers that will compete for your business.

And, lastly, there is Alipay, a Chinese version of PayPal that can enable, for example, a small Chinese manufacturer in the hinterland to sell its goods to a Chinese consumer in Shanghai. The buyer puts his money in escrow with Alibaba and it is released to the seller only when the buyer says he got the goods he ordered.

Presto: trust. What has been the impact? There are more than 500 million Chinese Taobao users and 600 million Alipay accounts.

While here in Hangzhou, I visited the workshop of Mr Robert Luo, the president of Classic-Maxim, a firm he started to make kitschy wall art for hotels, using foreign designs. Mr Luo used to drum up sales by flying to trade shows, but, in 2006, he got a huge US order through the Alibaba platform, enabling him to greatly expand his business. He has since shifted from doing outsourced artwork for others to hiring Chinese and foreign artists to produce his own original designs. "We design so much now" - outdoor art, solar art - and "we've applied for so many US patents", he said.

There are two trends to watch from all this: One, argued Mr Ming Zeng, Alibaba's chief strategist, is that Alibaba - which now serves more than 100 million consumers daily, through 6.5 million retail shops connected to 20 million manufacturers - is, in effect, creating "a virtual combination industrial park and online marketplace", where anyone in China or abroad can come to invent, collaborate or buy and sell goods or services.

Alibaba, Mr Zeng predicted, will eventually connect in some way with Facebook, Amazon, eBay, Apple, Baidu, LinkedIn and others to create a giant trusted virtual "global commercial grid", where individuals and companies will offer their talents and buy and sell products, designs and inventions.

Eventually, Mr Zeng argued, "every individual will have to find a way to succeed" on this global grid. "National boundaries will offer you no protection."

The other trend is that the Chinese will be big players on this grid. The creation of global trusted business frameworks like Alibaba is starting to enable a new generation of Chinese innovators - who are low-cost, but high- skilled - to extend their reach. We've seen cheap labour out of China; now we're going to see more cheap genius.

Which is why professors Phillip Brown and Hugh Lauder, in a recent essay on, argued that a big shift of the global labour market is under way, in which "many of the things we thought could only be done in the West can now be done anywhere in the world, not only more cheaply but sometimes better".


Wednesday, September 19, 2012


Sep 19, 2012
Minority owners sue over costs

They are claiming $585k from first sales committee's chairman, member
By esther teo property reporter

MINORITY owners who won a landmark court ruling to overturn the collective sale of Horizon Towers returned to the High Court this week as fallout from the bitter dispute continues.

They are suing Mr Arjun Samtani, the chairman of the first sales committee, and committee member Tan Kah Gee over costs incurred while trying to block the collective sale.

Both men were named as the prime movers of the sale by the Court of Appeal in its 2009 ruling to disallow the transaction of the Leonie Hill Road property.

The three sets of minority owners, comprising five plaintiffs in all, are claiming a total of $585,000 in costs and expenses incurred in a series of hearings that eventually killed the sale. They were earlier awarded $330,000 by the Court of Appeal in a separate action after the deal was quashed.

In the hearing, which started on Monday, Mr Samtani and Mr Tan contend that the claim is unsustainable since costs were already determined by the Court of Appeal. At that 2009 hearing, the plaintiffs did not seek any costs orders personally against the defendants, they pointed out.

In his opening statement, Mr Tan said that the plaintiffs' claim is "manifestly excessive and unreasonably incurred". He added that he did not breach his duties as a member of the sales committee and had acted in the best interests of all subsidiary proprietors.

The plaintiffs' alleged loss and damages were also not caused by his alleged breaches, he said. But even if he had breached them as pleaded, their loss and damages were not caused by him, he said.

Mr Samtani pointed out in his opening statement that he resigned from the sales committee in July 2007. Even if he is liable for costs, he contended, it should be limited to the first application taken by the committee for the collective sale of the property before his resignation. This would mean that he is not liable for any costs in view of the 2009 decision by the Court of Appeal, he said.

The minority owners argue that the Court of Appeal's finding that Mr Samtani and Mr Tan breached their fiduciary duties means that the two men were also the cause of the plaintiffs' losses.

The alleged breaches include failing to declare their purchase of additional units around the transaction time and failing to improve the chances of obtaining a better price for the property.

Senior Counsel Kannan Ramesh of Tan Kok Quan Partnership, who is acting for the minority owners, also argued that Mr Tan and Mr Samtani were effectively saying that the court should now come to a different conclusion from that handed down by the Court of Appeal.

This is something that they could not do, he said.

About the case

THE intended $500 million sale of Horizon Towers to Hotel Properties (HPL) in January 2007 turned into one of the most dramatic and protracted en-bloc battles in Singapore's history.

The affair spanned more than two years and went back and forth between the Strata Titles Board (STB) and the High Court twice before being decided in the Court of Appeal.

It ruled in April 2009 that the deal could not go through because the development's sales committee had failed to fulfil its duty on several fronts.

Three sets of minority owners have now cited that landmark judgment as they seek reimbursement for the hundreds of thousands of dollars they have each spent in the battle.

They are suing former sales committee chairman Arjun Samtani and committee member Tan Kah Gee, alleging that the two of them had pushed for a quick sale of the property for their personal gain.

They claim that the two men had bought additional units in Horizon Towers at the start of the collective sale process and were therefore keen to profit from a sale.

The Court of Appeal judgment accepted as fact that:

  •     Mr Samtani and Mr Tan had bought additional units in Horizon Towers;
  •     The sales committee had received an alternative higher offer of $510 million from Vineyard Holdings one day before HPL verbally indicated it was willing to buy the development for $500 million; and
  •     The sales committee agreed to sell Horizon Towers to HPL in spite of a suggestion from one committee member that it seek the approval of the other consenting owners because property prices had shot up. The committee was concerned that the deal would fall through if the other owners were consulted.

The Court of Appeal also ruled that HPL and the estate's majority owners should share the legal costs for the second High Court hearing, the Court of Appeal hearing and the second STB hearing.

The minority owners now want compensation of $585,000 for the sums not covered by that Court of Appeal judgment.

The case will be closely watched as it is seen as a litmus test for possible legal action that can be brought to bear against those involved in collective sales.


Tuesday, September 18, 2012

Indonesia's quiet welcome of US troops in region

Sep 18, 2012

By John McBeth Senior Writer

WHEN Indonesian Foreign Minister Marty Natalegawa asserted last November that the training of US Marines at a base in Australia's Northern Territory would create "a vicious circle of tension and mistrust in the region", he was quickly forced to back down.
After all, it was clearly an embarrassment to President Susilo Bambang Yudhoyono that US President Barack Obama was still on an official visit to Indonesia - his next stop after Darwin, where he had made the announcement of the new training arrangement.
Eight months later, Dr Yudhoyono and Prime Minister Julia Gillard pointedly chose the Northern Territory capital for bilateral talks, during which they discussed improved defence ties and Canberra gifted Indonesia with the first of four refurbished C-130H cargo planes.
Then, in early August, four Indonesian Sukhoi-30MK2 jet fighters entered Australian airspace for the first time for air combat exercises with Australian F/A-18s, US Marine Corps F-18s, Singaporean F-15SGs and Thai F-16s.
The Indonesian Air Force had only sent observers to Exercise Pitch Black in the past, so the Australians were surprised when Jakarta informed them in March it would be dispatching the Sukhois from their base in Makassar, South Sulawesi.
As much as Indonesia seeks to retain an even-handed foreign policy, particularly at a time of raised tensions in the South China Sea, the message seems clear: Within reason, the country's security chiefs favour an increased US presence in the region.
Canberra calmed any significant concerns by stressing the Marines will not be based in northern Australia. It also went further by rejecting a US think tank's proposal to station a carrier battle group at Perth's Stirling naval base, an idea that has not been endorsed by US officials.
The Australians are known to have been annoyed that Chinese leaders grilled Ms Gillard on the Marine training issue on her first official visit to Beijing last April, where she described the relationship as "important but complex".
Since then, the Chinese have raised hackles and created discomfort in the region with their renewed belligerence over the disputed Spratly Islands, which has caused a damaging divergence of views among the Asean partners.
Indonesia's participation in Australia's biggest air exercise comes when surging economic growth has enabled it to begin modernising its outdated military - even if some of the big-ticket items make little strategic sense.
One that does is the US$750 million (S$915 million) deal with the US for 24 refurbished F-16C/D jets, which will be armed with AGM-65K2 Maverick air-to-ground missiles and carry far more advanced avionics than those on its existing squadron of F-16A/Bs.
Deliveries will begin in 2014, with the Americans offering Jakarta the option of a third squadron to help fill the gap until Indonesia and South Korea enter into the planned joint production of a new-generation fighter in the mid-2020s.
The air force is also adding six more Su-30s to the five already in its inventory. Bought in response to the 18-year US arms embargo, the twin-engined Su-30's over-the-horizon radar and longer range make it better suited for maritime operations than the F-16.
Indonesia still needs 15 new radars to plug into an integrated air defence network that will allow the expanded fighter fleet to provide more effective control over the country's airspace.
Spending on the navy is increasing as well. In July, Indonesia signed a US$220 million deal with a Netherlands shipbuilder for a new Sigma-class guided-missile corvette, which will join four others shipped to the Indonesian Navy between 2007 and 2009.
The Indonesians are also in the market for three larger F2000-type corvettes, worth about US$300 million, which have been laid up at BAE Systems' Glasgow shipyard since 2002 when Brunei, the original customer, refused to accept delivery.
The Government's biggest naval order is the pending US$1.8 billion acquisition of three South Korean Type-209 submarines to go with two German-built 209s dating back to the early 1980s.
Defence Ministry officials say the diesel-electric attack craft are vital to protecting Indonesia's maritime borders, though they will do little to stop the illegal fishing and rampant smuggling that costs the country billions of dollars a year in lost revenues.
More controversially, the military appears to have broken down parliamentary resistance to its planned US$280 million purchase of 100 Leopard 2A6 main battle tanks - this time from Germany and not from the Netherlands as originally planned.
Dr Yudhoyono showed he was fully behind the deal during Chancellor Angela Merkel's recent visit to Jakarta, but it still has to be approved by the German government and a Parliament that appears to be just as hostile to it as its Dutch counterpart.
European opposition to the sale centres on a mix of "regional tensions", corruption and human rights. But it baffles military experts for a different reason: The tanks do not fit with Indonesia's strategic needs or the limitations of terrain and infrastructure.
Manoeuvring the 62-ton Leopards in overcrowded Java, with its under-strength bridges and narrow asphalt roads, would be almost impossible, reducing them to point defence and unable to engage in the mobile warfare for which they are designed.
Even then, there is confusion. A parliamentary hearing last year was told the tanks would be based in Jakarta and Surabaya. Other statements mention Kalimantan and Papua, where terrain would again be an issue - along with serious political and strategic implications.
Deploying the Leopards along accessible parts of the Malaysian border may only act as a further irritant in the relationship, with the two uneasy neighbours still embroiled in a territorial dispute in waters off East Kalimantan.
The Indonesians only recently announced they would build a submarine base at Palu in Central Sulawesi, which lies at the end of a deep-water inlet across the busy Makassar Strait shipping lane from the disputed Ambalat region.