What’s wrong with the current Singapore growth model?

[Kubes.SG]

I will not pretend that I am not sharing the article because it states all the same issues and challenges for Singapore that I have raised here.

Not questions SG has seen "success" in the past, at least for the top 25% of the native population.  But this has been done in a way that is unsustainable and will fail.



What’s wrong with the current Singapore growth model? (Pt.1)
February 18th, 2011

This article first appeared on The Online Citizen (TOC) and is reproduced with permission from the author.

The Singapore economy is near breaking point and cannot be sustained going forward without society tearing apart, says a former government economic planner who has just completed a 45-page paper “Creating Jobs and Enterprise in a new Singapore economy – Ideas for Change”.

Tan Jee Say feels strongly that new economic directions are urgently needed to prevent a socio-economic tragedy from unfolding, and he has proposed a $60 billion National Regeneration Plan to transform Singapore into a knowledge-based regional services hub that puts Singaporeans first in jobs and enterprises created in a new Singapore economy.

Jee Say’s analysis and prescription are persuasive, according to Lord Butler who as Head of the British Civil Service in the 1980s and 1990s, oversaw the “painful transition” of the United Kingdom from a predominantly manufacturing economy to a knowledge-based one. Lord Butler commended the paper and described it as a thorough and well-argued piece of work that deserves the attention of policy makers.
The following is the first in a three-part summary extract from the soon-to-be-published paper.
 
—————————————————————–

The Singapore economy has become more volatile in recent years, with business cycle fluctuations becoming more pronounced, and Singapore experiencing three recessions (1998, 2001 and 2009) in the past 15 years, in contrast to only one recession (1985) in the 30 years between 1965 and 1995. The greater volatility led to more job losses that lasted for longer periods. Volatility has resulted in lower growth.

Low Productivity

Singapore’s low labour productivity growth in recent years is a statistical phenomenon and is the result, not the cause, of our poor economic performance. To focus on raising productivity as a key economic strategy, an old and discredited strategy adopted by the government since the early 1980’s, is like putting the cart before the horse – can we expect it to succeed when it has failed to do so in the last 30 years with productivity continuing to be stuck in the lows to this very day in spite of all the high-sounding campaigns by high-level productivity councils? Rather we should focus our minds on economic policy because it is bad economic policy that has resulted in Singapore’s heavy dependence on foreign unskilled and low-skilled workers that in turn pulls down labour productivity.

Unsustainability of Manufacturing

A major contributor to the increased economic volatility was manufacturing which has been promoted by the government in the past 5 decades as a key pillar of its economic growth strategy. The strategy was successful in the first 2 decades but by the early 1980’s, it was running into bottlenecks as Singapore’s constraints manifested themselves.

Singapore has little comparative or competitive advantage for manufacturing to flourish as land, labour and skills are in short supply. The manufacturing sector can only remain viable in Singapore through more subsidized factory land and space, uninterrupted inflow of cheap foreign labour, and generous tax holidays and other giveaways. Such economic distortions in the last thirty years have delayed Singapore’s economic restructuring. We cannot afford and should not tolerate further wastage, not even for another year.

Two additional factors weigh against manufacturing – firstly, most top students are not opting to read engineering as their first choice in the local universities and polytechnics, a trend that does not augur well for the innovative potential of nor the prospect for ‘complex manufacturing’ , a niche that the ESC wants to promote; and secondly, Singaporeans are happier working in the services sector than in manufacturing industry. Without a happy and talented workforce, can complex manufacturing succeed in a sustainable way?

Which Services for the Future?

Singapore’s future lies in services. We can thrive as a dedicated services hub for the region as we had done so in the past as a vibrant commercial metropolis even before Singapore went into manufacturing in a big way in the 1960’s.The rest of the region has also progressed as we have. To continue to be relevant to them, we have to develop into a full-fledged integrated services hub with the best offerings available in the field. It should be knowledge-based that will capitalise on Singaporeans’ high level of education and experience of the world’s best practices. It must be the right kind of services that do not exploit or offend the sensitivities of the region.

The two huge casinos are the wrong kind of services activities to have. Economic development is more than just about generating jobs and income growth. There is a moral purpose as well, otherwise we might as well turn Singapore into a prostitution hub or a distribution centre for drugs which will bring us untold riches. Economic development is about developing and using human capital to produce decent and worthwhile goods and services in a sustained way.

On the other hand, casinos are a soft option that preys on human weakness to generate profits. They destroy the work ethic and lead to broken families and other social problems. The casinos should be closed down so that Singapore can part company with those who choose to prosper through vices such as gambling, prostitution or drugs; only then can Singaporeans once again walk tall and proud on the high and honourable path to economic development and prosperity.

To make up for the economic loss from closing down the casinos, we need to move aggressively to develop those services we are currently good at providing so as to yield quick returns such as services involving the port, transport connectivity, financial institutions, education and healthcare. While we can be proud of having good basic infrastructure, there are still serious gaps to be filled particularly in education and healthcare. Once these holes are plugged, Singapore will have a fully developed infrastructure that will enable it not only to uplift the well-being and standard of living of its own citizens but also have additional capacity to serve the needs of the region.

End of Part One.

by Tan Jee Say

The writer was with the Ministry of Trade and Industry from 1979 to 1985 where he headed economic and manpower planning and also served as secretary to the late Dr Albert Winsemius, the economic adviser to the Singapore Government. From 1985-1990, he was the principal private secretary to Mr Goh Chok Tong. In 1990, he went into investment banking and subsequently took up fund management. He is a Chartered Fellow of the Chartered Institute for Securities & Investment. He is a graduate of Oxford University where he read philosophy, politics and economics.

[would have thought]

Giving retards like you isn't a good start.

[Lack of balance]

Low Productivity

Rather we should focus our minds on economic policy because it is bad economic policy that has resulted in Singapore’s heavy dependence on foreign unskilled and low-skilled workers that in turn pulls down labour productivity.

Response: There are many high skilled expat imports as well up to the level of CEOs. The direction is to improve the quality og the labour imports. Argument is biased here.

Unsustainability of Manufacturing

Two additional factors weigh against manufacturing – firstly, most top students are not opting to read engineering as their first choice in the local universities and polytechnics, a trend that does not augur well for the innovative potential of nor the prospect for ‘complex manufacturing’ , a niche that the ESC wants to promote; and secondly, Singaporeans are happier working in the services sector than in manufacturing industry. Without a happy and talented workforce, can complex manufacturing succeed in a sustainable way?

Response: The developed nation of U.S. has this problem. Their hard sciences are populated by foreigners. Yet they still produced a company like Intel. This is precisely why incentives are needed to continue the growth in manufacturing.

Why no mention of the initiatives in bio-engineering and pharmaceutical sectors? A biased point of view.

Which Services for the Future?

The two huge casinos are the wrong kind of services activities to have. Economic development is more than just about generating jobs and income growth. There is a moral purpose as well, otherwise we might as well turn Singapore into a prostitution hub or a distribution centre for drugs which will bring us untold riches. Economic development is about developing and using human capital to produce decent and worthwhile goods and services in a sustained way.

Response: Obviously this activity is a success. The writer then goes into a tirade on morality. The topic is economic growth. The U.S. should also ban casinos then. A biased point shewed toward the writers personal opinion.


To make up for the economic loss from closing down the casinos, we need to move aggressively to develop those services we are currently good at providing so as to yield quick returns such as services involving the port, transport connectivity, financial institutions, education and healthcare. While we can be proud of having good basic infrastructure, there are still serious gaps to be filled particularly in education and healthcare. Once these holes are plugged, Singapore will have a fully developed infrastructure that will enable it not only to uplift the well-being and standard of living of its own citizens but also have additional capacity to serve the needs of the region.

Response: Who don't know. Every ministry involved is working hard already like education hub, healthcare hub. The writer should say something new here..

[Agent007]

The writer is obviously a retard and knows nothing about business.

He also knows nothing about casinos and hookers. (Sad man!)

The Singapore casinos are definitely not 'huge' and Singapore is already a prostitution hub. Not a huge prostitution hub but very well known hub! FFOW.

Rest assured Kubesy my little retard cousin of a criminal, Singapore will not fail and the casinos and hookers will continue to play their part in Singapore's success.

Airport.

[Kubes.SG]

The writer is obviously a retard and knows nothing about business.

He also knows nothing about casinos and hookers. (Sad man!)

Airport.

Agent, seems like the writer quite well qualified, very connected and has had played a role in Singapore's past success.  Certainly better qualified than you or me.  Here is the a summary of what got him to this point:

The writer was with the Ministry of Trade and Industry from 1979 to 1985 where he headed economic and manpower planning and also served as secretary to the late Dr Albert Winsemius, the economic adviser to the Singapore Government. From 1985-1990, he was the principal private secretary to Mr Goh Chok Tong. In 1990, he went into investment banking and subsequently took up fund management. He is a Chartered Fellow of the Chartered Institute for Securities & Investment. He is a graduate of Oxford University where he read philosophy, politics and economics.

[He is a fundamentalist]

who does not like gambling, womanising and drinking.

[There are pockets]

of people in certain parts of the world where he could fit in and live this lifestyle. It's a matter of personal choice though.

[TheWrathOfGrapes]

Tut-tut, Kubes, resorting to quoting my college chum to further your agenda. I will let him know that you are borrowing his knife to "kill" somebody else.

[Kubes.SG]

"Lack of Balance', can you please provide actual examples of the lack of balance.  For example you state that # of FTs has increased.  I would argue that he number of FW have increased at a far faster rate thus driving down productivity.

There is virutally now innovation that happens in SG.  How many Nobel prizes have been awarded to Singaporeans, or to researchers who did their research in Sinagapore.  The other point is that there no sustainability to the approach to research - it is happening here only because these guys are offered enormous funding (bribes) to be here.  There was a study I saw a few years that showed SG had the highest level of research funding per researcher - but on the the bang's per buck, SG was bottom of the list of turning that massive funding into viable results.

Except for Macau, no other country uses Casinos as a key pillar of their economic development.   To your point about Hubs in SG - it's a joke what goes on here - it's the hub of hubs.  Dozens of these Hubs, but ZERO success.  Show us one "Hub" in Singapore that is considered a regional or global leader.  Again, the Govt is throwing money to wind hoping that something will work.  

[You can say]

that the knife is pointing in the right direction for Kubes and he is pushing it harder..

[Kubes.SG]

Tut-tut, Kubes, resorting to quoting my college chum to further your agenda. I will let him know that you are borrowing his knife to "kill" somebody else.

I don't worry about who says what.  I focus on what is said, and how well it passes the logic and rationality test.  You should know that.  

Tell him to have a look here.  I am sure he would embarassed by his silly countrymen.

[Kubes.SG]

that the knife is pointing in the right direction for Kubes and he is pushing it harder..

?

[Lack of balance]

"Lack of Balance', can you please provide actual examples of the lack of balance.  For example you state that # of FTs has increased.  I would argue that he number of FW have increased at a far faster rate thus driving down productivity.

Response: I am just a simple critic questioning the assertions of the writer. Since you are propagating his point of view to serve your purpose, you do some pruductive work and let us know the numbers. I know that there is at least one expat living in the vicinity of Orchard Road..


There is virutally now innovation that happens in SG.  How many Nobel prizes have been awarded to Singaporeans, or to researchers who did their research in Sinagapore.  

Response: The goal is to make lot of money. What are you, an academic?


The other point is that there no sustainability to the approach to research - it is happening here only because these guys are offered enormous funding (bribes) to be here.  There was a study I saw a few years that showed SG had the highest level of research funding per researcher - but on the the bang's per buck, SG was bottom of the list of turning that massive funding into viable results.

Response: Well, when one tries, you say its useless. When don't try you say, do nothing to improve productivity... You would probably do better by critising the U.S. military funding programs or the space programs. What a worthless no productivity waste!


Except for Macau, no other country uses Casinos as a key pillar of their economic development.   To your point about Hubs in SG - it's a joke what goes on here - it's the hub of hubs.  Dozens of these Hubs, but ZERO success.  Show us one "Hub" in Singapore that is considered a regional or global leader.  Again, the Govt is throwing money to wind hoping that something will work.

Response: We have a bubling casino hub, so you are wrong. You mean, building Changi airport was useless or putting building in the financial distric is a waste? You are just waving your fist in the wind,raving non-sensical ideals. You are just plain unhappy. Watch the company you keep..
"Change the company you keep and you will change your life".

[Your are too]

that the knife is pointing in the right direction for Kubes and he is pushing it harder..

?

unsophisticated to grasp the meaning.

[TheWrathOfGrapes]

Tut-tut, Kubes, resorting to quoting my college chum to further your agenda. I will let him know that you are borrowing his knife to "kill" somebody else.

I don't worry about who says what.  I focus on what is said, and how well it passes the logic and rationality test.  You should know that.  

Tell him to have a look here.  I am sure he would embarassed by his silly countrymen.

Tell you what - why don't we meet at Vie Cafe & Wine Bar at Siglap Village (diagonally opposite Siglap Centre, and have a few glasses, then walk over to his house in Frankel Avenue. Or better still, I will ask him to join us for the libation session.

BTW - I agree with you that SG should not be run like a corporation.