Han Ming Wen
One need not be a rocket scientist to join the dots to reveal the master plan. First change the finance laws, then formulate almost impregnable secrecy laws, thereafter offer tax reliefs and incentives, and finally build casinos. And voila! Billions of overseas funds (much of it tax evasion and illicit monies) start pouring into our banks.
To the many who benefit from such money the move is a brilliant masterstroke that other countries are too slow to catch on to. Perhaps.
But lest we forget, unscrupulous financial dealings have already eaten up a 158-year old institution (Lehman Brothers), reduced the world’s biggest bank to a ‘me too’ when it comes to bailouts (Citigroup), crippled England’s largest financial institution (Barclays), and brought the USA and Europe to its knees.
Soon it will be Asia’s turn, Singapore included. The ‘R’ word may yet be transformed to the ‘D’ word.
To soften the impact the USA has announced plans to spend billions of dollars to create as many as 3 million jobs. This will be achieved through the building and improvements of infrastructure. China has announced a $586 billion stimulus package focusing on infrastructure investments. Spain once the engine of jobs creation in Europe, has announced that of monthly mortgage repayments will be halved to put more money into people’s pockets. England and Japan have also announced their own softening measures.
This financial fiasco exposed the inherent defects of the current capitalist system. In its place, will come 21st century reforms. This will most likely be in the form of a back-to-basics platform, that is, emphasis will be on the real economy, good-old fashioned factors of production.
In other words, the real world.
What will then become of financial centers, tax havens, money laundromats of the world?
Aiming to become a glamorous financial centre with all the glitz and razzmatazz is risky business. In Singapore, its worse — its being done at our expense.
We were like a teenage kid, dazzled by the material world but too naive to understand how the real game was being played behind the scenes. We saw how “financial centres” got rich and we wanted the easy-money too.
We, too, need to get back to basics. One way we can do this is to, like the teenager, go back to school. We can become a significant society that prides itself on education by creating a university city right here in Singapore.
But to achieve that, we need an open society and universities here need to be fully autonomous unlike the current ones (yes, James Cook University included). The benefits will be two fold: the economic dollars are big and, more importantly, Singapore will be able to develop brain power for the future.
At the moment, what we are doing is pouring in cash to foster something that resembles an education centre but not quite. Sure, the hardware — nice buildings, hi-tech equipment, and air-conditioned classrooms — is all there. But without freedom of expression and academia we’re kidding ourselves in wanting to compete with the top schools in the West.
We need to spend more on education. For a population of 4 million, we should have more universities. Spend more on education welfare, take care of the local population and they will take care of the country.
Also, we were once a shopping paradise. Tourists came from all over because they loved to shop here. But the inflated cost of doing business here destroyed that important sector of our economy. Cut the excesses in the country — much of it hidden — and cost would plummet. With the current infrastructure, we will be the shopping center of Asia once more.
Bring in the shopping crowd and the white elephants will be filled up too. The overflow of businesses into hotels, entertainment, restaurants, public transport, and small businesses would be a very good thing. Nothing high tech, but it keeps people employed and in business.
And at least we can be good at what we do unlike in high-tech or bio-tech where we will always be, at best, third-rate given our authoritarian political system. In the process, billions of dollars of tax payers’ money are poured in, and the industries then quietly fade away.
We have the advantage of our geographical location to become a shopping mecca. This can never be taken away. To ignore the importance and significance of this factor is foolhardy.
This has become even more important in light of the fact that we are no longer competitive in manufacturing and services. Our neighbors are now increasingly becoming English-speaking too, making them more attractive to multinationals.
It is time to spread the bread and butter around. Becoming a dubious centre of high-stakes finance in Asia only accumulates (risky) wealth for a select few. Getting back-to-basics and make money through hardwork and enterprise benefits the majority. It is the way to go.
Mr Han Ming Wen is a financial analyst and trader. He contributed the article to this website.