Another acronym into the bin

September 12, 2003
Singapore Democrats

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Yawning Bread
September 2003

Who said this?

“Skills training and upgrading remain of paramount importance. New jobs are being created and existing jobs are still unfilled, even during this slowdown.” (Page 26)

“Our infrastructure is first-class, up-to-date and well-connected to the world. Businesses can rely on the port and airport, the telecommunications and public utilities, and the financial system. We have built a vibrant enterprise ecosystem in Singapore where MNCs, larger companies and SMEs flourish and support one another with ideas, innovations, expertise and experience.We have pursued pro-market, pro-competition polices, leaving the private sector to create wealth.” (Page 30)

“However the government is not passive. It scans market developments, sizing up promising industries and sectors in which we can develop an advantage, and builds up capabilities and infrastructure to increase our chances of success.” (Page 31)

“In particular, the land market must be flexible and efficient, so that Singapore can make optimal use of the limited amount of land available. It is especially important for industrial land to be appropriately priced so as to help the manufacturing sector stay competitive.” (Page 34)

“In addition to the relevant knowledge and technical skills, Singaporeans must have the right mindsets and attitudes for a knowledge economyPage 36:We have a group of major Singapore companies, including GLCs, which have the capacity to become international playersWe want more of our domestic enterprises to develop their own products and own the associated IP. Such companies can be a breeding ground for new wealth creators and revolutionary ideas…We need to keep out regulations to the minimum, and ensure that regulatory/licensing requirement do not bog them down.” (Page 35)

“We will also be a fun and fulfilling place vibrant, cosmopolitan, unique and confident in our blends of cultures and the arts, where East meets West and diverse ethnic heritages co-exist with modernity.” (Page 44, For source: see footnote 1)

Read the quoted sentences above. Who do you think was speaking? It sure sounds like the government of Singapore. Its the usual brag-list of great achievements and the token concession that a bit more (of the same) needs to be done.

Perhaps I quoted them from a ministers speech? Or some kind of government publication about the “path ahead” in the age of globalisation?Actually, these words were from the final report of the Economic Review Committee (ERC), supposedly a quasi-independent team set up to brainstorm economic directions for Singapore in the years ahead. The report was released in February 2003. And was met with a huge yawn.

Most of those who had bothered to read it told me it was a great disappointment. There was nothing bold or radical in it. The report rehashed, they said, the same themes that the government had been saying. All it called for was a bit of tinkering here and there.

Were these ERC guys amazingly, I cant recall off-hand a single personality on the Committee, which shows how bland it all was unable to think out of the box? Or not allowed to think out of the box?

Deconstruct some of the sentences above, and the extent to which they were taken in by the governments propaganda becomes painfully clear.”

Skills training and upgrading remain of paramount importance. New jobs are being created and existing jobs are still unfilled, even during this slowdown.”Skills training has become our official mantra, but any observer of our unemployment situation will tell you that, at least in the immediate instance, the main problem isnt a skills mismatch. Instead, it is a hollowing out of manufacturing, and a reluctance by Singaporeans to take service jobs, or jobs that mean dirtier hands or lower pay. That is, its less a skills problem than an attitude problem.

Yes, we do have a shortage of health-care professionals and we do have quite a few vacancies in the shipbuilding sector. If only people would apply for these jobs, the employers will no doubt rev up their training programs. The main problem is that nobodys applying for these positions, in the first place.

Yet the ERC went on about skills training and didnt seem to see the facts on the ground. “We have built a vibrant enterprise ecosystem in Singapore where MNCs, larger companies and SMEs flourish and support one another with ideas, innovations, expertise and experience.”

Most SMEs in Singapore would laugh bitterly at such na?et? They feel crowded out by government-linked companies (GLCs) and totally ignored by many government departments too fixated on wooing and serving foreign investors.

Here’s a tale of woe that appeared recently in the press:

There were these guys with an entrepreneurial idea. They wanted to sell breakfasts and lunches from vans in various car parks in the Central Business District. They ran around the various government departments getting them to approve their idea and give them the necessary permits.

After much trouble Im personally amazed at their fortitude in even embarking on this run-around the departments concerned agreed it was a worthwhile idea. And what did they do? They stole the idea from them, called an open tender for vendors interested in operating out of a shortlist of designated carparks, and simply drew the winners by ballot.
The guys who started off with their idea got nothing, since by (bad) luck, their application wasnt drawn in the draw.

And so, if the ERC thinks that enterprises big and small “support one another with ideas”, its obvious they are surveying our economic playing field through rose-tinted lenses.

“We will also be a fun and fulfilling place vibrant, cosmopolitan, unique and confident in our blends of cultures and the arts, where East meets West and diverse ethnic heritages co-exist with modernity.”

In here is a strand of PAP-speak [2], although most Singaporeans, brought up on a diet of PAP-speak, cant see it. The above talks about diversity, but the only diversity it conceives of is ethnic, counterpoised against “modernity”, where modernity is cast as singular, and implied to be homogenous.

This kind of thinking is characteristic of the ideology here. We only allow difference in terms of race, ethnic culture and religion the ancestral baggage and we expect people to flow from these into a common stream known as “modernity” where people are alike in their prioritization of economic rationality, technical and professional skills, bilingualism and social normativity.

But look at America, a very diverse nation and modern indeed. Think for a moment about Las Vegas, then about a small New England town, say, in Vermont, then the Amish counties, then gay West Hollywood, and finally, Greenwich Village in New York City. Ethnicity is hardly the primary factor distinguishing one from the other; rather, the key lies in values and lifestyles.

It is precisely the way Singapore frowns on different values and lifestyles that makes this place numbing to the spirit. Without spirit, you can forget about vibrancy.

So if you read the above passage again, talking about Singapore aiming to be fulfilling, vibrant and cosmopolitan, and then suggesting how we can wear saris and gold bangles, and carry paper lanterns at the Mooncake Festival, and patting our own backs for being so tolerant of “diversity”…well, they just dont get it, do they?

Is this what passes for radical review in Singapore?

* * * * *

So what was going on in the committee?

By some stroke of good fortune, the gods let us in on a little secret, and we got an inside look to how the whole thing worked.

Let me digress a little here, to fill you in on the context. As our economy continues to stagnate, the government recently announced cuts in the percentage contribution rate to the Central Provident Fund (CPF). This should ease cost pressures on employers, and hopefully avoid more layoffs that might add to unemployment.

Its also, as the government stressed, to be seen as a powerful signal that Singaporeans are prepared to make sacrifices to maintain our cost competitiveness vis-?vis other countries in Asia, and thereby impress upon foreign investors (here we ago again!), Singapores attractiveness as a destination for their investment.

The CPF rate had previously been reduced from 40% to 36% after the internet bubble burst and the world economy slid into recession. With the latest announcement, it is reduced to 33% with further cuts foreseen.

The question on many peoples lips is, if a further cut in the CPF contribution rate is now so obviously necessary, how was it that the ERC report released just a few months earlier, still spoke about restoration of the 40% figure, albeit slowly? Why didnt the blue-ribbon ERC, tasked with seeing into the future, notice how relentless were the competitive pressures we faced, and how out of line were our costs?

“Instead the ERC recommends that the government defer any further restoration of the CPF contribution rate, beyond its present level of 36% for two years. While the CPF constitutes important old age savings for workers, it is also a statutory burden on wage costs for employers.

Deferring further restoration will avoid adding to this statutory burden at a difficult time. It will also send a strong signal to investors that Singapore is acting decisively to consolidate its competitive position.

The government has stated its intention to restore the CPF contribution rate to 40% when economic conditions permit. The ERC supports a progressive restoration of the CPF rate to 40% after the two-year period.

However, the timing and pace of the restoration should take into account economic conditions then, and especially Singapores cost competitiveness vis-?vis other countries.” (page 24 of Part 1 of the ERC’s Final Report)

Journalist Lydia Lim wrote:

What some people found most disconcerting about the Governments turnaround on the CPF was the lack of warning.

In February, the Economic Review Committee published its final report, including its recommendations on the CPF system.

The ERC stuck to the long-term CPF target of 40 percent. It proposed that the CPF rate be kept at 36 percent at least until 2005, to give the economy time to recover.

This recommendation was accepted by the Government in its Budget statement, which was also delivered in February.

So right up to six months ago, there was no hint a change in the CPF rate was in the offing.

If anything, the ERCs conclusion that the CPF system was “fundamentally sound” suggested the 40 per cent target rate had been re-examined and found to be viable.

However, Deputy Prime Minister Lee Hsien Loong revealed to Insight that this was not the case. The ERCs working group on CPF, which included both public and private sector members, was asked to look at the CPF system, but within certain parameters.

Specifically, they were asked to assume that the 40 percent rate and the rules allowing CF members to wirhdraw half their balances at age 55 were “fixed points”.

“Otherwise,” DPM Lee said, “if you say everything is completely up for grabs, then Singaporeans wake up the next day and find the stars are all indifferent places.”…(The Straits Times, 23 August 2003, INSIGHT: Slaughtering the most sacred cow, Sub-article: Why the change?)

In other words, the ERC was not allowed to say anything radically different from the governments existing programs. People might then be confused as to whether the government had been right or wrong. God forbid!

* * * * *

Not so, said the Chairman of the ERC Working Group on CPF, Peter Ong. In his letter to the Straits Times Forum, 28 August 2003, he said:

The Insight report, “Why the change?” stated that the ERC Working Group on CPF was specifically asked to assume that the 40 percent rate and the rules allowing CPF members to withdraw half their balances at age 55 were “fixed points”.

This was not the case. We were not constrained by the Government in our deliberations. Indeed, we took seriously the exhortation to leave no stone unturned. But we also wanted to ensure that our recommendations were realistic and implementable.”

Oh, the semantics!

When he said they wanted their recommendations to be “implementable”, he in essence said they didnt wish to recommend anything that they felt the government would reject. However, since, like all Singaporeans, we know the government does not like to be seen as wrong, this means the report could only say they were right. Thus, the only leeway the ERC gave themselves was to tinker — a few percentage points here, an extra 2 years there.

Given this no-balls position, its no surprise why the report sounded as obsequiously flattering to the government as it did. And why everyone else has consigned the ERC into the trash-bins of their minds.

You see why many of us are pessimistic about Singapores future? Group-think has become a monster.

Footnotes

1. From the Final Report (Part 1) of the Economic Review Committee, as published on the website of the Ministry of Trade and Industry
http://www.mti.gov.sg/public/PDF/CMT/ERC_Comm_MainReport_Part1_v2.pdf

2. The People’s Action Party (PAP) is the ruling party of Singapore.