Tagged: economy

Fear/Hope-based notions of Policy in Singapore

This is really for dialogue — about what fears are, what hopes are, and how these things frame Singapore’s growth narrative. The first part is about the existing condition, which to me seems to be fear-based; the second part is an exploration into hope.

I want to try taking a shot at what the general direction of Singapore’s governance is based on —  sort of summary of how to think about why and how policies are made, and why certain policies are the way they are. I can’t be exhaustive and look at all the policies, so I’ll look at the ones that seem to have very big impacts.

I’ll start off by saying that the policies appeared to be opportunistic in the early years, and then they became based on fear. I’ll explain what I mean by all these, and I’ll have to be quite cursory. I’ll then end by saying that the undertone of fear remains in the strategy of keeping Singapore going, and that there are other productive ways of looking at policy making, both fear-based and not.

The lens of Fear

Singapore’s early policy in building the economy and defense — the two most important things — were opportunistic. Singapore started on an Export-Oriented Industrialisation under Dr Goh Keng Swee — how he started up Jurong as an industrial estate, making sure that companies could start quickly. The British withdrawal left behind potential assets that could be further used for the industrialisation process — the legacies are still around — Keppel’s shipbuilding is part of this legacy. The strategies worked. By the mid 1970s and the 1980s, Singapore’s economy was at full employment, and the beginnings of a modern military, with platforms such at the A-4 Skyhawks being gradually introduced.

Along the way, the labour movement had to be coopted into the political system, forming the Tripartite system — with active negotiations between businesses, government and labour. The key concerns remain: employment, and income. Employment appears to be the priority of the government and the labour. In very broad strokes, the key concern of the government remains largely about how to maintain Singapore as a platform for companies to come and stay in Singapore and provide jobs to Singaporeans. This concern appears to be the overriding concern of governance in Singapore. I suggest that this concern is one that is based on fear.

There certainly are grounds for fear. There is first, Singapore’s condition as a small island state with a declining birth rate and an aging population. The fear is that any loss of dynamism in any section of society will cause investments to go somewhere else. This line of thinking then arrives at the conclusion: Singapore — as a society, as a country — must do as much as it can to maintain its economic dynamism.

With this perspective in mind — this thinking about Singapore’s vulnerabilities, about the fear of economic irrelevance, — is a useful framework to think about how policies relate to that broader goal. For example, one reason why Singapore’s employment guidelines are relatively lax is because companies can then hire and fire easily, within some constraints. And even then, it is unclear of the constraints or rules are enforced; hence the claims of racism or national biases in the practices of some foreign companies. Will the state want to enforce employment laws more strongly? According to the fear of economic irrelevance, the answer is a “no.”

The issue of immigration makes the framework more visible. The fear of an aging population, and a declining native population makes the fear of economic irrelevance and stagnation loom very large. And it does seem that immigration is the only answer in for various time horizons. Without a dramatic change in the social and economic policies, immigration will be an important part of the answer. Immigration, with the accompanying increase in the supply of foreign workers, will make foreign companies stay in Singapore, and provide jobs for Singaporeans of all kinds. The issue here is very clear: allowing foreigners here to come and work will cause companies to stay here, and their stay here will cause Singaporeans to have some jobs. The relative amounts of jobs does not matter; only the amount of net jobs created for Singaporeans matters.

What then about the crowdedness? The response then, has been a large increase in the number of infrastructural projects, and with changes in land-use planning. The increase in the MRT lines has been one response, and by 2030, the number of MRT lines will have dramatically increased. Land-use change — such as the relocation of the Paya Lebar Airbase will have a huge impact in the development of the area. Effectively, residential density can increase markedly, as the height limits for that area will no longer apply. And there will be more development and redevelopment projects — such as when Tanjong Pagar Port moves to Tuas… These are not trivial projects. For land-scarce Singapore, these are major changes. By 2050, the skyline of Singapore will have changed again.

All of these things, are however, cold comfort to those of us living in the present, having to deal with the crowdedness and the difficulties today. But these are the assumptions that have been with us for a long time — these fear based orientations stemming from the scarcity-based mentalities, most of which are justified. But difficult questions remain with us: to what end, or at what line, do we say that we have to fence something off against this fear of economic irrelevance?

A lot of things had to give in the drive to maintain economic relevance. A lot of people with memories will still ask — did the old National Library had to go, to give way to the Fort Canning Tunnel to save a few minutes for the motorist? Did Bukit Brown had to go, to save a few more minutes? Or even Bidadari to house people? Does the Cross Regional Line really have to go through the Central Water Catchment? Some of theses things have to be accepted, others mourned. Can we build a Singapore identity that does not only include government-sanctioned infrastructure? Today the Singapore Botanic Gardens is now in the UNESCO list, but in the 1970s it was close to being removed to give way to development. Where will Singapore end up if this line of reasoning were to be continued?

There is of course, optimism that the significance of economic development is less strong than before, even though it probably it still is very important, if not the most important. For one, there is now greater attention on healthcare and in uplifting low-income groups. The former, in view of the aging population — is necessary. The latter, from the opportunity point of view is probably necessary as well. For Singapore to remain cohesive, the argument of social mobility remains important — that it does not matter where one starts; the important thing is how hard one works. Yes, there are strains with social mobility, but as long as people accept the core principles, and as long as it seems that the principle still applies, socio-economically — Singapore will remain a cohesive society. A more socio-economically mobile society however, still requires an economically-growing economy — and the growth here has to extend to all parts of the economy, and not focused on specific industries. I guess going with this logic, it is easy to see why identity and the environment get the short end of the stick in Singapore — it’s because a growing economy is necessary for a social compact to be preserved.

The government is also well aware that economic development alone cannot guarantee social mobility, and so has kept on launching initiatives in education, employment and social assistance. There are limits to the agenda of economic development, but it probably still remains the core consideration.

We’ve come a long way. We’ve seen how the fear-based mentality towards economic development is necessary for Singapore’s existence, and for a social compact. It also explains why in Singapore, things to do with heritage and the environment are lower in priority when compared to the economy.

Fear will still be necessary — this fear of economic irrelevancy. Again, the issues of aging, a low birth rate, and social mobility will be with us. For the support of the aging population and to maintain social mobility, economic growth — assisted by immigration will still be necessary. But if it was based on fear alone, Singapore will become an unpleasant place to be in — due to the fear that things such as the heritage and the arts and the environment will be severely degraded, or at least be converted into additional means of supporting economic development. The questions for this situation remain the same as those asked today: is there an idea of when does economic development go too far? What do we ring-fence as sacrosanct? What do we protect?

There is another way to look at Singapore and its circumstances. It comes from hope. The following sections will seem weird.

The lens of Hope

The narrative of Singapore’s history and its future(s) thus becomes upended. It will consider Goh Keng Swee’s optimism that Singapore could succeed, and Rajaratnam’s claims that Singapore could become a world city, connected to other cities — a statement that remains remarkably prescient reading today. This hope is not a Pollyanna optimism but a determination, that despite the circumstances of Singapore’s realities, Singapore has come so far. The social mobility that has happened so far is also one of hope — that Singaporeans eagerly took the opportunities on offer during Singapore’s development and made a better lives for themselves, and gave hope to the people around them.

The decades ahead then, can be framed in terms of hope — that Singaporeans can again, see the opportunities that lie in the future, and that given the skills and other resources out there on offer, they can be seized, and hope can again prevail. What might that look like? It starts with a reaffirmation that people are the only resource of this country, and that all of them must be given the resources to have a good shot at life. It looks at the economic competition around us, and realises that the way to remain economic vibrant is to explore niches to thrive in, and to deepen specialisations in the industries that are already here. It is a perspective that makes competition on price irrelevant — simply because competition on price alone will be deadly to Singapore’s economic vibrancy. This would require an even larger investment in education and training programmes of all kinds, and maybe current policies are taking on these positions.

Perhaps a hope-based kind of framing will also see the elderly not as a challenge, but an opportunity. Greater investments and actions in preventive health could stave off the worst effects of debilitating chronic conditions, and would actually involve greater state intervention in mundane things: through the things we eat and drink. Maybe the elderly to come will have greater agency — will be healthier, will be more active, and more able to engage with others and with all sorts of activities. Will that happen? That will to some extent, be determined by how much agency that government and society is willing to give them. This isn’t just active aging, but to see that people are inherently abundant and have much to give to each other.

Then there is the question of social support and uplifting low-income communities. The research on scarcity has made it quite clear that the question on autonomy of personal choices is a much more complicated thing than previously thought. Rather than seeing only the potential of waste, there is at least some evidence to suggest that interventions in the social space will have to be quite drastic. Nonetheless, this could be justifiable for the purpose of enhancing social mobility, and yet does not erode the work ethic. Rhetorically, this commitment to social mobility from the bottom to the middle could make the work ethic even stronger.

What about the environment and heritage and the arts? Perhaps in a context where the economy is not the most important, perhaps these things can find spaces to thrive. Perhaps an expanded Park Connector Network together with less emphasis on cars and with compulsory shower facilities will see cycling become mainstream in Singapore; perhaps with less economic constraints, heritage can find its space and so can the arts. Poetry might yet become a necessity in a country full of beauty. But these are mere rhetoric — right now I can’t imagine yet what kinds of policies or acts in the community that could arise from a new context. Maybe more imaginative minds can.

And so I guess I come head to head with the biggest notion — that all of the things I talked about will entail large increases in spending, and thus require higher rates of taxation, which will erode Singapore’s competitiveness, cause companies to leave the country, and cause Singapore to become an economic backwater.

Yes, social spending will have to increase in many ways, and yes, rates of taxation will have to increase as a result, but look at what we might have then, at the end of the process — a more cohesive country where people believe in a work ethic and with social mobility; a country where people have a great range of skills and even be more creative and see how to rearrange existing ideas into new things; a country where old people are full of agency and can act for mutual need — I think it will be a great country, one where companies will want to come to invest in, and full of economic vibrancy, and certainly not an economic backwater.

Coming to the end still — a fear-based notion of policy has worked in Singapore. I’m just thinking that it won’t be enough, and I’m just exploring how a different orientation could change the way we look at our deepest concerns.

There is one more outrageous thing that I want to suggest: that with all these promise, with all these potential, Singaporeans can go on and be of greater service to the world and make the world a more liveable place. I want to unpack this at a later time, but for now this is enough.

*This piece will see updates as I add citations and so on.

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The Current 5-Trick Pony

I realise that I keep using 5 frames/logics/lines of argument whenever I discuss issues to do with Singapore.

1. Spectrum: Everyone for him/herself or community of fate

I use this frame to go through the substance and the rhetoric of new policy moves. ‘Everyone for themselves’ is the usual rhetoric of self-reliance, and not to depend on the state (which assumes other things below). I picked up the notion of ‘community of fate’ from a Danish contributor to Ethos – the publication of the Civil Service College. The idea is that there is a collective good that every social actor is striving for, and compromises have to be made to aim for that. The whole article is here is called “The Danish Negotiated Economy.  Apparently, this also translates to the German notion of Gemeinschaft (an ‘ideal type’ in the early 20th century Germany sociology tradition).

I also apply this more broadly, in thinking about say, the acceptance of employers for the disabled, or the elderly. This really is applicable for all of us – in deciding how much we want to care about others, and how to care for others, instead of putting it in a zero-sum frame.

Edited 25 Nov 2015: I say this is a spectrum because individualism and the broader social collective view are ends on a spectrum, and that communities and polities are really deciding which point to move closer to. These are negotiated positions, and societies fall along this spectrum (as with many things).

2. An opinion: The ‘Race for Talent” is a shorthand for corporate laziness.

My own sense is that ‘talent’ is a shorthand for corporate laziness. I use the word ‘corporate’ in the broader sense of the term to indicate organizations, whether private or public (or people sector). I use this also in the context of ‘the race for talent’ – the notion that there are only a few brilliant people in the world, and that organizations have to race to grab them with high pay, privileges and responsibility. Reality is of course, much more nuanced, but I want to point out that there is obviously more than individual ability at work, and there’s a whole bunch of factors, such as the company’s willingness to train people, the culture of job-hopping, the organizational culture – if it is nurturing or not, and most importantly, whether there are capable supervisors in the organization. Just focusing on the ‘race for talent’ is misleading and unhelpful, when there’s so much more that could be done in ensuring there are capable supervisors, managers and leaders in the an organization, and to also improve the capabilities of existing staff.

As a starting point, Geoff Colvin’s article in 2008 emphasizing the importance of deliberate practice is very useful.

3. Myth: As social spending goes up, taxes must eventually go up, and as a result, our economy will suffer. 

This is in relation to spending, especially on what seems to be ‘costs’. Donald Low, in one of his Facebook notes/updates (here) already note the fallacy of this framing – all spending is costs anyway, and it really is normative in how people define social returns.

So yes, more spending means at some point, higher taxes will probably be necessary. I guess I’m also constructing a straw-man, but the notion of increasing taxes seems to trigger a large reaction, and the usual fear from increasing taxes is the erosion of competitiveness.

At this point, I’m scratching my head because:

  1. Competitiveness is really a collection of a bunch of indicators;
  2. If the economy is dependent on one indicator (taxation rates) to be economically viable, then that economy is in a bad shape. Besides, as this guy has pointed here, the sky-high taxation rates in other countries are not really that high in practice.

4. An opinion: Between the state and individual there are organizations and associations.

This is in response to a Margaret Thatcher quote, who reportedly said the following:

‘I think we have gone through a period when too many children and people have been given to understand “I have a problem, it is the Government’s job to cope with it!” or “I have a problem, I will go and get a grant to cope with it!” “I am homeless, the Government must house me!” and so they are casting their problems on society and who is society? There is no such thing! There are individual men and women and there are families and no government can do anything except through people and people look to themselves first… There is no such thing as society. There is living tapestry of men and women and people and the beauty of that tapestry and the quality of our lives will depend upon how much each of us is prepared to take responsibility for ourselves and each of us prepared to turn round and help by our own efforts those who are unfortunate.’ (emphasis mine; quote taken from here)

This is a wonderful quote, with the highlighted section the oft-quoted section. The rest of it is also nice too, and many people subscribe to this view. This is a powerful reflection of the notion of self-reliance and individual empowerment, although there is also a little flaw with this view, as described below.

Where this applies to: associations and civil society

In Singapore we are very used to thinking in terms of self and the state and society. We fail to consider that that between self, society and state, there are all kinds of organizations and associations for people to come together and discuss all sorts of things. Some of them are nice, some of them are not-so-nice, and all of them are avenues through which individuals can exercise their influence. Just as with the economy we talk about expanding the pie and then think about distribution, surely the same can be said that the socio-political arena is one where we can expand the common space for social discussions, and then negotiate compromises for the greater good.

25 Nov 2015 update: Margaret Thatcher should have considered organisations in between family and the state.

5. An opinion: Not everything is about individual choice. Culture also shapes behavior.

Self-reliance and individual choices are not the only source of social outcomes. I mean, just look at rush-hour traffic. If everyone had real choice, everyone would avoid going out at the same time, right? Rush-hour is a half-absurd example, but surely the traditions and norms shape the way we make decisions too.

Where this applies to: thinking about poverty

People hardly have choice in growing up in poverty or in privileged backgrounds. People are almost not poor by their own choices, and everyone makes mistakes too, its just that some mistakes are more irrevocable than others. To paint broad-brushstrokes of poor people as deserving of their situation also fails to see how people are also trying to struggle out of their situation, and obscures institutional shortcomings. Besides, being poor can be a tax on mental capacities.

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So there you go, my 5 ‘tricks’. If there are serious flaws, let me know, and I’ll think about if I need to change my mind.

From Fear

This is a stab at applying assumptions and indicators to Singapore society.

From fear we have reached a few pinnacles. By some standards we have one of the best education system in the world. We have a prosperous society with one of the highest material standards of living. Despite the glitches in transport systems these still pale in comparison to the outcomes in other developed societies. From fear we have developed an impressive indigenous defence capability that cannot be trifled with.

Yet from fear we have created demands that cannot be fulfilled. From fear we have developed a society of selfishness. We have established a society where the gains seem increasingly zero-sum – one’s gains is seen as another’s loss. We have created hierarchies upon hierarchies – schools better than one another; JCs better than Polys, courses better than others, occupations better than others, where having a scholarship remains the best thing to have.

We have chosen implicitly to privilege the young heterosexual nuclear family at the neglect of those with different sexualities who still are filial and serve their parents. From fear of financial insufficiency, systems established put the burden of healthcare on the individuals. From the fear of dependence, a social safety net is constructed albeit a tenuous construct, leaving holes that some fall through, leaving people to protect themselves from life’s storms. Of course, there definitely is dignity in this, but sometimes the storms can be so great that the individual and the family alone cannot withstand them, and the state might be too far-off to intervene. Not that the state is deliberately aloof, but a fear of dependence drives the style of processes that can deter people from signing up, or from going through the whole process of being assisted.

From fear, the state can sometimes seen to be privileging MNCs than SMEs. Large corporations rooted in other countries and span continents might seem to provide a sure bet for jobs, and be a hub for technology transfer, but it also means being vulnerable to their relocation or collapse. From fear we have tried to reduce risk, and inadvertently created a culture of inaction. To call subsequent generations weak or not hungry begs the question of how they were brought up . From fear we have lost courage.

The indicators we have devised stem from fears, and certain kinds of it. We fear for our survival – and that’s the right thing, because Singapore’s existence cannot be taken for granted. A red vulnerable dot cannot hope to expect assistance from other people. The reasoning is clear, and hard to argue against. From this vulnerability we become fearful for our own future, and struggled in the early years of independence to make things work. And they have worked wonderfully. The fears remain nonetheless. The fear that all that we have can quickly vanish overnight, or in a few years. And now the fear has worked its way through generations, and the fear sustains itself.

SG is still vulnerable, but its vulnerability is the fear it has used to sustain itself. In an uncertain world, the fear only grows. Things have worked now, and in some senses, the fear from vulnerability has worked. We have only known fear; we don’t know as clear what hope, courage and risk-taking means. People hold on to what they know and familiar with, and not yet open to the possibilities that await. As others have put it, people would prefer the suffering they know than the goodness they don’t.

*From fear we relied on ourselves and become self-centred. From fear we have relied on transactional relationships instead of trusting on the goodwill of others. From fear perhaps we don’t even think about extending goodwill. Perhaps in a society such as ours, unconditional love remains an alien concept.

The idea that SG has to make her own way in the world is not yet a clear one. There are no examples to follow, no case studies to learn from. Whereas what we used to be able to look at others’ experiments, we have now become our own experiment of how long fear can be use to drive a people/nation onward.

 

*added on 3 March 14:48

The Consumerist System

There are a lot of criticisms about capitalism – about how it is destroying the natural environment, and how it is causing psychological harm to people and societies. There are criticisms of the giant corporations that are homogenising the world and destroying cultures, while a few people at the top of these corporations obtain a huge majority of the benefits.

All of the statements laid out above are very true. There can be debates about the specific degree of impact, but there is agreement that there is impact.

Many assumptions drive the consumerist society. The few ones that usually come to mind are that material goods are the main ways for people to show their social status, and that people are psychologically insecure and need material goods to assuage anxiety. After all, the best advertisements are ones that seem to offer psychological gains to the user/owner of the product. A car isn’t just a means of transportation, but about offering “freedom” – a family car is about “safety, assurances, convenience”. A watch becomes a signifier of taste and sophistication; a laptop becomes attached with action or efficiency. These symbols are all around us, and to ignore their power is a mistake.

These assumptions create demand. I find it curious how economists often talk about supply and demand as if they were abstract things in themselves. In clothing themselves in the economics-lingo, what’s often obscured are the psychological things of demand and desire. What people want, leads to what companies want. People wanting computing power becomes companies finding means to procure the resources to get them, which creates demand for other companies to supply other things to them. Financial systems develop to facilitate these demands – financial instruments were invented to reduce risks for farmers supplying products to the markets. They served real needs to protect their income and to supply appropriate goods to the markets. Reducing uncertainty remains the primary task some segments of the financial markets done in albeit complicated ways.

Can firms create demand? I find that demand is ultimately a psychological trait – one that’s always there and manifested in terms of the products that are acquired and owned.

So what is the economy? The economy is the activity and structure of firms and resources to meet people’s desires. The substantive content of the desires shows up in the goods that are produced and exchanged. The global economy is thus the economy on a global level, as firms and resources circulate to meet the demands of people around the world. Capital facilitates these flows with the creation of credit and debt; capital is given now with the belief that it will be repaid. As capital systems become an important part of the economy, one could suggest that the economy is a way of creating credit with the belief that it will be repaid sometime in the future – the economy is a way of satisfying today’s desire by borrowing from the future in the belief that it will be repaid sometime later on.

There really are two very deep assumptions that operate in the economy – the belief that material goods are required for psychological satisfaction, and that the future will be better than the best (for people to repay their debts). The two assumptions could work like this: because people will keep wanting to buy things, and some of them could be big expensive things, that people would incur debt to buy them. And the cycle continues, as people continue to buy things in a consumerist arms-race, furthering incurring debt, and so on. Only the bankers win, it seems.

If economic issues are framed like this, then the biggest threat to any economy, or to the global economy is simply that, people will stop wanting things beyond necessity/sustenance items. If people stopped wanting to be rich for its own sake, the global economy would not exist in the current state. Non-intuitively, people might actually be better off when they didn’t have to compare their material wealth with another.

I admit that this way of thinking about the economy is far from satisfactory, and leaves out many other things, such as where’s the place for community life, or what about non-market or non-economic activities. What about art? What about religion, or helping the poor? What about the marginalised, and culture?

I’ve heard about a cynical perspective about where culture comes from, in line with the consumerist perspective here. There’s at least a train of thought suggesting that culture is merely what the rich do to compare against another. The ostentatious products created as rich families compete against one another for prestige and status inadvertently creates cultural artefacts. That’s just one view, and there are surely are more benign views of where culture comes from.

There’s a line from Marx that says, “All that is solid melts into air.” I thought that applied very well during financial crisis, when the digits supposed to represent billions of dollars become zero – as expectations are inflated and then, deflated.

That’s what the “economy” is – our own expectations projected onto the real world, be they digital or physical.