Ng Kok Lim rebuts foreign commodity trader’s view of TRE (Classic!)

[makapaaa]

[h=2]Ng Kok Lim rebuts foreign commodity trader’s view of TRE[/h]

July 24th, 2012 |

Author: Ng Kok Lim


I refer to the article “a Foreign Trash’s review of TR Emeritus” dated 22 Jul 2012 contributed by someone with the Internet screen name of ‘CommTrader’.

CommTrader regards Singapore as a utopia, a place of ideal perfection especially in laws and government and one that has high GDP, highest home ownership rate, least corrupted, technologically advanced and very low taxes.

The following are the top scoring lists in “Rule of Law” and “Government Effectiveness categories of the World Bank’s World Governance Indicators from 1996 to 2010:

Country	Average “Rule of Law” score from 1996 to 2010	Country	Average “Government Effectiveness” score from 1996 to 2010
FINLAND	1.95	DENMARK	2.15
NORWAY	1.92	FINLAND	2.13
DENMARK	1.91	SINGAPORE	2.12
SWITZERLAND	1.87	SWITZERLAND	2
AUSTRIA	1.86	SWEDEN	1.99
SWEDEN	1.86	NORWAY	1.92
NEW ZEALAND	1.85	NETHERLANDS	1.92
ICELAND	1.82	CANADA	1.9
LUXEMBOURG	1.81	ICELAND	1.88
AUSTRALIA	1.76	AUSTRIA	1.86
NETHERLANDS	1.75	LUXEMBOURG	1.84
CANADA	1.74	NEW ZEALAND	1.78
UNITED KINGDOM	1.68	AUSTRALIA	1.78
GERMANY	1.64	UNITED KINGDOM	1.75
IRELAND	1.62	BELGIUM	1.74
SINGAPORE	1.57	LIECHTENSTEIN	1.69
UNITED STATES	1.54	GERMANY	1.67
		UNITED STATES	1.63

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Clearly, Singapore is far from a place of perfection in rule of laws, scoring only 1.57 compared to the top score of 1.95 by Finland. In terms of government effectiveness, it is also not the best let alone the ideal, perfect one.

When denominated in US dollars, our per capita GDP is actually not very high compared to other First World nations:

	World Bank 2010 per capita GDP (current US$)	purchasing power parity
Luxembourg	104,512	1.25
Norway	85,443	1.49
Switzerland	67,644	1.43
Denmark	56,278	1.45
Australia	50,746	1.25
Sweden	49,257	1.26
United States	46,702	1.00
Netherlands	46,597	1.17
Austria	44,885	1.18
Finland	44,091	1.28
Japan	43,063	1.21
Belgium	42,833	1.19
Singapore	41,987	0.69
Germany	39,852	1.13
France	39,170	1.21
United Kingdom	36,186	1.06
Italy	33,788	1.12
New Zealand	32,620	1.01
Hong Kong SAR, China	31,758	0.69
Korea, Rep.	20,540	0.68

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It is only because of purchasing power parity that our per capita GDP gets adjusted up significantly. According to purchasing power parity, a product that costs USD $1 in USA costs only USD $0.69 in Singapore. It’s like the iPad that costs USD $499 in USA costs only USD $344 or SGD $433 in Singapore when it actually costs SGD $658. Big ticket items like houses and cars cost only a fraction in USA than they do here. But purchasing power parity will have you think it is the other way round.

Another reason why our GDP figures look better than they really are is our high proportion of foreign workers. To illustrate this, we take the example of a family with father and mother each earning $5,000 and two children. The per capita income of the family is $10,000 / 4 = $2,500. Let’s say two foreign workers stay with the family and each earns $5,000 also. The per capita income in the house is now $20,000 / 6 = $3,333. The per capita income in the house has gone up simply by having more working adults even though the per capita income of the family remains unchanged.
It is therefore important to look at GDP per employed person instead of GDP per capita. In terms of GDP per employed person, Singapore ranks much lower than many other First World nations despite purchasing power parity:

Country	World Bank 2010 GDP per employed person (1990 PPP $)	Country	PWT 2009 GDP per person counted in total employment (current PPP $)
United States	68,126	Luxembourg	118,973
Hong Kong	61,382	United States	90,269
Ireland	57,473	Norway	89,811
France	55,033	Belgium	81,262
Belgium	54,882	Australia	80,856
Luxembourg	54,449	Ireland	78,882
Trinidad and Tobago	51,962	Netherlands	78,629
United Kingdom	51,604	France	77,773
Norway	50,582	United Kingdom	76,412
Finland	50,278	Austria	75,362
Australia	50,153	Singapore	74,027
Sweden	49,778	Hong Kong	73,570
Canada	48,916	Canada	71,950
Austria	47,474	Sweden	71,455
Netherlands	46,949	Iceland	70,898
Denmark	46,598	Finland	69,273
Italy	44,855	Italy	67,795
Japan	44,804	Spain	66,676
Estonia	44,568	Germany	66,116
Singapore	44,524	Switzerland	65,712

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Finally, a large chunk of Singapore’s GDP goes to foreigners and foreign owned companies by virtue of their large presence here. Our 2010 indigenous per capita GDP of SGD $46,092 is much lower than our corresponding 2010 per capita GDP of SGD $59,813 (Singapore Statistics Yearbook 2011). All in all, our GDP is not as high as our statistics make it out to be.

High home ownership is a myth. You don’t own your home until you fully pay up your mortgage loan. About 50% of supposed home owners have not fully paid up their mortgages and cannot be considered to own their homes. Because housing cost is so high, many people take thirty years to pay their housing loans. There are even 50-year loans now so one literally has to work until one is 75 years old before one can finally own one’s home.

According to the Transparency International 2011 ranking, Singapore is not the least corrupted. That title belongs to New Zealand followed by Denmark, Finland and Sweden.

Singapore is still not technologically advanced enough and continues to depend heavily on foreign investments to make products for the world.
Low tax doesn’t mean cost of living is therefore low. Other costs like housing, cars, petrol, business rent which affects cost of goods have been jacked up so that overall cost of living is not low.

Having no timber is no big deal; no country has become exceedingly rich by merely exporting timber. What Singapore lacks in natural resources, it more than makes up for with its excellent strategic location that is the basis of our prosperity. This is a point that our eminent former deputy prime minister Dr Goh Keng Swee acknowledges [1]. It is true that nearby places like Batam and Johor share the same strategic location. But places beyond the Straits of Malacca and the Riau Archipelago do not share the same strategic location. You would have to go to the next choke point along the international sea faring route to find the next strategic location. When Raffles set up Singapore as a port, the Dutch indeed competed with us vigorously using Indonesian ports. According to Dr Goh, Singapore won in the end because of the Victorian traditions of free trade and free enterprise which meant lean administration, minimal taxes and free competition [1]. According to Dr Goh, Singapore succeeded because of our geographical location and our colonial institutions and practices which he regarded as priceless [1]. Thus, even the pioneer of our government says that we are unique not because of our government but because of what we have inherited from the British.

1. The Singapore government oppresses and undermines a free press

This is not just true to some extent; it is true to a very large extent. The fact that we have to be compared to North Korea just shows how pathetic we have become. Watching CNN and BBC will not enlighten us one bit about our government’s false arguments. Even the CNN and BBC are clueless to our government’s false arguments since the only information they have are the ones released by the government.

It’s true that our government doesn’t control the Internet like China does. Again, it is pathetic we have to be compared with China to show that we are better. It is like consoling ourselves we are not bad since we scored 10 marks out of 100 compared to the guy next door who scored only 5. Shouldn’t we measure ourselves against the best in the world since we say we are perfect, ideal and utopian? Also, the Straits Times stresses every now and then that newspapers and television continue to be the people’s choice for news and that internet readership continues to trail far behind those of traditional media.

How would comparing us against countries like Philippines or Sri Lanka show that we are perfect, ideal and utopian? CommTrader claims that Russia’s HDI of 0.719 isn’t far behind Singapore’s 0.846. Perhaps that is why Russia’s Press Freedom Index ranking of 142 is also not far behind Singapore’s ranking of 135.

CommTrader is mistaken about Singapore being young. Singapore was founded in 1819 and has been around for 193 years already. He is also mistaken about people having both options of reading upbeat news in Straits Times and less upbeat news online. Many of our older generation do not know how to use the computer let alone go online. For these people, the only option they have is SPH newspapers.

2. The PAP promotes nepotism

LKY may not have installed his son as prime minister. But can anyone prove that being the son of LKY was absolutely no use, no help no good to his career? Quite some time back, there was a Straits Times feature about this person who did better than LKY in RI. But because he came from a poor family, he didn’t go to university and ended up with a mundane career and led a mundane life (not saying it is a bad life). This story tells us that backgrounds do matter.

As for LHL being respected the world over, let’s see if he gets the same respect if he was the prime minister of East Timor. Giving advice to the US president doesn’t mean the advice was wise, sought after or reflected upon. I remember the French president Mitterrand once asked who LKY was and remarked that LKY was governing the equivalent of a small French city whereas he was governing the whole of France.
India may be democratic but it is a democratic Third World country. Again, CommTrader seems to conveniently forget that he regards Singapore as perfect, ideal and utopian and chooses to compare utopian Singapore with one Third World nation after another. He likes to compare something with shit and then claim that since it is better than shit, it must be diamond.
There was a Temasek Review Emeritus article previously about Temasek Holdings recognizing the transfer of statutory boards like Singapore Telecoms to Temasek Holdings as profits when they are not. Such dubious accounts should be cleaned up first before we can fairly compare Temasek’s performance with other funds.

3. Foreigners stealing jobs

The government’s unemployment figures differ from those of the World Bank. But since CommTrader has chosen to compare with other countries, it is better to use the World Bank’s figures that span most countries. Also, it is better to use the average figure over several years to smoothen out extraordinary events that happen now and then.

Country Name	World Bank average unemployment from 2000 to 2009
Netherlands	3.4
Norway	3.6
Switzerland	3.6
Korea, Rep.	3.6
Luxembourg	3.9
Austria	4.3
Denmark	4.6
Japan	4.7
New Zealand	4.7
Singapore	4.8
United Kingdom	5.3
Australia	5.5
Hong Kong	5.5
United States	5.5
Sweden	6.4

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Thus, the average unemployment from 2000 to 2009 is:

• 4.8% for Singapore rather than 2.1%
• 5.3% for UK rather than 8.1%
• 5.5% for US rather than 7.9%

It is irrelevant to say that UK, US and Australia have more foreigners than us. What is pertinent instead is that because their populations are much bigger, their foreigner numbers are comparatively much smaller as a percentage of their populations and can be better stomached. Although Singapore has less foreigners in absolute numbers compared to UK, US and Australia, our numbers are large compared to our own population and is therefore much more difficult to digest.

It is not true that Singaporeans are only retrenched in favour of better or more professional workers. There have been numerous postings in Temasek Review of Singaporeans who were displaced by cheaper, foreign workers.

The US practice of terminating the bottom 5% is not shared by the Europeans or the Japanese. Again, CommTrader selects the country that supports his arguments while conveniently ignoring the fact that many other countries don’t support his arguments. Since American cost of living is low, the retrenched American VP can survive on flipping burgers. However, the Singapore cost of living is much higher. Flipping burgers is not an ideal job substitute in Singapore. More of CommTrader’s attempts at argument through selective choice of examples:

a) CommgTrader tries to dispute the notion that old folks shouldn’t have to work by pointing to Walmart greeters in the US. But what about old folks in Europe? No Walmart there, what do they do? They retire.

b) CommTrader tries to justify PAP million dollar salaries by pointing out that there is no corruption around. But we see cases of sex for commercial favours. We also see New Zealand, Denmark, Finland and Sweden doing better than Singapore in the Transparency International 2011 ranking despite not paying million dollar salaries to their ministers.

c) CommTrader tries to justify MRT overcrowding by pointing to overcrowded trains in New York. But has CommTrader ever ridden a train in Taipei? Again, CommTrader likes to choose countries that support his argument while conveniently forgetting so many other countries that goes against his arguments.

CommTrader claims that TR Emeritus readers don’t know how good our lives are compared to the rest of the world. But compared to which part of the world? Compared to North Korea, India or Russia? If CommTrader can only bring up Third World nation examples to show why lives are better for us, he only ends up showing we are better than Third World, not that we are First World. But we were already better than Third World at independence in 1965.

CommTrader claims that TR Emeritus readers loves to complain. But exposing the fallacies of people like CommTrader isn’t complaining. The so-called brilliant lifestyle boils down to working non-stop to pay ever growing bills to feed ever growing prices like housing. A large segment of the 60.1% majority comprises old folks who may never know how to use the computer or surf the web or read TR Emeritus. If Singapore had continued to maintain a free press at independence, we may never have reached 60.1% or we may have reached 60.1% the other way around.
CommTrader claims he has not made a single sweeping statement against Singaporeans. But he has when he said all those who are unemployed for three months or more are incredibly stupid, incompetent, has a bad attitude or just plain lazy.

Hitler didn’t get his strength from the National Socialist youth. He got his strength from the state apparatus from which he controlled the nation. Labeling TR Emeritus readers as National Socialist is another sweeping statement from CommTrader despite his claim otherwise. In fact, it should be the other way round. By speaking out against state propaganda and misrepresentations, TR Emeritus readers are the opponents of the National Socialists. They are the Sophie Scholls and the Von Stauffenbergs who dared speak up or go against the state apparatus because it is the right thing to do.
.
Ng Kok Lim
[1] Dr Goh Keng Swee, The Practice of Economic Growth, Chapter 1
* Responding to: A ‘Foreign Trash’s’ review of TR Emeritus

 

[makapaaa]

Ng Kok Lim rebuts Indian FT on Singapore’s economy

[h=2]Ng Kok Lim rebuts Indian FT on Singapore’s economy[/h]

July 23rd, 2012 |

Author: Ng Kok Lim

Dear Straits Times,

I refer to the 21 Jul 2012 letter by Mr Bobby Jayaraman.

To show that the government had chosen the right path in actively pursuing growth, Mr Jayaraman contrasted the years 2001 to 2005 when the economy grew slowly, property prices fell and median household income fell from $4,363 to $4,270 to last year when the median household income was $6,307.

Firstly, judging from the HDB resale price index, it is more accurate to say that property prices were relatively flat from 2001 to 2005 than to say that property prices fell. Secondly, the economy grew slowly in this period because of the double whammy of Sept 11 and SARs occurring almost one after the other.

Mr Jayaranman’s household income comparison is also inadequate for the following reasons:

1. If Mr Jayaraman had considered 2000 to 2005 instead of 2001 to 2005, the result would be an increase in median household income from $4,000 to $4,270 instead.

1. There are four years’ of growth between 2001 and 2005 compared to six years’ of growth between 2005 and last year.

1. There were two economic recessions in the period 2001 to 2005 compared to just one between 2005 and 2011.

1. Mr Jayaraman did not adjust his numbers for inflation. The median household income last year when adjusted for inflation is only $5,153, 18% lower than Mr Jayaraman’s figure.

Also, since the CPI doesn’t fully capture the steep spike in housing prices in recent years, for new households, it would be better to compare household income increase to housing price increase instead. HDB resale price index went from 106.7 in 2005 Q1 to 190.4 in 2011 Q4 or a 78.4% increase compared to a 47.7% increase in household income from $4,270 to $6,307. Therefore, for new households, increase in household income lagged behind increase in housing prices significantly.

Singapore was already a busy trading centre since colonial times. Going from trade to finance is not too far a leap and not too unnatural a step for the people of Singapore to make with or without the government. The integrated resorts are part of the tourism industry which accounts for only about 3% of our GDP, a percentage too small to be to be the driving force of our economy. In any case, casino betting taxes of $0.9 billion in 2010 is small compared to the government operating revenue of $44.5 billion [1] that year.

Mr Jayaraman asked whether empty buses and trains or secure, well-paying jobs are more important. Perhaps for Mr Jayaraman, an empty brain is most important. No one ever demanded for empty buses and trains, only comfortable buses and trains. Prior to the recent population explosion, were buses and trains ever empty? They weren’t empty, neither were they overcrowded, just the way they should be.

Mr Jayaraman argues that secure, well-paying jobs are possible only if the economy grows at a ‘healthy’ pace. Referring to the table [2] below, many First World nations can provide job security to its people with much less growth than us.

	Average unemployment 2005 – 2010	Inflation adjusted per capita GDP growth 2005 to 2010
Norway	3.3	3.2%
Korea, Rep.	3.5	0.2%
Netherlands	3.8	1.9%
Switzerland	3.9	5.2%
Japan	4.4	3.8%
Austria	4.5	1.9%
Hong Kong SAR, China	4.6	2.0%
Luxembourg	4.6	2.9%
New Zealand	4.7	0.6%
Singapore	4.8	5.5%
Australia	4.9	5.2%
Denmark	4.9	1.4%
United Kingdom	6.0	-3.3%
United States	6.5	-0.7%
Italy	7.2	0.1%
Sweden	7.3	2.3%
Finland	7.6	1.6%
Belgium	7.9	1.3%
France	8.6	1.4%
Germany	8.7	1.8%

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Quality of life is not just correlated to any kind of growth but to quality growth rather than to growth in numbers. It is unfortunate that Singapore cannot achieve quality growth and have to resort to massive growth in numbers instead.

The Arab Spring happened for reasons such as income inequality, lack of transparency and lack of democracy, the same ills plaguing our country. US unemployment isn’t representative of First World unemployment as over half of the First World economies in the table above have similar or better unemployment figures than us.

Life in Russia isn’t necessarily happier after the collapse of communism. Net migration has increased from 906,615 in 1990 to 1,135,737 in 2010 [2]. Referring to the table [2] below, Russian per capita GDP has been increasing at snail’s pace over the last twenty years.

Indicator Name	1989	2010	% annual increase
GDP per person employed (constant 1990 PPP $)	15,703	18,259	0.7%
GDP per capita (constant 2000 US$)	2,693	2,927	0.4%
GDP per capita, PPP (constant 2005 international $)	13,066	14,199	0.4%

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Referring to the table [2] below, income share of the poorest has fallen and GINI index has nearly doubled.

	1988	2009
Income share held by lowest 10%	4.22	2.75
Income share held by lowest 20%	10.01	6.46
GINI index	23.8	40.11

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There is even a video to show how miserable life in Russia is after the fall of communism [3].

No one is blaming the government, just stating the fact that growing numbers has many problems and that it is better to grow in quality instead. We don’t just choose the pace we run, we also choose how we run.

Thank you
.
Ng Kok Lim
[1] Yearbook of Statistics Singapore 2011
[2] Derived from World Bank data
[3] http://www.documentarystream.com/death-of-a-nation-russia-after-the-collapse-of-the-soviet-union/
.
Editor’s note: Some info on Bobby Jayaraman according to LinkedIn -

http://sg.linkedin.com/pub/bobby-jayaraman/5/385/62
Bobby Jayaraman
Frunze Investments: Investment Manager
Past Employments:
Business Manager, Financial Markets at Standard Chartered
Engagement Manager at mckinsey
Manager at A.T. Kearney
Education
INSEAD
Indian Institute of Foreign Trade
​

---

Straits Times forum, 21 Jul 2012, S’pore chose the right road
IN HIS letter (‘The road not taken: Singapore must pause and reflect’; Wednesday), Mr Kenneth Ling says that the ‘Government has chosen the path of monetary and materialistic emphasis’ which is largely responsible for the social imbalances and pressure on our infrastructure and resulting poorer quality of life.

My rejoinder to Mr Ling is to ask whether Singapore was better off in the years 2001 to 2005 when the economy grew slowly, property prices fell, the city lacked buzz and Singaporeans were looking to leave for greener pastures.

The median household income in 2001 was $4,363 and in 2005 it was $4,270. So Singaporeans were getting poorer.

Last year, the median household income was $6,307, which was possible only because Singapore chose to actively pursue growth.
Had it not been successful in becoming a regional financial hub and in developing the integrated resorts which were part of the measures to drive the economy, Singapore would not have had the resources to battle the financial crisis between 2008 and 2009 and could have plunged into serious recession.

Ultimately, what is more important? Empty buses and trains or a secure, well-paying job? The latter is possible only when the economy continues growing at a healthy pace. Citizens’ quality of life and growth are strongly correlated.

Singapore is fortunate in having the problem of high growth and managing its side effects such as pressure on infrastructure and environment. The reverse is much more serious.

Think the Arab Spring and the current unemployment situation in the United States. The Soviet Union prior to 1991 had teachers, engineers, astronauts and cleaners who were paid the same wages. Utilities were practically free, the infrastructure was good, there were no foreigners competing for resources and there was plenty of open space. Yet, why were the people unhappy?

Let us not blame the Government for something that is entirely in our hands. We can choose to run at the pace we want.
.
Bobby Jayaraman
.
​

 

[scroobal]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

Kudos to Ng Kok Lim. This guy should be in the cabinet. Bobby Jayaraman, can you please fuck off from this country.

 

[Tension68]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

Kudos to Ng Kok Lim. This guy should be in the cabinet. Bobby Jayaraman, can you please fuck off from this country.

Here here. I agree wif you on both remarks!
I just dun understand why sporeans (who most has GCE O levels) can't see that statistics dun play any part in our lives! The ppl who use statistics may not show u the whole truth. Statistics dun lie.. but if not presented correctly and in it's full entirety, may not give you the full picture.

If by now, sporeans still dun see that "growth", as said by the pappies, doesn't really equate to better living or better lives for them.. then I wish the Colorado shootings would happen here in our own land. Don't get me wrong, but someone or something has to kick those ppl out of their dreamzones.

 

[eatshitndie]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

"you don't own your home until you fully pay up your mortgage loan." who is this crackpot?

if this is used as the benchmark, more than 50% of americans with a real home in 2007 would not have had owned their homes, which is untrue. in fact, in 2007, americans on the average had about 70% equity in their homes. that was just before the housing bust. 40% who paid up their mortgage in the 2007 survey data contributed to the high equity number. but full 100% equity ownership of a home is never used as a benchmark for home ownership. you can have 20%, 30%, 40%, 50% equity of a home, and you're considered a homeowner. the other part equity owner is the loaning bank.

there are more holes on both sides, but i'll point them out later.

 

[eatshitndie]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

the example of 2 working adults with 2 children earning a per capita income of $2500 compared to the same family plus 2 foreign workers earning a per capita income of $3333 is ludricrous. 1st of all, 2 foreigners earning $5000 each would have rented their own apartment. foreigners who are most likely to tenant with a family with screaming kids are those with lower pay and who struggle to have their own apartments. if maids constitute the foreign labor pool who live in family households, their contribution to per capita income within the household would lower it due to much lower wages. for example, if there are 2 maids making $1000 each, the per capita income for that household would be $12000 divided by 6 = $2000. it's a circular and useless argument. the more useful number would be gdp per employed resident (does not include employed foreign workers on visas or permits). gdp per employed person doesn't tell the whole story. it may actually be contaminated with cheap foreign worker wages and bring both the gdp per capita and gdp per employed person down. gdp per true sinkies may actually be much higher than many 1st world countries on the list!

 

[Spock]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

Ungrateful and ignorant SGreans should just keep their mouths shut and their heads down if they cannot come up with a better solution than our highly-paid leaders who came up with the ingenious idea of importing people to grow the economy. Of course there will be some minor hiccups here and there like the infrastructure not being able to cope but nothing that can't be solved by adjusting people's expectations and aspirations.

 

[Narong Wongwan]

Re: Ng Kok Lim rebuts Indian FT on Singapore’s economy

Kudos to Ng Kok Lim. This guy should be in the cabinet. Bobby Jayaraman, can you please fuck off from this country.

CSI please post details on this Bobby fucktard and let the mob lynch him!!!
Battle cry.....FREEDOM!!!!