Some may consider a total re-invention of the wheel with regards to our national policies a high-risk move, especially if it is part of an electoral manifesto for an opposition party. However, ruling out a total re-invention of the wheel for certain policies is a little bit premature, and who knows we may be better off with a total re-invention. Of course, certain policies only require tweaking to achieve optimal results. Thus, a non-exhuastive list of policies that require either total re-invention of the wheel or tweaking are explored in this article.
Economic policies
In as far as economic policies are concerned, a total re-invention of the wheel may be required in order to address issues we are facing currently and in the future. Much of Singapore’s growth during the early years was due to Foreign-Direct Investments that formed the basis of economic planning during the Drs Goh Keng Swee and Albert Winsemius era. With the rise of cheaper manufacturing bases in Vietnam, China and Thailand, Singapore will inevitably face an uphill struggle to retain the multi-national corporations (MNCs) that have set up shop here. The most tragic part is that our socio-economic planning have always revolved around the interests of MNCs. Thus, the floodgates opened to allow in cheaper foreign labor that effectively depressed our wages. But, these MNCs are still able to reap in profits. In essence, Singapore’s economic model is an export-driven growth one due in part to its reliance on foreign investments and export of goods. Thus, the re-invention of wheel will come in when the focus turns to increasing domestic consumption. Domestic consumption can fuel economic growth and give rise to a more resilient economy.
How can we increase domestic consumption? There has to be dedicated efforts to establish our domestic industries. This can come in the form of innovation drives and support for our local firms. The Taiwanese have a good model of partnership between government and the private sector that allows the homegrown industries to produce innovative products. What happened in Taiwan is that its National Science Council established the Science and Technology Information Center to provide academic research departments and the industrial sector with information on science and technology. The Center has a long history of more than 20 years and is a well-established institution for collecting, processing, exchanging, and offering information on science and technology. If that is not all, the Taiwanese government opened its national laboratories to the private sector for Research and Development (R and D). Thus, an open laboratory was set up to bring together enterprises and research institutions to conduct R and D, which upgraded the technology level of the local industries. It is quintessential for our local firms to increase their innovative levels, and it is entirely possible for the government to assist in this process through collaborations with its Research Institutions.
Another way to boost domestic consumption is to facilitate easy access to credit, which allows people to spend and business owners to set up their firms. For instance, allowing prospective business owners access to their CPF savings will allow the latter to use their CPF funds to start-up their business.
Housing policy and population numbers
There is some concern with the surge in HDB resale prices and this is intrinsically linked to the increase in the foreign population here in Singapore. Yet, the government aims to hit the 6.5 million mark for population figures. However, the existing infrastructure clearly do not support such figures. The HDB builds 8000 flats a year, but there are doubts whether this number can support the increase in demand for flats, especially when the increased pressure for demand comes from the new residents.
The increased demand will drive up the prices of the flats, and the hardest hit will be the bottom 20% of the earners. The latter already possess an outstanding loan of $119,000, which according to Mr Leong Sze Hian, is 150 times the average monthly income of $795. Thus, this desire to expand the population base will drive up the prices of the HDB flats and exacerbate the debt-to-income ratio of Singaporeans, which in itself is already among the highest in the world.
Hence, we are looking at the negative spillover effect of population increase on our housing, which begs the question – should the government even ditch its plans to increase our population to 6.5 million? Not only will it have ramifications on our housing, but other infrastructure may not be able to support this population increase. Thus, a more drastic action than the re-invention of the wheel is on the cards. Perhaps, a U-turn in the plans to increase our population to the 6.5 million mark.
Education
Reforms were made under the watch of Mr Tharman Shanmugaratnam as the Ministry of Education went on the “teach less learn more” initiative. That is where students are taught real-life skills in sourcing and researching for information, and to critically analyze and evaluate them. These are the real essential skills that students have to pick up, which will serve the latter well for life. Instead of the rote learning process in the past, students are imbued with real skills that can be relied upon to upgrade themselves in a lifelong learning process.
However, the aspect of our education system that requires tweaking is to do away with programs that encourage streaming altogether, and that includes abolishing the Integrated Program. The latter allows the brightest students to skip “O” levels and only take their “A” levels at the age of 18. Having different classes of ‘elite’ and ‘non-elite’ programs which require entry examinations (which in this case is the PSLE) into them is still considered a subtle form of ’streaming’ per se. The gunner type of parents and students will go to great extents in order to get (their children) into such ‘elite’ programs, and this will put unnecessary stress on the students. It is entirely possible to do away with the Integrated Program, but still achieve REAL education for our students.
After all, nowadays, the catch phrase is diversity, and having students with different talents in a classroom setting will open their horizons, and appreciate their fellow classmates for their gifts and talents.
Defense and healthcare
Our defense budget has typically been between 4.5-5% of our GDP, and it will reach $11.4 billion in 2009. On the other hand, about 3% of our GDP is spent on healthcare.
The threat of an all-out war with our neighbors isn’t as realistic as what the South Koreans are facing with North Korea or the Israelis are facing with its middle-eastern neighbors. In fact, certain economists are already encouraging regional trade engagement with our ASEAN neighbors which if materializes will see ASEAN diplomacy being taken to greater heights. Diplomatic engagement at the ASEAN level will eliminate the need to spend on new military weapons typically used in conventional warfare. However, no one is denying that we must still dedicate a portion of our defense budget to homeland security due to the realistic threat of terrorism. However, positive diplomatic engagement with our ASEAN neighbours will negate the need to spend on conventional military weapons. If we are spending less on such military toys, we can decrease our defense spending.
Healthcare on the other hand will take higher priority owing in large part to an aging population and an increasing affluent society whose population will encounter diseases typically associated with the affluent world, e.g. heart diseases. Our 3% of the GDP expenditure is one of the lowest among developed countries, and is not exactly something that we should be proud of. Thus, hopefully, we will see a reduction in our defense expenditure and an increase in our expenditure on healthcare, which should take higher priority over defense.
Conclusions
Our economic model for growth is definitely in need of re-invention, and we can no longer revolve our economic policies around Foreign-Direct Investments. Our projected population figures and the targeted 6.5 million mark is in need of a serious rethink considering their impact on housing prices. Thus, it will not be surprising if there are calls to reverse that policy. Other policies that are in need of tweaking are our current educational policies and expenditures devoted to defense and healthcare. Thus, a total re-invention of wheel for a major national policy will not necessarily do us in as this depends a lot on the context of the issues that we are facing. Neither do all policies require total re-invention, as they require tweaking to achieve optimal results. It could perhaps be a combination of both scenarios where national policies are concerned that will be a major part of the campaign for the next elections.
Economic policies
In as far as economic policies are concerned, a total re-invention of the wheel may be required in order to address issues we are facing currently and in the future. Much of Singapore’s growth during the early years was due to Foreign-Direct Investments that formed the basis of economic planning during the Drs Goh Keng Swee and Albert Winsemius era. With the rise of cheaper manufacturing bases in Vietnam, China and Thailand, Singapore will inevitably face an uphill struggle to retain the multi-national corporations (MNCs) that have set up shop here. The most tragic part is that our socio-economic planning have always revolved around the interests of MNCs. Thus, the floodgates opened to allow in cheaper foreign labor that effectively depressed our wages. But, these MNCs are still able to reap in profits. In essence, Singapore’s economic model is an export-driven growth one due in part to its reliance on foreign investments and export of goods. Thus, the re-invention of wheel will come in when the focus turns to increasing domestic consumption. Domestic consumption can fuel economic growth and give rise to a more resilient economy.
How can we increase domestic consumption? There has to be dedicated efforts to establish our domestic industries. This can come in the form of innovation drives and support for our local firms. The Taiwanese have a good model of partnership between government and the private sector that allows the homegrown industries to produce innovative products. What happened in Taiwan is that its National Science Council established the Science and Technology Information Center to provide academic research departments and the industrial sector with information on science and technology. The Center has a long history of more than 20 years and is a well-established institution for collecting, processing, exchanging, and offering information on science and technology. If that is not all, the Taiwanese government opened its national laboratories to the private sector for Research and Development (R and D). Thus, an open laboratory was set up to bring together enterprises and research institutions to conduct R and D, which upgraded the technology level of the local industries. It is quintessential for our local firms to increase their innovative levels, and it is entirely possible for the government to assist in this process through collaborations with its Research Institutions.
Another way to boost domestic consumption is to facilitate easy access to credit, which allows people to spend and business owners to set up their firms. For instance, allowing prospective business owners access to their CPF savings will allow the latter to use their CPF funds to start-up their business.
Housing policy and population numbers
There is some concern with the surge in HDB resale prices and this is intrinsically linked to the increase in the foreign population here in Singapore. Yet, the government aims to hit the 6.5 million mark for population figures. However, the existing infrastructure clearly do not support such figures. The HDB builds 8000 flats a year, but there are doubts whether this number can support the increase in demand for flats, especially when the increased pressure for demand comes from the new residents.
The increased demand will drive up the prices of the flats, and the hardest hit will be the bottom 20% of the earners. The latter already possess an outstanding loan of $119,000, which according to Mr Leong Sze Hian, is 150 times the average monthly income of $795. Thus, this desire to expand the population base will drive up the prices of the HDB flats and exacerbate the debt-to-income ratio of Singaporeans, which in itself is already among the highest in the world.
Hence, we are looking at the negative spillover effect of population increase on our housing, which begs the question – should the government even ditch its plans to increase our population to 6.5 million? Not only will it have ramifications on our housing, but other infrastructure may not be able to support this population increase. Thus, a more drastic action than the re-invention of the wheel is on the cards. Perhaps, a U-turn in the plans to increase our population to the 6.5 million mark.
Education
Reforms were made under the watch of Mr Tharman Shanmugaratnam as the Ministry of Education went on the “teach less learn more” initiative. That is where students are taught real-life skills in sourcing and researching for information, and to critically analyze and evaluate them. These are the real essential skills that students have to pick up, which will serve the latter well for life. Instead of the rote learning process in the past, students are imbued with real skills that can be relied upon to upgrade themselves in a lifelong learning process.
However, the aspect of our education system that requires tweaking is to do away with programs that encourage streaming altogether, and that includes abolishing the Integrated Program. The latter allows the brightest students to skip “O” levels and only take their “A” levels at the age of 18. Having different classes of ‘elite’ and ‘non-elite’ programs which require entry examinations (which in this case is the PSLE) into them is still considered a subtle form of ’streaming’ per se. The gunner type of parents and students will go to great extents in order to get (their children) into such ‘elite’ programs, and this will put unnecessary stress on the students. It is entirely possible to do away with the Integrated Program, but still achieve REAL education for our students.
After all, nowadays, the catch phrase is diversity, and having students with different talents in a classroom setting will open their horizons, and appreciate their fellow classmates for their gifts and talents.
Defense and healthcare
Our defense budget has typically been between 4.5-5% of our GDP, and it will reach $11.4 billion in 2009. On the other hand, about 3% of our GDP is spent on healthcare.
The threat of an all-out war with our neighbors isn’t as realistic as what the South Koreans are facing with North Korea or the Israelis are facing with its middle-eastern neighbors. In fact, certain economists are already encouraging regional trade engagement with our ASEAN neighbors which if materializes will see ASEAN diplomacy being taken to greater heights. Diplomatic engagement at the ASEAN level will eliminate the need to spend on new military weapons typically used in conventional warfare. However, no one is denying that we must still dedicate a portion of our defense budget to homeland security due to the realistic threat of terrorism. However, positive diplomatic engagement with our ASEAN neighbours will negate the need to spend on conventional military weapons. If we are spending less on such military toys, we can decrease our defense spending.
Healthcare on the other hand will take higher priority owing in large part to an aging population and an increasing affluent society whose population will encounter diseases typically associated with the affluent world, e.g. heart diseases. Our 3% of the GDP expenditure is one of the lowest among developed countries, and is not exactly something that we should be proud of. Thus, hopefully, we will see a reduction in our defense expenditure and an increase in our expenditure on healthcare, which should take higher priority over defense.
Conclusions
Our economic model for growth is definitely in need of re-invention, and we can no longer revolve our economic policies around Foreign-Direct Investments. Our projected population figures and the targeted 6.5 million mark is in need of a serious rethink considering their impact on housing prices. Thus, it will not be surprising if there are calls to reverse that policy. Other policies that are in need of tweaking are our current educational policies and expenditures devoted to defense and healthcare. Thus, a total re-invention of wheel for a major national policy will not necessarily do us in as this depends a lot on the context of the issues that we are facing. Neither do all policies require total re-invention, as they require tweaking to achieve optimal results. It could perhaps be a combination of both scenarios where national policies are concerned that will be a major part of the campaign for the next elections.
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