The headline reads : “The dollar was trounced once again in Asian and early European trade after a surprise tightening move by the Monetary Authority of Singapore sent the greenback plummeting against all its major trading partners”
Wow, impressive I thought. Our little island is really building a name for itself, so much so that our monetary policy decisions will actually influence the Forex majors.
Well, an amusing sidetrack that is. My interest lies in the reason behind our Government’s reliance on adjusting the SGD’s trading band to control inflation as compared to targeting interest rates. Fair enough, we are by and large an export reliant nation. Our domestic consumption has a high import content as well, which translates the fact that we are price takers in the international market and very susceptible to imported inflation. This has been the case for our monetary policy decision since the 1980s, but isn’t there a need to re look into the issue of combating inflation since the dynamics of our economy has changed in the past 2 decades?
Ultimately, the decision to use whatever monetary tools to curb inflation must have an overarching goal, which is to ensure that excessive price increases will not be a burden to its citizens and affect a country’s growth. With that in mind, I am not sure if using exchange rate targeting polices will be ideal Singapore. We just have to question ourselves, especially in recent years, what factors actually contribute to our inflation. Why is it that our cost of living seems to be creeping up on us every time we become complacent and think that we are comfortable?
I am not too certain that we can attribute a large percentage of our inflation on external factors anymore. With a large influx of foreigners, be it investors or genuine citizens hopefuls, one just simply cannot ignore domestic inflationary pressures like the rise in demand for housing and consumables. Secondly, there’s the Government’s fees and charges like your road tax, ERP,COE, utilities tariffs, and the list goes on, that is ever-increasing. The reason for it? To control congestion and mange the population surge. One big bloody irony I tell ya especially when they are the ones who opened the floodgates. But I shall dabble more on that in the future.
Thirdly, rising land prices especially with the government tendering state land to the highest bidder and worse, allowing these developers to dictate prices for public housing. Again, fingers are pointed to the Government for exacerbating the already high property prices which contributes a huge chunk of overall inflation.
My concern is this. I acknowledge that a rise in the cost of living is inevitable, especially in a land scarce nation like ours. Let’s take property for example, which incidentally contributes the most to inflation. As much as I want a massive property correction, I have succumbed to the fact that property prices will most likely hover around such prices or perhaps correct a little. I really don’t see it coming down to levels after the 1996 crash, based on the inelastic demand created by immigration and our government being that proverbial slut when it comes to big investor money. Yes, not even with the recent slew of measures to curb rising prices. The recent polices to me are a mere reaction to pacify the noise on the ground. Yes, it might soften the prices for public housing and mass market condominiums, but that’s about it. The bar of having an “affordable” home here is already set, if you can’t reach it, that’s your problem. Sale of high-end properties like the Good Class Bungalows (GCBs) and the Sentosa Cove area will still remain well bidded just because of the current global economic landscape where hot money will continue flowing to Asia. The last thing that our incumbent will do is to take away the punch bowl from the party and be a party pooper.
But they must recognize that fact that Singapore is not just for the elitists who can blow millions in the casinos or dock their yachts over at our piers just for a party weekend. Singapore is also made up of the aunties who contributed to our economic success in the past, but collects cardboard boxes and sell them for a living now. It is also for that young aspiring and working adult trying to make living and start or support a family.
Ultimately, the arrival of the filthy rich to our shores will inevitably push up domestic inflation whether it’s because of their investments, or the high salaries. Hell, even the ever-increasing million dollar salary Ministers, despite good or bad times, does contribute to overall inflation. Who will suffer in the end? Simple. The middle and the lower-income groups which will basically spark a vicious cycle of debt.
Essentially, I am no economist that can conjure the best recipe to curb inflation. But I am sure that the exchange rate targeting measures has its limitations. There is only so much room that the SGD can be strengthened before it becomes uncompetitive for our exports. Thus, whether we look into interest rate targeting factors or introduce certain policies, something needs to be done. Again it begs the question: Is our government running Singapore as a city or a nation?
Remember the Malaysia Cup of the 90’s? Where the whole nation as one stood behind household names like Fandi, Abbas, Malek, Sundram, to slaughter our Malaysia opponents? How the National Stadium was drenched in a sea of red every single match? How these mere soccer players achieved celebrity status and even produced their own music album? The national fervor back then still brings a smile every time I reminisce.
Fast forward to today and the much talked about YOG. It is supposedly a world class event, hosted by yours truly and boasts many young local athletes competing as well. But to say that the support is lukewarm is a total overstatement. Judging from the abysmal attendants (coerced school kids does not count) especially the concert celebration held in conjunction with the event and reading comments among netizens, I sense a lot of discontentment. The current YOG, it seems, is bearing the brunt for the ruling party’s policy failures of late. Quite a number are hoping that it is an epic failure that serves as a slap in the face to the ruling party who just doesn’t get it. I think that politics and sports should never be mixed but to me, this YOG might be a turning point in Singapore’s history. It simply personifies the widening disparity between what the ruling party and true blue Singaporeans think. While most of us are struggling to make ends meet, politicians are busy blowing their trumpets to the world. And that is the crux of the problem.
It is very concerning when the government of a country is too obsessed over its own branding. Like a chronic narcissist looking at the mirror and flexing his biceps, I don’t understand how a government can blow its budget by 3 times by splurging millions on an excessive showcase but be oblivious to its issues in their backyard. And worse, do all that with a straight face. Some citizens might think what issues? Well, if you bloody care to step out of your material chasing, capitalist world and probe deeper, you’ll understand.
Please do not use the excuse of sportsmanship and embracing the youth spirit to defend one’s policies. That is just merely attempting to use sophistry to divert one’s ulterior motives. It is as though us citizens don’t know our ruling party well enough. It’s all about the money and potential economic benefits isn’t it? Because if it is not just about the economic benefits then you would understand that national spirit cannot be bought, blatant importing of foreign athletes is detriment to the development of our young and most of all in sports, winning is not everything.
And before anyone comes and thinks that organizing such events will help boost our economic standing which will further translate into added benefits for citizens, think again. It is already proven statistically that we have one of the lowest wage to GDP ratio among developed countries as well as a widening income gap (measured by the Gini coefficient), thus good economic numbers don’t mean a thing to an average Singaporean until structural changes are being made.
To end off, I want to salute our young sportsmen, volunteers and “volunteers” for the tireless hours in contributing to the YOG event. Please don’t ostracize your fellow Singaporeans if they sound too negative and slam the games. The intended target is not you because we just want to be heard. Perhaps it’s also a good time to ask yourselves whether you are a patriotic Singaporean because you fly our flag during such events OR because you question and challenge the way our country is governed for the betterment of society and the majority?
An observation from this world cup and recent football tournaments. One thing is apparent in modern football, successful teams are built from the bottom up. Gone were the days where we witness the likes of Maradona or Eusebio running through the entire defence of the opposition and scoring a classic goal. Teams of today are more tactically and defensively shrewd and that is one of the reasons why the stars of football like Messi, Rooney and Ronaldo went missing. To say that their performances were ordinary is an overstatement. Games nowadays are mostly won not so much by attacking flamboyance, but by organized defence, which forms a strong backbone of any team. I really thought that it was going to be a year of the South Americans, with most of them making it through to the knockout phases and playing pretty attractive football. However, they were brought back to reality when faced with more astute European opponents who exposed the fragility of their defence. Quite shocking at times really. Dunga tried to emulate the qualities of modern football by sacrificing a bit of the samba magic that Brazil once possessed with a more complete all round team, but as we all know they failed.
One of the let downs I thought was the performances of the African teams. I really enjoyed watching the likes of Gyan from Ghana sprinting down the touchline or Tshabalala from South Africa… well mostly because of his name. But you got to admit that these African teams epitomizes the unpredictability and heart-ware of the game. It’s like a “Kinder Surprise” every time you watch them play.
On the lighter side of things, like every World Cup tournament there are the infamous oracles and jinxes. Paul the Octopus who was born in England predicted all 6 of Germany matches correctly. Amazing. Sometimes, it’s such unexplained phenomena that defies all logic that captures our imagination. How about jinxes? Apparently one reporter claimed that the remaining world cup teams playing has politely dissuaded Mick Jagger from attending the matches and supporting his favorite teams. Well, The US team which lost to Ghana and England team which was pitiful against the Germans were victims of his curse I guess. And who could forget all the pre tournament hype surrounding the Nike football advertisement? The likes of Ribery, Canavaro, Rooney, Ronaldo, Drogba mesmerized audiences in the advertisement, but not on the pitch sadly. And of course, the forgotten man, Ronaldihno who starred in the advertisements as well. Nike could not have picked a more perfect lineup of World Cup duds.
How about the controversies surrounding the Jabulani balls? The Europeans despise it, evident from the number of free-kicks and long range goals they scored with it. Regardless, I never understand the need to launch a new ball design with every major tournament. Yes, despite the need for branding, marketing revenue, blah blah, but at the cost of the quality of football? Come on…
Finally, who can forget the sounds of the Vuvuzelas? Loads of complaints in the beginning of the tournament, but I guess all of our ears have been so accustomed with the sound, the next time we catch an English Premier League match, we’ll find something amiss.
So yes, it has been a rather colorful tournament in all, certainly worth the late nights. Kudos to South Africa for hosting the world spectacle, and if there is one World Cup winner, it should be them. As a country that has progressed from a history of apartheid and poverty, I certainly hope that the financial and intangible benefits of hosting the World Cup will alleviate some of the socioeconomic factors plaguing the country for years.
Till then, see you at the finals…
The time has come for Singaporeans to wake up and snap out from the Singapore Dream. What is the Singapore Dream? The paper pursuit, followed by that coveted Multi National Corporation (MNC) job, and materialism, chasing the 5 Cs. A bit of generalizing, but you get my drift…I have read many many issues and matters of contention towards the current state of social affairs, government policies and cost of living. I concur with many views and I believe that our ruling party needs a wake up call too. However regardless whatever happens in the next general election, we cannot and must not expect that through our votes; and if more opposition seats are won, things will completely be solved. Even if the opposition win more seats, you cannot dispute the fact that our ruling party has buried its roots deep into our system via various monopolistic industries and government linked corporations (GLC)s.
If that’s the case, the amount of unhappiness, resentment and complaints will still be present. We therefore have to look at ourselves and take onus and responsibility of our life choices. A lot has been said about our education system and how it creates “A” grade students and conformists, but not thinkers. It’s true to a certain extent and the government has to shoulder some of the blame. Many of us love to bicker, bitch, complain, but somehow fail to take action. How many friends you know complain about the daily grind at work but have done absolutely nothing for months or years even. Astounding. Call it complacency, lack of oomph, but I somehow cannot disagree totally when our MM mentioned that we are falling behind because” the spurs are not stuck in the hide.”
By now, we should be very aware that our government sees Singapore as a globalized city and it will spare no expense to make sure that Singapore is up there in terms of competitiveness and economic growth. Everybody is dispensable nowadays because there is always more efficient or just plain cheaper alternatives out there. The world is a marketplace. Therefore, we need to take a long hard look at ourselves and see whether we have a future in this GDP obsessed state. Stop being myopic and take a step back to see what’s happening.
Freedom and mobility are two critical elements that I reckon people must possess in order to survive. Being able to be free of long-term debt obligations so that we can be mobile enough to adjust ourselves in the global playground. Free enough to chase our passions, or relocate for better opportunities, or satisfying that entrepreneurial urge in us. Of course, we are rooted by our families and friends, but hey, if you start having this mindset early, and build your finances prudently, live within your means, then you will be able to spend more quality time with your love ones, — once you have passive income going for you and you are not bounded by any financial burden, which to me is a major obstacle to living a fulfilling life in Singapore.
It’s really too late if you hit a mid-life crisis and find yourself in need to go for skills upgrading or relearning that is totally irrelevant to what you have been doing for the past 20 years. Because like I mentioned above, a better or cheaper alternative is at hand. To make things worse, you have that monthly housing and car loan, children to raise and elderly parents to support. It is no point crying to the government for social assistance then, because along with you will be thousand others. That is the harsh reality of globalization.
The writing’s on the wall people – being able to use Medisave in hospitals in Johor Bahru, a retirement home being built there as well to cater for the elder Singaporeans, our government’s relentless pursuit of foreigners and its best efforts to try to assimilate and integrate them into our society. There is a reason why they do not release statistics like average household income that differentiates between true bred Singaporeans and new Permanent Residents. To them, we are all just “GDP Oompa Loompas.”
The government sees Singapore as a globalized city, it’s time that we should see ourselves as globalized citizens too or forever be that Oompa Loompa trapped in a well.
I once blogged on the HDB conundrum issue [link], but a recent report that stated resale prices rising 3.8% for last quarter triggered me to re-explore this issue again.
Our town planning for public housing has been a model for many countries and it’s something that Singaporeans should all be proud of. The fact that they can incorporate facilities, transport infrastructure and beautiful landscapes into fairly affordable shelter for the masses in the past must be applauded. However, somewhere along the way, the balance was altered.
Before I carry on, I’d like to clarify that in any market, there are 2 types of inflation.Healthy inflation, where it shows that the economy is growing and all sectors are moving at a pace consistent with the fundamentals like unemployment rate, foreign direct investment etc. And then there’s artificial inflation, where prices are held up not by fundamentals but by sentiment or a short-term change in conditions. Our current situation fits the latter. A grossly under supply of HDB units coupled with opening the immigration floodgates. [link] It ain’t rocket science isn’t it?
I don’t think that our public housing is in a bubble that could burst overnight because firstly, we have sound stringent lending criteria in banks, secondly most home owners pay via CPF which is sort of forced savings and more importantly, real demand due to our lax immigration policies. But the big question is, what will happen if this real demand dries up when we hit our population target of 6.5mil in the near future? Will a fall in prices be imminent?
There are two camps when it comes to HDB issue currently. On one side, we have new purchasers, owners and investors who want prices to rise indefinitely, and on the other hand we have aspiring new owners and up-graders who want prices to fall. It’s like the bulls and bears fighting it out in a stock market. Except that for this case, its supposedly for public housing. Either way, the failure or the lack of foresight of our Men in White (MIW) polices has seriously caused a conundrum. Nobody knows the percentage of one camp from another, but one thing the MIW is doing is playing its cards right, spreading the usual fear mongering rhetoric about a collapse in values of HDB flats should they lose their constituencies and vote. Hence a blatant ranking exercise of the cleanest meanest coolest HDB estates which was released not too long ago. [link]. Plus a new take on retirement planning after the CPF model was proved inadequate by doing a so-called reverse mortgage of your HDB flat to provide annuities as another form of passive income for the future. Wow, how gracious… more wealth created by our MIW especially for us!
One caveat which they failed to mention is an assumption and a big IF, that our public housing prices will continue rising indefinitely so that our $400k flat we purchased today will be worth close to $1mil by the time we retire. And even if the prices do rise, we are making another assumption and a big IF that we have fully paid off our flat at retirement and can reap the full monetized value. Here’s a reality check, how many of our parents have actually fully paid off that HDB loan today even though prices were more affordable back then? Also considering depressed level of wages relative to GDP growth for the past decade. Now, all these assumptions plus the fact that we have not even factored in inflation of 3% to 5% which we all know erodes purchasing power. With 2 big IFs and inflation, that’s cutting a very thin line when it comes to retirement planning doesn’t it? Of course the young educated ones will not leave their retirement planning solely on their HDB flats, but for the ruling party to blatantly spread such flawed concepts to cover up their policies inadequacies is simply irresponsible.
Something’s got to give in the near future. Never will I thought I ‘ll see the day where our public housing will hit $1million. But with the recent $900k hurdle cleared for a Bishan flat, I’m not holding my breath anymore. Am I the only one who sees that the current prices of so-called “public housing” is unsustainable? One thing I am sure is the prices will keep trekking up till elections. The Built to Order (BTO) system which restricts supply to cushion prices will be our ruling party’s tactic to win voters cum this election. As I mentioned earlier, voters who are existing or new flat owners who coincidentally make up a bulk of new citizens will definitely favor the current ruling party to maintain the value of their flats. After all, it is them that gave these new citizens an opportunity to make a living here.
A lot of young couples in my age group view that BTO flats are the way to go, a common demographic of tertiary educated, a fairly decent combined income of $5k, paying around $200k for a flat is decent. But, looking beyond ourselves, isn’t such BTO flats the only option left for the lower-income/needy group as well? Even if they were to stretch their loan to 30years, the long-term financial implications will not be healthy.
It is fairly easy, especially if you are the majority to overlook socioeconomic factors that plague the growth potential of the younger generation of the minority groups, but yes it does exist, contrary to the meritocratic ideology that people down there deserve to be there. It also begs the question of what kind of society are we cultivating? Don’t forget the potential negative long-term societal impact of a widening income gap as well.
At the end of the day, a government’s responsibility is to ensure every citizen must be catered for. Not spoon-feeding, so as to spur ambition but as much as possible provide a level playing field for every individual to embrace the true essence of meritocracy. Well, either you can do that or marginalize the lower-income group by diluting their impact. It seems that our ruling party has chosen the latter with a mere 4% of the national budget dedicated to the Ministry of Community Development Youth and Sports (MCYS) in our 2010 budget. [link][link]. Mind you, around half of that 4% will be dedicated to sports development which leaves very little for the needy in Singapore.
I am not sure how I deviated from HDB issues to social assistance, but public housing is one of the basic need any government should provide for its citizens. Purchasing a house is also one of the biggest financial decisions for the majority. Hence it is paramount that this illusion of affordable housing must be addressed. There are various solutions proposed by bloggers and opposition parties which make good sense. They range from re introducing the Build to Sell (BTS) system to dividing the public housing into cost-plus models for long-term occupants to market subsidy models for investors. But whatever it is, the very immediate challenge is the need for the current ruling party to see the problem, admit the policy flaws and address them. However, I really wonder if they are up to it anymore. After all, these are the same leaders that in one week, glorify themselves, heaping praises for the recent strong GDP figures, but on another week defending their pride with infamous “caught off-guard” response to the recent flooding. Gees.
Pardon the hiatus, in a bit of a trading slump. Sheesh.
We are in really interesting times. Internet bubble burst. Real estate crisis, credit crisis. A bubble decade I call it. I read with utmost interest articles on the fabrication of such bubbles, the implications and causes and one thing I find eerily common, that history repeats itself over and over again. And people generally do not learn from past mistakes. Call it herd mentality, greed, but it’s just God’s way of reminding us that at the end of the day, we are all just humans, susceptible to our very own weaknesses.
Looking around today as an average Singaporean in my late twenties, I am amused by how Singapore has transformed itself. Like many other young aspiring adults, the dream of making it big in this island is becoming a distant future. Not that I am not striving mind you. It’s just that when you see countless condominium showrooms filled with people as if it were a warehouse sale, or ridiculous amounts being splashed for public housing, you kinda feel disenchanted with reality. It begs the question, where is all the wealth coming from? It seems that more and more Singaporeans are feeling poorer in their own land. What do you do in such circumstances? You could either follow the Jones-es, leverage your wealth with real low bank interest rates at that moment and commit to that dream home/car or you could stay at the sidelines and be contended with life.
Wealth in today’s world is a very misused word. In the past, wealth is created by input, which can be in forms of labour or capital. This is what I term “real” wealth. However in this decade especially, a lot of wealth is created by perception and sentiment. This is best explained by the root cause of the recent great recession. The real estate in America was hyped up as an asset with limitless potential. Based on this perception and low interest rate environment, banks were willing to lend to each other as well as the the public. Similarly during the internet bubble burst where people actually believed that start-up tech companies will be an instant hit, bidding their value up to millions of dollars based merely on ideas that these companies had. No actual target market for its service, just ideas. Similarly, how private equity entities can leverage on cheap credit, basing the debt on the assumption of potential returns of their existing and future assets to takeover companies, (just like what the Glazers did to my beloved football club). If the potential fails, it will lead to a spectacular failure immediately and what was built with blood sweat and tears in decades can be brought down in a blink because the fundamentals of the entity is laden with debt after the takeover.
Again,perception and sentiment rears its ugly head.
If you think that the recent great recession has taught us a few lessons, think again. It might be a sobering experience for that average man on the street, who lost his entire savings on an investment gone bad, or became unemployed. However, greed is here to stay…. for the people at the top at least.
Financial reform? What financial reform? Was there even a crisis in the first place? All the elaborate public hearings for the so-called “crooks” of wall street was just a staged show, because really, the recent American Financial Stability Act that was passed last week was a toothless one, teetering on the lines of reform but in essence little changes that will keep Wall Street happy. No breaking up of big banks that they promised, no curbing of the derivatives market that brought the markets to its knees, and yes taxpayers could still bear the brunt if these banks fail again. The funny thing is that, it was big money that caused the mess, and it was again big money that influenced the outcome of the reform. With 2000 lobbyists sent by Wall Street to Washington, the outcome was really imminent wasn’t it? Notice also in the recent G20 summit, all that’s emerged were rhetoric about reducing budget deficit and stabilizing the banks, but absolutely nothing on reining in excessive risk taking which was the core issue of the crisis just months ago. I wonder if these politicians have selective memory or perhaps on a more cynical note, a hidden interest/agenda?
As I mentioned in the beginning of the post, we do live in interesting times, a time where capitalism is being marketed as the most sound and effective system to preserve the status quo of the rich and excessive risk taking is here to stay. From a private equity firm who qualifies for a bank loan on the presumption of potential wealth that is not really there or European governments that do not meet the Maastricht criteria but pretend to do so, the sad truth is, the more things change, the more they stay the same.
Congratulations to our woman’s table tennis team for clinching the world cup from our arch rivals China. It is another milestone in Singapore’s sporting history. Only thing missing is the enthusiasm of support among Singaporeans.
I could see it coming, after reading about our triumph in Moscow. The never-ending debate about our Sports representatives not being “true blue” Singaporeans, hence the lack of national empathy and pride associated with their victories. And of course like any national issue that our incumbent is uncomfortable with, they will point to extremities via their propaganda mass media, attempting to alienate alternative views and sway public opinion. Just like how they claimed that we are all xenophobic when it comes to foreigners of all classes and how they are critically needed to fill lower end jobs that we shun, OR how they should lock our CPF funds up if we liquidate our property just because some guy irresponsibly squandered his proceeds away.
On a similar tone, we are told to embrace the efforts of our table tennis world champions, treat them as fellow Singaporeans and not be ungrateful [link]. Well, once again these reporters are missing the point. A hidden agenda perhaps… I reckon the majority of us certainly do not doubt the effort and time put in by our peddlers in achieving what they have today. And we also acknowledge the fact that they were “unpolished diamonds” when our scouts found them and we nurtured their talent to be world beaters. We are also told that like the Zidanes of France and the Cacaus of Germany, many countries are importing their way to victories. It’s an unfair comparison if you ask me. Firstly unlike us, the majority of their representatives are still natives or second generation immigrants who were brought up there, with a handful of new immigrants to boost their strength. Secondly, Singapore is a young country with a mere 50 years of independence as compared to other developed countries with a couple of hundred years of history.Are we already putting our hands up and forgo generic growth in our local sportsmen? A small population is not a problem as seen in countries like Denmark and Norway which boasts world-class sports representatives. A very typical fear mongering type of mindset that our ruling party instilled in us led us to believe that we must be world beaters ASAP in anything we do, and the end justifies any means even if it takes blatant importing of talent in the sporting scene. I dare say, what’s the rush? Is it just to meet a certain key performance indicators (KPIs) that government boards are so fond of?
I’m sure it takes time and money to nurture home-grown talents, but for every sportsmen, it is definitely worth it if he has the full support of the nation he is representing. Never mind the world cup, a regional cup would suffice, because the passion of a true sportsman lies in not what material rewards he’ll attain by winning a competition, BUT the pride of representing his country and adornment & fervor of his supporters. Just look back in the nineties and the Malaysia cup. Never mind if it’s a competition among the states of merely 2 countries, the pride of seeing our local footballers in action is for all to see.
This leads to the ultimate question, can our China born peddlers that represent us feel connected to our country? I am utterly frustrated by the mass media because,why is the focus always on the negativity of Singaporeans whining about our foreign-born athletes? Why can’t the focus be on these new immigrants instead? Ask them about their sense of patriotism or whether they can truly call Singapore home. Ask them what were in their hearts when our national anthem was played at the podium? What can they identify with our country that will keep us in their long-term plans? It is paramount that we know the answers to these questions because at the end of the day with our low fertility rates, we are relying on these new generation of immigrants which includes these athletes to sustain the growth of our country. It does not help that they can only speak Mandarin during interviews. No wonder some Westerners think Singapore is in China. Gees.