My friend asked me to have a read of Tommy Koh's recent Straits Times article. It brings up some interesting points, and it can be read here:
I agree
with much that he says is 'improvable' with Singapore, however I disagree with his
solutions.
Firstly, I think he is a little misleading mentioning how we
shouldn’t chastise Europe for their financial worries (Greece, Italy, Ireland,
Spain, Portugal & france etc etc) and then goes on to compare Singapore
with the Nordic countries? Just to point out: Finland is the only one using the euro. Norway is
not in the EU. Sweden and Denmark are in the EU but still use the krone. They
do not have a sovereign debt crisis. Actually Denmark just had an oversubscribed
bond auction lately, pointing to the fact that they are actually on the
opposite side of the ship from the PIIGS mentioned above (where no one wants to buy their bonds, hence the soaring bond rates). So yes we should criticise Europe (PIIGS) for their debt binge, and no, no one is actually talking bad about the Scandinavians (not yet anyway).
Back on point, everyone agrees that equality is great. That high
wages for all is great. Free education and healthcare is great. That the ability to have a lot of kids and afford for
them to have childcare is great. What Tommy doesn’t mention is that
these things cannot and will not be made possible just by the government or its
people wishing for it to come to pass. Nothing is free. Everything has to be paid for with taxes, or by deficit spending (PIIGS/US/Weimar Republic/Zimbabwe anyone?)
My thoughts on his solutions:
1.
Limit the number of cheap foreign workers in Singapore
a. Prices
of everything starts to increase. Bus fares go up since we need to pay more for
drivers. Houses go up since we need to pay more for construction labourers. Food prices go
up (bye bye $3 chicken rice) since we need to pay for cooks. Yada yada yada.
You get the drift
b. Sweden
and the rest of the Nordic areas would KILL to have cheap labour like we do.
Why is it a bad thing that we get something cheaply? Nordic countries tap into cheap energy (wind, oil, coal) to fuel their economy, we tap into cheap labour. There are people willing to work and there are people
willing to pay for that work. Why should the government come into the situation
to stop what would make 2 parties happy?
c. He
talks about us not having enough childcare services. Then asks us to decrease
foreign labour. Who then will agree to be our maids for $500/month (not entirely sure on the price)?
2.
Set a minimum wage
a. Minimum
wages always affect the economy adversely. Worst of all, they affect the people that they
are trying to protect. When you increase the minimum wage, cost of setting up
business goes up, the flow on effect is everything else goes up. Businesses don’t get
set up (imagine setting up a hostel, and needing to pay $25/hour for a person to clean
tables and man the reception), so unemployment goes up, with the people that
would be earning minimum wage being the ones now not having the jobs (because the businesses dont get set up). Even if
these jobs are somehow kept, their high wages mean everything else has to go
up in price, so they end up losing that increase in salary since they have to pay more for
goods.
3.
Better education
a. I
think our children suffer from the mentality of their parents more than from
the education system. People in Europe want their kids to chase their dreams, and enjoy
school, and to get a pass from exams. Singaporean parents want their kids to
chase condos and cars, and to get straight A’s. Who is the pressure really coming from?
Lastly, he stated: THE
citizens of the world aspire to live in fair societies. One important aspect of
fairness is the equitable distribution of income and wealth. This is the moral
force behind the economic doctrine of inclusive growth.
I would ask everyone to be careful of what he means ‘equitable
distribution’. Does that mean taking from the poor to give to the rich? From the productive to the unproductive? Would
this constitute stealing? Should stealing be considered a moral force? Please do not get me wrong. I believe that as a member of the human race, we ultimate aim should be to strive towards helping the poor, towards serving the needy. However,this should be done through free will, and not through government mandate.
I think that the role of government is to protect their
citizens through a fair and just judicial system, and by
protecting us from outside threats (armed forces). Besides that, the government
should allow us to chase our dreams, and to keep what we earn based on our
skills in the market place. Give the market place what they want, and you will
be rewarded richly. Don’t offer the market place something useful, then you don’t
get rewarded. It is no surprise that Singapore has been able to attract the best talent globally by following this mantra. If you can do something that everyone can do, you are not
offering anything ‘rare’. If you want to get rich, go better yourself and make
yourself unique and valuable. Simple, though unfortunately not easy.
Lastly, he fails to mention that those countries have a
wealth of natural resources which fuels(Norwegian oil, Danish wind) and supports their welfare state. He also fails to
mention that the Nordic people are very generous (free education for foreigners, huge aid donations etc) and content people, being happy with the
basics in life, and striving to share and give to the needy. Singaporeans on a whole (there will always be exceptions) are
not happy with taking the bus (most Scandinavians are more than happy to rely on trams and trains), with earning as much as the next guy etc etc. So
instead of blaming our government/ the system, maybe we should look inwards at
ourselves. We cant have our cake (wanting to have all the riches of the world)
and eat it too (not work for it, and ask that we be given it based on ‘equality’).
Singapore is a country built on meritocracy principles, and I am proud at how it is like that. I personally do
not think the system has much to learn from the European model. I believe ours
is actually superior. There are however plenty
more we can learn from the Scandinavians when it comes to being content, and
generous, and hard efficient workers. We
need to change from the inside out (if we want to be like them), and not vice versa.
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