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Saturday, December 28, 2019

Manifesto Of A Singaporean

Call it what you like. A fool's errand or a firebrand challenge. Ruling party may take it as unsolicited feed-back. Opposition parties may consider it support ammunition. As for me, I'm just wishing for stuffs in my Xmas stocking.

With election round the corner, it's time to survey the political landscape and see the offerings. In Singapore, political party ideologies are not well defined as in the West. On the political spectrum, the PAP is on the Right, polishing the meritocracy medal with their ethos of every man for himself, to each his own efforts. On the Left are all opposition parties with their bleeding hearts for more-re-distribution to benefit the poor.

To be fair, nobody's on the extreme Right or Left. Whilst the PAP is all globalist capitalism and ensconcing elitism, it tries to build social safety nets, although many will question its adequacy given the rise in poverty and cost of living.  Neither are opposition parties ideologically socialists simply because they want to see the poor better taken care of. They are not Robin Hood, out to take from the rich to give they poor.

A vote for PAP is a vote for status quo, a bowing to a supercilious elitist oligarchy who has made life very good for one segment of the population - the rich, the well-connected, the business owners, and the well educated who are gainfully employed. A vote for the opposition is a protest vote by Earth-scorchers, people prepared to see a change, any change is better than the PAP for various issues that irk them. The battle lines are issue specific. Opposition parties have laid out the issues they are fighting against. One thing the opposition is not, and that is riding on populist lines the way many other countries have been torn apart. "Singapore first', or 'take back our country' ought to be legit cries in a tiny country where 4 out of every 10 residents are non-Singaporeans and 40% of the workforce are foreigners.

Some opposition parties have published their manifesto or spoken out on issues. However,  many have been simply generalisations, such as abuse of power, incompetence, loss of freedom of speech, non-accountability, loss of jobs to foreigners, shifting goal post of CPF withdrawals, eroding value of HDB, rising cost of services, neglect of the poor, etc.  I would like to see more specifics of which I list below, not necessarily in order of priority.
  1. Set up a Truth Commission:
    The commission to be tasked with investigation into possible past wrongdoing of state and non-state actors in the past with the objectives of (a) setting historical records straight, (b) pursuing restorative justice where transgressions have been discovered, (c) improve on weaknesses of regulation or legislation if any.
    The specific areas to focus:
    - Who were the state actors who purchased pre-war properties
    - The truth about Operation Spectrum
    - The charges against Phey Yew Kok
    - The truth about ex-president Devan Nair
  2. Statement of Family Members by MPs:
    On assuming office, MPs to provide SFM to 2nd degree of consanguinity.
    To obtain from MPs past and present SFMs for the purpose of (1)(3)(4)(5)(6)(7).
  3. Statement of Assets and Liabilities by MPs:
    On assuming office, MPs to provide SAL.
    To obtain from MPs past and present SALs from start date to 2019
    Deemed ownership includes those of children and spouse. Holdings far in access of their capabilities require explanations.
  4. Bonus shares of GLCs:
    List bonus shares issued to all political appointees and connected actors.
  5. Cabinet member salaries:
    Re-evaluate salaries of MPs and cabinet members.
  6. Depoliticisation of actors and institutions:
    Depoliticise the civil service, PA, CCC, grass-roots organisation, HDB, GLCs, social institutions, trade unions etc. The role of PA and CCC to be reviewed. These 2 institutions of non-elected actors have operated on the basis of partisanship and acted with great bias towards wards run by opposition.
  7. Dismantle the spider web of political connections in various institutions:
    The political domination of the same ruling party for 54 years have seen an incestuous network of the politically connected and their relations embedded in all aspects of life in the country. We need a breadth of fresh air into this suffocating environment. Where necessary, political appointees and connected persons whose only reasons for being in the position is their connection, to be removed. 
  8. Town councils:
    MPs to refocus on legislative responsibilities and no direct involvement in the running of town councils.
    Doctrine of exclusiveness as regards access to state resources to be ceased. All electoral wards to have equal rights to state resources notwithstanding which political party runs the ward.
  9. Privy Council of UK as Final Court of Appeal:
    Re-instate the right of final appeal to the Privy Council of UK. This is not a regressive step but a bold statement of the independence of the Judiciary. The reason is, with a small population of 3.5m citizens, we have too small a base to produce brilliant legal minds. As Singapore establishes itself as an international centre of excellence, this will certainly have the endorsements of all denizens of whatever nationalities.
  10. Libel case laws:
    Repeal all precedents of local political libel cases and re-subjugation to universal libel case laws. The PAP will reel in horror of this suggestion if they win the election, but likely to support this idea if they loose. 
  11. Review POFMA:
    Some form of curtailing online falsehoods is acceptable but the current arrangements are open to abuse by Ministers. A proper review is necessary and this time, to really allow participation by all stakeholders.
  12. Referendum:
    Legislate a requirement for a national referendum on amendments to the Constitution, the powers of the President, and Presidential Elections Act.
  13. Presidential qualification:
    To review the criteria for qualifying candidates in presidential elections. The current bar is too high. Just imagine if other countries had adopted the same principles, there can never be a Mandela, Deng Xiao Ping, Winston Churchill, and others.
  14. Strengthen the Law Society:
    The Bar Association is a mainstay of democracy in a country. This is called the Law Society in Singapore. The shackles for voicing dissent or criticism of legal matters must be thrown away. The Society must regain it's rightful role as a staunch and fierceless voice of conscience for the people.
  15. Change in Companies Act:
    Private exempt companies to file financial returns. Not doing so allows illicit and improper corporate activities to hide behind a veil of ACRA exemptions.
    Practice of nominee shareholdings to be abolished. This is an antiquated practice of the past where physical scripts were required. Nominee shareholdings is an affront to an open market. It facilitates the concealment of improprieties. 
  16.  Freedom of Information:
    An FOI Bill should be introduced.
  17. Smaller government:
    Rationalise and shrink the government which has been bloated over the years in abeyance to Parkinson's Law. More specifically, abolish the practice of layering approach of the government which has resulted in duplication and higher costs. The Doctrine of Subsidiarity should be practiced. Why should the government, through its various agencies and institutions, be running small little business like childcare and others.
  18. Review CECA:
    Produce a Balance Sheet on CECA and review the bilateral agreement.
    Conduct an inquiry into who wanted the article of labour mobility inserted and why.
  19. Temasek & GIC:
    Conduct independent financial analysis and report on the state of affairs.
    Re-install full governmental control.
    Report on executive compensation paid.
    Re-evaluate on the principles for sovereign wealth fund investment. Should it be wealth maintenance or profit maximisation at high levels of risks. To reign in the increasing move towards leveraged investment.
  20. Incentive grants:
    List all the commercial grants and incentives provided by the government indicating the quantum and the recipients.
  21. CPF:
    Restore CPF withdrawal rights on the basis of what the contributors signed up. If a contributor started CPF contribution in a particular year, he should be allowed to withdraw according to the standing regulations then. The goal post should not change since people make their long term plans based on the parameters when they signed up.
  22. Wealth transfer tax:
    Death duties and capital gains tax to be re-established. It should not be crippling, but a progressive rate should apply.
  23. Social redistribution:
    To make a proper detailed study of the state of poverty in Singapore. Metrics currently available are insufficient. To establish metrics on citizens as distinct from just residents. To establish a poverty line. Determine the real state of affairs and to consolidate all safety nets available to one coordinating agency. Determine the quantum of assistance to be raised.
  24. HDB Pricing:
    Conduct a public inquiry into the basis of HDB pricing. To determine if HDB pricing strategy was the benchmark used to prop up the private real estate which distorts price discovery. HDB must return to its proper role of providing public housing, its determinant utility is affordable public housing.
  25. Public transport and electricity:
    To re-evaluate the cost effectiveness of nationalised and deregulated services. Singapore market seems too small for full deregulation, the benefits of which are lost through duplication and faux competition.
  26. 5G implementation:
    A proper health review has to be conducted. There is no need to rush to be number #1 in 5G technology. The public needs to understand the health issues - what's proven, what's possible, what studies have been made.
  27. 10m population:
    To be rejected outright. What an irony to save and struggle and pour so much resources into all those land reclamation projects in the past so that we have more breathing space, only to bring in millions of immigrants and turn on the pressure cooker again.

These are just my first few priorities. No doubt the reader will have his/her own list. My list covers almost all current issues contributing to the angst of the people struggling to live dignified lives in the most expensive city in the world. What I have glaringly left out is the issue of diminishing value of HDB apartments and associated inadequacy of retirement funds. The reason is simple. I do not share the views of many that they have been cheated and lied to about their HDB flats. It is understood leaseholds have depreciating values. If a person has emptied his retirement funds in his CPF to purchase a leasehold property, the consequences are obvious. My only concern in this regards is whether HDB pricing is fair and that changes to CPF terms should only apply to new entrants to the fund.






Wednesday, December 25, 2019

CECA - the shocks of labour mobility

Singapore-India CECA was first mooted in 2003 as any Free Trade Agreement between two countries desiring to improve bilateral trade relations . By 20 June 2005, when it was inked with articles for enhanced labour mobility for PMETs (professionals, managers, entrepreneurs, technicians) across 127 specified job titles, CECA was no longer a plain vanilla FTA but a binding treaty facilitating the flow of Indian workers into Singapore. Adding to the planeloads of incoming Indian workers, favourable immigration policies allowed those that hit home base to sponsor direct family members over, and in turn, spouses may find jobs.

Singapore has a 3.5m home citizens on a tiny 721 km2 space and is a magnet for immigrant workers. India is a behemoth with 1.3b population in 3.2 million km2 land, and high unemployment. With such disparity, an FTA allowing high labour mobility must be the most lop-sided bilateral trade agreement ever signed in the world.

"An economic shock refers to any change to fundamental macroeconomic variables or relationships that has a substantial effect on macroeconomic outcomes and measures of economic performance, such as unemployment, consumption, and inflation. Shocks are often unpredictable and are usually the result of events thought to be beyond the scope of normal economic transactions. Economic shocks have widespread and lasting effects on the economy..."  Investopedia

In simple layman term, shocks are the impact on macro and socio-economics that the influx of Indian PMETs wreak on Singapore. In going to bed with Goliath, can David stand up to the shocks?

Much of what is written here is based purely on personal observation and internet chatter. Hardcore statistics are hard to come by and official data is suspect for its inability to drill down from residents to citizens and non-citizens. With a population of 5.6m of which 2.1m are non-citizens, and where 40% of the workforce are foreigners, statistics that shy away from citizen specific do not tell the real story. The government has a high trust deficit here having been outed on several occasions for presenting statistics skewed to fit its narrative.

The open labour mobility of EU supports the theory of ‘Optimum Currency Area’ that people move from areas of increasing unemployment to where the jobs are. It acts as a stabilisation mechanism in smoothening out employment and population distribution. For the EU, this has consonance with its political and economic integration objectives. It is also facilitated by shared western cultural background. The Singapore-India arrangement has none of these.

Experience has shown the receiving country of immigrant labour, being a higher cost economy, ultimately faces the shock of depressed wages. Employers have no reason not to welcome a source of cheaper workers and the government is certainly happy to push GDP numbers on the back of competitive labour. Yet official statistics show Singapore median wages have grown both nominally and in real terms. How is that so? Without a breakdown of data to show the status of citizens, it remains to be proven that the lot of the locals have actually improved. In the absence of citizen specific data, it is not within the bounds of reason to suggest that the median wage has risen due to a structural change in labour composition. The new high technology economy has caused a paradigm shift of more head counts in a higher skilled sector whose wages has the effect of pulling up the median numbers. The average Singaporean feels wages have not increased sufficiently and resigned to a lowered standard of living.

The shock of unemployment is inevitable as cheaper Indians displace Singaporeans across the board. Local PMETs above 40 years of age who, having hit glass ceilings, are the most vulnerable. There has been a glacial  displacement of local PMETs at a time when they are just beginning to build a family and paying for big ticket items like a home mortgage loan. Lateral mobility is almost impossible for this category of job seekers. Many resorted to work as Grab share cab drivers, security guards, private tutors, insurance or real estate agents, or whatever freelancing or gig jobs that come by.

Not only are PMET jobs taken over by Indians, but increasingly, the C-suites (CEO, COO, CIO, CFO) are also going to the Indian nationals. These pay scales are reckoned to be on levels higher than Hongkong and other cities. Singaporeans find themselves displaced and high paying jobs out of reach.

The shock of welfare tourism is not significant for Singapore since it does not provide unemployment benefits and immigration is work-pass dependent. Nevertheless, permanent residency status has its benefits in subsidised medical, child care, education, right to retire in Singapore, and right to purchase public housing. Many immigrant workers use Singapore as a springboard to move to their country of choice, namely USA or EU.

The influx of hundreds of thousands of Indian nationals present a social and cultural shock that is evident everywhere. Infrastructure and public services are stretched to the limit. Public transport, especially the mass rail transit, are jammed-packed like Tokyo rails. Hospital beds are crowded out, and waiting time stretched long. Public spaces are taken up by Indian nationals. Go to Changi Business Park where it feels like downtown Mumbai. Go to the popular coastal stretch on the East Coast Park and its Indians, Indians, everywhere, Singaporeans are black cats in a coal cellar.  Indians are crowding out locals in selective condominiums such as Mandarin Gardens and social tension is inevitable. Adding a magnitude of Indians on a tiny land of 721sq metres is mind boggling. It is an understatement the demographic landscape has changed radically.

The shocks of labour mobility as a consequence of CECA need to be seriously studied, understood, adequately explained and managed. Hiding behind skewed data, oxymoron statements from Manpower Minister such as 'new job creation increased and unemployment also increased', and Minister of Trade & Industry's view of taking criticisms of CECA as subversive, are not helpful at all. The EU experiment offers a lesson. The same shocks of labour mobility suffered by the British fueled the 'take back our country' cry and was one of the key reasons for Brexit.

See related blogs :

CECA : The Dangers Of Labour Mobility

The Government Thinks Singaporeans Are Too Stupid For Lots Of Jobs





Thursday, December 19, 2019

Aqua Munda to buy Hyflux's accounts payables

Strange happenings at the beleaguered Hyflux. The blog title needs a double-take. Yes it's accounts payable, not accounts receivable.

1. Newly minted company Aqua Munda goes to Hyflux to buy out water/power production company's Accounts Payable -- namely some bonds, unsecured creditors and some contingent liabilities. Should'nt Aqua go to bondholders and creditors to buy out their Hyflux bonds and Accounts Receivables instead?

2. Aqua is actually making an offer through Hyflux. So there is no actual direct offer by Aqua to creditors and bondholders?

3. State media say Aqua is making a tender. It's asking sellers to quote their price. Aqua retains the right to accept or reject any offer, without the need to explain why.

4. Just imagine the administrative hassle. Supposing Aqua buys Hyflux's Accounts Receivable. It deals only with Hyflux to buy the debts on their books (an asset). But here, Aqua has to deal with the hundreds or thousands of retail bond holders and sundry creditors to buy what Hyflux owes them. It's unheard of.

5. How does this deal affect Hyflux? Absolutely nothing. They still owe the same amount of money, (about S$1.7B) but to a different party is all.

6. What's in this for Aqua? They take on Hyflux credit risk. So if they buy from bond holders and unsecured creditors at a good price and Hyflux manages to pull out of their crisis, it's boom time Charlie for Aqua. Since Hyflux is now suspended and its financial distress seems insurmountable, it can only mean Aqua knows something the market does not know.

7. The mystery deepens. Acra information shows Aqua's principal activities are water treatment, waste treatment and oilfield chemicals.  It is then in the same line of business as Hyflux. Does it intend to go into business?. If so, why take over the liabilities and not ownership?. Is it a precursor to taking over the company? Resolve the messy retail bonds and unsecured creditors first and then to make an offer to shareholders? If that were so, surely the egg must come before the chicken. Aqua must have reached some agreement with major shareholders and secured creditors as pre-conditions. That begets questions of non-compliance of disclosure requirements by Hyflux.

8. If Aqua was recently registered as a company seeking to go into water treatment business, nothing is known of the personalities involved. Are they from the industry? Why are these people so coy? Surely they ought to step right out for public confidence. 


9. Here's something that might give a clue. The shareholder of Aqua is Singapore citizen Mr. Bambang Sugeng Bin Kajairi.  A Google search shows Bambang has been associated, at various times, as officer, director, CEO or shareholder with Geylang United FC, Reem Investments (UAE), CapitaLand Amanah Pte Ltd, some corporations in UK, Credenze group (sports, real estate, fund management) and senior management positions in the Ministry of Foreign Affairs.

10. So, Mr Bambang is no water industry guy.  He is a PAP guy. Does he know something no one knows? Or could he be the PAP face in a government attempt to sort out the Hyflux debacle?

11. Could this be a government bailout disguised as an open market transaction? This makes sense. It's a political play to bail out local retail bond holders and small businesses. A Hyflux arrangement with bond holders will need to fix a single compensation rate which is almost impossible to satisfy all uncles and aunties. An Aqua tender allows individualised rates which should be palatable to all. Aqua has the right to accept or reject any offers. It is thus possible for a selective bailout of only the local retail investors and SME creditors at acceptable prices. Is this a smart way for the government to remain anonymous in bailing out small time local investors and ride out a high octane outpouring of anger unfairly directed at it, whilst at the same time, avoid setting a precedent for the market to seek the administration's support for investments gone bad?

12. Lastly, here is a trivial which may not mean anything. Mr Bambang is listed in the Panama Papers and has shareholdings in 2 offshore companies -- Bartley Development and Lindbergh International, both registered in Virgin Islands. Of the several associated personalities disclosed in Panama Papers is a Malaysian Mr Pang Shun Pen. He seems to be from the oilfield chemicals industry, one of Aqua's principal activities.


19 December 2019

Addendum:

States media mentioned Hyflux made some filing with SGX regarding Aqua's proposal. This is so strange. Aqua offers to purchase from the aunties and uncles their holdings of Hyflux bonds, and from SMEs their Hyflux debs. Hyflux is not privy to such transactions. It has nothing to do with them. So what SGX filing is required of Hyflux?

20 December 2019