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Sunday, February 18, 2007

RH: Latency, Low-Base & Tiny-Country Effects

From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: Latency, Low-Base & Tiny-Country Effects
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Newsgroups: soc.culture.singapore
Date: 2004-05-10 05:52:12 PST

From: robert_ho@my-deja.com (robert_ho@my-deja.com)
Subject: RHo: Latency, Low-Base & Tiny-Country Effects
View: Complete Thread (2 articles)
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Newsgroups: soc.culture.singapore
Date: 2000/09/20

I have been most busy in the last few weeks reading, posting and
replying to readers of soc.culture.singapore. Uncannily like a few
years ago when I posted my messages in the Young PAP Forum on Lee Kuan Yew's misdeeds, I was jumped on by a whole gang of pro-PAP readers who argued against me using almost exactly the same arguments that I encountered in Young PAP. Deja vu? Or are they the very same people paid or volunteered to defuse any 'dangerous' postings. It has taken so much time and trouble that I may well let them have the last word and not involve myself in further repetitious and circular arguments. I think I have made my point. However, one posting from a "Brother Keong" made me realise how pervading is the view that Singapore is an unmitigated 'success', with a No.1 airport, seaport, airline, etc, etc. Today, I would like to debunk these.

First and foremost, the pervading notion among many Singaporeans that
we have the world's No.1 airline is due to what may be termed
the "latency effect". Let me explain. Yes, Singapore Airlines used to
be the No.1 airline according to a small and unscientific survey, but
it is no longer. I believe Emirates Airlines now is. But many
Singaporeans don't know that. They still believe SIA is the world's
best airline. Why?

The Latency Effect.

When SIA was No.1, according to a small, unscientific survey, the
airline advertised this heavily and the press and government hyped it
up. So the impression was strongly pushed that SIA is the world's best. Then, when it lost that position, there was hardly any or no news. By employing front page big headlines when the government has scored well and pushing the bad news to the latter sections of the paper under small headings when the government scores badly, the impression is that SIA is still the best.

Incidentally, if I may digress, I was told by one Adrian Gerson, then
Creative Director of Batey Ads, the ad agency doing the advertising for SIA, that in some campaigns, they used unfair tactics. For example, for the campaign that advertised that "SIA has more flight cabin attendants than competitors", it was true only during the duration of the campaign. Immediately after the campaign ended, SIA pulled out the 'extra' flight cabin attendants back to pre-campaign levels. But the impression had been created and the Latency Effect continued.

The Latency Effect also explains why many Singaporeans and even some
foreigners think that Changi Airport is the world's best. That is no
longer true. I believe the spanking huge new airports in Malaysia,
Hongkong and even the new Beijing Airport are much newer and better.

In other words, the Latency Effect works this way: hype the successes
and suppress the failures and it will take the people a long time to
realise things have changed. That is why many naive Singaporeans and
quite a few foreigners still think Singapore is one unending success
story and Lee Kuan Yew a brilliant man who worked miracles.

Then also, there is the actual survey methods. Again, to take the case of SIA, the title of No.1 airline was not given by any official body or organisation. Because there are none. There are no official
organisations going round surveying airlines and ranking them in order of merit. So how did SIA get its No.1 title? It was the result of a very small circulation magazine called Business Traveller conducting a very simple, unscientific and mathematically or statistically flawed poll of its readers answering a few simple questions to win a free airticket.

Similarly, there are no official organisations going round ranking
airports or seaports or corruption or the integrity of our judicial
system or our government's competence, etc, in an acceptably competent and scientific way. The results are often obtained through simple polls and the polls are conducted amongst small groups who often lack indepth knowledge of the very things they are asked to vote on. Thus, due to this latency effect and the constant playing up of success and the suppressing of failure, Singaporeans and even some foreigners have come to believe that our government is uncorrupt, honest, competent, our judicial system fair, our airline, airport, seaport, etc, are all well run. Some of these may have been so at some time but may no longer be so. Some of these may just be comparisons with much worse 'competitors' and therefore somewhat true but my advice is, whenever you read of some praise for our systems, especially of government or our judiciary, be wary and question your sources. Always question your sources. Ask if the poll was scientifically carried out. Ask if the respondents know what they are talking about. Recently, a small organisation called Transparency International 'reported' its 'survey. Singapore scored well. But when Dr Chee Soon Juan contacted them to ask how they arrived at their conclusions, he was passed from one email address to another and finally came to a dead end. The organisation could not tell him how they arrived at their results, the methods of assessment, etc.

There is also another effect I want to discuss. It is what may be
called the Low Base Effect. I had no time to elaborate in
soc.culture.singapore to Brother Keong but I can do so now.

The Low Base Effect simply means that when you are starting from a low base in anything, your initial improvements will be huge but it gets harder with consecutive attempts or years. For example, if you start from a low base as a very poor country like Singapore did in 1959, the initial GDP growths will be huge. You need very little work to effect huge improvements. But when you have reached higher levels, the improvements will drop to more realistic levels.

For example, if you want to train for the Olympics 100 metre dash, your first month of training will yield improved times of maybe 10%. But in subsequent months, your dramatic improvements will drop until, in the end, you reach a plateau. You may never go any faster.

Similarly, the growth rates of Singapore in the 1970s were very
creditable. But from now on, it will get harder and harder to maintain the same rates. One economist described the government's efforts at raising growth rates as "running on steroids". He did not think Singapore can continue for long. Also, growth rates, one of the major justifications for our Ministers' astronomical salaries, come at an ever increasing cost to the average Singaporean, with worse to come when Singapore hits 5.5 million people, as projected for continued growth rates. The Low Base Effect also explains why highly developed countries like the United States cannot achieve the same growth rates as Singapore did. It also explains why most countries in East Asia and even some in Southeast Asia and South Asia will achieve about 8% growth this year, bounding from the lows of the recent recession. Singapore certainly hasn't got anything to boast about nor our Ministers any reason to further hike their salaries.

There is also what may be termed as the "Tiny Country, Tiny Problems
Effect". This explains why Singapore can do better in many ways than
bigger countries. Take unemployment for example. Suppose Singapore
attracts a Foreign Direct Investment of $1 billion annually. That is
enough to give jobs to say, 1,000 workers. So, all that Lee Kuan Yew or the PAP government needs is to attract a FDI of say, $1 billion
annually and that will absorb all the school leavers for the year. But if Malaysia were to attract the same amount and that creates the same number of jobs, it will not be enough to employ even a small percentage of its school leavers. And the problem will worsen as the unemployed pile up. Or if India were to get the same FDI, it would hardly be enough for even a fraction of its school leavers. (Incidentally, India, with nearly 1 billion people is having a GDP growth of 7%!). So the Tiny Country Tiny Problems Effect explains why unemployment is relatively low in Singapore. It is certainly not due to the competence of Lee Kuan Yew or his PAP government.

So the Latency, Low Base and Tiny Country Tiny Problems Effects explain much of what you see in Singapore today. It is something to remember everyday when you open your papers and watch the news. Or read Lee Kuan Yew's Memoirs.

Robert Ho
20 Sep 00