RH: Robert's Complete Case against Leeconomics [Main]

From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: Robert's Complete Case Against Leeconomics (Main)
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Newsgroups: soc.culture.singapore
Date: 2003-06-18 07:02:04 PST

RH:

ROBERT's COMPLETE CASE AGAINST LEECONOMICS

No discussion of LEECONOMICS can begin without a definition of GDP, so
I will offer one here, a fairly standard definition of GDP: "Gross
Domestic Product is the total market value of all the final goods and
services produced by labour and property in a country, regardless of
the nationality of the entities producing the output."

The last is key to understanding Leeconomics: "…regardless of the
nationality of the entities producing the output." Thus, in this one
definition can be understood why Leeconomics has failed the people of
Singapore and ultimately, Singapore itself. To quote from Dr Chee Soon
Juan's January 2001 speech to Stanford University, entitled The Puzzle
That Never Was, "More than 7000 of these multinationals, involved in
every type of business conceivable, have setup shop in Singapore. They
account for more than 90 percent of investments in the manufacturing
sector, 70 percent of the gross output in the manufacturing sector,
over 50 percent of those employed, and 82 percent of direct exports."

Meaning that, as in the arguments that follow, since most of the
entities producing the output in Singapore are foreign Multi National
Companies [MNCs], the people and economy of Singapore derive little
benefit from such unusually heavy reliance on Foreign Direct
Investment [FDI] except initially, in the profusion of jobs created,
but which are now, also very unusually, largely taken by foreign
workers deliberately mis-named "Foreign Talent" [FT]. But more of
these later. [As an aside, China today stands in danger of becoming
another ‘economic slave' with as little chance of upgrading out of
it].

When did GDP come about? After all, it wasn't even understood by
Governments a few decades ago, although now, every single Singaporean
seems to know the latest figures, thanks to a Government and a
Government-controlled media that has come to regard this Magic Number
as a kind of national scorecard and a kind of indicator of how well
Singapore is run as compared to other countries. It has been subtly
portrayed in Singapore by Lee's Regime as almost a kind of athletic
event race to the finish line, with Singapore, of course, usually
among the leaders, if not well in the lead.

This was not always so. In Singapore a few decades back, there might
have been some statistical measures of economic performance but it was
probably the GNP, and hardly made the news, since it was just a number
only the very few statisticians around understood, or knew how to
calculate, and even the collection of statistics was in its infancy
and wholly inadequate. In those days, probably even the Government of
Lee Kuan Yew and LKY himself did not fully understand the import of
GDP. Certainly, LKY then did not even think of measuring himself using
this, by now Magic, Number of GDP.

‘ADVANCED' AND ‘BACKWARD' COUNTRIES

In those days, countries did not compare with one another. And when
they did, they merely thought of themselves as 'advanced countries' or
'backward countries'.

An advanced country was one where the people had enough to eat, had
decent homes, a good public transport system, decent work with decent
working hours and adequate healthcare, etc. In other words, the basics
of good social and physical infrastructure. A backward country was the
opposite.

How much simpler things were then, and how much more relevant
comparisons were than today's over-emphasis on the GDP Number. Today
in Singapore (at least, until recently, when the Number began turning
ridiculously low and even negative), the GDP is used to justify the
$1-2 million salaries the Ministers pay themselves. It is also used in
other nefarious ways, for example, to change the entire workforce into
a GDP-enhancing system, without regard for whether this all-consuming
drive for high GDP actually translates into an 'advanced' country's
quality of life for the citizens.

As one example, the overriding desire to produce high GDP Numbers has
led to the influx of 1 million foreigners, deceptively labelled by the
PAP as 'Foreign Talent' so that locals would not baulk at the numbers,
the highest in the world for a small domestic population of 3.2
million. Also, it was a non-too-subtle putdown for the locals for, if
you are not a talent, would you dare oppose so many foreign 'Talents'
pouring in, and being treated even better than the locals, to boot?
Also, we are told by the Great Man himself, and repeated by his
faithful Heir and Court Eunuchs, 'that foreigners create jobs that
would otherwise not be created' and which has been disproved by me in:

RH: Why Foreign Talent policy cannot work:

http://groups.google.com/groups?dq=&hl=en&lr=&ie=UTF-8&oe=UTF8&group=soc.culture.singapore&selm=c443dfe.0306170359.51a0d094%40posting.google.com

Why is this incessant chasing after high GDP Numbers bad? Isn't this
how all countries are ranked and measured now, if not way back then
but very true now?

CHICKEN ENTRAIL READERS

True to some extent. Nowadays, with the Economist having become the
modern day Oracle and Soothsayer, [but reading the innards of
computers instead of chicken entrails], from whom even world leaders
have to seek advice and prognostications, the GDP Number is indeed
important. But it was not always so. I would put the Rise of the
Economist about 20 years back. (Different countries would have
different times for their Rise of the Economist until today, we are
all living in the Golden Age of Economics).

Around 20 years ago, the world and LKY began to adopt statistical
measures for everything. For everything, there was a number. Without a
number, you could be accused of generalities, of not being 'accurate'.
With numbers, everything seemed so scientific, so precise, so
unbiased. No longer did countries call themselves 'advanced' or
'backward'. Now the world had numbers and you stand either on a very
precise 6.3% GDP growth or a less impressive 5.9%. Instantly,
countries could be very precisely ranked, which is what numbers allow,
since numbers are created for that very purpose and by definition, are
ordered progressions.

Except that, numbers can lie and do lie, and lie very insidiously.

Why?

Let's take GDP Numbers. First, let me repeat my definition of GDP:
"Gross Domestic Product is the total market value of all the final
goods and services produced by labour and property in a country,
regardless of the nationality of the entities producing the output."

That is a short definition. No proper understanding of GDP can be had
in less than a thousand words embedding several technical
sub-definitions. Ah, we begin to sense that the GDP is actually woolly
and indistinct and not a sharp featured animal -- it is a Jabberwocky.
Worse, the compilations of the numbers that go into this final
so-accurate-looking Number, are actually even more woolly. Different
countries have vastly differently-sized or even wholly different
economy sectors and so we are not even comparing apples with apples.

Since different countries have differently-sized or different economy
sectors, this means that Country A's GDP growth of 4.1% [I have always
wondered how they can manage to get it so accurate to one decimal
place!] may actually be 'better' than Country B's 6.1%. By 'better', I
would have to use the old, English, non-Economics meaning of 'better
managed and better-performing'.

THE RUNNING TRACK ANALOGY

Now, I normally dislike using analogies because no analogy is 100%
accurate to the meaning it is supposed to illustrate and often
introduce inaccuracies and irrelevant sub-meanings that distort the
original meaning intended. But I will break my rule here to offer one.
Just one. Imagine countries to be runners all running around a 400
metre running track. Also imagine that all the runners started at
different times from different start points around the track. Further
imagine that some runners are running full marathons of 10 km, some
half marathons of 3 km, some 1,000 metres, some sprinting 400 metres
and others doing the dash of 100 metres. Now, comparing these
different countries (runners) at a moment in time by putting yourself
at the Finish Line or some other point, could you meaningfully say
that Country A is better than Country B or Country C or D, etc? It
just
doesn't make sense to even compare.

So, when LKY found that advanced countries measured themselves using
the GDP growth rates, and that Singapore happened to score high GDP
growth rates because of its unique size and economic features, GDP
Numbers became the prime justification for everything from his own
salary to deliberately lowering the salaries of workers, and for
policies benefiting the rich to become richer while the poor were
kept poor and even made poorer by deliberate Government policies --
justified on the premise that high GDP growth rates were the be-all
and end-all of Government!

Thus, his entire economics policy (singular, because he has had only
one) became one long drive to attract Foreign Direct Investment and
lately, to bring in vast hordes of Foreign Talents to work in the jobs
this FDI brought. Where, you might ask, do Singaporeans figure in all
this? We don't. Foreigners invest here, employ foreigners to work here
to produce the goods and services –- most for export, and both these
foreign parties make the money and probably repatriate much of it back
home. We look on as unemployed locals. And meanwhile, this
'foreignisation' of the economy seems to produce decent Numbers that
LKY and his Court Eunuchs can boast about and on the basis of which
they reward themselves with yet more pay rises!

THE 3 WAVES OF LABOUR

This last policy of bringing in vast hordes of FTs is what may be
termed the Third Wave of workers. In the early days of LKY's reign, he
faced the postwar baby boom, which produced big numbers of workers
seeking work and a life – the First Wave. So he went into overdrive to
create jobs, hence the drive to attract FDI. Due to the boom in the
region, and the rise of the Japanese Yen, which drove many Japanese
companies out of Japan and many to Singapore, he succeeded. So well,
in fact, that he also encouraged women to leave their womenly chores
at home to work in offices and factories – the Second Wave. Finally,
when yet more cheap labour was needed, FTs were brought in. Thus,
Leeconomics's seemingly impressive early GDP growth was largely due to
massively increasing labour participation, in 3 big Waves. However,
this Third Wave was also designed to lower overall wages, since the
local Singaporeans were becoming used to decent wages. This resulted
in the current deliberate lowering of all wages to restore the economy
back into a low-wage, cheap labour economy, from which we never really
upgraded. "If we did not have some foreign workers to average down the
wage cost for the employers, are you sure the employers can survive in
Singapore?" admitted DPM Lee Hsien Loong, Straits Times, Oct 29, 2001.

Thus, while the elite have their taxes cut so they can get richer, the
working classes are actually heading back to become the cheap labour
attraction of a generation ago. To quote again from Dr Chee's 'Puzzle'
Speech: "During the Asia crisis, monthly wages for low-skilled workers
fell up to 34 percent from $746 in 1998 to $492 in 1999. During that
period, 16 percent of the work force earned below $1000 a month.
Nearly 30 percent of households were not earning enough to afford the
minimum standard of life," [while] "the average household income for
the top 10 percent rose by more than 3 percent while the number of
millionaires in the country increased by 40 percent to a record high
742."

Economists will recognise from these 3 Waves of labour that
Singapore's seemingly impressive GDP growth in the early years are all
due to increasing inputs of labour and not from increasing
productivity and as such, cannot be sustained. FTs now number 1.1
million, that is, work permit holders including maids, out of a native
population of 3.2 million. What this does to the social fabric is not
just a matter for sociologists, but a concern for economists as well
because on an island of 650 square kilometers without any resources,
this is clearly unsustainable. Unless, of course, a non-economics
solution is sought, such as the invasion of Johor State, for its land,
water and Chinese population, probably on some Hitler-Poland pretext.

Thus, Leeconomics is: ‘attract foreign capital into Singapore,
bringing in their foreign technology, employing foreign workers,
producing foreign goods for foreign exports'. The peoples' crisis at
the moment [the leaders never suffer any, for obvious reasons], is
that all this foreignisation of the economy nowadays doesn't even give
them the jobs or the salaries it used to some years back.

For a fuller discussion of why FTs are bad for Singapore's economy and
people, read my post in this newsgroup

[RH: Hiring Foreign Talent -- How Many Jobs Do We Lose?]:

http://groups.google.com/groups?dq=&hl=en&lr=&ie=UTF-8&oe=UTF8&group=soc.culture.singapore&selm=c443dfe.0306180209.225024b9%40posting.google.com

ROBERT's THEORY OF JOB CREATION

[This Robert's Theory of Job Creation explains how, across the whole
economy, 100,000 FTS –- and there are now 1.1 million work permit
holders -- may cause a loss of up to a million jobs. It also explains
why hiring one FT results in generating only ONE family's worth of
economic activities whereas hiring a local instead generates MANY
families worth of economic activities. Thus, from a sheer economics
standpoint, hiring locals for top-level jobs is far, far better for
the economy].

This Numbers Game Syndrome is a peculiarly Singaporean phenomenon for
several reasons. Firstly, the Singapore Technocrat or Bureaucrat or
Minister is not a real politician. He has no political skills in
communicating with or moving the people. At best, he is a manager and
indeed, most of them were former managers in Government Companies or
the Civil Service. Thus, these managers are predisposed to Numbers and
totally lack the instinctive empathy with the people that all true
politicians possess. Secondly, they are totally unaccountable to the
people because Singapore is not a democracy. This leads to a totally
top-down administration that can get very, very distant from the
people below.

Today, if you have lived long enough in Singapore, especially over the
last 15 years or so, and have been reading the local media, you would
know instinctively that what I have written above is all true. Except
that I am the first one to point out this truth in this way.

So, if comparisons of GDP growth rates between countries are
meaningless, are high Numbers also meaningless? The answer is Yes.
Coming back to my Running Track Analogy, it is useless and unhelpful
to compare a 100m dash runner to one doing the 10km marathon, even if
both are passing you by at the same time. They are running different
races! Thus even Absolute Numbers are meaningless. If LKY says that he
managed 8% GDP growth last year, so what? Does that mean that all the
people got better pay/profits by an average of 8% last year? Until
that is so, even high absolute numbers mean nothing. The most LKY can
say is that, under his rule, Singapore has become better in social and
physical infrastructure and that people have a better quality of life.
Which can also be said of Hongkong, China, South Korea, Taiwan, Japan,
Malaysia, Thailand, etc, etc, -- more than half the world if we bother
to count. Very few countries regress in such things.

Thus, GDP growth rates used to justify astronomical Ministers'
salaries and other unfair Government policies that benefit the rich
and disadvantage the poor is a Lie at best. At worst, it DISTORTS
Government policies away from a more equitable distribution of wealth
and important things like healthcare as well as 'Foreign Talents'
taking away jobs and meaningful lives from citizens. We can say that
the PAP Government, which prides itself on being the most intelligent
Ministers in the world, have made themselves the stupidest by not
having analysed the issue as I have done here. If they had, they would
have come to the same conclusions as I have and the people would all
have been better off. I am aware that I am doing the PAP a service by
pointing out this aspect of their policies of which they are totally
oblivious. And by so pointing out where they had gone wrong and
thought wrong, I am helping them to change tack, to dephasise GDP and
to emphasise people first, at a time when GDP growth is no longer
impressive and will remain that way for years, perhaps decades,
perhaps even forever, to come. So, this little treatise actually gives
them an excuse to drop the emphasis on GDP Numbers just when the
Numbers are no longer impressive.

‘AVERAGE', ‘GOOD', ‘EXCELLENT' GDP GROWTH

It would have been better for this stupid Government to express
economic growth annually by giving it a say, 'Good' score, or an
"Average' score or an 'Excellent', etc, and be done with it. By
getting seemingly impressive numbers in the earlier years, the PAP has
gone chasing after high GDP Numbers in a kind of 'competition to get
the highest Number' contest to the extent it has forgotten that the
ultimate end result of all Government polices is to improve the
citizens' lives and not to achieve some high GDP Number. Other
countries are not obsessed with high GDP numbers because firstly, they
don't have seemingly impressively high numbers, and secondly, they are
all hitting about the same numbers range, so they take it in their
stride and don't deliberately formulate Government policies for the
sole effect of high GDP Numbers. This is because most other countries
have a free press and a more democratic system that prevents this
particular abuse and distortion of Government policies. When people
are allowed to think and criticise, the Government cannot get away
with stupid practices like this of LKY and his PAP Govt. Precisely
because only Singaporeans are not allowed to think and criticise, this
Abuse and Lie of GDP Numbers is practised only in Singapore.

If the PAP does not deliberately formulate policies for high Numbers,
what should it do? Ah, here I may have to do some National Service
again, to offer alternatives that are better than the current Number
Chase, which has gone on for too long and distorted economic and
social, even welfare (practically non-existent) policies.

SOCIAL COMPACTS THE ANSWER

For example, instead of formulating Government economic policies for
high Numbers, the Government should set itself a series of Social
Compacts.

By that, I mean that the Government should sit down and think out a
series of desired objectives for the people, such as:

*That no Singaporean should go hungry;
*That no Singaporean should live without a roof over his head;
*That no young Singaporean should be without at least 10 years of
absolutely free schooling;
*That no Singaporean, able or handicapped, be without a job that
pays no less than $600 a month, this to be reviewed yearly;
*That no Singaporean worker be without a non-politically-affiliated
union;
*That no Singaporean should be without medical care when sick, even
if he cannot pay for it;
*That no working Singaporean be without sufficient leisure to rest
from work and to improve himself whether such improvement be
educational, in hobbies or community matters;

These are all easily achievable and only require a different focus and
a change in thinking from chasing High Numbers to Serving
Singaporeans. When that change in thinking is undertaken, the
Government economic policies can be adjusted accordingly, such as
reducing 'Foreign Talents' -- practically an 'instant' cure for many
of Singapore's current economic ills! These are all very achievable
and much of it requires no more than small changes in
policies. [However, change will be hard for a Regime that never admits
that any of its policies can be wrong or ill thought out -- saving
face is more important to it than saving the people].

Certainly, my Social Compacts make much more sense than the current
bullshit about 'Community Above the Individual' rubbish which is
nothing more than an excuse for continued dictatorship.

Other Social Compacts can include (although I am not hopeful):

*That every Singaporean above 18 have the right to elect his MP in a
Single-MP Constituency as conducted by an independent Elections
Commission; while every Singaporean below 18 have their vote exercised
by the mother, first, and the second child, the father, and so on
[thus achieving, for the first time in the world, truly universal
suffrage for every citizen without any arbitrary distinction due to age];
*That every Singaporean household be given a free permanent
subscription to a newspaper of his choice, which can be changed;
*That every Singaporean household be given a 14" CTV if it does not
already have a better one;
*That every Singaporean household be given a radio if it does not
already have a better one;
*That every Singaporean household be allowed to use their CPF for
the purchase of computers and peripherals;
*That there be a free-to-air Politics Channel on TV and Radio [with
related Internet websites] that broadcasts politics 24/7, including
registered Opposition political activities;

*Other Social Compacts can relate to the rights of citizens or their
legal rights, or human rights, or citizens' rights, etc.

If all these seem startling, it is only because of their novelty. I
have long thought out parts and pieces of these, so I can say that
with time, these are all very sensible, even obvious. They are not
pie-in-the-sky ideas at all. The first Social Compact is easily
achievable. The second requires a willingness to level the playing
field for the Opposition but still confers enormous advantages to the
PAP. It will actually be better for the PAP than the Opposition and
better overall for Singaporeans. All it requires is an acknowledgment
that Leeconomics has had its day and should be retired, which can also
be said of Lee himself. And about time, too. Too much damage has
already been wrought.

Robert Ho
18 Jun 03
UK 1500 Singapore 2200

RH: I would like to acknowledge an intellectual debt to Dr Chee Soon
Juan for the above article because he had long sounded this theme in
various speeches, books and publications in the Open Singapore Centre
and the Singapore Democratic Party.

http://groups.google.com/groups?dq=&hl=en&lr=&ie=UTF-8&oe=UTF8&group=soc.culture.singapore&selm=c443dfe.0306180602.6ee2adb6%40posting.google.com

From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: Robert's Complete Case Against Leeconomics Appendix 2
This is the only article in this thread
View: Original Format

Newsgroups: soc.culture.singapore
Date: 2003-06-17 04:59:10 PST

Appendix 2:

RH: Why Foreign Talent policy cannot work

RH:

1. My subject title is not some new discovery -- it is now an
accepted fact with the 'departures' of several top honchos in the last
12 months, including the top foreigners at DBS Bank, Chartered
SemiConductor, and probably a few more I don't rememeber. Another
note: there are 3 kinds of foreign workers in Singapore. Together,
they number 1.1 million or 1 in 4 of us. The highest-paid and regarded are the OFT or Overpaid Foreign Talent. Then there are the UFT or Underpaid Foreign Talent. Finally, there are the Foreign Workers or FW. Now, I can start my little thesis:

2. My few months in the UK have brought home to me one rueful fact:
Everything is very expensive here. And even more so in the US. And as
expensive in Europe and Japan. This across-the-board High Cost Living
is the central plank in my thesis.

3. What does High Costs of Operation mean to companies here? And how
does that connect to OFTs in Singapore being unable to do what they
were headhunted to do?

4. OK. Let's take DBS Bank as one example. Since Lee Kuan Yew began
his mantra about how FTs are necessary for Singapore companies,
especially his SGIC companies, the Board of DBS Bank began to
reshuffle its top management posts to create room for several FTs who
would prove that LKY is once again, a brilliant thinker who cannot be wrong, so steeped in wisdom is he.

5. So, DBS, like Chartered SemiConductors, and many others more about
which we do not know about, hired headhunters to lure proven and
tested top honchos with successful track records. The offer, like the
always generous offers to foreigners (and always stingy stipends to
locals who have no clout with the PAP)included a 'Name Your Price'
kind of salary, 'Name Your Conditions' kind of contract including
Golden Parachutes if the deal did not work, and finally, 'Name Your
Working Conditions' kind of contract that gave these OFTs a very free
hand to do anything they want. This last, because Talent
like these do not just switch jobs for money, they also want a free
hand to do what they think best.

6. Thus, these OFTs and there are at least a dozen of them, maybe
double or triple that number, had the best deals they could ask for.
Big money and the chance to shape or reshape their companies as they
see fit.

7. With a deal like that, especially the 'freedom to achieve' bit,
they simply could not refuse the deal nor fail. Yet, they failed. Some
had to jump, saved from humiliation by the Golden Parachutes. Others,
marking time, unable to achieve what LKY and the PAP and the SGIC and
the GLCs and the whole country expected them to achieve. Why?

8. It is not for lack of Talent. This is never an issue. All these
men were headhunted and had proven track records.

9. The reason they failed and why the existing ones are not achieving
much and why future OFTs will also fail, is simply this: ASIAN
COMPANIES ARE NO-FRILLS OPERATIONS WHEREAS WESTERN COMPANIES HAVE LOTS
OF FAT.

10. Remember my statement about how everything here in the UK is very
expensive? That is the key. Now, in the UK or US or Europe, bank (or
other company) operations are very expensive, which is why everything
to the consumer is very expensive -- the costs simply have to be
passed on.

11. For example, take legal work costs to the bank. In most Singapore
or Asian companies, the legal work costs are very minimal because
contract laws are probably not as onerous (meaning not as
sophisticated). Also, lawyers are cheaper in Singapore and other Asian
countries. Also, most Asian companies merely engage a small law firm
on retainer to do any legal work they need, which, as we have seen, is
far less and less onerous than in the West.

12. In the West, the legal requirements are a lot more sophisticated
and expensive and companies maintain a large in-house legal department
of expensive lawyers as well as retaining outside law firms for more
specialised work. This all adds to huge costs.

13. This legal department example is just one example. There are other
departments that bloat up costs in Western, more sophisticated
companies that are either non-existent in Asian companies or are very
small operations in Asian companies. Another example, in Western
companies, there would almost surely be a sizeable Marketing
Department. In Asian companies, the salesmen would be doing what in
Western companies would be split into Marketing Dept and the Sales
Dept functions. Again, in many Western companies, there would even be
a HSE (Health, Safety & Environment) Dept, which would be non-existent
in Asian companies. There are many more examples but I believe I have
made my point.

14. So when a OFT is lured from a big, reputable Western company to a
Singapore company, with the expectation and mandate to 'make that
Singapore company world-class, that is, Western, what can he do?

15. He fails. First, if he tries to graft all these Western high-cost
operations onto the Singapore company, he not only increases headcount
and payroll costs, he also has to create company structures that
ultimately are not needed!!! If they had been needed in the first
place, the company would already have them. So creating these new
depts and functions, while possible structurally and costs-wise, do
not add to the bottom line or even the efficiency of the company. So,
if he tries to reshape his DBS or Chartered Semiconductor or whatever
GLC into the kind of Western company operating environment he came
from, he will do more harm than good. So he fails.

16. Now, suppose the reverse happens. The Singapore company he is
lured to join is not doing well and he needs to cuts costs. He fails
again. Because, unlike the Western company, which is padded with much
fat, the Asian company is a no-frills operation. There is nothing to
cut. Any cut results in immediate reduction of operating efficiency
that will soon hit the bottom line -- here, he either gets out before
the bottom line exposes him or he hangs on and is eventually removed
when it is clear to all that he has done nothing good for the company.

17. Now, in the West, companies have so much fat that, like fat on the
body, accumulates with time so imperceptibly that no one notices, so
when the Western company is faltering, someone like the OFT can be
brought in and with ruthless cuts left and right, he can often restore
the bottom line and so gains fame as a miracle worker. Alas, even
miracle workers cannot work miracles on Singapore or Asian companies
(Japan is probably halfway between a Western and an Asian operation,
which may be interesting to speculate on whether a Japanese OFT may be
able to do what a Western OFT may fail to do).

18. Thus (I think I have given enough examples to illustrate my
argument), Lee Kuan Yew's Great Thought about how OFTs can create jobs
and wealth for the GLCs that hire them is sheer nonsense. This has
been proven by the failures and departures of so many.

19. Now, how about the UFTs?

20. These are talents and foreign but cheap. They are the ITs from
India and China that compete directly with our local ITs for jobs and
promotions. And because they can do almost the same jobs as our local
Singaporeans but cheaper, they get the jobs and thus depress the
salary levels of the profession they enter into in Singapore. The PAP
knows this. But they deliberately want to depress wages, which are
already the lowest among all the countries with comparable per capita
GDP, hoping that cheap labour will lure investors. They had only one
economic policy since 1965 and that is to lure investors. The only way
to lure investors is by being cheap. And since the PAP refuses to
reduce land costs, rent costs, statutory costs, etc, the only cost
they can easily reduce is wage costs. Thus, the UFTs.

21. Thus, the OFTs cannot create jobs and wealth, as claimed by LKY
and the UFTs steal jobs and depress wages for Singaporeans.

22. As for the FW, these are the labourers, construction workers and
maids. Singaporeans do not want to do what they do because there is no
minimum wage, as platformed by Dr Chee Soon Juan and his Singapore
Democratic Party in the last General Election. Since there is no
minimum wage, so the actual wages of these FWs are too low to attract
Singaporeans -- you cannot blame a Singaporean for refusing a job that
pays less than what he needs to pay for his transport, food,
utilities, etc, which is why FWs continue to be 'needed' for these
jobs in Singapore. If SDP's Minimum Wage solutions had been adopted,
much of the current unemployment of about 100,000 would have been
solved.

23. Thus, it is not a pretty picture. It is a grim discovery for
Singapore and Singaporeans to discover that OFTs, UFTs and FWs are all
stealing jobs and promotions and a meaningful life from Singaporeans.
All because one Old Man tried to impose his feeble solutions on a
Singapore that no longer had the right to challenge him.

24. The UK is also experiencing some of the same disappointing
non-performance of US OFTs. These US OFTs may have a 'proven' track
record in the US but when they come to the lower cost and less
sophisticated UK companies, they fail exactly like OFTs fail in
Singapore, and for the same
reason. Generally, Japanese companies do not give US OFTs so big a
welcome because they know that these US OFTs will not be able to do
any magic for Japanese companies because the corporate structures and
practices are so different. Similarly for European companies. Thus,
language barriers seem to prevent these US OFTs from cashing in on
companies in Europe and Japan. Or elsewhere in South America, Asia,
Africa, etc. Therefore,
only the UK and Singapore remain suckers to US OFTs.

25. The question now may be asked -- why is it that these OFTs can
perform so well in US companies and yet fail so miserably and
indisputably in the UK and especially in Singapore? The reason is, IT
IS MUCH EASIER TO SUCCEED IN THE U.S. THAN ANYWHERE ELSE IN THE WORLD.
First, there is the scale of doing business. There are 280 million
Americans. If you have a business that just makes a dollar profit a
week from every American, you'd have a profit of $14.56 BILLIONS a
year. And Americans being Americans, it is easy to part them from
their money. In fact, the scale of business is much, much bigger than
just that $1 a week, for example, cars, houses, vacations, clothes,
etc. Thus, this scale of business creates giant companies with giant
operations that make billions and billions of annual profit, which
simply cannot be replicated anywhere else outside of the US. Thus fat
cat OFTs fail in the UK because the UK is 'only' 59 million people.

26. However, the UK does not suffer from this OFT phenomenon as badly
as Singapore, mostly because the UK has quite a lot of native talent,
who are often as good in the boardroom level management as US OFTs.
Singapore suffers badly because of another phenomenon -- Lee Kuan
Yew's calculated sucking up to the Americans. He has the country's
reserves to play with, with which to endear himself to Americans and
he does this in abundance. He hires US OFTs so that when these news
are reported in the American media, he is seen as a benefactor to
American companies, and word gets round that he is a good friend to Americans. He even paid $1.8 million to Michael Porter basically for a speech and some very general 'advice'.

27. As further proof to what I have writtten, let me point out that
Chartered Semiconductors is third largest -- behind the world's
largest contract chip makers, Taiwan Semiconductor Manufacturing Co
Ltd and United Microelectronics Corp. Therefore, it would have made
sense to lure a Foreign Talent from these Taiwan companies instead of a Westerner, since the Taiwanese are Number 1 and 2 in that industry. But to LKY, Asians are low-class. Only Westerners are high class and Real Talents. So he never thought of hiring Taiwanese FTs. With the result we all know now.

28. Thus, American business operating and business environments are
very, very different from Singapore's -- or even the UK's. Therefore,
what works in America usually doesn't work in Singapore and hiring
American experts do nothing for Singapore except waste money and
prevent original thinking and solutions. The only benefit from hiring
American OFTs is that Lee Kuan Yew gets to talk to them to impress
them on how up to date he is on the latest American fads and
practices, especially in management and economics theories. This makes
LKY a Big Sucker, and 'there is a Lee Kuan Yew born every second'.

29. Some American companies do do very well outside of America. Some
may think that this fact 'proves' that American Talents are very good,
that is, superior American business acumen, superior American business
management, superior American business practices, etc. (And you cannot
find a more eager believer in American 'superiority' than Lee Kuan
Yew).

The truth is, all these American companies which do well outside
American ALL have their businesses succeed in America FIRST. As I have
pointed out, it is far easier to succeed in America than anywhere else
on earth because there are 280 million Americans who are easily parted
from their money. So, these American companies, in such an easy
business climate, grow big and therefore have the money to perfect
their business products and processes, from say, developing excellent
french fries fryers in MacDonalds, for example, to say, computer
chips, etc.

AFTER having developed these superior products in America and making
lots of money in America, it is therefore easy to propagate these
products and processess elswhere because say, the MacDonalds fryer is probably among the best in the world [although not always]. So, we see American products and businesses everywhere, not because they are inherently superior to locals but because they developed these better products and services in easy America first.

Thus, all the global successes are honed and perfected in the easy
business climate of America and therefore have better chances of
succeeding elsewhere. For example, take Research & Development. If a
Singapore company started out to develop something for the home market, it could only say, spend $1 per capita, so it spends $4 million on R&D. In the UK, the same approach would result in 59 million and in the US, it would be 280 million. So, which start up would have the better
product? Obviously the US start up of course. Thus the myth of
American business superiority and its OFTs are made this way and only
fools like Lee Kuan Yew think that it is able to reproduce such
business success in Singapore, or even Britain. To sum up, it is one
thing for a huge American company to establish a branch in the UK or
Singapore and put an American OFT to head it; and quite another for a
local company in the UK or Singapore to 'import' an American OFT and
hope he can work wonders.

Robert Ho
17 Jun 03
UK 1258 Singapore 1958

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From: Robert Ho (ho3@pacific.net.sg)
Subject: RH: Robert's Complete Case Against Leeconomics Appendix 1
This is the only article in this thread
View: Original Format

Newsgroups: soc.culture.singapore
Date: 2003-06-18 03:09:43 PST

Appendix 1:

RH: Hiring Foreign Talent – How Many Jobs Do We Lose? [Also
known as Robert's Theory of Job Creation]

The foreign talent issue has been with us a long time and got an
almost complete airing at the General Election of Nov 3. At least,
that was the closest it ever got to a complete airing -- the
Opposition made such a good case against it that the PAP was forced to
defend, mostly by regurgitating all the old, standard clichés that its
leaders had thought out. Instead of (as usual) debating the Opposition
arguments point by point, many points went unanswered but this went
unnoticed because the media did such a good job of painting them as
rebuttals when they were not.

That Lee Kuan Yew, Goh Chok Tong, and Lee Hsien Loong did not or could
not think is proven by this following very simple observation I am
about to make.

Many letters to the Straits Times Forum and to soc.culture.singapore
defend the hiring of foreign talent as being ultimately beneficial to
the economy. Indeed, during the heat of the debate in the GE, the PAP
trotted out purported figures to show that foreign talent accounted
for a significant part of the GDP. The (simplistic) assumption was
that without them, the GDP would be lower.

However, I can point out at least one aspect of all this charade of
statistics that anyone who has ever worked (including our present PAP
ministers and parliamentarians) can instantly identify as correct. And
which, to my utter surprise, nobody from the million dollar Ministers
to the bankrupt Opposition has yet picked upon.

The observation is this: Most people who have thought about the matter
assume that when a foreign talent takes a job in Singapore, he
deprives ONLY ONE Singaporean of a job. The amazing truth is that more
than one job is lost to Singaporeans. It may be as many as a dozen
jobs or even more, depending on the particulars.

How is this so?

Suppose that a company operating in Singapore needs a Accounting
Director. It hires a foreign talent. So, the conventional thinking is
that a Singaporean is deprived of a job as a Accounting Director. ONE
Singaporean.

However, consider what happens when a SINGAPOREAN is hired instead. He
or she will have to be almost qualified for that post, meaning that he
or she will be at least a Accounting Manager.

Now, the chain effect begins. He or she is hired to fill the
Accounting Director post THEREBY LEAVING VACANT HIS OR HER CURRENT
ACCOUNTING MANAGER POST. Another Singaporean gets the opportunity to
get promoted into that just-vacant Accounting Manager post. Since this
person is likely to be a Accounting Supervisor, he or she thereby
creates another vacancy that can be filled by another Singaporean,
probably currently a Accounting Executive. This post, in turn, becomes
a vacancy to be filled by a fresh accountancy graduate.

Thus, by hiring a Singaporean at the top, a whole chain of musical
chair vacancies is created benefiting everybody along the chain,
including the fresh accounting graduate who gets his or her first job.
Conversely, not hiring a Singaporean for that top post KEEPS EVERYBODY
STUCK IN HIS OR HER CURRENT JOB.

Thus, the nefarious effect of hiring foreign talent hits home AT EVERY
LEVEL, NOT JUST THE JOB TAKEN.

This is an observation everybody knows instantly when it is pointed
out, though few probably have reasoned it out thus.

Even our Cabinet Ministers know this sublime truth of moving up. For
example, if Lee Kuan Yew does not or cannot remove Goh Chok Tong from
the Premiership, his son, Lee Hsien Loong cannot move up to the top
job. And if Lee Hsien Loong cannot be promoted, George Yeo cannot be
promoted to be Deputy Prime Minister. And if George Yeo is not
promoted, a Minister of State cannot become full Minister. And if that
Minister of State cannot become full Minister, a Parliamentarian
cannot make it to that job. And so it goes on.

Anyone who has ever worked knows that whether you get that coveted
promotion to the next level depends not just on whether you are good
enough for that job but more on whether the current incumbent moves
out of it. No vacuum, no push to the top. Everybody stays stuck in his
or her current job, losing hope over the years at the stagnation in
career path.

Therefore, there is a great argument for promoting Singaporeans to
fill every top job available. If they don't have the skills, send them
for training or get them to understudy someone. This takes time and
effort but as I have demonstrated, the benefits far outweigh hiring
foreign talent. Hiring foreign talent is quick and easy, which is why
it is attractive to the PAP Government. Simply put out an
advertisement. Or hire a headhunter. Or poach someone from a
established corporation. But that is the shortest sighted policy in a
country with the highest myopia rate in the world, especially in a
country that has succeeded in crushing any decent debate or free
thinking.

This is not the only major issue on which Lee Kuan Yew, Goh Chok Tong,
Lee Hsien Loong and the entire Cabinet and Parliament have blindsided
themselves through refusal to tolerate criticism and real debate. Dr
Chee Soon Juan has enumerated many other instances of poor and
thoroughly inept thinking resulting in bad policies in his brilliant
book, "Your Future, My Faith, Our Freedom"
http://www.sfdonline.org/Link%20Pages/Link%20Folders/01Osc/PRChee_fff.html
. It is beyond my scope to attempt the careful analyses and arguments
he has made, so please buy a copy of this 2001 classic thesis.

There are many things wrong with Singapore today in 2001. Many of them
have been creeping upon us for decades and now that they are here,
they will not just go away or disappear, even with an upturn in the US
and world economy. Many of Lee Kuan Yew's simplistic thinking and
policies are coming home to roost and it will not be a pleasant time.
But perhaps the most damaging of all his bad policies is the
curtailment of real debate and criticism. In the complex world of the
late 20th and 21st centuries, no one mind, especially an old one mired
in the 60s and 70s, can come up with the policies to cope with faster
and faster change. Punishing criticism and eliminating real debate in
Parliament have created insoluble problems that no amount of behind
the doors discussion by an oligarchy can solve. Putting the media in a
straitjacket simply means that the Cabinet cuts off any ideas from the
ground and the people. Trying to strangle criticism only strangles
possible ideas and solutions. Bankrupting the Opposition simply means
the country is bankrupt of many of its leading thinkers and problem
solvers, like Dr Chee Soon Juan.

Singapore is now in a mess and it is a mess of its own making, with
the blame squarely laid at the door of the PAP and the people who
chose to believe in it. Perhaps, after Lee Kuan Yew dies, change may
be possible. There is also the frightening possibility that like all
dictators, he has so corrupted and bent every institution in the
country that these may not survive him, that without the strongman,
everything will spiral out of control.

The people have spoken on Nov 3. But do they really know what it is
that they have said?

Robert Ho

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