Productivity at its lowest ebb

For the past decade or so our productivitiy has reached a point of zero, save only by the influx of foreign workers. They contributed to practically all the growth numbers to our economy. Taking them out of the equation our growth is zero, yes zero. That's why everyone in the know is so grateful to the foreign workers. I am not going to ask what have the supertalents contributed if our growth came from the low down and poorly paid foreign workers. Now we are going to increase or boost productivity. And it seems so simple, a few training courses will do it after languishing for all these years. I think there are easier ways to improve productivity than training courses. Just follow the examples of the property industry. Every 4 or 5 years, the price could be double. That should be the kind of productivity numbers we be looking for. How to go about it? We used to call it asset inflation. But there are many areas that we can inflate the prices, the consumers just pay. By increasing the prices of things and services here and there, productivity will simply go up proportionally. A plate of char kway teow can be increased from $3 to $3.50, giving a 17% increase in productivity without having to do anything except changing the price tag. Some measures could be more ingenuine, like erecting another few toll gates and money will keep rolling in. That is productivity. One thing that will reduce productivity and should not be thought of is pay rise. Any increase in pay will definitely lower productivity unless there is also an increase in goods or services produced, or increase in price. The latter must be more than the hike in pay. Whenever the rental goes up, the stall holders simply raise their prices, several percentages more than the rental hike. So the productivity of the landlords and the stall holders also go up disproportionately. Now we can understand why stallholders are not complaining. They constantly raise their productivity to improve their income. I must add that this kind of productivity growth is only possible in a monopolistic or near monopolistic environment, or insular market when supple and demand can be managed.

Talents or changing fortunes?

Harvard, Stanford, MIT, Princeton, Yales, Bill Gates, Warren Buffett, Steve Jobs and all the eminent academics and intellectuals and financial gurus, are what America is famous for. It is a land of talents and world best institutions nurturing more best brains for the country and the world. What people did not want to see or acknowledge is that America is turning into a huge Titanic waiting to be sunk. America is now running in trillions of debt which it believes confidently that it could pay now or later. And it is still spending daily in the billions on wild hunting adventures in the Middle East and military excursions in the high seas, thinking that it is an Empire ruling the world and it needs to be in every corner of the world, with its soldiers and guns guarding the interests of the Empire. It took America more than 200 years of uninterrupted development and growth to reach this peak of achievements. And it took America the last thirty years to become the most corrupt nation in the world, with corruption concealed under a veil of respectability and legal framework. It is all legal, when all the 'knows who' have their hands in the cookie jar, and taking whatever they deemed fit, under the spotlight, and smiling to the banks. From Congressmen, bankers and CEOs, all are in for the quick bucks, grabbing everything they can that are within their control. Overseas they are sending our their armies of hedge funds to suck away the liquidity in foreign markets using technologies and the heavy hands of big bucks. They steam rolled the stockmarkets of the world to fill their pockets with instant millions and billions. In short, America’s brilliant minds are focussed on making instant billions for themselves at the risk of bankrupting America and countries that naively welcomed them and their system of operations with open arms. On the other hand, China is guarded and is carefully guarding what it has built up over the last 30 years. No, they will not blindly let in the Americans to mess up their economies and financial system. In the last 30 years, unknown peasant leaders from unknown universities that were partially ruined during the years of revolution have turned around a poverty stricken agriculture economy to compete with America for world supremacy. They are now number two, coming from nowhere. Until recently, what is Beida, Tsinghua, Jiaotong, Zhejiang, Nanjing, names of universities that were not even ranked, and could never smell the prestige of the Ivy League universities in America and their strings of Nobel Laurette and prominent thinkers and professionals. But the products of these universities, many still unknown, are now running a tight ship and running at good speed to challenge America as an economic power. While America is in debt of several trillions, China has surplus in its reserves of several trillions. Is it talents or fortune changing, or winds of change, that a country blessed with all the finest talents and a system of education that is churning out the best brains for tomorrow, is running aground or out of steam, while a third world country, rising from the ashes, with little known universities and talented individuals is giving it a run for its money? Are the Chinese more talented than the Americans or does China have more talents than the America? The answer is an obvious no. It must be fortune smiling on them. When fortune favours, even a beggar can become a king. When fortune smiles, whatever touched will be turned to gold. When fortune frowns upon the best, no matter how well conceived are the plans, no matter how talented are the executors, they will failed. Pundits are expecting China to overtake America in the near future. Could it really happen with America hoarding an abundance of talents and resources and a superior infrastructure in all areas, except finance and govt? One is infested with crooks and another with dunces. Will fortune smile for China and imbue it with more talents? So far none can be spoken of as talent in the American sense. The only Chinese talent is probably in America, in Yahoo.

Stop the crap about relative affordability logic

Several MPs are going to Parliament to kpkb about housing affordability. They are going to question HDB about its original role in providing affordable housing for the masses, high prices, supply and demand, inefficient system and allowing rich private property owners to buy HDB flats. These are reported in the ST today. Are they crazy or what? Do they take all the kpkbs in the internet seriously and really think that there is a problem? Didn't they read the reports of HDB and Mah Bow Tan about how affordable HDB flats are and how efficient and perfect the system is? Even this morning, two eminent scholars from NUS Dept of Real Estate, Tu Yong and Yu Shi Ming, reported that 'Housing in Singapore still affordable'. And they have authoritative figures to prove their point. How could MPs ignore such well research reports even if they don't believe in the comments of politicians? Unbelieveable! Why did these two academics say that housing is affordable here? They compared housing data of London and Hongkong and found our data much better than theirs. 'In terms of affordability, Singapore has achieved a lower housing price to income ratio. On the whole, the figures reveal that the housing system here does deliver comfortable and affordable housing to the majority of Singaporeans.' Brilliant conclusion. Flawless arguments backed by indisputable facts. So, who is still complaining about housing here not affordable? The MPs should better withdraw their intended questions in Parliament. They are going to get the same answers. Period. According to the two academics, Hongkong and London's housing ratio are 19.8 and 7.1 respectively while ours is 5.8. Housing ratio is housing price to median annual household income. See, ours are cheaper and more affordable. Tiok boh? In terms of comfort, we have 27 sq m for one person while Hongkong and greater London have 12.5 and 31.9 sq m per person. Ok London has bigger space than us because Europeans believe that comfort means more space. Don't compare with Australia when comfort means 300 sq m per person. That is not comparing apple with apple. Using this kind of #$%@ logic of relativity, when Hongkong's housing ratio is 30, then we can push up the prices of HDB flats to 20 and pat ourselves that we are still cheaper. And when Hongkong is squeezing their people into 5 sq m dog kennel, we can build smaller flats and sell at higher prices and say we are still comfortable. The same logic goes to the toxic bonds. Other people are selling it, especially the West, then it should be ok for us. The Americans are designing their stock markets to fleece the small investors with programme trading, and unfair advantages for the big funds to cheat the small investors, would these also be acceptable for us? Can we use a more independent set of criteria of our own to define what is affordable and comfortable for our people instead of relatively logic and shifting goal posts? My simple definition is 30% of one income and repayable in 20 years and a space of 50 sq m person. No space? Who is the bum that said we have a lot of space? Or stop the influx of more immigrants to this little piece of rock. Our population density is now more than Hongkong, 6,814 to 6,460 and greater London's 4.761. Want to make it worst? It is madness. And some MPs going to Parliament to ask why so many traffic congestions on the road? Wait till the lunatics increase the population to 8 million, then you will know what is congestion. Now it is so good, relatively speaking of course. Can't call it congestion. Even the packed MRT trains are soooo comfortable.

Kenneth calling for abolition of GRC

I totally and vehemently disagree with this call to abolish GRCs. Yes, it used to be advantageous to the PAP to run in GRCs and with strong ministers carrying weak and newbie MPs into parliament. That was long long ago. History. The ball game today is completely different. The GRCs are no longer that formidable and favourable to the PAP. I can sense fear in the vulnerability of GRCs. What could happen today is that GRCs would be the nemesis of weak ministers, and there are quite a few, and the GRCs will present them to the oppositions, plus the weak and strong MPs. Looking at the mood and situation today, two or three GRCs could easily go to the oppositions. And with a few more if nothing changes from now till the GE. The opposition should just go with the GRC system. The time is never better than now. Believe me, the GRCs are favouring the oppositions instead.

Demographic growth determines the new economic powers

According to Dr Helen Qiao, the economist from Goldman Sach, China's rapid economic growth will peak by the end of this decade and subsequently decline. Her prediction is based on the dependency formula which shows the relationship between the number of dependents and that of the working population. China's one child policy will reduce this ratio and thus works towards its decline. Japan is facing the same problem and so are the old European countries. Countries that have low dependency ratio will go on a decline and vice versa, countries with a high dependency ratio, ie, more working populations than dependent population will do well. Extrapolating this relationship we can see the new emerging powers of the 21 Century. India will overtake China as it does not have a population control law to limit reproduction. Other countries that will also rise to become economic powers will be Indonesia, Malaysia and many African countries where population growth is nothing short of phenomenal. The higher the birth rate, the higher the potential for growth and sustainability. Singapore will also decline in double quick time as we are not reproducing ourselves fast enough. The more proactive Singaporeans should make plans to migrate to the higher growth countries quickly before the decline sets in. The first sector to be hit will be properties as there will be lesser new population to purchase properties, unless we keep importing more foreign talents.