Singapore will not be another Detroit

Detroit City was one of the richest American city in the 60s and 70s. Ford, GM and Chrysler made it their homes and provided hundreds of thousands of well paying jobs to create a rich middle class of Americans driving ultra big cars and tearing down the highways with petrol costing only a few cents. What a good life.
 
Detroit has just declared bankrupt with a debt of US$18b and unable to pay. I thought this is too small an amount for bankruptcy. Maybe Temasek or GIC should pay for it and buy over the City. The automobile industry was long gone, the houses and factories left vacant to rot. Two main factors contributed to the fall of a one time rich and prosperous city. It happened.
 
The first is high wages. Japan took over and sold cheap Japanese cars to replace the American hunks. Cheaper Japanese labour and even cheaper labours elsewhere just made the American workers not competitive with their high wages.
The second factor was debt. The city incurred huge debt that it could not repay without the big industrial base supporting it. The demand for housing fell when jobs disappeared and the population shifted out. And very likely many homes were just abandoned or disposed off under fire sales.
 
Singapore will never be another Detroit on these two factors alone. We don’t have overpriced Singaporean workers. We only have overpriced govt and this is unlikely to bankrupt the City like Detroit. If there are overpriced workers, and if they are not competitive, they can easily be replaced by cheaper foreign workers all the way to top management level. So Singapore is safe. Not sure about the fate of Singapore workers.
 
As for debt, Singapore has very big debt, among the highest in the world. But the debt is being dissipated by several schemes. Whatever the Govt owes to the people through the CPF saving schemes, a large part has been redeemed through selling exorbitant priced public flats back to the people. And whatever still owed to the people, the minimum sum schemes will ensure that there is very little chance of the need to pay back for at least the next 20 or 30 years. And if the minimum sums can keep spiraling up to a million or two or more, then there is really no need to pay back at all, or at very minimum sum that will be very bearable.
 
The Singapore Govt thus will have no debt despite owing a lot of money to the people through the CPF savings scheme. All the debt is either redeemed or deferred to perpetuity, to till the cow comes home.
 
The only debt is incurred by the people through expensive housing and cars and high medical bills. The state is debt free and will not be another Detroit. The State or City of Singapore will always be rich, with free supply of cheap labour and with the Singaporeans funding the debt through their life savings.

The inhuman monetary consideration and solutions

Money can solve all problems, or many problems. We have nearly solved our corruption problem with money. We can easily solve our traffic congestion with monetary solution. A $6 pass through an ERP gate is going to deter many drivers. A $10 pass will deter even more. A $50 pass will make it very convenient for those who can afford it to use the road as their private road.
 
These kinds of solution and mentality do not take into consideration the human factor, the empathy and compassion on those who need to pass through the gantry come what may and either have to pay painfully or be as good as drop dead.
 
Dropping dead at an ERP gantry may not be a common occurrence when one just cannot afford to pass through. Dropping dead could be a high probability when many simply cannot afford to pay for hospital bills. The latest suggestion of pegging hospital beds to inflation is one such monetary solution with a missing heart. It is an inhuman suggestion. The need for hospitalization cannot be measured in terms of monetary value. To minimize a hospital bed shortage problem by making the beds unaffordable is a very mean solution. Get it?
 
When there is a shortage of beds, why not increase the supply? It will add to cost in building more hospitals or providing more beds. But this provision is not a luxury, not liposuction to look better, not a hairdo, it could be a matter of life and death. The need for hospitalization is a genuine need and has to be provided. When the demand for more basic food is high, should the price be raised to reduce the demand?
 
Reducing the demand for road usage or even housing may not be life threatening, just an inconvenience or a difficult choice for some. Don’t build enough roads or no land to build more roads, don’t build enough housing, would create some pain and frustration. But life goes on. People who cannot afford the housing or cars would check their expectations or look for other cheaper alternatives.
 
Can the sick look for cheaper alternative beds elsewhere other than to cheaper medical practitioners like TCM or self medication or going to the temples or to voodoo doctors? Alternative medicine could do well when expensive conventional medicine is beyond the reach of the poor. At least there are voodoo alternatives available. But when they are so sick and needed to be hospitalized, price them out? Price them out to lower the demand for beds? Though it is an economic problem, a monetary problem, it is still wicked to think in such terms. A commercial decision, a private enterprise, got to think of shareholders’ profit?

Senior’s studio versus single’s 2 rm flats

The latest launch of 2 rm BTO flats for singles came as a pleasant surprise to many singles waiting eagerly for a place to stay and having nightmares watching how the prices have skyrocketed to beyond their reach. Many would not be able to afford to buy even direct from HDB, or be barred from buying because they were singles. Now the latest delivery by Boon Wan, with grants that could make a 2 rm flat going to as low as $16k! This is cheaper than a top of the range bike. Too good to believe, but it is true. It is possible, more real than the $1000 income can afford to buy HDB flat.
 
With such a good price, the seniors would now have a better option, instead of buying 30 year lease studio apartment at $90k each, correct me if I am wrong on this pricing. Now, which will give better value, a 99 year 2 rm flat of 45 sq m or a 30 year studio of 30-45 sq m? The former is priced at $76k before grant and the latter at $90k also without grant. The studio apartments do come with a lot of features to support the life style of the oldies, like grab bars, emergency buttons and better designs to make moving around easier.
 
I am an oldie too. I would definitely go for the 2 rm flat with a 99 year lease. At $76k for 99 years, it works out to be $768 per year, without grant. The studio will cost $3000 per year and unlikely to have any appreciation value as the lease will run out soon.
 
the oldies being short changed? Or let me put it in a positive way, are the singles being given a very good discount?

Japan spreading white lie

In its attempt to show the world that Japan is willing to talk to China and that China is the one that is unwilling, the special adviser to Shinzo Abe, Isao Iljima, has been spreading a lie that he had spoken to Chinese leaders and a summit between Xi Jinping and Abe is on the card. Chinese foreign ministry had rebutted this statement and said that Iljima was in China to discuss about North Korea and nothing to do with any summit of the two leaders.
 
China’s condition for a meeting is that Japan must agree to a dispute on the Diaoyu/Senkaku islands before any talk can commence. Japan seized the islands from China after a war and is now claiming that the islands were inherently Japanese.
 
The importance of the islands is not just about resources and minerals. It is national sovereignty and even if there is nothing there, no country will allow another country to seize its territories by force. China could only lie low if it is still militarily a weak country like in the past. Today, China could overrun Japan if needed and would not be lying down or turning the other cheek anymore. It will want its islands back.
 
The only compromise to this dispute is for both sides to acknowledge there is a dispute but leave it on the back burner. China and Japan both do not need the islands for their economic development for a long time to come and can talk about it in the future when relations are better state. For Japan to push the issue and resorting to underhand tactics and lies like they used to do in the late 19th and early 20th Centuries would not do today. Even the balance of power is tilted towards China and in favour of China. The use of force to settle the issue will be very costly to Japan and a likely defeat given the odds.
 
China is no longer the bankrupt Sick Man of Asia. It is the second super power and will deal a very bloody nose to Japan if force to. Would Japan be tempted to take on China militarily with the abolition of its pacifist constitution and remilitarization of its armed forces as a big military power? The changing of the pacifist constitution is only a matter of time In today’s report, Taro Aso, the Finance Minister has been accused of sowing the idea of changing the constitution secretly like Nazi Germany without the knowledge of the Japanese people and the world. The rightist govt of Abe is on the march towards remilitarization with the support of the US to counter China’s rise.

Hsien Loong’s National Day Speech

Hsien Loong is working hard on his new National Day Speech to the nation. And with the coverage of CNA, the speech is going to be broadcasted over many countries and will have millions of viewers. It is a great PR opportunity to sell the island and how well it is managed.
 
I hope he does not get carried away by the size of the audience and get down to really talk about the problems and challenges facing the people, the unhappiness and the concerns. There are many serious issues that will not go away just by not talking about them. In the past, most of his speeches were devoted to making the people feel good. The effect of such feel good speeches does not last longer than the next TV programme. It would be good if he could address the people’s concern, not what the Govt thinks are the people’s concerns or to say what the Govt thinks are the right things.
 
Would he be telling the people what is the Govt’s position on the 6.9m population and what is the situation now, what is the size of the population and what is the Govt’s intent? There were two public demonstrations against the 6.9m population and the disquiet cannot be ignored. Would he address the problems of locals losing jobs to foreigners, particularly in the PME fields and how the Govt is tackling the fake qualifications and discrimination against Singaporeans by foreigners here? Would he be talking about the housing problems, how many Singaporeans have been left out from public housing schemes by the bad policies of the past and what the Govt is going to do to redeem itself and to ensure that every Singaporean will have a chance to buy a HDB flat, that every male citizen who has served NS and will continue to be in the reserve, has the right to buy a public flat?
 
The problems of public transportation, car ownership and the regular breakdowns of the SMRT, what is the Govt thinking, what it is going to do about them? Higher ERPs and higher COEs are not going to solve these problems if the influx of foreigners continues and the target of 6.9m is still unchanged.
 
The high medical cost, the shortages of hospital beds when we don’t have such problems in the past when the govt was relatively very poor, fewer hospitals and few doctors. The waiting time to see a specialist, to see a medical practitioner, to see a dental surgeon, is now becoming ridiculous. Many would have died or suffered while waiting for their next appointments. Why are there such a big shortage of doctors and hospital beds and what are the solutions when the situation can only get worse with more immigrants coming in?
 
There are so many problems and so many things to answer. Can Hsien Loong address the problems and let the people know what the Govt will be doing, a change from the past when he painted almost an utopia, of happy and prosperous people in a vibrant and rich city and everyone hoping to live happily ever after?