Thursday, March 31, 2005

Singapore flies high, but not AWAIR 

AWAIR, the Indonesian arm of Malaysian budget carrier AirAsia that has recently been caught in the dispute between Singapore and Indonesia over landing rights between the two countries (see “Budget airline dispute shaping up between Indonesia and Singapore” and “Singapore under fire in airline dispute”), is not doing too well.

Indonesia’s Awair Loses Money Due to Inability to Land at Changi
Awair Airlines said it lost billions of rupiah owing to recent rejection by the Civil Aviation Authority of Singapore (CCAS) for its planes to land at Singapore’s Changi International Airport. Awair President Sendjaja Widjaja said the loss was affecting the performance of the airline. Sendjaja said the airline has to postpone serving the Jakarta-Singapore route to prevent further losses. He said the restriction announced recently by the Indonesian government on foreign budget airlines will not affect Awair.
In the light of what has been happening, the last two statements apparently made by AWAIR president Sendjaja Widjaja sound a bit strange, though.

Singapore and AirAsia, two of the other parties involved in the dispute, seem to be doing much better.

Singapore flies high
The 2003 outbreak of severe acute respiratory syndrome (SARS) had a dramatic impact on the local aviation sector. Yet the latest outbreak — this time of budget airlines, otherwise known as low-cost carriers (LCCs) — is likely to cause even more turbulence for the sector...

Soaring above all budget carriers in the region though is Malaysia-based AirAsia, established in December 2001 by its current chief executive officer and director Tony Fernandes. With a staff of around 1,600 and a customer base of 5 million, AirAsia flies from multiple points throughout Southeast Asia, including Singapore.

... AirAsia, which listed on Bursa Malaysia in November, now employs a fleet of 80 aircraft and has plans to add another 40 from early 2006. Services to China are also in the offing. The airline, which includes affiliates in Thailand (Thai AirAsia) and Indonesia (AWAIR), saw its profitability for the first half of the year rise substantially to US$14.2 million.

... While the flying public has certainly gained from LCCs, the biggest winner may yet be the Singapore government. This is likely not only from its investments — via its trading arm Temasek Holdings — in two of the low-cost airlines, but also from the jump in passenger traffic at Changi Airport and the growing number of tourists entering Singapore.

Passenger and cargo traffic hit new highs at Changi in 2004... The airport also handled a record amount of air cargo last year... Tourism numbers have also improved, with visitor numbers in 2004 surpassing the Singapore Tourism Board’s targets... LCCs can be assumed to have at least partly helped in this strong rise in visitor numbers and revenue...

One organization set to gain from the entry of new airlines into the Singapore market is Changi Airport, which appears to be banking on a bright future. Work aimed at expanding Changi Airport’s capacity continues, with the construction of the third passenger terminal building due for completion next year... Moreover, a terminal solely for LCCs and able to handle 2.7 million passengers annually will be built by early 2006...
Another piece of good news for Singapore is that it remains the top place in Asia for doing business, according to an Economist Intelligence Unit survey.

Singapore, Hong Kong retain top Asian spots in business survey: EIU
Singapore and Hong Kong retained their spots as the best places in Asia to conduct business in the next five years, a global survey showed Wednesday. Singapore, Southeast Asia's most advanced economy, was ranked number four in the survey by the Economist Intelligence Unit (EIU) which saw Denmark dethrone Canada in the number one spot... Singapore had the highest ranking among the Asian economies, followed by Hong Kong, which was in fifth place in the global tally...
This is evidence that the Singapore government’s economic policies is largely on the right track, even if some don’t seem too impressed with the results of its science policies.

Wednesday, March 30, 2005

Mavericks and the elite 

Koh Buck Song has a commentary in The Straits Times today on mavericks.

In the commentary, he says: “Ideally, the maverick would be seen playing the role of a ‘wise duke’, who has the guts to speak truth and advise the ruler and enlighten the people to avoid errors.”

This leads him to ask the question: “Can mavericks be part of the elite?”

To which I would ask: Why not, if they are talented? After all, in his speech on the elite at the NUS Society Lecture, Prime Minister Lee Hsien Loong said that “there will always be some who do not fit the mould for an academic education, but have other valuable talents and life skills” and “doors must always be open to those who have taken alternative routes to success”.

Huichieh of From a Singapore Angle discusses the elite in some detail in “"Elite"...what's in a word?”.

Apparently plenty, if the post is anything to go by. Responding to some negative sentiments towards the word “elite”, he basically argues that the elite is a necessary part of society, as surely as leaders need followers, and that it is no use getting too hung up over the word. Read the post for the details.

He is quite correct, in my opinion, although the fact remains that the word “elite” is too closely associated with the exclusivity and privileges of elitism and just doesn't go down well with many people.

The King must have the right to rule, but his subjects don’t have to like it. Especially if they’re mavericks.

Tuesday, March 29, 2005

Earthquake off Sumatra — again 

Yet another earthquake off Sumatra. Thankfully, there was no tsunami this time around.

Up to 2,000 dead in earthquake: Indonesian VP
As many as 2,000 people may have been killed when a powerful earthquake hit the Indonesian island of Nias, Indonesian Vice President Yusuf Kalla said on Tuesday... [O]fficials on the Indonesian island of Nias off the west coast of Sumatra ealier said at least 300 people were believed to have been killed after many buildings were brought crashing to the ground by the quake...

The huge earthquake off northwest Indonesia triggered tsunami alerts across the Indian Ocean which caused widespread panic. The under-sea quake measuring up to 8.7 on the Richter Scale came just three months after an even bigger temblor in the same region sent giant waves crashing into 11 nations, killing over 270,000 people. The quake struck about 205 kilometres off the coast of the main northern Indonesian island of Sumatra and prompted Indonesia, India, Malaysia, Sri Lanka and Thailand, among others, to issue warnings of imminent tsunamis...
Although the quake did not trigger off a tsunami — a fact that puzzles some experts — it was strong enough to be felt in Singapore, including in Toa Payoh, where apparently many residents evacuated their flats.

Sunday, March 27, 2005

South Florida in Singapore 

Excerpt from an article in the Sun-Sentinel:

S. Florida companies enjoy doing business with thriving Singapore
South Florida executive Rodrigo Vera travels at least twice a year to Singapore for his company that imports construction materials from Asia.

His business partners chose the small island nation as an Asian hub, lured by its sophistication, stability and strong banking and telecom systems.

Vera enjoys the ease of doing international business in the trade-oriented nation, which boasts Asia’s only free-trade accord with the United States and ample high-speed Internet access. And the tropical landscapes are beautiful, too.

“It’s like living in a garden,” said Vera, a principal in Delray Beach-based Southern Cross Building Products LLC. “The place is so manicured.”
The fact that you get the sun and sea without the hurricanes probably helps too.

Thursday, March 24, 2005

Singapore’s foreign relations and its economy 

This is a relatively long post as I have a number of things to share.

First, let me follow up on yesterday’s post on the budget airline dispute with this excerpt from a Channel NewsAsia report:

Indonesia to restrict budget airlines’ access to protect domestic carriers
Indonesia is to impose new restrictions on foreign budget airlines flying to key destinations such as Jakarta and Bali to protect its own operators in the face of fierce competition, reports said on Wednesday. Transport Minister Hatta Rajasa said the new regulations would remain in place until Indonesia had negotiated agreements with other national aviation authorities over the booming low-cost air industry in the region...
With Indonesia’s protectionist measure now officially in place, it may actually become easier for the Civil Aviation Authority of Singapore to defend its decision to withhold AWAIR’s right to fly to Singapore.

But Singapore also faces other disputes with Indonesia.

Singapore Embassy in Jakarta attacked over dumping allegations
The Singapore Embassy in Jakarta was attacked by a group of demonstrators on Tuesday morning. Accusing Singapore of dumping toxic waste in Batam, the demonstrators turned violent, damaging the main gate of the embassy and defacing it with graffiti...
Clement Mesenas, in his article entitled “S’pore-Indon ‘toxic’ issue must be neutralised in Today, points out that this incident may just be “a diversionary tactic to distract Indonesians distraught with rising fuel prices following the removal of subsidies”. This suggests that the friendly relations built up in “Singapore’s generous and forthright response to the plight of tsunami-ravaged Aceh” should help provide a resolution to the dispute.

But Singapore’s relations with Indonesia aren’t the only ones giving it problems at the moment. While Singapore’s alleged military exercise with Taiwan hasn’t quite blown up to serious proportions, there is already another potential irritant:

China blamed for Singapore’s refusal to let in Taiwan seamen
Taiwan yesterday accused Singapore of blocking a port call by two warships to the city-state because of pressure from China... Frank Hsieh, the Taiwanese prime minister, alleged Singapore did not allow the crew of two Taiwanese frigates to go ashore when they docked in the city-state this month because of pressure from China...
If push comes to shove, Prime Minister Lee Hsien Loong has already made clear which side he will back. China is too important to Singapore economically for him to antagonise.

And the economy is something that PM Lee definitely has in mind, as he made clear at the NUS Society Lecture in talking about the casino:

Singapore must reinvent itself to stay attractive and competitive: PM Lee
Prime Minister Lee Hsien Loong said Singapore must reinvent itself to remain attractive and competitive and building a casino is one of the possible ways to do it. But if one is built, the government will ensure there are systematic ways to cope with its social costs...
And in an interview with Bloomberg:

Sure economic gain from casino resort
WITH less than four weeks to go for its decision on whether Singapore is to have a casino, the signs are that the Government is leaning towards a “yes”. In an interview aired yesterday on Bloomberg Television, Prime Minister Lee Hsien Loong said that if Singapore were to have a casino, “there’s not much doubt about the economic benefits to us”...

Mr Lee said: “...It will make Singapore different and it’s one of the things we must do as we continue to make development grow. You have to be prepared to look at a different world, see a landscape which is changing and ask, ‘What do we need to do to keep up with that?’ Staying put is not an option.”

... In the long-term, the “very fierce” competition in the region means that Singapore has to move “very fast and very resolutely” if it wants to avoid being left behind...
That more or less echoes the point I made in “Employment and globalisation”. And to illustrate the problem that Singapore faces, the following story in The Arizona Republic on long-term unemployment is perhaps instructive:

Unemployment plateau: Many jobless for longer
... For the past 29 months, one-fifth of the nation’s jobless people captured in federal statistics have been out of work for more than 27 weeks, which qualifies them as “long-term unemployed.” And unlike previous periods, many of those job seekers have college degrees and solid professional experience...

While there have been periods when the share of long-term unemployed has been higher, it has never remained above 20 percent for so long, economists note. And when the jobless rate shrank, as it has lately, the share of long-term unemployed traditionally shrank along with it. That hasn’t been the case this time around...
There are new dynamics in the world economy; just blaming the unemployed isn’t going to be very helpful.

If it’s any consolation to the unemployed, inflation seems reasonably subdued:

Singapore’s living cost falls, Japanese cities remain the world’s most expensive: EIU survey
Costs of living in Singapore have dropped while the Japanese cities of Tokyo, Osaka and Kobe have preserved their status as the world’s most expensive cities to live in, a survey shows. A bi-annual Economist Intelligence Unit survey of more than 130 cities says Singapore is now at the 19th position, down from 17th in cost of living over the past year...
The following report says the same thing once you read beyond the headline:

Singapore’s CPI up 0.7% in February
Singapore’s consumer price index rose 0.7 percent in February from a month ago, due largely to higher housing cost, the Department of Statistics said on Wednesday. The consumer price index was flat from the same period a year ago...
Of course, counter-intuitive though it may be to some, those who are familiar with economics know that low inflation isn’t necessarily a good sign, as I point out in “High expectations and cost of living”.

As they say: Be careful what you wish for.

Wednesday, March 23, 2005

Singapore under fire in airline dispute 

The budget airline dispute between Indonesia and Singapore — or more accurately, between budget carrier AirAsia and the Civil Aviation Authority of Singapore — gets more airing in the media. Although the title of the following report highlights Singapore, this is really about AirAsia’s battle with the Singapore aviation authority.

Singapore shakes up skies over Asia
The Civil Aviation Authority of Singapore (CAAS) has come under fire for refusing to grant landing rights at its only airport, Changi International, to an Indonesia-based carrier in which Malaysia’s leading low-fare airline, AirAsia Berhad, holds a 49% stake. Though Singapore may call the shots in granting landing rights at Changi — upsetting AirAsia, which claims Singapore is using its planned Jakarta-Singapore route to give itself an edge in bargaining with Jakarta over air links — the issue has stirred up waves of criticism.

Southeast Asian countries plan to adopt an open-skies policy between their respective capital cities by 2008 and fully liberalize the region’s air-travel industry by 2011, but AirAsia’s charismatic founder and chief executive officer Tony Fernandes has implied that unless the respective governments fight back, the only winners in the skies between Singapore, Indonesia and Malaysia, at least, will be Singapore. AirAsia has said it is abandoning the planned Jakarta-Singapore route after having to postpone its launch at the 11th hour because it failed to secure the necessary approvals from Singapore aviation authorities. This would be a setback for the republic’s plan to present its only airport as an aviation hub for Southeast Asia...
Notice that the report is largely written from the perspective of AirAsia, particularly that of its CEO Tony Fernandes. It’s not quite a model of balanced reporting, but it’s hard to blame Bill Guerin. In contrast to the reticence of CAAS, Fernandes makes it easy for reporters to quote him.

Those who shout loudest get the most attention.

The Singapore authorities probably need to pay more attention to its image. This Asia Times report is just another example of the bad press that Singapore often gets from the foreign media.

And the resulting poor image for Singapore conceivably explains the behaviour of a British footballer as reported in the following article.

Defender rejects a move out to Singapore
Frozen-out defender Steve Burton has incurred the wrath of Kidderminster boss Stuart Watkiss again — after snubbing a move to Singapore. Watkiss claims the 22-year-old third choice left-back has turned down the chance of a lucrative year’s contract in the Far East. Burton, who has already rejected the chance of loan moves to Worcester City, Redditch and Accrington Stanley, now faces the prospect of a depressing diet of reserve team football indefinitely.

“Steve had the chance of going to Singapore on more money to play professionally in their mini-championship,” said Watkiss. “His accommodation would have been paid and he would be on more wages. “But he’s turned it down. I find it amazing that he has rejected such an opportunity by preferring to pick up his money in our reserves.”...
Or maybe the footballer just finds Singapore’s standard of football even more atrocious than that of the reserve team of a British Division Three side.

Tuesday, March 22, 2005

New scheme for HDB shops underlines disturbing trend 

Earlier this month, Minister for National Development Mah Bow Tan announced several new policies in Parliament, one of which is the Restructuring Programme for Shops (RPS).

This programme is targeted at shop tenants where there is an over-supply of shops and where business is poor. Shop tenants in a cluster selected for the RPS will be polled on whether they wish to retire from their business. If more than 50 percent of the tenants in a block opt to quit, those who opt to quit will receive $60,000 while those who did not will be given HDB assistance to relocate.

Some responses on the scheme in Channel NewsAsia:

Mixed response from shop tenants on Restructuring Programme for Shops
The Restructuring Programme for Shops could provide a vital lifeline for struggling shop tenants as the new scheme aims to minimise oversupply of shops and improve business by offering them a way out. But not every tenant was keen.

Jessica Yeo, who operates a skincare centre along Mei Ling Street, was one of many who welcomed the Restructuring Progamme for Shops... Yet others like Janice Chan want to stay put despite sluggish sales...
And in Today:

Lifeline heartens HDB shopowners
IT would not be wrong to call the Government’s new rescue package for beleaguered heartland retailers a scheme of half-measures, say some observers.

After all, the Restructuring Programme for Shops (RPS) requires a voting majority of just over half to take place, helps less than half of Singapore’s 15,200 HDB shop units and co-funds up to half of business revitalisation projects.

But what some say are half-measures is seen as help by others, which begs the question: Is the glass of the HDB retailers half-empty or half-full?...
While it may need some refinements, I think the concept behind RPS is a good one. It gives retailers who are not doing well a way out, while for those who choose to remain in the business, it helps to reduce competition and keep them viable. But I think it also reflects a disturbing underlying trend.

Ownership of a small business represents, for many people, an alternative avenue for making a living — one that does not tie them to the corporate world, affords them some freedom and provides a back-up for employees who cannot get or keep a salaried job. In a sense, it represents economic egalitarianism.

The HDB shop is an important symbol of the small business owner. But it looks like many retail shops in Singapore’s heartland have difficulty staying economically viable. This is not surprising; in the United States, large retailers like Wal-Mart are driving smaller ones out of business as well (see “The Darwinian world of retailing”). Unfortunately, the government’s plan to remove the 30 percent rental rebate for HDB retailers only makes things worse for the latter.

These developments indicate that the door may be closing on one alternative for people to own their own business. All this while the world may be facing greater income insecurity (see Brad DeLong’s recent post “Daniel Gross on Social Security and Income Insecurity”) and Singapore itself sees a possible slowdown in hiring. The RPS notwithstanding, this may mean more frustration for people trying to earn a living in Singapore.

Monday, March 21, 2005

Singapore-Taiwan joint military exercise 

Singapore Ink’s Wows has this interesting report.

S’pore-Taiwan Joint Exercises
The Taiwanese army has gained a major breakthrough in its inter-military cooperation level. In order to familiarise themselves and Singapore’s Starlight forces with alliance-like joint operational co-ordination mechanisms, the military is currently breaking from its previous restrictions to conduct joint military operational exercises with the Starlight forces under the joint instruction of American and Japanese military advisers...
From a Singapore Angle’s Huichieh picked up the report and added his comments:

Unfortunately, this sort of news is hard to verify. SAF is not in the habit of being open about our Taiwan connections (the very opposite is true), while the Taiwanese tend to be fairly footloose at times about supposed information. But it is certainly within the realm of possibility... I’m really not sure if China would be pleased with Singapore to hear about this.
Well, you can be sure that China would make her displeasure known — maybe after US Secretary of State Condoleezza Rice’s departure.

Thursday, March 17, 2005

Think again 

Excerpt from a post by Wows at the Singapore Ink on the Oxford Singapore Forum.

A question also popped up about tolerance of homosexuals. Irene Ng gives the story of her change in attitudes from before and after she was an MP (these kinds of stories are always interesting … the many Vivian ones are just irresistible for instance). She has many gay friends, from the arts scene primarily. When she became an MP she wanted to fight for a more actively and openly tolerant stance by the govt. towards gays. Then she realised during dialogue sessions that many, many people were almost bitterly opposed to any change from the government.

Warren Fernandez then recounts how he used to run stories on gay hangouts. Not only does he receive angry callers (he is just that bit short of saying “religious”) who berate the paper for devoting space to such “deviant” elements of society, he receives calls from the higher-ups in the police. “Why do you want to run so many stories on gay hangouts. If only you don’t run them, then we don’t have so much pressure to crack down.” His belief is that perhaps a spotlight might not be the best way to foster a space for gays.
Off the top of my head, I can think of two problems that these two instances illustrate.

Firstly, people often think that others have the same views as them. Diversity of views is underestimated. As is conflict of interests.

Secondly, people often take or suggest actions that superficially forward their goals but don’t think through the second and third order effects. Think of backlash. Think of unintended consequences. Think of game theory.

Wednesday, March 16, 2005

Singapore workers are fussy 

As seen in The Straits Times report on employment and salaries in Singapore:

Asked if the new rule to let companies hire more foreign workers will further widen the gap [in employment growth between locals and foreigners], Aljunied GRC MP Cynthia Phua said most companies prefer to hire locals and that it is the workers who are fussy.
In contrast to workers, companies are not fussy and hire anybody who asks for a job.

I sometimes wonder whether The Straits Times makes up these quotes just so that I have something to blog about.

Monday, March 14, 2005

Temasek in the news 

Looks like Singapore doesn’t have to go into biotechnology to create clones.

The Singapore Clones
If copying is the most sincere form of flattery, Singapore should be red in the face. Its Temasek Holdings was once a novel experiment: a state investment fund that molded renowned brands, like Singapore Airlines and SingTel. In recent years, as Temasek began to invest abroad, it was at first greeted by neighbors like Malaysia and Indonesia as an unwelcome foreign intrusion. But now several Asian states, including these detractors, are more or less openly trying to copy the Temasek model.

At a time when much of the world is questioning the free-market ideal, the appeal of a quasi-public investment vehicle is clear. It gives Asian political leaders a proven mechanism for directing investment and shaping national industrial champions. Taiwan has plans to consolidate some $31 billion in state shares into a holding company modeled on Temasek. Indonesia is considering a similar idea to reorganize and improve the efficiency of some of its state giants, like the oil and gas company Pertamina. And while Malaysia would never admit to following the lead of its neighbor and rival, economists say the recently reorganized Khazanah, the national investment agency, looks like a carbon copy of Temasek in its early days...
In the meantime, Temasek itself appears to have moved on beyond its national borders.

Singapore’s Temasek emerges as an Asian powerhouse after regional expansion
Singapore’s Temasek Holdings is stamping its mark as an Asian powerhouse investor after a trailblazing multi-billion dollar shopping spree in the region over the past two years, analysts say. Temasek, which has interests in everything from banks to telecoms, airlines to energy firms, is now a major presence in the region, stretching from closest neighbour Malaysia to China and India.

Almost half of Temasek’s portfolio, worth 90 billion Singapore dollars (55 billion US), is invested overseas with many of its foreign interests acquired over the past two years, company spokeswoman Rachel Lin told AFP...
According to the AFP report, Temasek’s portfolio is worth US$55 billion. Interestingly, American billionaire investor Warren Buffett’s investment vehicle Berkshire Hathaway has US$43 billion that it is trying to invest but has trouble finding good buys.

No Companies to Buy in 2004, Buffett Says
The mighty billionaire Warren Buffett says he has “struck out.” The CEO of Berkshire Hathaway Inc. wrote in his annual report Saturday that he had hoped to make several multibillion-dollar acquisitions in 2004. He certainly had the money, so the problem? None to buy, he said.

“I found very few attractive securities to buy,” Buffett wrote in his company’s 40th annual report. Berkshire ended the year with $43 billion of cash equivalents, something he called “not a happy position.”...
If he raised a little more cash, Buffett could buy up Temasek and save himself the trouble of looking for any further acquisitions.

Maybe Buffett could help Temasek improve its investment performance (see my earlier post on Temasek’s performance).

Friday, March 11, 2005

Budget airline dispute shaping up between Indonesia and Singapore 

I have mentioned previously the delay that Indonesian budget carrier AWAIR is facing in getting approval from the Civil Aviation Authority of Singapore for its flight to Singapore (see “Budget airline may sue Singapore”), and the lack of explanation from the latter. Well, the CAAS has finally spoken.

New Indonesian restriction stops AWAIR’s flight to Singapore
There has been a new twist to the AWAIR saga. In a statement on Thursday, the Civil Aviation Authority of Singapore (CAAS) said it was unable to proceed with AWAIR’s application to fly to Singapore because... Indonesian authorities intended to introduce a new restriction on services by low-cost carriers to and from certain points in Indonesia...
The Straits Times reports that the Indonesians are unhappy with this linkage.

When contacted in Jakarta, director for air transport in the Transportation Ministry, Mr Eddy Santoso, said he was baffled by Singapore’s attempt to link Awair’s application with the talks on Singapore-based carriers... “[T]his was never in the talks with Singapore,” he said, adding Indonesia’s airlines are already far behind in the competition...

In a statement, Mr Sendjaja Widjaja, president director of [Awair]...said that the carrier was “very disappointed” with CAAS for “dragging its feet”... “CAAS should not have used Awair as a bargaining chip...” he said.
To the Indonesians, I would say that tit-for-tat is just par for the course when it comes to protectionism.

To Singapore, this should be a reminder that when you make a living off others, a conspicuous advantage tends to invite a backlash from the latter, even when the advantage is gained in fair competition.

Thursday, March 10, 2005

Singapore tops in networked readiness 

IT- and rank-obsessed Singapore will probably be pleased with this.

S’pore tops WEF’s survey on use of infocomm technology
Singapore has been ranked the world’s most successful economy in exploiting infocomm developments. In its latest technology survey, the World Economic Forum placed Singapore ahead of 104 other nations in its Networked Readiness Index...
Internet users will probably be interested in the fact that Singapore ranks a relatively lowly 11th in broadband adoption. The report states that the Infocomm Development Authority is already addressing this by providing “more choices and more alternatives”.

See also “IDA believes Singapore firms poised to ride next wave of infocomm”.

Wednesday, March 09, 2005

Spin and the universities 

The Straits Times published an opinion piece on spin today from the Los Angeles Times. Excerpt:

It’s an old story that the news and our understanding of it are affected — or afflicted — by “spin,” meaning efforts by partisans to make us see things their way. But this treatment of the mechanics of spin as news in its own right seems more recent. And so does the spread of spin and the awareness of its mechanics to areas far beyond politics.
Singapore universities would probably see the value of spin, judging from their latest recruitment activities.

Varsities adopt marketing approach to recruitment
[T]he three local universities have already spent tens of thousands on advertising campaigns to draw students. In stark contrast to former no-frills application proceedings, this year, marketing strategies include talks at five-star hotels, outdoor concerts and even pre-entry undergraduate courses...

Director Alan Goh of the Office of Admissions at the Singapore Management University (SMU) said: “The old model in which you sit back like a retailer is long gone. Today, you need to take a marketing approach to recruitment.”...
Indeed, the SMU seems the most adept at it. Not surprising perhaps for a university that, relative to the other local universities, seems to stress presentation in its curriculum. In fact, it looks like the SMU can even get a newspaper to weave its marketing spin for it.

SMU – Going from being different to making a difference
FIVE years since it burst upon Singapore’s staid education scene, the Singapore Management University (SMU) has gone beyond making American-style teaching in higher education a hot new trend. It is now a brand leader, to quote Mr Alan Goh, the university’s sharply dressed director of undergraduate admissions and a respected marketing maven himself...

Its liberal but rigorous pedagogy...and institutional autonomy have gained the school almost a cult status among Singapore’s students. More importantly, it has established itself as such a reliable source of graduates among the nation’s top corporations, that for two years running, the heads of several blue-chip companies have vouched for them in eye-catching university recruitment advertisements...

There are statistics to back this up. According to a study by market research company Taylor Nelson Sofres last November, SMU has the makings of a “rising star”...

Above all, it speaks of the commitment of the faculty. How many universities are there in the world, let alone in Singapore, where a dean kick-starts a scholarship fund by paying a whopping $80,000 out of his own savings to fund two needy but bright young men’s studies?...
It’s not too often that you see a journalist describe an institution or organisation in almost gushing terms without those terms being in quotation marks and attributable to a source, preferably reliable. Not that the story didn’t have its fair share of anecdotal accounts, another favourite marketing technique.

Its fee increase notwithstanding, I think the SMU will be successful in establishing itself as an educational icon in Singapore.

Tuesday, March 08, 2005

Employment and globalisation 

While the job market appears to have become rosier for graduates of the National University of Singapore and Nanyang Technological University last year, KnightofPentacles of Singapore Serf still has trouble getting work which pays reasonably in the IT sector.

If you think the education policies puts Singaporeans at a disadvantage, just wait until you start competing in the cut-throat work private sector environment...

I was chatting with a friendly recruitment agent (“headhunter”) last Friday. What I heard ran a chill down my spine... What was upsetting to me personally was that her clients are specifically rejecting Singaporeans for those positions.

Seems that clients are requesting Caucasian faces for the mid- to top-level positions to bolster the “image” for the company...

As for the cost-sensitive entry-level positions, the clients have specifically requested for India and PRC workers and are more than willing to apply for (‘Q’-class) employment passes since it is cheaper than paying the extra CPF for Singaporeans, and the hassle of having male Singaporeans disrupt employment for National Service reservist every year...

... The recruiter told the SO that the wages for the IT market (from the recruiter standpoint) has pretty much collasped due to the influx of cheap foreign labour...
The discrimination at the mid- to top-level positions would probably strike a chord with redrown of Rebrab Moor. For entry-level positions, the situation that KnightofPentacles describes has to be seen against the backdrop of globalisation, and specifically, the rise of India as an IT powerhouse.

The effects of globalisation is far-reaching. In my earlier post on “Budget crunch?”, I had consciously stretched my excerpt from The Straits Times to include a paragraph that mentions Harvard economist Dani Rodrick and his book Has Globalisation Gone Too Far?. Much of the income risk that I have mentioned elsewhere in this blog is the result of globalisation. It is a phenomenon that Singapore cannot be shielded from.

Incidentally, I doubt that Australia — where KnightofPentacles hopes to go to — can either. It’s a worldwide problem. In fact, just yesterday, Morgan Stanley chief economist Stephen Roach wrote a commentary entitled “From Jobless to Wageless” regarding the current American job situation:

The global labor arbitrage has a rich and long history... Courtesy of e-based connectivity, both tradable goods and an increasingly broad array of once non-tradable services can now be sourced anywhere around the world. That has turned low-labor-cost platforms in places such as China (goods) and India (services) into both wage- and price-setters at the margin... [T]hese offshore employment options played an important role in crimping domestic hiring. Now, I suspect these same forces are having an important impact on the US real wage cycle... Why pay up for a software programmer at home when you can get the same functionality at a fraction of the cost from Bangalore?
To a large extent, many of the Singapore government’s policies — including that on accepting foreign talent — are formulated in an attempt to address the effects of globalisation without sacrificing economic growth. In a sense, I guess, the Singapore government should be commended for being proactive about meeting the challenges arising from globalisation.

However, being proactive also often means implementing untested policies. Or even reversing tested policies. The policy that favours foreign talent, for example, contradicts a long-standing policy of keeping out immigrants from Singapore, a factor behind the foreign worker levy. Little wonder then that its effects are causing a brouhaha among Singaporeans (see “TODAY Reader Mail: Feeling marginalised in own country”).

On a more fundamental level, we also need to ask whether the almost-single-minded pursuit of economic growth — at least as measured by gross domestic product or similar indicators — is realistically compatible with the true wishes of individual Singaporeans. This is a question that I am not sure the government has provided the correct answer to (For elaboration on this point, see for examples another Singapore Serf post “GK’s Real Question” and my own “High expectations and cost of living”).

Monday, March 07, 2005

Study on political blogging 

No doubt, like many other Singapore bloggers, I’ve been invited to participate in a study on political blogging by some NUS students (see the comment in the neuromarketing post). Ironically, the invitation appeared in a post that has nothing to do with politics.

Or maybe I’m wrong. Maybe neuromarketing is related to politics. Maybe something to do with the brain scans.

Saturday, March 05, 2005


Rob at the BusinessPundit.com explains why he believes in neuromarketing.

Because you can’t fool a brainscan... Everyone has a different worldview based on his or her past experiences, and while listening and engaging them may help us understand how they think, we can never be totally sure we are getting the truth. Why not? Because we ourselves don’t always know the truth. We don’t always know what we want. We can’t even explain our own actions sometimes.
To understand more about neuromarketing, Rob gives the following references:

In Search of the Buy Button

Inside the mind of the consumer

What is neuromarketing?

Maybe neuromarketing can be part of Singapore’s arsenal in developing Singapore brands. So that Singaporean companies don’t have to rely just on trade shows or exhortations to Singaporeans to buy Singapore-made goods to sell their products.

I can also see other uses for brain scans. Maybe Singaporeans entering Singapore’s proposed casino could be subjected to brain scans to filter out those who are likely to become addicted to gambling.

Friday, March 04, 2005

Yet more views on the casino 

Singaporeans have had their chance to have their views aired on the casino debate.

Casino debate gets a public airing on TV
THE casino debate was given a concerted public airing yesterday, with Singaporeans seemingly still torn on whether having one would be good for the country...

MediaCorp put the seal on a multi-platform national debate through an hour-long programme called High Stakes: The Casino Debate, aired last night on Channel NewsAsia (CNA). The programme featured a studio panel hosted by Ms Diana Ser, with Today CEO and editor-in-chief Mano Sabnani and Institute of Policy Studies research fellow Dr Gillian Koh as panellists.

Letters from Today readers, comments from NewsRadio listeners, online postings and emails to CNA’s website were read out during the show.

Viewers also followed two Singaporeans who visited the casino at Genting Highlands recently...
Andy Mukherjee of Bloomberg thinks that Singapore will have its casino anyway.

Singapore’s trump card
Las Vegas casinos can’t wait to come to Singapore. And although groups like Families Against the Casino Threat in Singapore and the National Council of Churches of Singapore are putting up a strong protest, they will probably lose...

The decision appears to be a foregone conclusion, especially since the government has already planned safeguards for the local population...

What’s important is that legalized gambling is one of the few businesses left where Singapore has an edge over other Asian nations, because casino operators are forced to choose their locations not based on the size of the market, wage costs or availability of raw materials, but purely based on which place is open enough to receive them, warts and all...
Maybe Andy Mukherjee only watches Bloomberg, not Channel NewsAsia.

Thursday, March 03, 2005

Why companies don't get more this year, budget crunch or not 

Among those who had asked for handouts from the government during the budget debate, I thought that businesses were among the least deserving. Businesses may need more structural reform to sustain them for the long term, but in what looks like a relatively good economic year, fiscal handouts appear out of place.

Prime Minister Lee Hsien Loong appears to agree.

PM Lee explains why companies did not get all they wanted in Budget
Prime Minister Lee Hsien Loong gave reasons why business did not get as much as they hoped in Budget 2005. He said part of the reason was because major tax changes in the last five years have already saved companies at least $1.8 billion a year. Mr Lee said the government had also adopted a conservative fiscal policy stance this year because the Singapore economy has been expanding within its long-term sustainable growth rate.

Singapore’s economy grew an impressive 8.4 percent last year, but that was coming from a low base in 2003 when SARS hit. On average, economic growth over the past two years was 3.4 percent — well within Singapore’s long-term sustainable growth rate. Mr Lee said that is why Singapore’s economy does not need further stimulus this year.

Even though Budget 2005 may be less expansionary than last year’s, Mr Lee notes that the government’s total expenditure is still higher than its operating revenues. “We are now able to balance the overall budget only because of the contribution from net investment income, and even then we expect to have only a thin buffer — a surplus of 0.5 percent to 1 percent of GDP in the medium-term. Our fiscal objective is to achieve an overall budget balance, or a modest surplus, on average over the business cycle,” he said.
There’s that thing again about achieving a balanced budget, which I had touched on in my post on the so-called budget crunch.

I think the view of Morgan Stanley economist Daniel Lian on Singapore’s budget is pertinent here. Here’s an excerpt:

The long-term fiscal and government wealth positions of the republic remain very strong. The broad fiscal trend continues to be structurally healthy and, at the same time, the government directly and indirectly is controlling huge corporate and financial wealth... The structural fiscal latitude and vast government wealth mean there is considerable financial and policy scope for Singapore to further slash its tax rates and strengthen its pro-business environment in the future.
Adding to the views of Standard & Poor’s, I think the message on the real state of the government’s fiscal position is pretty clear.

Wednesday, March 02, 2005

Good? Bad? Protectionism? 

What do you say when a writer from The Straits Times makes statements like these?

Good protectionism allows market forces to play out in the larger arena, but targets specific sectors, or jobs, with measures.

Bad protectionism, in contrast, seeks to impose blanket bans or requirements which stymie the profit motive or work incentive.

[T]o require those vying for government contracts to hire older workers, is another example of bad protectionism, because it imposes an additional cost on contractors which will ultimately be passed on to the purchasing Government.

Good protectionism, in contrast, will reward companies for hiring older workers.
Repeated criticism gets monotonous and sounds churlish after a while.

Tuesday, March 01, 2005

Budget crunch? 

The Singapore Budget 2005 parliamentary debate has begun. Channel NewsAsia reports: “MPs have called for help for local businesses as well as the elderly and the poor on the first day of parliamentary debate on the 2005 Budget.”

Everyone wants a handout, it seems. Not everyone would deserve one though. The Singapore government has limited fiscal resources and has to prioritise its expenditure.

As least, that seems to be what Chua Mui Hoong of The Straits Times is saying. She writes in today’s edition:

[Y]esterday, the first day of debate on the Government’s Budget philosophy. Most chose to speak on policies close to their hearts... When it comes to financial policy, though, it’s hard to gainsay the facts. And they show that the Government faces a Budget crunch.

As [Tanjong Pagar GRC MP] Prof Koo [Tsai Kee] notes, the Government is collecting less in revenue... [T]ax rates have been falling... Even as it’s collecting less, the Government is facing pressure to spend more. Why?

For one, the population is ageing, and medical spending is likely to rise... Also, as the economy restructures, a large segment of the population won’t be able to cope and will need help when they lose their jobs or fall into poverty.

In 2000, there were 12.6 per cent or 116,300 households with incomes below $1,000 a month. That translates into about half a million people who need some form of support in cash or in kind.

Harvard economist Dani Rodrick, in the book Has Globalisation Gone Too Far?, found a correlation between government spending and openness of an economy in the 1980s: the more globalised and open an economy, the greater the level of government spending. He postulates that citizens in a globalised, open economy can’t be shielded from competition...and so need more social assistance like the dole and welfare.

Singapore has an open economy, but has so far kept its spending low. But, as Prof Koo notes, it may not be able to hold that line for too long...

The fiscal future is a serious, if rather, boring issue. It deserves far more attention than it received yesterday.
The priorities mentioned above look about right to me. I’ve posted on some of these issues on this blog (see, for example, “Unemployment woes for mature graduates”).

So yes, the Singapore government has many pressing fiscal concerns to address. However, is it actually facing a “budget crunch”, as claimed by Chua?

I know that in The Straits Times front page report by her colleague on the budget debate, an MP was cited as saying that “operating expenditure was still higher than operating revenue”. But I have never personally seen actual figures showing such a thing. It is only total expenditure — operating expenditure plus development expenditure — that has exceeded operating revenue. This is how the government defines its basic balance (the overall budget balance adds in special transfers and investment income). See, for example, the Ministry of Finance’s (outdated) figures for the 2003 budget on its website.

Comparing operating revenue against total expenditure is hardly apple-to-apple comparison. So the deficit figures that are mentioned actually don’t give an accurate picture of the fiscal outlook for the government.

Now I’d be the first to admit that omitting development expenditure wouldn’t either. The fact is, getting an accurate picture of the government’s fiscal position takes some work. Thankfully, credit rating agency Standard & Poor’s has done some of that work and here’s how UPI quoted it in a report last year:

“Singapore...may benefit from a re-examination of some of its fiscal principles, especially in light of its strong performance during the difficult past 6 years,” [ said analyst Ping Chew.] “In particular, it may be useful for the government to examine whether its already ample resources are sufficient for further rainy days, and whether funds could be more efficiently managed if they are released into the private sector.”...

... [O]ver the past 6 years...Singapore managed to stay in the black with an average general government surplus of 5.8 percent. S&P figure contrast with that of the government which said in its last budget it was running a small budget deficit of 0.45 percent of GDP.

“Most governments around the world go to some trouble to re-jig their numbers to present deficits as surplus. Singapore tends to disguise surplus as deficit. If you look at the numbers in an international standardize way, Singapore is actually delivering a very large surplus once again,” Paul Coughlin told reporters. “This leaves open the question of whether the government could have done more to cushion its economy from the shocks,” he added.
So before anyone concludes that the Singapore government is facing a budget crunch, better go crunch the numbers again.