Singapore Democrats
 In his 2010 Budget Speech, Finance Minister Tharman Shanmugaratnam has announced that the Government will splash $5.5 billion over the next five years to help boost productivity and efficiency in Singapore.
Throwing money at the problem and making the same proposals that have been tried and found wanting, but packaged differently, will not make the problem go away. Productivity will still languish.
Let us compare what has been said and done before, with what has been proposed this year. Mr Tharman's basic approach is very similar to the strategies that the Economic Review Committee (ERC) led by Mr Lee Hsien Loong came up with in 2003:
Tharman 2010: One, to “restructure our overall economy towards higher-value activities.”
Lee 2003: “Our basic strategy is to upgrade ourselves” and “restructure our economy to strengthen our position.”
Tharman 2010: Two, to “upgrade individual industries and enterprises."
Lee 2003: Industries need to “upgrade themselves...to become more innovative.”
Tharman 2010: Three, to “raise the skills and creative potential of every worker.”
Lee 2003: “We need an environment that encourages creativity, intellectual curiosity and risk-taking...The aim is to bring out the full potential of every individual.”
Clearly the Government is re-proposing what it has been doing all these years. If after all that the ERC proposed failed to boost productivity, what makes it different this time around?
Mr Tharman also announced that the Government will set up the National Productivity and Continuing Education Council (NPCEC), to be headed by Deputy Prime Minister Teo Chee Hean, to “galvanise the major national effort required to boost skills and enterprise productivity.”
If that's the case, why do we have the Ministry of Trade and Industry running SPRING (Standards, Productivity and Innovation for Growth) whose aims are to “raise productivity to enhance Singapore's competitiveness and economic growth.”
Is this a tacit admission that SPRING has been a failure? Again, what reason do we have to believe that the new NPCEC can elevate productivity if SPRING could not?
The Finance Minister also mentioned in his speech that our productivity levels lagged behind those of other countries such as Australia and Japan. He cited the construction sector as one such area that needed improvement.
Again this is nothing new. In 2001, Dr Chee Soon Juan reported in his book Your Future, My Faith, Our Freedom had already cited that productivity in Singapore's retail sector was “only 50 percent of its economy, compared to 70 percent in Japan and 80 percent in the United States.”
If truth be told, the productivity problem has been in existence for the past couple of decades, not just the one or two years ago. The PAP's refusal to acknowledge the root cause of the problem is the real reason why our productivity has been languishing all these years. These problems are:
- The over-dependence on MNCs so much so that wages had to be, and are being, actively suppressed in order to keep Singapore attractive to these companies;
- The channelling of resources to GLCs, whose performance are lamentable at best, to the point that local SMEs are crowded out and unable to develop;
- The continued autocratic system run by the PAP that pushes talented and skilled Singaporeans to leave the country, and cause a sense of alienation among those who remain behind.
Collectively, these problems contribute in a major way to the lack of an entrepreneurial and innovative mental attitude which are the key ingredients to a higher value-added and productive economy.
The solutions are clear:
One, we need to reign in our addiction to MNCs and allow wages to find their natural levels in a genuinely free market system.
Two, the GLCs must be dismantled and local SMEs allowed to develop and grow to be world beaters.
Three, we must empower our workers by allowing them to organise their own unions and we must democratise the economy to retain Singaporeans and prevent its hollowing out. Opening up and democratising society will encourage the flourishing of the market of ideas and this will, in turn, lead to a more vibrant, dynamic, and enterprising business sector and labour force.
For more details of the SDP's proposals, please read Part 3, Part 4, and Part 5 of the SDP's Economic Alternative Programme.
Analysts, productivity experts and even Nobel laureates have repeatedly cited that the Singapore must open up and society must be free of the authoritarian control of the PAP to allow the economy and productivity to expand.
Without a concomitant shift in the political-economic system in Singapore no amount of dollars will improve the productivity question.
Unfortunately, the PAP will continue to do everything except what is most needed, that is, free up economy. But, alas, the ruling party knows that the only way that it can continue to exert its overwhelming control of Singapore is by controlling the economy.
In short Budget 2010 is no different from past budgets. It is meant to first and foremost keep the PAP in power, the rest of Singapore will have to take a backseat.
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Over at the SPRING website, the mission is no longer there (at least I can't find it).
But it describes itself as “the enterprise development agency for growing innovative companies and fostering a competitive SME sector. (They) work with partners to help enterprises in financing, capabilities and management development, technology and innovation, and access to markets. As the national standards and accreditation body, SPRING also develops and promotes internationally-recognised standards and quality assurance to enhance competitiveness and facilitate trade.”
The word “productivity” is conspicuous by its absence.
It seems that over time, SPRING (and the government) has become not very proud of or focused on the “P” in the acronym. There are four main areas of domain covered by SPRING, none of them related to productivity. What is left (in the corner) are remnants of a Productivity Programme Office.
It no longer looks like a core business.
(http://www.spring.gov.sg/aboutus/pages/organisation-chart.aspx)
If CSJ makes that point that SPRING should have continued to give some emphasis to the “P” in its name and not solely shifted to other areas (of importance), I would agree with him. But to say that creating the NPCEC is a tacit admission that SPRING has been a failure would be going too far.
I am not here to make a conjecture whether government-led councils or committees such as NPCEC will work – so do, some don’t. Others just continue to linger, such as PS21, cut-waste panel, etc.
But at least setting up a forum chaired by the DPM shows the emphasis given by the government, something that the opposition has clamoured for.
I suggest that instead of “pouring cold water” even before the council sit, opposition parties such as SDP attempt to make themselves useful by contributing ideas or even getting themselves onto the council so that they can play a constructive role.
Now that the government has recognised the need to refocus on productivity, and this recognition COULD be attributed to public statements made on this areas by some of the opposition parties such as SDP and RP (or even capture in some books), it is unwise to remind the government that it should not try.
Otherwise, the opposition will (yet again) be accused of opposing when the government does not do, and then opposing when it does. It'd then be a case of the opposition living up (solely) to the name.