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Monday, February 4, 2013

The ????? of South East Asia

Cycle 1
In the 1960s, it was easy to grow the economy by injecting more bodies into the workforce to achieve more man-hours. All you needed to do was create jobs by getting MNCs to set up shop here. More man-hours lead to more growth. It then came to a point where pretty much every Singaporean was gainfully employed.

Cycle 2
The only way then to inject man-hours in order to keep things growing was to increase working hours. Notwithstanding that there was some government effort to move into a 5-day week, many jobs squeezed people for hours of their lives. You see... existing HR policy and practices coherent with the old way of achieving growth (through more and more man-hours) were still around. Companies valued face time. Managers wondered if people would goof off if they worked from home. Career progression suffered from lack of man hours, never mind that some people can generate more value from half a day's work than others can from 2 days' work.

Cycle 3
Naturally then... people start to think twice about starting a family. Women's careers take a back seat. If you have kids, then it's hard to manage a demanding job that pulls hours from the same 24hr day. There are opportunity costs such as self-worth, a monthly pay cheque that go with the decision to have a child (especially if grandparents refuse or cannot help out with the grandkids). It doesn't help that kids have to be enriched at home to cope with schoolwork. I did want a 3rd child but after Little Boy's PSLE and my experience with having to run a one-person homeschool to bridge the gap between what schools taught and what they tested.... well... I decided the personal price to me was too high. So... no Number Three. Happily, I had plenty of free time to figure out high productivity work methods and am now able to create more value whilst working much less. My friend A however, works in a bank. She often works through to midnight. She has NO time to dream and innovate... learn new things to get herself more productive. Her only solution is to hire more bodies but her bank has a hiring freeze.

Cycle 4: Babies
Cycles 1 to 3 accelerate as time passes. These cycles should have been nipped in the bud in the 1990s but back then, our government was complacent, surfing upon the crest of the Singapore wave set in motion by the previous generation of leaders. The momentum of Cycles 2 to 3 is hard to beat in 2013 without very aggressive measures.

Money incentives don't work. It is stupidity to do more of the same thing and expect to get different results. The government has been throwing money at this problem for years. Has it worked? Women can work to earn money. Sometimes, they may make more than what the grant disburses to them. Once baby comes, their lost earnings (job loss... slowed career progression) can well be in quantum far larger than the Baby Bonus. Only the extremely myopic would be fooled by the upfront grant and fail to see the long run costs of raising a child. People have no time to look after kids... especially if they want me-time. It's time. Not money.

To fight against the combined momentum of Cycles 2 to 3, policy needs to be far more aggressive than that little bit of paternity leave. There must be a political will to CHANGE social mores and make child-rearing as much an alpha male thing to do as it is a lowly female thing to do.

Cycle 4: Productivity
There was a brave effort to increase productivity but since measures to increase productivity (training and re-skilling) for long term national gain also reduced short-term economic growth for individual businesses (which of course reduces GDP) Cycle 1's drive for economic growth also put the brakes on Cycle 4's efforts to increase productivity and value-addedness. Chiefly, the government tried to get companies to co-fund or fund these training and re-skilling efforts. Companies baulked. They resisted these efforts at productivity training and pushed hard for more foreign labour.

Meanwhile government investments made humongous losses in some areas (though overall they've still made $$)... those moneys could have been used for citizen upgrading and advances here could have been way more aggressive (this would probably save more on future welfare spending than the not-much-money made in investments).

Instead of trying to ACCUMULATE ever more reserves and to INVEST them (only to make some little money), these reserves could have been aggressively used to invest in citizens without asking private sector companies to foot the bill. And future welfare spending would be saved. This means you dun need so much taxes to support the aged, that you need 7 million people.

And there was YOG. Millions gone... just like that.

Meanwhile too... public services went all out to increase profits. Bus routes that would save commuter time and contribute to their productivity were deleted from service. MRT routes had no bus redundancies because it ate into transport profits. All the lost time from the millions of lives transiting through the MRT daily became $$ and cents for the transport companies. Transport became more productive at generating profits but the workforce became less productive at working and making babies (because so much time is lost in transit).

Singpost also went that way and increasingly, mail gets lost in transit leading to even more productivity losses. Education tried to mirror the private sector, making schools compete with each other. As a result, there is duplication of effort from school to school... and no possibility for economies of scale. How productive is that? And since schools are not productive parents/tutors have to teach in lieu, increasing the costs of child-rearing... and we have seen how that impacts birth rate.

Cycle 5: No Resistance
In the end, we are left with one logical conclusion. We can't get out of our low productivity and low birth rate trap. This cycle meets with the least resistance... very little resistance from some vocal detractors.

It will accelerate.

As immigrants come into Singapore in droves... our best youths will go abroad simply because they are wanted there and quality of life is better for them (bigger cars... bigger houses... nature), and since they're smart, they'll end up working less hard to fund a better lifestyle than if they stayed here. They've had a good education (our best talent truly gets a good education) and are bright.

The best of the 3rd world countries around Singapore will come here. They have less opportunities in their own country and are as bright as the best Singaporean youths (who have left). Those young Singaporeans still trapped here will fume as they realise that they can't compete with the best from the region (who will work for cheaper). Several well-to-do retired friends with children in top US and UK universities say that they're happy enough here because Singapore remains affordable to them... BUT looking at how crowded and competitive Singapore has become, they encourage their kids to stay abroad, and build their lives there.

Older Singaporeans who've accumulated a tidy sum in their years here (but for whom Singapore remains no longer affordable) will seek to retire elsewhere. They've no more income and want a quality retirement at a low cost of living. Even our hawkers can afford to live in style in a village in China or Malaysia. The older folks from the 3rd world countries around here will come and take their place as babysitters for their children who work here as foreign talent. For a while. Then they too will all go home to enjoy the money they earned here.

Hence, Singapore will live up to its promise as the ????? of South East Asia... welcoming transient people with their transient affections with open arms, whilst scorning the rich deep affection of Singaporeans born and bred here (either because they can't afford to live here anymore [the retirees] or because they get better treatment elsewhere [our youths]).

Worst Case Scenario? No lah... It's an easy retreat.
Ever heard of the general who burnt the bridges he crosses so that his soldiers cannot retreat? Since they can't retreat, they have to fight and WIN. The will to win is important to winning. The Knights Templar were a formidable force in battle precisely because they believed in NO retreat.

The worst case scenario Population White Paper allows our government a way to retreat from the twin challenges of...
(1) Re-engineering social mores to improve birth rate
(2) Increasing productivity

The government won't have the political will to carry through either (1) or (2) if it can get the population to agree to potentially living with 7 million people on this island. That is an easier way out you see.

Singaporeans MUST NOT AGREE to the 6.9 million figure in the Population White Paper... whatever color it happens to be - White or Blue or Green or Pink. Nonetheless, the part of the White Paper that describes necessary infrastructural investment is highly desirable.

Let's not throw out the baby with the bath water.


Wen-ai said...

Ah, Petunia. this is a brilliant post! Can I share your post on my Facebook? The best part is: the parliament only has FIVE days to debate and approve/reject on the White Paper. How can we, as citizens reject the 7 million as indicated on the White paper? We can only "reject" in 2016, in the next GE and that might be too late by then... and yes, you are right. Hub and I have been in discussion about relocating or retiring in another country where cost of living is lower, with better quality of life.

Malar said...

I'm speachless! You have done an amazing study and come out with brilliant fact!!