HDB and CPFComments Off

Something about the recent statement about the fact that HDB is affordable for the singles in their 30’s irked me. Link here http://singaporeenquirer.sg/?p=4619. Of course his idea of “affordable” is that the person in question spends 29% of his income on housing.

But even his calculations are misguided. In order to be eligible to buy a flat, and get the subsidy of $11k that Mr Yap mentioned, the person in question need to be over the age of 35. But when a person is over the age of 35, the amount of his CPF contribution that goes into his ordinary account ( and as such can be used to finance his HDB mortage) goes down. For the example given, the in the ordinary account to be used monthly is $525.41, not the $575 that our Deputy CEO mentioned.

Of course the difference is only $50, andf it doesn’t make a difference to the calculation of 29% arrived at. But either our HDB head is not familiar with his own policy with regards to singles, or more likely, he is not familiar with the fact that contributions to the ordinary account goes down with age.

And who can blame him, such small variations to his own cpf account, would hardly matter to him. For someone of his pay scale, he is likely to have hit the CPF contribution ceiling anyways, and the amounts in his CPF accounts are inconsequential to him. Reminds me of a certain minister of state who once claimed that he receives his CPF statement monthly

Only someone like the person used in the example making a measly $2500 a month, would notice that his disposable income is smaller by $50 and would fall futher that as he grows older.

Notice also that in the example used, the 3 room flat in question is $200k, a simple search on the HDB site would tell you that the median 3 room flat cost $240k ( average of about $246k).  Even if we take the benchmark of affordability to be 30% ( and 30% is highly debatable), that would definately blow it.

What we have then is that, someone of average income, would need to take the maximum of loan of the maximum tenor, and still not be able to afford ( assuming 30% benchmark) an average 3 room flat.


Going the way of Japan?Comments Off

Singapore has always looked upon Japan as it’s developmental role model. Maybe not explicitly, due to WWII sensitivities. But our economic and social policies have been a carbon copy of what Japan has implemented themselves since the war. And it has been a sucessful one, enabling Japan to go from post war outcast to being the 2nd largest economy in the world, and at one time affording it’s people the worlds highest standard of living.

The Japanese model should look familiar

(1) Huge government linked companies and banks

(2) Export dependent economy

(3) Focus on high value electronics production

(4) State fiscal stimulas primarily through large construction projects.

(5) Huge public sector that runs everything from pension, healthcare, media, transport


What’s Next51

Seems like it never just rains, it pours.

If you’re in the Singapore government, it must have been a bad few months.

You gave yourself a big time pay rise at the beginning of the year on the basis of your brilliant economic management. Then you had to spend the rest of the year, trying to convince the population, that the economy is still growing strongly, when it has been contracting for 9 of the last 12 months. In fact it had already started contracting before you gave yourself the nice pay hike. But no matter because the cash is already in the pocket.

Then that big economic stimulus project you had going, in spike of protest by people on social ills, stalled when Sands ran out of money to carry on the construction. No matter how much you want to make it sound like a construction, geological or logistical problem, everyone knows what kind of financial problems Sands has run into. So much for the ten thousand jobs that it was suppose to create. It now looks like, the government will have to step in to provide the cash to help complete the casino. Yes, they said they will not step in, but everyone knows a government company will step in.That will mean we have a government owned casino. Yes it will be a casino, forget the pretence of an integrated resort, because when u have limited cash to build, you will only build what is important for profits, and that will be the casino.

And this when the government bank, DBS, is being screamed at by almost everyone in the country over the lehman linked notes fiasco. I’m sure there was mis-selling in the mix ( there are investors that speak and read almost no english, just how they were supposed to understand a first to default basket option, when they signed their live savings over, is quite beyond me) Of course there might be a small minority of investors who did understand ( And I’ll say given the complexity, a very small minority), who might be hopping on the bandwagon in the hopes of being bailed out. $500 million, is a lot of life savings. Is there any doubt if the government is pro business or pro people?

 Despite all this, we have a ST poll that says that 69% of the people have “full trust in the Government’s ability to tackle the financial crisis and protect Singaporeans’ interests”. Yes, but which bunch of  Singaporean interest?


Still Denying it33

“Senior Minister Goh Chok Tong, urging those with the means to continue spending, or the economy ‘will really go into a recession’ ” - Straits Times 07 Nov 08

So what do you call contraction for 9 out of the last 12 months?

Talk about shifting the blame, so if we ” really go into a recession” . It’ll be our fault because we do not spend enough, ok? It’s nothing to do with a government induced housing bubble or the global financial crisis, that we’re not sheltered from.


Sudden Recession?2

So the local pages over the last 2 weeks have been filled with news that Singapore has slipped into a recession. And it seems like everywhere you turn there is news of impending doom. In fact the tone is getting a little worse everyday.

Last week, the government stressed that it was only a technical recession, meaning 2 consecutive quarters of contraction, as if it was a statistical abnormally, and not a real cause for concern. Over the next few days, news of slower growth then of possible pay cuts, then the snowball cummulated to last night’s admission by Mr Lee, that we are in a recession and that the next 12 months will be hard. At this pace we could start hearing them talk about bracing for job cuts in about 2 weeks.

Now, to the average Singaporean this is all pretty sudden. Two months back the government was telling us that everything was fine, and this years growth forcast would be in the 4% region, and suddenly today,  we are being told we’re in a recession. So what happened?

If the news is to be believed, Singapore is an innocent bystander caught up in a global financial crisis, originating from America, and created by greedy investment bankers with their fancy derivatives product. And that is was a storm that came suddenly and without warning.


Except maybe the greedy part.

The financial crisis had been raging for the last year, since August 07. Bank after bank in US and Europe had fallen. Did everyone forget that it was just last year that DBS and it’s local counterparts, wrote off billions in their sub prime holdings? Leading to the then DBS CEO’s urge to spend more time with his family?

Anyone who has not been stuck in the local propaganda would have seen this coming from a mile away. The fact is that the government, with their million dollar ministers, and high flying scholars would have seen this coming too. ( They better, since  their justification for the higher pay is that they’re smarter and more competent.) Which means that they are deliberately keeping the news away from the people.

Over the course of the last year, I have often been amazed at the buying frenzy happening around me amid the global difficulties. I seem to recall a whole newspaper section dedicated to the topic of BoomTown at the end of last year, in light of the increased luxury spendings by local Singaporeans, the impending casinos and converting the southern islands into the playground of the super rich.

The government had admitted that they wanted to transform Singapore into a Monaco of the East, and there was a concerted effort to push the whole nation in that direction. Suddenly everything was glamourised and vibed up. Even the papers were bragging about Singapore climbing up the party city rankings.

 Almost nothing happens in Singapore without government planning, and this was part of it’s new plan. In light of what it was trying to achieve in terms of branding itself, it had to keep the bad news at bay. If you told the people that a recession was heading their way, would they still be as inclined to go out and buy $1000 phones, $6000 TVs and live it up every friday night? Probably less so, and that would have put a damper on their grand plans. Of course it’ll also be difficult to justify that huge pay hike they gave themselves at the begining of the year.

Now to the cause of the recession.

Yes this is a financial crisis, but the cause of it is the asset bubble burst, more specifically a burst in the US housing bubble. (More on the technical details of the causes in a later post) Given that finance is one of  the 4 pillars of the Singapore economy, how could a financial crisis not affect Singapore? It’s funny how in the same breath, the papers can trumpet that we’re one of the most open economies in the world, and then turn around and say that the global financial troubles will not affect us? We’re either open or we’re not, make up your mind.  If we’re and open economy, then you have to take the good together with the bad.

So sudden recession? I don’t think so. The reaason why most people think so is the direct result of selective propaganda, that was designed to keep the bad news from people for as long as possible, and then put the blame on someone else.






News blackout?0

My typical Saturday morning ritual, is to have a mid morning cup of coffee while scanning through the news, both local and international. And every Saturday I’m appalled at the discrepancy in news coverage locally.

Overnight in US, the stock markets have fallen by another 1%, global equities are officially in a bear market , 5 US banks have collapsed so far this year, and the latest buzz is if another government bailout of their largest lenders are needed immediately. Jobs losses and loan defaults are debated hotly.

And it’s not just the US, the housing bubble has officially burst in UK, Spain and Ireland. The EU is bracing itself for a recession. China’s stock market has been halved this year, for completely separate reasons. Hong Kong is not too far behind really.

Yet in the local news, there is not a whisper of the financial tsunami. Isn’t Singapore supposed to be one of the most open economies in the whole? Are we supposed to be a financial hub? There is no question at all that it will hit our shores. Yet other than the occasional  article on inflation here, there is no mention of  any economic news  to give the population a heads up on what is coming their way.

Sure some prominent businessmen here have stepped out to say that the economic situation is bad and getting worse, but these articles are usually buried at the tail end of the papers, in small inconspicuous corners.

I know that the broad sheet is focus on local news and it is government censure, but the near complete blackout of bad economic news, seems like censorship that could rival the Great firewall of China.

When GDP growth contracted in Q4 of 07, it was brushed off by the ministers because according to them, the economy was growing too strongly the quarters before.

When it was repeated this week that GDP contracted again in Q2 of 08, it was also dismissed as a blip in drug export.

I’m sure the news will be quickly wiped off the table. Already 3 days later the papers seem to be more interested in what the MPs are listening to on their ipods.

Hmmm… so that’s why we’re paying them millions every year…

Is it me or is the Straits Times just trying to stuff it’s readers with feel good articles.


LTA Strikes again0

Article from 2 weeks back.


No it’s not the rise in ERP again. It used to be that they penalise people for driving into town, now it seems like they are penalising people for trying to leave town as well.

What strikes me is not the lack of notification on the aquisition of the property. But the fact that they actually will acquire private property and not even attempt to pay the rightful owners anything. Hoping for fair market value might be a little beyond the LTA. But you would think that there would be some token theoretical (read lower) value that would be compensated.

Talk about robbery.

I guess what we can imply from this is that, there is no such thing as property rights here.

Oh an I’m pretty sure we will not hear about the case again in the news.



Left vs Right0

In recent weeks, I’ve tried figuring out how I stand on the political spectrum. While I can firmly say that I’m socially a liberal, strongly support free trade, lean heavily in favour of green policies and favour a small government. I cannot quite figure out if that puts me more  in the left or the right wing. I’m referring to the more orthodox sense of left and right, not the American reference of it ( but who can blame them, when they can’t even drive on the correct side of the road)

Coming from Asia, I cannnot pretend to understand fully the implications of living in a US style democracy. Nor have I experienced European style social support and welfare. In most parts of Asia, the political focus is predominantly on the economy, issues of social conservatism or liberalism or even nationalistic sentiments really rarely come into the picture.

The fact of the matter is, Asia is unlike Europe or the US socially and politically. It doesn’t mean that it’s better or worse, or that we should aspire to be like one or the other, just that we’re different, having come from a very different place historically.

In an attempt to not chicken out, and take Tony Blair’s “The Third Way”, I pressed on, but the harder I tried, the more hopeless the exercise.

The fact of the matter I think is that a linear scale, such as a classification like left vs right, is no longer applicable today when everywhere views and social norms are fragmenting. Even European politicians are tripping over themselves trying to get to ” the middle”

Socially what do we consider to be liberal or consavertive in Asia? I think no where else is the contrast more stark than in Japan, where I’m currently writing this post. Stop by Shinjuku or Harajuku train station, on the western side of Tokyo, and the extend of social freedom is clearly on display. Yet just a  minute’s walk from Harajuku station, will bring you into the Meiji shrine that families visit weekly in their traditional costumes.

 Why should someone who is pro freetrade have to be anti social welfare? Why can’t someone support both an active foreign policy and liberal social practises?

In a sense, I think the pundits are right, in that Asia will change the world. Not just it’s economic balance, but also it’s social and political landscape. The left vs right argument that most grew up listening to, and that is still being hotly debated in the current US election, is rapidly becoming irrelevant to the rest of the world. That does imply that most of the convenient mental markers that we we taught in school are also fast becoming obsolete, as Asia’s impact on the rest of the world grows. It’s no longer about capitalist vs socialist or conversative vs liberal.

A lot of Asian countries have shown that they can blend them effectively, and in ways that defies classifications. Take for example, China and Japan, one is a communist country with a vibrant capitalistic economy, the other a paper democracy with a monopolistic like economy.

Most of us grew up with western news reports and analysis, thanks to the success of the BBC, Financial Times, Wall Street Journal and the Economist (or you grew up on lousy TV serials, in which case you are not really concerned about the rest of the world). And they have conditioned us to think of the world in the traditional framework.

What this might mean is that we have to relearn the way we look at the world, and how we look at the governments and policies around us, and maybe make judgements based on very different rules.



Interesting site below. Singapore ranks about 30 out of 95.

I’m guessing since it’s above the 66 percentile, our government would consider that a good result. Especially since we’re convincing ahead of Zimbabwe.

Strangely, even taking into account the chaos in Indonesia in the late 90’s, the typical Indonesian seems about as happy with their lives as a typical Singaporean living in a “stable and safe haven”.


More detailed breakdown:


Interesting fact is that the survey was from 1995 - 2005. I’m wondering if it was updated with more recent data, how the score would defer.

Even without the latest results, the trend over the years seem to be pretty clear.

So much for having a whole class government.





Just occurred to me that elections in the US is still 6 months away, and yet the debates about left vs right, foreign policy vs domestic economy, liberal vs conservative, have been going on for the whole of last year. Yes Americans do talk more and louder than most.

Compare that to the chatter and circus during the last Singapore election and the contrast is striking. Given that the Singaporean government is more right winged and conservative than most others, think Singapore Inc and Penal Code 377A, it is shocking that there were not more debates on social welfare, civil liberties, personal freedoms or even the “privatisation” of public goods.

Forget about foreign policy in Singapore, everything is domestic. Don’t even think about green issues.

Is it because most Singaporeans are right winged conservatives, that measure everything in terms of profitability, and thus are in complete agreement with the government?

Or are we just too uneducated in social and geopolitical issues to even be able to form a view?

Or because most Singaporeans are too busy making ends meet that they can’t raise their heads above water long enough to look around?

I mean yes, the state media does suppress most debates and censor discourage any discussion of it’s more “sensitive” issues, but surely that can’t be the reason for Singaporeans to not have any political views or outlooks.