Last year, CEO of Singapore Inc, PM Lee said Singapore had maxed out all the easy ways of driving economic growth. PM Lee had actually shot himself in the foot, or perhaps by his speechwriter. He was effectively admitting to Singaporeans that PAP had been taking economic shortcuts, plenty of them.
“Easy ways”/shortcuts started decades ago and PM Lee was referring to:
1. The use of our CPF retirement savings to set up hundreds of GLCs, their subsidiaries and statutory boards, eg Singtel, Keppel Corp, DBS, POSB, HDB, etc to drive economic growth (and take credit). These savings were supposed to be earning returns for our retirement but were channelled elsewhere, resulting in a huge retirement shortfall.
2 PAP’s shortcut to generate additional government revenue is to cream off half of CPF returns through legislation. At the stroke of a pen, government revenue increases by billions every year, ie return CPF members about 3.5% while GIC keeps the rest.
3 “Easy ways” growth model has been assisted by PAP’s asset enhancement policy. HDB flats were already enhanced in the 1980s when PAP legislated CPF contributions to as high as 50% of wages in 1984/85 to pay for our flats.
Property prices up, all other costs up, GDP up, up and away = high economic growth.
Assets could be enhanced and economic growth driven easily – at the stroke of a pen. Another “easy way”.
4 In order to sustain the above “easy ways” of driving economic growth, PAP needed additional headcount and had no choice but to increase the number of foreigners. Foreigners, excluding PRs, increased by about 1 million since Lee became PM.
With dumb PAP MPs in Parliament, PM Lee was allowed to squeeze in 260,000 PRs in 4 years from 2006 to 2009 to increase the GDP-linked bonuses. An additional booster – the doubling of new citizens to 20,000 annually since he took office.
Not another “easy way” to drive growth?
5 If any country had done likewise, their GDP per capita would probably have exceeded ours. But economic shortcuts/”easy ways” will always exact a heavy price.
6 Because the PAP was so focused on “easy ways”, civil servants forgot to construct infrastructures such as housing, ie, HDB constructed only 30,000 flats during the same period. Roads, childcare centres, etc were an afterthought.
7 Arguably the worst CEO was Lau Goh with his die-die must have foreign talents. This was the only way to grow the economy, or so as Goh would have us believe. Singaporeans are now paying the price for his “easy way” folly.
After Lau Goh had warmed up the throne, PM Lee carried on with business as usual.
8 Truth be said, the seeds of “easy ways” had already been planted during CEO LKY’s time. Personal income taxes were slashed from a high of 45% in the 1980s to a low of 20% during his son’s reign. So was our corporate tax rate slashed to 17%, possibly the second lowest among Asean countries.
9 Propaganda would have us believe that Singapore’s success is due to:
– A hardworking and educated workforce.
– Our superb geographical location.
– Political stability.
– A clean government.
10 Foreign companies are not investing in Singapore because of our clean government and other advantages listed above. Remove our low personal and corporate taxes, many foreign investors will bid sayonara to PAP.
While taxes should be reduced, it should not have been a race to the bottom, ie another “easy way”. (It appears this was also intended to benefit PAP elites.)
11 If the US or wealthy European countries had lowered tax rates to similar levels, our per capita GDP would not be one of the highest in the world.
Because PAP has been taking “easy ways” all the way, its attempts at increasing productivity for 3 decades have proven to be … an abject failure.
In short, our miraculous economic growth has been totally reliant on shortcuts/”easy ways” undertaken by PAP. “Easy ways” was easy to implement with a rubber-stamping Parliament creating money trees out of thin air.
It is the increased headcount that:
– generates additional economic activity,
– increases the GDP which is tied to PAP’s bonuses and
– supports high property prices.
Pseudo economic growth with high social costs.
PM Lee has admitted all the above “easy ways” to drive economic growth have been maxed out to prepare Singaporeans for subpar growth.
And all the talk about a transition to knowledge-based economy since last century appears to be crap. All the best elite brains in our Economic Review Committees also maxed out their capacity, no more ideas or no more brains?
Issues such as retirement shortfall, record number of elderly performing menial jobs, pay stagnation, locals’ lunch lost to foreigners, inadequate infrastructures, inadequate ministers, etc. have resulted directly from PAP’s “easy ways”.
The mess that we are in is caused by PAP’s “easy ways” to drive economic growth, to entrench its power.
Thank you PM Lee for admitting what’s already obvious to thinking citizens. 🙂