Tuesday, 29 January 2013

PM Lee admits his government lacked 20/20 foresight

29th January 2013

PM Lee has finally admitted that his government lacked 20/20 foresight, resulting in problems with inadequate infrastructure in Singapore. His admission came about after PAP sustained a devastating loss in the Punggol East by-election to WP last Saturday (26 Jan). PAP’s share of valid votes dropped 10.8% from 54.5% in the last general election 1.5 years ago to 43.7% while WP’s share shot up 13.5% from 41.0% to 54.5%.

PM Lee Hsien Loong
 Mr Lee was speaking at the “Singapore Perspectives 2013″ conference as the Guest-of-Honour today (28 Jan). The annual conference, organized by the Institute of Policy Studies (IPS), seeks to engage thinking Singaporeans in a lively debate about the public policy challenges the nation faces.

Mr Lee acknowledged the problems of insufficient housing and inefficient transport network. He said that the government was blind-sided by the “outcome of some international events”.

He explained that after the 9/11 terrorism attack on the U.S. in 2001, countries were plunged into recession. Singapore had to cope with a slow economy with minimum population growth. Consequently, property prices went down. The economy only started to pick up in 2005-2006.

So, he said, the government did what it thought it should. It decided to “make up for lost time by growing the population and boosting the economy”.

He acknowledged that infrastructure like housing and transportation didn’t keep up with that growth.
“We lacked that 20/20 foresight. Next time, we will try to do better, certainly to have a bigger buffer and not to cut things so fine,” he said.

It is strange that the government, with their many scholars and brilliant economists, chose to boost the economy through population growth rather than through innovation and productivity growth.

Three years ago, before GE 2011, the Wall Street Journal (WSJ) recognised a surge of population in Singapore. WSJ wrote in an article:
January 12, 2010
“Between 2005 and 2009, Singapore’s population surged by roughly 150,000 people a year to 5 million—among the fastest rates ever there—with 75% or more of the increase coming from foreigners. In-migration continued in 2009 despite expectations it would collapse because of the global recession.
The influx helped boost Singapore’s economy in the short run by creating new demand for goods and services and helping manufacturers keep labor costs low. Developers built apartments and posh shopping centers for the new arrivals.
By some estimates, a third or more of Singapore’s 6.8% average annual growth from 2003 to 2008 came from the expansion of its labor force, primarily expatriates, allowing Singapore to post growth more commonly associated with poor developing nations.”

WSJ even warned that lower standards of living might consequently be felt by Singaporeans:
“Some economists say the most damaging effect of the immigration is that the influx appears to be putting a lid on productivity gains, as manufacturers rely on cheap imported labor instead of making their businesses more efficient. Labor productivity, or output per employee, fell 7.8% in 2008 and 0.8% in 2007 — a phenomenon that could eventually translate into lower standards of living.”

How is it that a foreign newspaper had the foresight to see the potential problems with this flawed policy but Mr Lee and his scholar Ministers did not?

article from TRE website


No comments:

Post a Comment