Singapore: deregulating politics but what about the economy?

Many analysts blame the excesses of the Anglo-Saxon capitalist model for the recent global financial crisis. Surely, greed played a significant part in the stresses faced by the international financial system. At the height of the crisis, the future of the post-Bretton Woods capitalist system seemed gloomy.

More than two years after the crisis began, the financial hangover still hurts. Apparently, it takes more than a few aspirins to cure an alcoholic of many years.  

Euro zone nations have yet to satisfactorily resolve the Greek debt crisis. The problems associated with the remaining PIIGS, i.e. Portugal, Ireland, Italy and Spain, come to the fore from time to time. 

Source: Wikipedia

As for the US, each time the crisis seems relegated to the history books, a new event occurs to remind the world of its fragile state. Perpetually low interest rates suggest the economy is mired in a recessionary state. Additionally, US government indebtedness has reached proportions normally associated with Latin American debt defaulters of the 1980s.

To add insult to injury, rating agency Standard and Poor's has put the US 'AAA' credit rating on negative watch. China, the central banker for the US, is desperately seeking investments not denominated in US Dollars. China's purchases of US treasury bills have declined during the last several months.

Nevertheless, there are some benefits to unbridled capitalist greed. 'Creative destruction' is one of these benefits. Often 'creative destruction' requires corporations to jettison existing management to refocus on creating shareholder value.

Corporate managements often tend to behave like bureaucracies, i.e. to perpetuate their own longevity.

In the new 'post-Bretton Woods' world, activist hedge funds and institutional shareholders play a significant role in keeping management and shareholder interests aligned. Given the large shareholdings of such activist institutional investors, managements are challenged if their focus is distracted from creating shareholder value. No corporation, large or small, is immune from activist shareholders.

Recently, a particularly influential institutional investor turned his sights on Microsoft's senior management. Microsoft stock has significantly underperformed the broader US stock market for many years.

Singapore consistently ranks in the top three most competitive economies in the world. However, Singapore's capitalist way is as unique as its legal system. Like in politics, perhaps it is time for a shake-up within Singapore's sedate corporate environment.

Undoubtedly, Singapore's economy functions like a well oiled machine. However, the state's dominant position in important economic sectors leaves little room for shareholder activism as a means to create economic value. Institutional shareholders should be able to indulge in meaningful criticism of managements.

Shareholder activism is an extension of Singapore's traditional meritocratic process. It leads to greater economic efficiencies and grows the economic pie for all Singaporeans.

Singaporeans spoke loudly during the 2011 general elections to demand a greater say in the country's future. Singapore's future is a combination of politics and economics. Along with political liberalization, it is time for economic liberalization through reduced government participation in Singapore's economy. Policies to gradually lessen the influence of the state and government linked corporations in favour of greater participation from the private sector must be actively considered.

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Imran is a business and management consultant. Through his work at Deodar Advisors, Imran improves the profitability of small and medium sized businesses. He can be reached at imran@deodaradvisors.com.

General elections 2016 and Singapore’s opposition parties

Legalized gambling, crowded trains, litter on the streets, bicycles on pavements and the latest Singaporean phenomena: politically independent citizens willing to shun stability for change. It almost feels like a New Singapore.

Add to the above, Members of Parliament (MP) waiting at bus stops timing bus frequencies, a (transparent?) review of ministerial pay scales, 'permanent fixture' ministers booted from the cabinet, the Workers Party merging opposition ruled constituencies to create economies of scale and some residents of Woodlands petitioning for the resignation of the Woodlands Town Council management.

The list goes on. One can type Lee Kuan Yew's name (LKY) with neither prefix nor suffix. While not yet an 'ordinary' Singaporean as LKY remains an MP, he is neither Minister Mentor nor Senior Minister any longer. (After many years, Singapore currently does not have a Senior Minister in its cabinet.)

Singapore's General Elections 2011 are notable for more than transforming Yam Ah Mee into a local celebrity. Singapore's longstanding rulers, the People's Action Party (PAP) obtained a relatively low percentage of the popular vote. An electoral slap in the face for most sitting MPs.  

However, in reality only the PAP's ego and pride have been dented. The PAP's hold on Parliament is secure. Its control of the national treasury, state institutions and government linked entities are as firm as pre-May 2011.

On the contrary, Singapore's opposition parties may pat themselves on the back for some visible successes, including winning a Group Representation Constituency and a good percentage of the popular vote.

Following the 2011 elections, Singaporeans may have overcome the psychological fear of voting for non-PAP candidates. For its part, the opposition helped by bringing together some credible candidates who campaigned in a professional and responsible manner.

However, it is certainly premature for the opposition to start popping champagne bottles.

Singapore's ruling PAP can expect to continue to win elections for years to come for one simple reason: there is only one PAP and there are six opposition parties. Few Singaporeans probably know the full names of the SPP, SDP, RP, SDA, NSP and WP. Until the opposition's alphabet soup can be synthesized into one cohesive voice and message the non-PAP vote will tend to get 'wasted' between the various parties.

Coupled with the opposition's differing structures across the island are the weaknesses associated with the opposition's policy making apparatus. Will a majority of Singaporeans allow the country's foreign exchange reserves to pass into the hands of the Workers Party? Or do any of the opposition parties have viable foreign policy initiatives?

Singaporeans are increasingly willing to indulge in a 'protest vote'. However, to move from a protest vote over local issues such as immigration, transport and property prices to overall governance of a largely successful city-state is some ways away.

The opposition can multiply its chances of success by establishing well funded not for profit think tanks which act as quasi-policy making institutes. For example, an economic center might help to provide depth to the country's debate about the income gap between the wealthy and not so wealthy. By supporting the opposition's economic arguments with genuine academic research the probability of more refined national economic policies is heightened.

Surely, accountability and democracy within Singapore took a step forward with 2011's general elections. The opposition shrewdly rode a wave of popular discontent to make an electoral splash. The landscape has never appeared more conducive for Singapore's opposition to garner votes.

However, the PAP has repeatedly demonstrated its ability to regenerate and use the benefits of incumbency to its advantage. For the opposition to use its 2011 election successes much needs to be done. For starters, consolidating several party structures and political messages into one single voice is a necessity.

The good news for opposition politicians (and 'wannabe politicians') is that being sued into bankruptcy for criticizing the system, if done responsibly, appears to be history. These days the ground is not sweet for trying opposition politicians on defamation charges.  

Who knows, maybe the Wall Street Journal's long running feud with the Republic is reignited by some forthcoming editorials about Singapore and its political establishment!

Pakistani intelligence, Osama Bin Laden and the Greek debt crisis

Questioning Pakistan's commitment to fighting Islamic extremism is as common as birds chirping in the early hours. Following Bin Laden's capture in the country's Khyber-Pukhtunkhwa province, the soft chirping of birds increased to a squealing reminiscent more of Hitchcock's classic thriller, 'The Birds' than of international diplomacy.

Blaming Pakistan has become a knee jerk reaction for coping with an international failure in Afghanistan. The tactic works well with the American public, especially a few months prior to the formal drawdown of US forces from Afghanistan. 

Clearly, none of the high value fugitives on this list are living in a US metropolitan area: that would imply incompetence or collusion on the part of the US government (a support system of some sort).   

Spare a thought for Pakistan. The international presence in Afghanistan has only served to 'internationalize' the Afghan war into Pakistan. The country's sovereignty is routinely violated by US drone strikes – it is as if international borders or laws of war do not exist. Meanwhile, Pakistan's population shudders with insecurity each time a new 'success' in the war on terror is achieved.

The easiest target for Islamist revenge is none other than Pakistan.

Pakistanis die with reckless abandon at the hands of those with who the country's intelligence apparatus is supposedly in collusion. The only thanks Pakistan gets for any cooperation – however limited or critical – is public humiliation by international coalition 'partners.'

Surely, Pakistan bears some responsibility for its current mess. The state cannot protect its own officers and functionaries, what to say of the ordinary citizen. The nation has demonstrated an inability to control an unhealthy proliferation of weapons within its borders. The military establishment succumbed to US pressure and allows a large number of American security contractors to roam the country freely.

More to the point, economic development has been at a virtual standstill since Pakistan joined hands with the US in its war on terror. Terrorism thrives in a vicious cycle of cause and effect mired in joblessness and governmental inability to deliver basic services. Whether economic stagnation is cause and terrorism the effect, or vice versa is a moot point.  

Critics of Pakistan ask the obvious question: how could Bin Laden live in the midst of a Pakistani city? Surely, Pakistan's security services are either incompetent or in collusion with Bin Laden and Al-Qaeeda.

When airplanes were flying into New York's Twin Towers did anyone accuse the CIA of incompetence or collusion? Likewise, when the 'underwear bomber' unsuccessfully set off his device on a transatlantic flight, despite a warning to the CIA by the bomber's father, does one claim incompetence or collusion by the CIA?

In hindsight, it is easy to decipher clues and point fingers. However, bureaucracies are not known for their efficiencies. The Pakistani military is good at following orders but even it is still very much a plodding, albeit uniformed, bureaucracy.

I find it inconceivable that the Pakistani military could have kept support for Bin Laden secret for so many years. Once knowledge of Bin Laden's existence leaked, as it surely will in a bureaucracy, then it is a simple step for a junior captain or a senior colonel, to be tempted by the USD 50 million bounty on Bin Laden's head. Money talks and captains, colonels and even generals listen.

Either that or Pakistan's intelligence services are so incredibly capable that Bin Laden's location was kept secret from the prying eyes, cash and massive electronic intelligence resources of the US for approximately one decade. Yes, the Pakistani Directorate of Inter-Services Intelligence (ISI) was able to fool the world's electronic and human intelligence presence in the region for almost ten years due to its proficiency.

Move over Mossad, the ISI now rules the world!

But Osama is dead now, fishmeal for marine life in the Arabian Sea. And Osama was captured in Pakistan. The civilized world can (and did) celebrate by partying in the streets like intoxicated college students during Spring Break. So, how long before unpopular Pakistan's pariah status is ratcheted up one notch?

Probably two years before the US dumps Pakistan as unceremoniously as after the first Afghan war in the 1990s. In the interim, relations will be rocky but not broken. Perhaps the final rupture will come with Pakistan shooting down some US drones to salvage some national pride. Symbolism is a powerful tool for diplomacy and domestic consumption. 

The US will not need the Karachi to Peshawar supply route in a few years. Without other important common interests, the Karachi – Peshawar logistics trail acts as the glue for the Pak-US relationship.

Pakistani policy makers and academics should start preparing for a unilateral, wilful default and restructuring of the country's international debt obligations. Proactive restructuring of Pakistan's onerous debt load might kick-start the economy. If Pakistan's creditors, including the US, are unhappy at Pakistan's new found independence then 'regime change' and military intervention under the guise of securing Pakistan's nuclear assets may be the only option available to the unhappy nations. However, a SEAL team or a few drones may not be sufficient to install a 'friendly' regime in Islamabad – an intervention along the scale of Iraq will likely be required.

Pakistan may be nuclear armed and inhabited by 160 million people, but Pakistan is not Greece. The EU and the IMF may consistently allow a few million Greeks to evade taxes and collect generous pensions through financial bailouts, but Pakistan will have to make its own way.

Pakistan's third encounter as an American client state is ending just as badly as its earlier two experiences. It's time for Pakistan to chart a more independent course or at least find a new map maker.

Of Chiam See Tong, Singapore’s general elections and ‘new’ and future Singaporeans

Stock traders say numbers never lie. A stock trade is either profitable or not. Dollars and cents define the outcome. Similarly, during an election a candidate either wins or loses. There is no grey area. Votes numerically define the result.

Yet, human affairs cannot be weighed as exactly as numbers suggest. Often the greatest of human successes appear in the guise of a defeat. So it was with Mr. Chiam See Tong's election bid in the Bishan-Toa Payoh Group Representation Constituency (GRC).

This post is neither about Singapore's opposition nor about Singapore's political system. It is about a remarkable man: a man who fought like a tiger with the tenderness of a kitten.

Mr. Chiam See Tong has battled against the odds his entire political career. He won the Potong Pasir constituency on his third attempt in Singapore's 1984 general elections.

Winning any seats against Singapore's People's Action Party (PAP), with its efficient grassroots machinery coupled with the benefits of incumbency, is no mean feat. One can only imagine the type of pressures brought to bear upon him and Potong Pasir's voters to switch loyalties in successive general elections.

Neither carrot nor stick worked to bring Potong Pasir back to the PAP. Potong Pasir voters even disregarded a PAP election promise of SGD 80 million for 'upgrading' during the 2006 elections. For 27 years, Mr. Chiam See Tong successfully fought off all PAP challenges to dethrone him from Potong Pasir. Until he stood down in 2011, he was returned as the ward's MP at every general election.

Courage and persistence have their own rewards. Surely, Mr. Chiam See Tong has rightful claims to much recompense in both these categories.

The story does not end here. In 2011, Mr. Chiam See Tong stepped out of his 'comfort zone' of Potong Pasir to take the fight directly to the ruling party's Deputy Prime Minister and Coordinating Minister for National Security Mr. Wong Kan Seng, in the Bishan-Toa Payoh GRC.

The PAP has not faced a contest for the Bishan-Toa Payoh GRC in the last three elections, i.e. 1997, 2001 or 2006. The GRC was a 'walkover' for the PAP. On May 7, Mr. Chiam See Tong's team obtained 43 percent of the constituency's vote, a success by any measure.  

I have never been a constituent of Mr. Chiam See Tong in Potong Pasir. I do not know him or his family. I do not need to in order to write these words. To survive and succeed for an unbroken 27 years as an opposition MP in Singapore's political environment is testament enough for me.

Singapore's next generation will find few better role models than Mr. Chiam See Tong. He embodies many of the reasons Singapore was able to transform itself from Third World to First World in one generation: hard work, determination, courage bordering on audacity, empathy with fellow Singaporeans but most of all a fanatical desire to improve his community. 

Mr. Chiam See Tong, I have never felt more 'Singaporean' than at that precise moment inside Beatty Secondary School when I marked an 'X' next to your name on my ballot. (This is only my third general election as a Singaporean.) Thank you for allowing me the privilege to believe that I too played a small part in your success.

Gambling: nurturing Singapore’s home grown talent

Singapore is no stranger to multinational corporations. The city has been a safe haven for foreign capital since independence in 1965. Many large firms house their regional headquarters in Singapore. However, it is only recently that Singapore has seen the arrival of international gaming companies.

The 'integrated resorts' have changed Singapore's urban landscape, physically and otherwise. The Esplanade's 'durians' are passé. The Marina Bay Sands roof garden is a 'newer and better' representation of Singapore.

I am no moralist. If individuals wish to gamble, let them. Nevertheless, I do recall official exhortations that Singapore's casinos were geared towards foreign visitors.

Various strategies were implemented to discourage Singaporeans from risking their hard earned money at the roulette wheel. Significantly amongst these rules is a 'locals' surcharge. Singaporeans must pay SGD 100 before entering the casinos.

A recent report highlights the success of Singapore's 'gaming strategy.'

In 2011, Singapore is expected to overtake Las Vegas as the second largest gambling city. Singapore's gaming industry should rake in USD 6.4 billion versus USD 6.2 billion for the Las Vegas Strip. Macau retains its top spot.

Importantly, approximately 60 percent of all gamblers at Marina Bay Sands and Resorts World Sentosa are Singaporeans.

Perhaps Singapore's casinos have been too successful - at least as measured by the number of locals visiting the casinos. Surely, the government did not envisage that a majority of casino patrons would be local citizens. This fact alone suggests it is time to revisit policies designed to discourage Singaporeans from frequenting local casinos.

Singapore's integrated resorts have reinvigorated sectors of the city's economy and real estate market. As an added bonus, the establishments have provided hours of pleasure to gamers; gamblers who otherwise might have travelled to Genting or Macau.

Slowly but surely, Singapore's reputation as a 'sterile' city which imposes fines for everything from chewing gum to littering is being shed. The liberalization of gambling laws is a step in that direction.

A few more steps and, in a few years, there may be little to distinguish the Little Red Dot from Kuala Lumpur or Bangkok.  

Dollars anyone ... Err, prefer Yuan if available?

The one hundred US dollar bill, fondly known as the 'Benjamin,' remains universally accepted legal tender. More and more, the reason for such widespread acceptance relies more upon quantity – the number of Benjamin notes floating around – and not quality. (Of late, the US dollar has been a poor store of value against most currencies.)

At one time, any self respecting international gangster cherished the feel of large wads of one hundred dollar bills. No more.

The Chinese triad likely prefers the Yuan. Maybe even the Singapore dollar, exchange controls permitting. The Japanese Yakuza's loyalty stays with the Emperor and his Yen. Russian and East European organized crime syndicates probably prefer doing business in the Euro.

All is not yet lost for the US dollar. The Latin American drug kingpin and Mexican human trafficker still revel in Benjamin's glow. Moreover, gangsters in many Asian and African countries still yearn for the US dollar.

Organized crime syndicates may not be the only people shunning US dollars. Central bankers are also diversifying their reserves into other currencies.

The global move away from the US dollar is confirmed by the percentage of international reserves held in US dollars by central banks. The US dollar's share of reserves has been in steady decline for many years.

Thus, rating agency Standard and Poor's recent announcement placing the US credit rating on negative watch should not come as a surprise to many. Statistically, being added to the negative watch list implies that the odds of a US debt rating downgrade within the next three years are 33 percent.

Two major wars and an 'out of control' financial sector have taken a toll on the US economy. Not even the world's sole superpower can afford overseas military deployments measured in decades.

International military adventurism costs money.

Unfortunately for the US, China (as America's lead banker) seems to have run out of patience with the world's biggest debtor nation. China is no longer willing to write blank checks. Consequently, China is cutting back on its ongoing US Treasury bill purchases.

Fortunately for the US, there are few credible alternatives to the US dollar.

Nevertheless, China is trying hard to elicit other options. The country is buying 'real' assets in any country such assets are available. Even gold and other precious metals have regained respectability among central bankers.

Importantly, the People's Bank of China is making slow but steady progress in 'internationalizing' the Yuan; moving towards one elegant solution to China's foreign exchange reserves dilemma: gaining seigniorage for the Renminbi.

The United States is still the world's sole superpower. America's operating flexibilities, soft and hard power, are superior to any other nation in the world. That is a fact.

Nonetheless, America's role as the exclusive lead actor on the international stage is nearing its final act. The country's unwillingness (or is it inability?) to decisively affect events in Libya is clear evidence of America's declining global influence.

Some years ago, America's politicians would not have shied away from another overseas military engagement, especially if the conflict could be couched in the rhetoric surrounding the global war on terror. In 2011, there is little appetite to expand America's 'greatness and idealism.'

American financial, military and psychological energies have been sapped by internal problems. Surely, all nations have the ability to revitalize themselves over time. The US is no exception. None should write off the US as a global power.

Nevertheless, there is a transformation of roles occurring on the world's stage. Soon, the US will not be eligible for 'Best Lead Actor' nominations, but merely for the 'Best Supporting Actor.' The 'Lead Actor' position must be shared with an ancient civilization comprised of young dragons.

Over time, the US must learn to share the global spotlight.

Singapore’s Muslim leaders, Islam, music and symbolism

There was a fascinating concert of Sufi music by the Al-Kindi Ensemble at Singapore's Esplanade concert hall this past weekend. Those lucky enough to witness the show were enthralled by the spectacle of a black turbaned Taliban like Syrian male screaming prayers to Allah as melodically as Steven Tyler and the Aerosmith of old.

If Islam had rock stars then Sheikh Ahmed Habboush would be in the Rock Hall of Fame. The good sheikh may even find himself in multiple halls, as a religious scholar in his own right he may also find himself inducted into the Ulema Hall of Fame.

Accompanying the Sheikh on vocals was the Grand Imam of the Fatih Mosque in Istanbul. A total of twelve performers, dervish dancers and musicians (percussion and string) rounded off the ensemble. In case Muslim religious zealots did not already have enough to fume about, throw in the ensemble's colourfully dressed female percussionist and a radical online sermon by a jihadist mullah is virtually guaranteed.



The Fatih Mosque located in Istanbul, was completed in 1470

Sufism is not a sect within Islam. The reach of Sufi philosophies cuts across geographies and sects (Sunni and Shia Islam). Many of Islam's great theologians have been drawn to its mystic appeal, including Al-Ghazzali,  Bayazid Bastami and Abul Hasan al-Shadhili.

Ibn Khaldun, a respected fourteenth century Islamic historian, described Sufism as "... dedication to worship, total dedication to Allah most High, disregard for the finery and ornament of the world, abstinence from the pleasure, wealth, and prestige sought by most men, and retiring from others to worship alone."

Sufism unifies and purifies. Sufi philosophy assumes a personal spiritual path to God – not a collective path forcibly imposed by the state through laws.

In this respect, it would have been nice if the Islamic Religious Council of Singapore (MUIS) or Singapore's Minister for Muslim Affairs had graced the concert in a high profile manner. (Perhaps they did attend the event, though without any fanfare, there was no political symbolism attached.)

The reason: attendance by either 'state religious representative' symbolically denotes acceptance of the heterogeneous nature of Islam in Singapore. An announced presence will have legitimated the notion that Malay Sunni Islam is not the only Islam 'certified' in Singapore. And that Singapore embraces, at least in theory, more than only the Shafi school of Islamic law. 



The mausoleum (gongbei) of Chinese Sufi Ma Laichi, also known as Abu 'l-Futūh Ma Laichi in Linxia City, China

Despite Sufism's significant role in spreading Islam across the world, orthodox Islam's aversion to Sufi practices is deep rooted. Two centuries after Islam's birth in the early 900s, Sufi saint Mansur al-Hallaj was imprisoned eleven years for heresy. Ultimately, Al-Hallaj faced a gruesome death engineered by Islamic orthodoxy: torture and finally death by dismemberment.

Wahabi (or Shafi) Islam has as much a monopoly on righteousness as a rose controls the market for beauty. Undoubtedly, Sufism will continue to inspire Muslims around the world as they search for their unique identity in today's troubled world.

"O Lord! You are the guide of those who are passing through the Valley of Bewilderment. If I am a heretic, enlarge my heresy." 

- Mansur al-Hallaj