my humanities class

Phelps & Ammous: Blaming Capitalism for Corporatism

2012-02-02T19:51:00.001+08:00

NEW YORK - The future of capitalism is again a question. Will it survive the ongoing crisis in its current form? If not, will it transform itself or will government take the lead?

The term 'capitalism' used to mean an economic system in which capital was privately owned and traded; owners of capital got to judge how best to use it, and could draw on the foresight and creative ideas of entrepreneurs and innovative thinkers. This system of individual freedom and individual responsibility gave little scope for government to influence economic decision-making: success meant profits; failure meant losses. Corporations could exist only as long as free individuals willingly purchased their goods - and would go out of business quickly otherwise.

Capitalism became a world-beater in the 1800's, when it developed capabilities for endemic innovation. Societies that adopted the capitalist system gained unrivaled prosperity, enjoyed widespread job satisfaction, obtained productivity growth that was the marvel of the world and ended mass privation.

Now the capitalist system has been corrupted. The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system, however, is not capitalism, but rather an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism.

In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favours declared goals such as industrialisation, economic development, and national greatness over individuals' economic freedom and responsibility. Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the 'public good.'

The costs of corporatism are visible all around us: dysfunctional corporations that survive despite their gross inability to serve their customers; sclerotic economies with slow output growth, a dearth of engaging work, scant opportunities for young people; governments bankrupted by their efforts to palliate these problems; and increasing concentration of wealth in the hands of those connected enough to be on the right side of the corporatist deal.

This shift of power from owners and innovators to state officials is the antithesis of capitalism. Yet this system's apologists and beneficiaries have the temerity to blame all these failures on 'reckless capitalism' and 'lack of regulation,' which they argue necessitates more oversight and regulation, which in reality means more corporatism and state favoritism.

It seems unlikely that so disastrous a system is sustainable. The corporatist model makes no sense to younger generations who grew up using the Internet, the world's freest market for goods and ideas. The success and failure of firms on the Internet is the best advertisement for the free market: social networking Web sites, for example, rise and fall almost instantaneously, depending on how well they serve their customers.

Sites such as Friendster and MySpace sought extra profit by compromising the privacy of their users, and were instantly punished as users deserted them to relatively safer competitors like Facebook and Twitter. There was no need for government regulation to bring about this transition; in fact, had modern corporatist states attempted to do so, today they would be propping up MySpace with taxpayer dollars and campaigning on a promise to 'reform' its privacy features.

The Internet, as a largely free marketplace for ideas, has not been kind to corporatism. People who grew up with its decentralisation and free competition of ideas must find alien the idea of state support for large firms and industries. Many in the traditional media repeat the old line 'What's good for Firm X is good for America,' but it is not likely to be seen trending on Twitter.

The legitimacy of corporatism is eroding along with the fiscal health of governments that have relied on it. If politicians cannot repeal corporatism, it will bury itself in debt and default, and a capitalist system could re-emerge from the discredited corporatist rubble. Then 'capitalism' would again carry its true meaning, rather than the one attributed to it by corporatists seeking to hide behind it and socialists wanting to vilify it.

Saifedean Ammous is a professor of economics at the Lebanese American University and Foreign Member of Columbia University's Center for Capitalism and Society. Edmund Phelps, the 2006 Nobel laureate in economics, is Director of the Center.

What if Raffles hadn't founded S'pore?

2012-01-30T20:33:00.000+08:00

Hundreds of ships crossed the Malacca Straits from the 17th century to January 1819. So why did historians decide that when Sir Stamford Raffles did so on Jan 29, 1819, it was a historic event?

This date has passed us by again without much ado. Should we, as a nation, consider once more the role of Raffles in the founding of Singapore?

To answer this, consider historian Niall Ferguson's suggestion to imagine alternative outcomes, or counterfactual history, as a way of stressing the contingent aspects of history.

What would have happened if he had not landed in Singapore? Would other British ships or British East India Company clerks have "discovered" Singapore sooner or later?

What would have happened if he had landed in Singapore but was not interested in the local Malay history and the quarrel between the two brothers in the Johor sultanate?

What would have happened if the governor of Penang, John Alexander Bannerman, had not written to the Dutch to assure them that Raffles was out of order and thus stopped the Dutch from invading Singapore?

What would have happened if the Anglo-Dutch Treaty of 1824 was not signed and trade could not continue in Singapore?

When I consider these questions, I realise that Raffles' interest in the history of the Malay Archipelago was pivotal in the discovery of Singapore. Without it, Raffles would have been unsuccessful in establishing a trading post.

However, Singapore was still in danger of failing as a great trading post as he had envisioned. Even the creation of the Raffles Town Plan could not have ensured the growth of Singapore, as it could not continue to grow as a local trading hub.

So what would have happened if the "Highway to India", the Suez Canal, had not opened in 1869, thereby throwing a new lifeline to trade in Singapore?

Even so, what would have happened if botanist Sir Henry Nicholas Ridley, the first director of Singapore's Botanic Gardens, had not promoted the growing of the rubber tree in Malaysia, thus creating the hinterland that ensured our continued growth?

These two counterfactual questions seem to indicate that Raffles was responsible for getting the ball rolling, but historical forces beyond his control must be taken into account for the development and growth of Singapore.

One final question: If Raffles had not established a trading post in 1819, sooner or later, would anyone else have, considering that the opening of the Suez Canal would demand a hub in the rich but long India-China trade route?

My conclusion is that Raffles had been there 50 years earlier, and it was lucky for Singapore that he had a deep interest in history.

A final word - speculation is free but history is expensive. Perhaps, this is why Singaporeans do not really care if Jan 29 has any significance in our collective memory.

Frances Ess-Ong Hock Lin | 30 Jan, 2012 2:12 PM

True or not?

2012-01-29T20:37:00.001+08:00

Suppose you hear a suggestion that a company is going bankrupt. How many times do you need to hear it before you believe it is true?

By Tan Hui Yee, Senior Correspondent

According to global public relations firm Edelman, the figure for most Singaporeans lies somewhere between three and five. They may need to hear it on the radio, spot it on a blog, and see it on a Facebook update, as well as hear it from some friends or colleagues before truly accepting rumour as fact.

Such dispersal of authority is to be expected in the Internet age, where an increasing array of communication devices makes it easy for just about anybody to broadcast from his bedroom. The flip side of this phenomenon is that people are increasingly sceptical of what they hear, see or read.

BACKGROUND STORY

Radical approach

'I believe in radical transparency, which is to say you should tell your employees first, everything that you can about a company policy, and then let them talk freely.'

Edelman president Richard Edelman

This level of distrust is far higher in the United States, notes Edelman president Richard Edelman, who spoke to The Sunday Times during a visit to Singapore last month.

The 57-year-old American maps the lay of the land: 'In the year 2000, with three advertisements on evening television, you could get 85 per cent of your target audience. Today, it's not even possible with 50 to 70 ads, because the audience is so dispersed.

'And then the question is: do they believe them when they see them?'

Edelman, incidentally, was the firm that drew fire in 2006 when it was exposed for sponsoring a blog by a couple who travelled across the United States in a caravan and parked for free at various outlets of retail giant Walmart.

The blog painted a rosy picture of Walmart, which was Edelman's client, and which has long been accused of not paying its employees enough or providing enough health coverage.

What the blog did not disclose was that the couple had their expenses paid by Walmart, and were members of Working Families for Walmart, a pro-Walmart organisation started by Edelman.

Looking back at the furore, Mr Edelman put it down to 'insufficient training on disclosure and on behaviour' in the early days of the blogosphere.

'It was a company failure... It was a collective issue.'

The company, he says, has since committed to higher standards of disclosure. 'If we make a mistake we'll stand up and say we'll do better next time, and judge us from what we do in the future.'

It is a promise that seems to have stuck.

'I go crazy if people in my company go into social media and don't disclose they are representing a client,' he says.

And depending on the circumstances, he says, a repeat offender gets the sack.

Trust, in the wired world, is a function of transparency, expertise and exposure, he says. People are more likely to trust someone who not only has in-depth knowledge of a specific area, but also puts his work out regularly though various media, online and offline.

People are also more likely to believe organisations which measure clearly their effort in significant areas like the carbon footprint they leave and then state it clearly in public.

'I believe in radical transparency, which is to say you should tell your employees first, everything that you can about a company policy, and then let them talk freely,' he says.

'Traditionally you tell the employees last and you tell them very little.'

This is not to say that he advocates the approach of WikiLeaks, an organisation which publicises classified or private information from whistle-blowers.

Two years ago, WikiLeaks waded into global controversy after it worked with major newspapers to publicise diplomatic cables which contained, among other things, private conversations between statesmen and diplomats. The White House and other governments struggled for months to contain the fallout.

'The principle of moving institutions to a more open approach is right,' says Mr Edelman. But 'there's got to be some gauge on the value of what you are putting up'.

On this count, a diplomat's opinion of a statesman would not be as substantial as the revelations about how a global conglomerate makes its products, he reckons.

Still, he acknowledges that it is almost impossible to hide information these days. 'The world today has so many ways of learning the truth.'

After the meltdown at the Fukushima Daiichi nuclear power plant in Japan last year , for example, ordinary citizens armed with geiger counters were able to tell the world about the extent of radiation in the surrounding areas even while the Japanese authorities were insisting that all was well.

But governments can use such online activism to their advantage. Rather than try to control information, they can use citizens' comments online 'almost like a cross-check of the truth'.

They can seek instant feedback on matters like 'is your street clean?' on social media, so that they know for sure what is happening on the ground.

What then, does he make of the common assumption by some Singaporean politicians that people expressing their views on the Internet and social media constitute the 'vocal minority'?

'There are 800 million on Facebook. I don't know how you can say this is a vocal minority any more. It's everyman.'

tanhy@sph.com.sg

Apple products once made in US, now made in China

2012-01-29T17:15:00.001+08:00

Not long ago, Apple boasted that its products were made in America. Today, almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured in other countries.

Why can't that work come home, President Obama asked Apple's Steve Jobs at a dinner in California last February.

'Those jobs aren't coming back,' Mr Jobs reportedly said.

It is not just a matter of wages being lower outside the United States. Rather, Apple's executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that 'Made in the USA' is no longer a viable option for most Apple products.

One former executive described how Apple relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea and within half an hour started a 12-hour shift fitting glass screens into beveled frames.

'There's no American plant that can match that,' the executive said.

Apple employs 43,000 people in the United States and 20,000 in other countries. Many more people work for Apple's contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple's other products. But almost all of them work for companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

'Apple's an example of why it's so hard to create middle-class jobs in the US now," said Mr Jared Bernstein, who until last year was an economic adviser to the White House. 'If it's the pinnacle of capitalism, we should be worried.'

Similar stories could be told about other companies in the United States, Europe and elsewhere. Outsourcing has become common in hundreds of industries, including accounting, legal services, banking, textiles, auto manufacturing and pharmaceuticals. But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs.

'Companies once felt an obligation to support American workers, even when it wasn't the best financial choice,' said Ms Betsey Stevenson, the chief economist at the United States Labour Department until last September. 'That's disappeared. Profits and efficiency have trumped generosity.'

Apple executives say it is a mistake to measure a company's contribution simply by tallying its employees - though they note that Apple employs more workers in the United States than ever before. They say Apple's success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products.

'We don't have an obligation to solve America's problems,' a current Apple executive said. 'Our only obligation is making the best product possible.'

The creative power of one

2012-01-29T17:03:00.001+08:00

Solitude is out of fashion. Our companies, our schools and our culture are in thrall to an idea I call the New Groupthink, which holds that creativity and achievement come from an oddly gregarious place. Most of us now work in teams, in offices without walls, for managers who prize people skills above all. Lone geniuses are out. Collaboration is in.

By Susan Cain

But there's a problem with this view. Research strongly suggests that people are more creative when they enjoy privacy and freedom from interruption. And the most spectacularly creative people in many fields are often introverted, according to studies by the psychologists Mihaly Csikszentmihalyi and Gregory Feist.

Such people are extroverted enough to exchange and advance ideas, but see themselves as independent and individualistic. They're not joiners by nature.

BACKGROUND STORY

Solitude can help us learn

According to research, the best way to master a field is to work on the task that's most demanding for you personally. And often the best way to do this is alone. If you want to improve, you have to be the one who generates the move. Imagine a group class - you're the one generating the move only a small percentage of the time.

Brainstorming sessions are one of the worst possible ways to stimulate creativity.

Decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size increases.

One explanation for these findings is that introverts are comfortable working alone - and solitude is a catalyst to innovation. As the influential psychologist Hans Eysenck observed, introversion fosters creativity by 'concentrating the mind on the tasks in hand, and preventing the dissipation of energy on social and sexual matters unrelated to work'.

In other words, a person sitting quietly under a tree in the backyard, while everyone else is clinking glasses on the patio, is more likely to have an apple land on his head.

(Newton was one of the world's great introverts: William Wordsworth described him as 'A mind for ever/ Voyaging through strange seas of Thought, alone.')

Solitude has long been associated with creativity and transcendence. 'Without great solitude, no serious work is possible,' Picasso said. A central narrative of many religions is the seeker - Moses, Jesus, Buddha - who goes off by himself and brings profound insights back to the community.

Culturally, we're often so dazzled by charisma that we overlook the quiet part of the creative process. Consider Apple. In the wake of founder Steve Jobs' death, we've seen a profusion of myths about the company's success. Most focus on Mr Jobs' supernatural magnetism and tend to ignore the other crucial figure in Apple's creation: a kindly, introverted engineering wizard, Mr Steve Wozniak, who toiled alone on a beloved invention, the personal computer.

Rewind to March 1975: Mr Wozniak believes the world would be a better place if everyone had a user- friendly computer. This seems a distant dream - most computers are still the size of minivans, and many times as pricey. But Mr Wozniak meets a simpatico band of engineers calling themselves the Homebrew Computer Club. The Homebrewers are excited about a primitive new machine called the Altair 8800.

Mr Wozniak is inspired, and immediately begins work on his own magical version of a computer. Three months later, he unveils his amazing creation for his friend, Steve. Mr Wozniak wants to give his invention away free, but Mr Jobs persuades him to co-found Apple Computer.

The story of Apple's origin speaks to the power of collaboration. Mr Wozniak wouldn't have been catalysed by the Altair but for the kindred spirits of Homebrew. And he'd never have started Apple without Mr Jobs.

But it's also a story of solo spirit. If you look at how Mr Wozniak got the work done - the sheer hard work of creating something from nothing - he did it alone. Late at night, all by himself.

Intentionally so. In his memoir, Mr Wozniak offers this guidance to aspiring inventors: 'Most inventors and engineers I've met are like me ... they live in their heads. They're almost like artists. In fact, the very best of them are artists. And artists work best alone... I'm going to give you some advice that might be hard to take. That advice is: Work alone... Not on a committee. Not on a team.'

And yet the New Groupthink has overtaken workplaces, schools and religious institutions. Anyone who has ever needed noise-cancelling headphones in her own office or marked an online calendar with a fake meeting in order to escape yet another real one knows what I'm talking about. Virtually all American workers now spend time on teams and some 70 per cent inhabit open-plan offices, in which no one has 'a room of one's own'.

Schools have also been transformed by the New Groupthink. Today, elementary school classrooms in the United States are commonly arranged in pods of desks, the better to foster group learning. Even subjects such as mathematics and creative writing are often taught as committee projects.

Some teamwork is fine and offers a fun, stimulating, useful way to exchange ideas, manage information and build trust.

But it's one thing to associate with a group in which each member works autonomously on his piece of the puzzle; it's another to be corralled into endless meetings or conference calls conducted in offices that afford no respite from the noise and gaze of co-workers.

Solitude can even help us learn. According to research on expert performance by the psychologist Anders Ericsson, the best way to master a field is to work on the task that's most demanding for you personally. And often the best way to do this is alone. Only then, Mr Ericsson told me, can you 'go directly to the part that's challenging to you. If you want to improve, you have to be the one who generates the move. Imagine a group class - you're the one generating the move only a small percentage of the time'.

Conversely, brainstorming sessions are one of the worst possible ways to stimulate creativity. The brainchild of a charismatic advertising executive named Alex Osborn who believed that groups produced better ideas than individuals, workplace brainstorming sessions came into vogue in the 1950s.

'The quantitative results of group brainstorming are beyond question,' Mr Osborn wrote. 'One group produced 45 suggestions for a home-appliance promotion, 56 ideas for a money-raising campaign, 124 ideas on how to sell more blankets.'

But decades of research show that individuals almost always perform better than groups in both quality and quantity, and group performance gets worse as group size grows. The 'evidence from science suggests that business people must be insane to use brainstorming groups', wrote the organisational psychologist Adrian Furnham.

'If you have talented and motivated people, they should be encouraged to work alone when creativity or efficiency is the highest priority,' he said.

The reasons brainstorming fails are instructive for other forms of group work, too. People in groups tend to sit back and let others do the work; they instinctively mimic others' opinions and lose sight of their own; and, often succumb to peer pressure.

The one important exception to this dismal record is electronic brainstorming, where large groups outperform individuals; and the larger the group the better. The protection of the screen mitigates many problems of group work. This is why the Internet has yielded such wondrous collective creations.

Marcel Proust called reading a 'miracle of communication in the midst of solitude', and that's what the Internet is, too. It's a place where we can be alone together - and this is precisely what gives it power.

Susan Cain is the author of the forthcoming book Quiet: The Power Of Introverts In A World That Can't Stop Talking.

The New York Times

We're Not Broke, Just Twisted: Extreme Wealth Inequality in America

2012-01-28T20:01:00.001+08:00

Restoring hope and public trust

2012-01-28T16:53:00.000+08:00

CAPITALISM has gone through crises of legitimacy before but this one is unprecedented. The underlying causes are complex, yet the net effect is plain - inequality is great and rising. Sixty-one million individuals have the same wealth as 3.5 billion people.

By Juan Somavia, For The Straits Times

And the macroeconomic outlook is worsening. According to the International Labour Organisation's (ILO) annual Global Employment Trends report out this week, one out of every three workers - some 1.1 billion people - is unemployed or living in poverty. At the present rate, it will take us 88 years to eradicate extreme poverty. Over the next decade, we need to create 600 million jobs - 200 million for today's unemployed and 400 million for those entering the labour market.

Given this, it is not surprising that this year's Global Risks reports of the World Economic Forum (WEF) rate severe income inequality and high unemployment, especially among young people, as the most likely global risks over the coming 10 years.

Last year's Gallup polling data showed that globally, people are perceiving their living standards to be falling and expressing diminishing confidence in their government's ability to reverse this. In the United States, a recent survey by the Pew Research Centre showed conflict between rich and poor as the biggest source of societal tension. In far too many places, there is a sense of receding hope for the future.

Clearly, this cannot go on. We need to be bold and not just tinker at the margins (the recovery after the 2008-2009 crisis was short-lived because the 'quick fix' option prevailed). Nothing short of a new paradigm will do - the bonding of people, the economy and society.

This is why this year's WEF theme, 'The great transformation: shaping new models', is spot on. I will be arguing that we must urgently put in place a much more effective model for strong, sustainable and balanced growth that is people-oriented.

First, we must rethink how we measure growth beyond percentage changes in gross domestic product or average income per capita. The measure of success must be tangible improvements in people's lives.
Second, full employment, with low inflation and financial stability, must be a top macroeconomic goal as well as a central bank policy goal, as in the US and Argentina. We know this works. Countries that invested in job creation (and social protection) as a way out of the 2008 crisis fared better than those that prioritised bailing out their banks. China invested in labour-intensive infrastructure projects. Germany's work-sharing programme kept 1.5 million workers employed at the height of the crisis.
Third, we must put the financial system back at the service of the productive economy, not the other way around. The distortion of this fundamental notion is at the heart of the current crisis, yet the markets are once again calling the shots. Risky and unproductive operations must become less profitable for financial institutions and taxpayers should not pick up the losses.
Fourth, we need to strengthen the framework for productive investment, including through an income-led growth strategy. This ignites demand through consumption and leads to savings to fuel future growth, rather than debt.
Fifth, we need social protection for the most vulnerable. In Brazil, income inequality, as measured by the Gini coefficient, is largely declining due to a national conditional cash transfer scheme that supports poor families. Boosting jobs reduces poverty.
Sixth, we need to build strong institutions to assist in the creation of new businesses, including through long-term partnerships between banks and enterprises, as in Germany and South Korea. Promoting decent work and labour rights is part of the process.
Finally, we need more coherence between economic and social policies to connect people's aspirations for social justice with the management of a sustainable global economy.
This is an achievable agenda. But governments cannot deliver it alone. We need what WEF founder and executive chairman Klaus Schwab calls 'collaborative power' - and what the ILO calls social dialogue.

Businesses have a vital role to play to make this global shift possible, from leading in debates like those in Davos, Switzerland, to their job-creating capacity. An ILO/University of Maryland study projects that US companies could create 2.4 million new jobs in 2014 by investing the US$500 billion (S$630 billion) extra corporate reserves accumulated over 2010 to last year. The highest priority should go to small and medium-sized enterprises as they are engines of growth.

Above all, we need creativity and innovative thinking to seriously address the social dimension of globalisation. It is a political responsibility and a sound business decision as an investment in a peaceful and prosperous future.

In Davos this week, leaders must focus on restoring not only hope and confidence but also public trust. Never again must people feel that, while some banks are too big to fail, they are too small to matter.

The writer is the director-general of the International Labour Organisation.

What will Internet users and industry take on next?

2012-01-28T16:50:00.000+08:00

SAN FRANCISCO: The unlikely coalition of companies and consumer groups that helped quash anti-piracy legislation last week on Capitol Hill is weighing the future of what might be called lobbying 2.0.

Can the Internet industry, along with legions of newly politicised Web users, be a new force in Washington? And if so, what else can they all agree upon?

If labour unions once amplified the legislative agenda of certain American industries, the anti-piracy fight showed the potential power of young Americans who live and breathe the Internet.

The Bills in the House and Senate, backed by the entertainment industry, encountered a surprising defeat after a vast alliance of chip-makers, Internet service providers, rival Web companies and digital rights groups cast them as a means of censoring the Web.

Several sites went dark for a day in protest, and in Washington e-mail servers were flooded with messages from citizens opposing the Bills. Soon even sponsors of the Stop Online Piracy Act (Sopa), and Protect IP Act (Pipa) backed down.

But if the Internet industry was buoyed by support from its users on this particular issue, they may find themselves on opposing sides in other cases.

Consider the prospect of Washington seeking to restrict the use of facial recognition technology, which Facebook uses to speed the process of adding the names of friends to photos. It is hard to imagine Facebook users lobbying on its behalf.

The scruffy nature of the protests was summed up by one of their spokesmen, Mr Alexis Ohanian, 28, a co-founder of the popular social news site Reddit. 'No one can predict what will catch on,' he said. 'If Sopa and Pipa are any indication, if it's something that threatens the Internet, I believe we can recreate this.'

Mr Ohanian is part of a flurry of online discussion about what to tackle next.

There are some who oppose a global treaty called the Anti-Counterfeiting Trade Agreement, which the United States and many European countries have already signed. Others want to block a Bill that would compel Internet providers to retain data on users' online travels.

In some ways, the Bills' defeat was the awakening of a generation that has come to rely on its right to digital freedom.

'What this did show is as a citizen in the Internet age, you have to add the Internet and your digital rights and liberties onto the list of things you need to be worried about if you want to retain your political freedoms,' said Ms Rebecca MacKinnon, a fellow at the New America Foundation.

NEW YORK TIMES

5 myths about China's power

2012-01-28T16:48:00.000+08:00

AS CHINA gains on the world's most advanced economies, the country excites fascination as well as fear, particularly in the United States, where many worry that China will supplant America as the 21st century's superpower. Many ask how China has grown so much so fast, whether the Communist Party can stay in power and what Beijing's expanding global influence means for the rest of us. To understand China's new role on the world stage, it helps to rethink misconceptions that dominate Western thinking.

By Minxin Pei

China's rise is marginalising American influence in Asia

Just the opposite. Certainly, China's power in Asia is growing; its economy is now the biggest in the region, and the country is the largest trading partner for every Asian nation. And its military modernisation has made the People's Liberation Army a more lethal fighting force.

But instead of marginalising or supplanting US influence, China's expanding power is pushing most Asian countries closer to Washington and elevating America's status. Uncle Sam's presence is still welcome because it prevents a regional power from dominating its neighbours and promotes strategic balance. Today, the more power China gains, the more critical the US commitment to the region becomes, and the greater the influence Washington exercises.

No surprise, then, that when the Obama administration recently announced a strategic pivot towards Asia, China bristled while most countries in the region felt reassured and applauded quietly. Today, US security ties with key Asian nations such as India, Japan, South Korea and even Vietnam are better than ever.

China's massive foreign exchange reserves give it huge clout

China owns roughly US$2 trillion (S$2.5 trillion) in US Treasury and mortgage-backed debt and US$800 billion in European bonds. These massive holdings may cause anxiety in the West and give Beijing a lot of prestige and bragging rights, but they have not afforded China a lot of diplomatic sway.

The much-feared scenario of China dumping US sovereign debt on world markets to bend Washington to its will has not materialised, and probably won't. China's sovereign wealth fund, which invests part of those reserves, has favoured low-risk assets (such as a recent minority stake in a British water utility) and has sought to avoid geopolitical controversy. And in the European debt crisis, China has been conspicuously absent.

China's hard currency hoard adds little punch to its geopolitical power because its stockpile results from a growth strategy that relies on an undervalued currency to keep exports competitive. If China threatens to reduce its investment in US debt, it will either have to find alternative investments (not an easy task these days) or export less to the US (not a good idea for Chinese manufacturers). With so much invested in Western debt, China would suffer disastrous capital losses if it spooked financial markets.

The Communist Party has the Internet under control

In spite of its huge investments in technology and manpower, the Communist Party is having a hard time taming China's vibrant cyberspace. While China's Internet-filtering technology is more sophisticated and its regulations more onerous than those of other authoritarian regimes, the growth of the nation's online population (now surpassing 500 million) and technological advances (such as Twitter-style microblogs) have made censorship largely ineffective. The government constantly plays catch-up; its latest effort is to force microbloggers to register with real names. Such regulations often prove too costly to enforce, even for a one-party regime.

At most, the party can selectively censor what it deems 'sensitive' after the fact. Whenever there is breaking news, whether a corruption scandal, a serious public safety incident or a big anti-government demonstration, the Internet is quickly filled with coverage and searing criticisms of the government. By the time censors restore some control, the political damage is done.

China's regime has bought off the middle class

Hardly. Three decades of double-digit economic growth has elevated about 250 million to 300 million Chinese, mainly urban residents, to middle-class status. Since the regime crushed the Tiananmen democracy movement in 1989, the middle class has been busy pursuing wealth, not demanding political freedoms. But this does not mean this group has thrown its support behind the ruling party. There is a world of difference between political apathy and enduring loyalty.

At most, the Chinese middle class tolerates the status quo because it is a vast improvement over the totalitarian rule of the past, and because there is no practical or immediate alternative. But as the Arab Spring shows, a single event or a misstep by authoritarian rulers can transform apathetic middle-class citizens into radical revolutionaries.

That can happen even without a precipitating economic crisis. Today, China's middle class is becoming more dissatisfied with inequality, corruption, unaffordable housing, pollution and poor services.

The party knows it cannot bank on middle-class support. Such insecurity lies behind its continuing harshness towards political dissent.

China's rapid economic growth shows no signs of slowing

The pace of growth is already cooling from above 10.3 per cent in 2010 to 9.2 per cent last year, and the downward shift will accelerate in future years.

The Chinese economy will encounter strong headwinds. The population is ageing; citizens aged 60 and older accounted for 12.5 per cent of the population in 2010 and are projected to reach 17 per cent in 2020. This will reduce savings and the supply of workers, and raise the costs of pensions and health care. If China wants to keep its high growth rate, it must graduate to making Chinese-designed high-tech and high-value-added products. It will need more innovation, which demands less government control and more intellectual freedom.

Most critically, the investment-driven and state-led economic model responsible for China's rapid growth must give way to a more efficient, consumption-driven, market-oriented model. Such a shift will be impossible without downsizing the state and making the party accountable to the Chinese people.

The writer is director of the Keck Centre for International and Strategic Studies at Claremont McKenna College.

WASHINGTON POST

WWII bomb shelter opens for tours

2012-01-28T15:52:00.000+08:00

WHAT is possibly the last wartime civilian air-raid shelter here will welcome groups of visitors on guided tours next month.

By Lim Yan Liang

The shelter, occupying the ground floor of Block 78, Guan Chuan Street in a quiet corner of Tiong Bahru, has had an anonymous existence all this time.

No signs have pointed casual passers-by to it, and the whitewashed brick walls of its exterior betray little of the purpose for which the 1,500 sq m space was built.

BACKGROUND STORY

HOW TO SIGN UP

Two guided tours, each lasting an hour, will be conducted at 10am and 11am every Saturday next month. Members of the public may register for the tour by sending an e-mail to lee_bee_cheng@nhb.gov.sg

BACKGROUND STORY

Father died, sister was born - all within 24 hours

IN THE early hours of Jan 21, 1942, amid intermittent bombing raids on Singapore by the Japanese, Mr Callistus Raymond Pereira, a 29-year-old teacher and father of two, was called to duty as a civil defence volunteer.

He had breakfast with his wife Gerarda, who was expecting their third child soon. Before leaving the family's home in Chay Yan Street, he went to kiss his sleeping sons, Andrew, five, and Eddy, four, goodbye.

As there had been heavy bombing the day before, he had a bad feeling about that day. He took a picture of the Virgin Mary that he kept in a drawer, passed it to his wife and said: 'Don't worry, if anything happens, Our Lady will look after you.'

When he did not return that evening, his wife knew he was gone. She headed for the hospital mortuary in Outram Road, determined to claim his body and give him a proper burial.

But she could not find his body amid the chaos at the mortuary, on a day when 600 people lost their lives.

Later that evening, after she got home, the air-raid sirens went off.

As they howled, she took her sons to the air-raid shelter in Block 78, Guan Chuan Street. The elder of the boys, Andrew, a former lab technician now aged 75, said he remembers being carried into the shelter with Eddy.

'The sirens were blaring. There were bombed-out houses with only the staircases left standing.'

His most vivid memory of life in the shelter, though, was the charcoal fire the adults built inside. Over it, they roasted a long pisang tanduk, or horn banana.

He said: 'I was only five, so I don't recall much, but we ate the bananas with butter, and it was wonderful.'

Later that night, Mrs Pereira went into labour, and by a stroke of luck, Professor J.S. English, Singapore's first professor of obstetrics and gynaecology, was in charge of the medical unit in the shelter.

With help from him and his wife, Mrs Pereira delivered Mary Magdeline Pereira just after midnight on Jan 22, 1942.

Ms Pereira, a retired teacher now aged 70, said: 'If there had not been an air-raid shelter, I don't know if I would have been born safely - or if I'd even be alive now.

'Singapore was razed to the ground that day, and I am like the phoenix that rose out of the ashes. That spirit is in me. I've been a fighter all the time - that's me.'

The family learnt from a historian after the war that a 'C R Pereira', recorded to have died on Jan 21, 1942, lies buried in a mass grave in Batu Pahat, Johor.

LIM YAN LIANG

But it was this space that gave about 100 people from the neighbourhood shelter during the Japanese air raids between December 1941 and January 1942, shortly before Singapore fell during World War II.

Built in 1940 by the Singapore Improvement Trust, the colonial predecessor to the Housing Board, it was the only air-raid shelter to have been incorporated into public housing at the time.

The National Heritage Board (NHB), seeking to mark the 70th anniversary of the battle for and eventual fall of Singapore, will organise the tours. It will also launch a community exhibition at the nearby Tiong Bahru market.

Photos, oral accounts and material gleaned from Britain's Imperial War Museum will tell the history of pre-war and wartime air-raid shelters here.

The tours and exhibition are part of a larger schedule of events to mark the anniversary. These include an exhibition of artwork by former prisoner of war William Haxworth and Singaporean artist Liu Kang at the National Library, the launch of heritage trails at Reflections At Bukit Chandu, and a remembrance ceremony at the Kranji War Memorial on Feb 15, 70 years to the day Singapore fell.

Mr Alvin Tan, the NHB's director of heritage institutions and industry development, said: 'The guided tours and exhibition are part of the overall experience that NHB is providing to commemorate the Battle for Singapore.'

He said the NHB hopes to raise public awareness of Singapore's war history and highlight the people's resilience in that early phase of nation-building.

Although in good condition, the shelter is not entirely in its original state. The HDB, which has been using the shelter as a storage space, retrofitted it with fluorescent lights.

Other changes, which Mr Tan described as 'minor renovations', included the knocking-down of some walls, and the cementing-over of some original entrances and skylights. Little will be done to the space ahead of visits by history buffs and students of Singapore history.

'If we do it too nicely, it will lose its authenticity,' said Mr Tan.

The exposed red bricks of the interior walls are unadorned. Overhead, planks and pipes run, unhidden, and the concrete ceiling and pillars are unpainted.

Some graffiti, including Chinese characters in black paint, are on the walls in the shelter, but the NHB is unsure when these marks were made.

The shelter has memories for Singaporeans like Mr Andrew Bosco Callistus Pereira, 75. (See report below.)

Just five years old when the bombs began falling on Singapore, he said: 'It was spacious down there, but dark, and if I recall correctly, we had just a few kerosene lamps.'

The sound of the air-raid siren is etched in his memory, he said, as are the bright beams of searchlights that criss-crossed the sky outside the shelter.

One reason the shelter is intact could be because it was little used.

Mr Peter Chan, a 58-year-old businessman whose grandfather Chan Chun Wing was a volunteer air-raid marshal in Tiong Bahru, said only one dry run of evacuation to the shelter was held - in the daytime - after the shelter was built ahead of the war.

But the Japanese launched their bombing campaign on Singapore at 4am on Dec 8, 1941. At that hour, most residents were asleep in their own homes and under-prepared to evacuate to the shelter, although it was used the following month.

Mr Chan said: 'My grandfather said people nearby did use the shelter when the sirens went off, but those were mostly false alarms. It was actually hardly used.'

yanliang@sph.com.sg

The killers - Exitlude

2012-01-27T23:24:00.001+08:00

Chinese clans plan centre for new citizens

2012-01-26T22:36:00.000+08:00

Aim is to better integrate them into Singapore. A NEW Chinese cultural centre to integrate newcomers to Singapore and showcase the local Chinese identity will be set up by the Singapore Federation of Chinese Clan Associations (SFCCA).

By Rachel Chang

It will be a one-stop venue that Chinese community bodies can use for anything from performances and exhibitions to networking events and seminars.

The cost and site of the centre have yet to be finalised.

BACKGROUND STORY

Helping execs understand China

FROM tea appreciation to conversing about Chinese poetry and art, it is all part of doing business in China.

A new programme for businessmen with interests in China will be a first in Asia to emphasise a social, cultural and political understanding of the mainland - knowledge that will give them a 'distinct cultural advantage in a world where guanxi (Mandarin for connections) matters', said Ms Low Yen Ling, chief executive of Business China.

The non-profit networking group will launch the programme in March, with the Nanyang Business School of the Nanyang Technological University.

Its first group of senior executives will go through three five-day modules that will have speakers who are Chinese government officials, scholars and business leaders.

The aim is to help them understand the Chinese business landscape, and the Chinese businessman's psyche.

One of the modules will require the executives to be in China, where they will be exposed to aspects of Chinese culture such as an appreciation of tea, wine, paintings, poetry and music.

To keep the programme exclusive and ensure close networking, each group will have no more than 40 people.

People applying to attend the programme must be rising stars in their companies who are likely to helm Asia or China operations in a few years.

RACHEL CHANG

The integration of new citizens will be one of the centre's primary goals, said the federation's president Chua Thian Poh yesterday when announcing the plan of the umbrella association.

This will be done by showcasing Singapore's local multicultural identity through performances and exhibits.

The cultural centre will also be a central venue for new immigrant groups to interact with the established and longstanding clans in Singapore, he said.

The federation aims to have the centre up in five years' time.

Mr Chua announced the plan at a Chinese New Year event organised jointly by the SFCCA and Business China, a networking group for building links between Singapore and China.

The project follows an amendment to the federation's constitution about six months ago to let new immigrant groups join the federation.

Its recognition of the importance of the Government's foreign talent policy was praised by Prime Minister Lee Hsien Loong, who was the guest of honour at yesterday's event.

It has done its part to facilitate integration, Mr Lee said, through initiatives like organising tours for new citizens to the different clan buildings in Singapore.

Speaking in Mandarin, he said the Government is happy to help the federation's cultural centre plan become reality. With a laugh, he added a caveat: 'It's easy to talk about it, but we have a lot of work to do.'

The Straits Times understands that the Government will provide a substantial portion of the funding for the new centre.

Asked how it will differ from other Chinese cultural institutions in Singapore, like the Chinese Heritage Centre at Nanyang Technological University, clan leaders pointed to two elements.

The first is that other institutions have more of a scholarly or museum bent. The new centre will be 'dynamic' and focused on activities, said vice-chairman of the federation's research and publications committee Li Yeming.

The second is its focus on the integration of newcomers.

'At the moment, we don't have a special place for interaction between new and old clans,' said Mr Chua.

President of new immigrant group Tian Fu Association Tony Du welcomed the plan. He said the centre would provide 'a much bigger platform and more resources for us to network with older clans'.

In his speech, PM Lee also lauded clan associations for the focus on values and character in their schools.

'We hope that the younger generation recognises that as citizens, they have rights but also responsibilities and duties,' he said. 'In chasing their own goals, they must also think of the country and society's interests.'

'Chinese school students all know the Confucian saying 'Help yourself by helping others'.'

Why Singapore Has the Cleanest Government Money Can Buy: View - Bloomberg

2012-01-25T16:03:00.000+08:00

Singapore’s prime minister, Lee Hsien Loong, isn’t often taken publicly to task. But when you make S$3.1 million ($2.4 million) annually to run a country, people tend to expect results. When they don’t get them, the aggrieved masses turn to that lowest-of-common-denominator gripes: Hey, how much are we paying this guy?

Lots compared with, say, Barack Obama, who as U.S. president gets $400,000 a year. Lee’s compensation will fall 36 percent, and that of Singapore’s president will drop 51 percent, to S$1.54 million. The cuts were based on the recommendations of an advisory committee formed three weeks after last May’s elections, when opposition party candidates made hay with the pay issue -- and the ruling People’s Action Party won with the narrowest margin since independence in 1965.
Such still-fat paychecks may give pause. Yet let’s applaud Singapore for what it’s trying to achieve by paying top salaries to leaders and ministers: attracting the best and brightest to public service and reducing the temptation to engage in graft. Done properly, such initiatives can make government more efficient and economies more vibrant. Transparency International has ranked Singapore among the world’s top five least-corrupt governments since 2001, and according to Worldwide Governance Indicators, an index supported by the World Bank, it has also been among the best governed.
Asia’s Mixed Record
Since the 1997 Asian crisis, the region’s other governments have had a mixed record in holding public servants to account, making growth more efficient, and creating the institutions -- independent judiciaries, central banks and media as well as freer watchdog groups -- needed to clean up political and economic systems. One way for Asian countries, home to a big share of the world’s households living on $2 per day, to boost their economies is to increase the pay of their civil servants.
Take Cambodia, which ranked at the bottom of a recent regional Transparency International corruption survey. Its government workers pad their paltry, sporadic pay by demanding bribes for everything from birth certificates to school grades. One oft-cited International Monetary Fund working paper argues that paying civil servants twice the wages of manufacturing workers is associated with a reduction in corruption. In Cambodia, civil servants make less than half what a garment worker makes.
In China, corruption is the common link between state-owned banks doling out billions of dollars to cronies; land grabs by local government officials; and the negligence that killed 40 people in a high-speed rail crash last July. If Beijing paid higher salaries, it might reduce the incidence of graft and rent-seeking that aggravates the lopsidedness of China’s development. Its Gini (DFIGCN) coefficient, an income-distribution gauge, has climbed to almost 0.5 from less than 0.3 a quarter-century ago.
Japan should consider fattening public paychecks, too. Although Japan’s best and brightest are still drawn by the prestige of a government career, over the past two decades the differential between private and public salaries has grown. Ministerial slush funds help make up the difference, and in recent years, numerous scandals have arisen involving bureaucrats using such money for limousines, louche excursions, and golf-club memberships.
More fundamentally, Japan’s economic model encourages dangerous collusion between the public and private sectors. The root of the problem is “amakudari,” or “descent from heaven.” It’s the main gravy train for public servants; when they retire, ministers and bureaucrats get cushy jobs in industries they oversaw while in government. The incentive is to look out for your future employer, not taxpayers.
Japan’s Rotten Example
Japan’s nuclear crisis, for example, was made worse by power-industry regulators focused on their post-government careers, not Japan’s 126 million people. Pledges by Japan’s ruling Democratic Party of Japan to abolish amakudari have gone unfulfilled. But for the sake of its citizens’ welfare, Japan needs to end the practice, perhaps in return for better salaries and pensions.
Of course, throwing money at corruption won’t make it go away. If it did, countries such as Kenya, which pays its members of Parliament handsomely -- more than $13,000 a month -- would be paragons of virtue instead of cellar-dwellers in Transparency International’s annual Corruption Perceptions Index. Decent salaries are just one incentive that can tilt the cost-benefit analyses of potential bribe-takers toward probity: More important than reducing the potential financial benefits of corruption is increasing the probability of detection and meaningful punishment.
Singapore isn’t exactly a hotbed of anti-corruption muckraking. According to the 2010 U.S. State Department Human Rights Report, journalists in Singapore practice “self- censorship,” the level of public debate is “moderate,” and opposition parties face “formidable obstacles.” Yet the city- state does have an aggressive Corrupt Practices Investigation Bureau; professional courts; a ramrod political will inculcated by its first prime minister, Lee Kwan Yew (father of Lee Hsien Loong); and a ruthless, relentless emphasis on efficiency and results.
Not every country can follow that recipe, especially those with larger, more diverse populations. Still, countries like Cambodia can start by auditing its public services to get a sense of how bad corruption really is -- something that it will have to do in any case to comply with the United Nations Convention Against Corruption. Civil-society groups can help greatly in that process: We think the UN would be wise to let them take part in the process it has created to review a country’s anti-corruption efforts.
Japan could benefit greatly from an independent watchdog agency to investigate corruption; given its global influence, we also don’t understand why it is one of only 35 countries yet to ratify the UN convention. And even if the huge internal challenges of fighting corruption in China risk tampering with the prerogatives of Communist Party control, the government could crack down on the pervasive bribe-mongering of Chinese companies overseas, which presents a huge global challenge.
There’s an old saying in Asia that the real money is in government. Not the paychecks, but the kickbacks. Isn’t it possible that a bit more capitalism at the highest levels of public service will make capitalism itself more efficient and equitable? We think Singapore proves it can.
Read more opinion online from Bloomberg View.
To contact the Bloomberg View editorial board: view@bloomberg.net.

Jane, Lisbon scene - "You never went to high school?"

2012-01-24T12:29:00.001+08:00

Google plays both sides in piracy fight

2012-01-23T21:56:00.000+08:00

THE Internet's watershed political moment in the United States arrived last week. You can Google it. The role of Google itself, however, in the so-called Web blackout is more interesting than a quick Google search would indicate.
By Susan Crawford

First, some background. On Jan 18, to protest against a pair of anti-piracy Bills in Congress, Wikipedia posted a blackout page on its English-language site that was seen by more than 162 million people. Google, meanwhile, gathered seven million signatures against the Bills.

These tactics worked, at least temporarily: At the beginning of the great day of Internet wrath, there were 80 members of Congress who supported the legislation and 31 opponents. Afterwards, those numbers were 63 and 122.

Google's statesman-like chairman Eric Schmidt has led the rhetorical charge against the two Bills, the Stop Online Piracy Act (Sopa) in the House and the Protect IP Act (Pipa) in the Senate. In November last year, he called the Bills 'draconian' and said that requiring Internet service providers to remove the URLs of suspected pirates from the Web amounted to 'censorship'.

On Jan 18, however, Google didn't disappear. Students with term papers to write may have had a tough time without Wikipedia, but all of us could get a blizzard of results from the familiar search giant. If actions speak louder than words, then what was the meaning of Google's inaction?

Janus-like, Google has two faces: It is both a technology company - providing a way to navigate to the glories and confusion of the Web - and a media company - producing content and making choices about what consumers will find useful. Those choices are based on extensive experience with consumers' use of search results.

Google-as-search-engine relies on user-generated content to thrive. As an intermediary, Google doesn't want to be conscripted as an automatic enforcer of other people's copyrights. Thus Google's objections to the piracy Bills, which give broad immunity from liability to service providers that block other sites 'dedicated to infringement'. This legislation would encourage them to remove links on the mere suspicion of illegal activity. As Mr Schmidt's remarks indicate, search censorship sets a dangerous precedent at a time when repressive regimes around the world target search engines to limit what their citizens can know. Google- as-search-engine has plenty of good reasons to oppose Sopa and Pipa.

But Google-as-speaker has enormous power to shape the boundaries of knowledge. This month, Google visibly flexed these muscles when it introduced 'Search, Plus Your World', which presents search results to users of Google+ that include materials coming from people within the users' 'circles'. Twitter results weren't included, and Twitter's general counsel, Mr Alex Macgillivray, himself a former Google employee, said that the introduction of this product marked a 'bad day for the Internet' because Google's search engine had been 'warped'. If Google had turned black on Jan 18, its power would have become obvious to millions more people. Left without Google, and if ignorant about alternatives, consumers would have been up in arms. Result: backlash.

Here's a thought experiment: A few decades ago, how would Americans have felt if one of the three major broadcast networks devoted an entire day of programming to a particular political advocacy campaign? Given the dominance of the few media outlets of the time, the initial shock of seeing a broadcaster display a political point of view would probably have been followed by anger - and a push for greater regulation of all of the networks.

Google obviously didn't want to trigger that kind of fear and knee-jerk political response. Nor did Google, as a public company, want to lose revenue by closing down. (Wikipedia, by contrast, is a volunteer enterprise.) So it stayed on safer ground, tinkering with its logo - it was blacked out for the day, as if redacted from a classified document - rather than 'disappearing' its search results.

Google-as-publisher, after all, has content concerns of its own. What Google did was more akin to a network running a public service announcement to present its views without pre-empting anyone's favourite soap opera.

Last week, we met a new Google: Google-as-political-influencer. How you feel about Google's role will depend on your categorisation of the company. To irascible mogul and novice tweeter Rupert Murdoch, Google is a pirate: 'Piracy leader is Google who streams movies free, sells advts around them. No wonder pouring millions into lobbying.' As a media company, Google would say it was adhering to its principles by putting users first and being transparent: It didn't make it difficult for users to get work done, and the company made clear where the Google 'editorial' began and ended.

Making an editorial comment openly is arguably an upgrade from the way media companies have historically sought to influence politics. An old-media company might have played backroom politics by threatening to run programming critical of a candidate.

Google isn't perfect. But we should root for its attempt to balance its search engine job with its media role, and encourage every company - on the tech side, the content side, or in between - to make clear what it's up to when it engages in politics.

BLOOMBERG

The writer is a visiting professor at the Harvard Kennedy School of GoverBarack Obama for science, technology and innovation policy. nment and Harvard Law School. In 2009, she was a special assistant to President

Moving up in life

2012-01-21T19:13:00.000+08:00

SOCIAL mobility is the bugbear that will not go away. With the gap between the rich and poor widening, Singapore has been grappling with the issue of whether children from poor families can move up. And until a week ago, there has been no comprehensive study across generations on whether the rich tend to stay rich, and the poor remain poor.

By Cai Haoxiang

RELATED LINKS

Source: MINISTRY OF FINANCE -- ST GRAPHICS TEXT: CAI HAOXIANG
Last Thursday, the Ministry of Finance (MOF) released the results of a study that tracked the extent to which children's incomes and education are linked to that of their fathers.

The study comes after Prime Minister Lee Hsien Loong's warning last October that 'our society is stratifying'.

In his speech at the opening of the 12th Parliament, he had said: 'The children of successful people are doing better, the children of less successful people are doing less well.'

The MOF study tracked income mobility for males born between 1969 and 1978. Its study found that this cohort has enjoyed plenty of opportunities to move up in life.

The son of a father in the bottom 20 per cent of income earners, for example, has a two-thirds chance of breaking out of that income group, the study shows.

And he has a 10 per cent chance of rising all the way to the top 20 per cent of income earners here.

The children of a primary-educated father are also likely to leapfrog his low educational background by at least two rungs, rising on average to an A-level or ITE certificate. Almost half - or 45 per cent - will make it to a diploma or university education.

That compares to 56 per cent of the entire cohort who attained a diploma or university degree.

Just how mobile?

ACADEMICS welcomed the study and described it as robust, given the quality of MOF's data, the large sample size and rigorous methods used in the analysis.

Assistant Professor Irene Ng of the National University of Singapore (NUS) social work department said that equality or inequality across different generations can now be tracked using 'good data' in a 'fair' way.

Dr Ng was the academic involved in two recent studies on income mobility, which, until the MOF's study, were the only Singapore literature on the matter.

She had used data from a national survey of youths aged 15 to 29, but the data had various constraints compared to that used in the MOF study.

'As academics, my co-authors and I did not have access to large-scale data from the Department of Statistics,' she tells Insight.

Her sample size was small: 271 parent- child pairs.

The MOF's study by contrast had a sample size that was almost 150 times bigger: 39,500 father-son pairs who are Singaporeans or permanent residents.

Moreover, in the survey that Dr Ng based her study on, parents' incomes were not directly measured but depended on what the youths thought their parents earned, which could have led to errors.

By contrast, the MOF study was based on DOS data and could measure incomes with 'high precision', the paper's author Yip Chun Seng wrote.

Dr Yip, who is MOF's principal economist on fiscal policy, also noted that he had a larger sample size to work with. He was thus able to overcome the challenges faced in the previous studies.

Asked why the study was commissioned, Dr Yip tells Insight via e-mail that it was 'quite natural' for policymakers to want a better understanding of the issue.

In the paper, he wrote that high mobility is seen as desirable because it means that society offers similar chances of achieving economic success regardless of one's background.

Low mobility, on the other hand, would present a case for 'active government intervention to 'level the playing field'', he wrote.

Using the better-quality data at his disposal, Dr Yip found a higher level of income mobility than the estimate Dr Ng arrived at in her previous studies.

The measure of mobility he found was 0.22 to 0.3. That figure is called the correlation coefficient - a statistical measure of how the father's income is related to the eldest son's.

A higher figure implies lower mobility because the son's income is more closely tied to his father's.

Considering sons, rather than children of both sexes, is standard practice in such income mobility studies because life events like marriage and childbirth affect daughters' employment and thus complicate income measurements.

The MOF's figure of 0.22 to 0.3 indicates moderate to high income mobility, compared to Dr Ng's previous conclusion of lower mobility at 0.44, after adjusting for data limitations.

Figures of 0.18 for Finland, 0.19 for Canada and 0.27 for Sweden - indicating high mobility - had been estimated in a 2006 study by University of Ottawa economist Miles Corak for cohorts born between the 1940s and 1960s.

Professor Corak has also estimated a figure of 0.47 for the US and 0.50 for the UK - indicating low mobility.

But Dr Ng believes that the true level of income mobility in Singapore lies somewhere between her estimate of 0.44 and the MOF's top estimate of 0.3.

She points to two limitations of the MOF study, which were also acknowledged by Dr Yip in his paper.

Firstly, the fathers measured in the study are too old, averaging more than 50 years of age.

That could introduce some biases where only those who stayed in employment had their data recorded.

The ideal period to measure income is in the late 30s to early 40s, the same period the sons were measured, she says.

Secondly, data from fathers' incomes was tracked only over a five-year period.

But the data shows that sons' incomes are more tightly linked to their fathers' when a longer period of measurement is used, like up to 10 years in some studies.

The MOF also stated in its report that the moderately high level of mobility for the cohort it studied might not apply to future generations.

'If the limitations were adjusted for, we could get a lower indicator of mobility,' says Dr Ng.

NUS sociologist Tan Ern Ser says he was 'quite impressed' with the analysis, and that he was not surprised that there is still upward social mobility.

'But the argument is whether it is slowing down, and whether we are doing worse than other developed countries,' he says.

Class background does influence the probability of upward mobility, he notes, pointing to a finding of the study that sons of poor fathers are likely to remain poor.

The study found that the mobility measure for those at the bottom 10 per cent was up to 0.36, compared to 0.3 for those in the middle.

But Dr Yip tells Insight that the figure of 0.36 is 'not too much higher' than the average of 0.3, and low compared to an equivalent figure of 0.67 in the US for the poorest 10 per cent.

NUS sociologist Vincent Chua, meanwhile, says that the reference point 'should not be the United States, but the other class groups within Singapore itself'.

Dr Chua is of the view that 'channelling resources downwards to disadvantaged groups will help a great deal to achieve a more inclusive society'.

What next?

MORE can and likely needs to be done to keep tabs on mobility.

Dr Ng has various proposals, including tracking the impact of government policies in education and immigration on social mobility.

'You can look at different points in time when policies change, for cohorts that experienced policy changes, to see if the numbers change,' she says.

One example is the streaming policy introduced in the 1980s and the through-train programme introduced in 2004 that allows bright students to skip the O-level examinations.

That is because studies in other countries have shown that different education tracks lead to different wages, she says.

Prof Tan adds that measures on wealth and occupation can also be added to future studies.

'I think wealth - broadly speaking, the five Cs and assets like stocks, cash, properties and cars - is a much better measure of class than income,' he says.

He also suggests having data on how long it takes for the son to acquire a four-room flat and a mid-sized car as compared to his father, because they are 'the key indicators of being in the middle class'.

Asked about these suggestions, Dr Yip points out that income and educational attainment are widely-used yardsticks because they are easier to measure accurately. 'On the other hand, the obstacle to measuring wealth, occupation and others is usually data. Given that meaningful measures are harder to obtain on the latter, less is known about them,' he says via e-mail.

It will be some years before another such large-scale study is done to estimate income and educational mobility.

Dr Yip says that mobility estimates like those in his paper 'tend to be fairly stable, so there is not that much value in doing this every year'. 'The main interest is probably on younger cohorts, and we would need to wait some years to study them. This is because ages below 30 are generally regarded as too early to measure income mobility.'

The next age group up for study is likely to be those born in the 1980s. They would at most be in their early 30s today.

That suggests a wait of perhaps 10 years before the next government study of this scale. In the meantime, academics and others interested in mobility have much new data to dive into.

haoxiang@sph.com.sg

New year dilemma for China's only-child generation

2012-01-21T19:09:00.000+08:00

BEIJING: For one particular group of Chinese - young urban married couples who grew up as only children - the yearly ritual of going home for Chinese New Year can also mean tough decisions and sometimes-painful arguments.

These young couples are part of the generation of only children born during the 34 years of China's 'one-child policy'. Following the typical pattern, they migrated to the larger cities from the outlying provinces to go to university. They stayed for work, then got married.

And now they must decide which set of parents to go visit. It's a decision fraught with emotion.

'Both of us want to go back to our home to celebrate Chinese New Year,' said Ms Lin Youlan, 30, a government worker who married her husband, Mr Li Haibin, 33, four years ago. 'We always fight about this problem.'

She is from Chongqing in south-west China, and he is from Shangdong, on China's east coast. They live in Beijing, and they are both only children.

Mr Li said as the only son, he is under intense family pressure to visit his parents, who are not in good health.

'In Shandong province, men must celebrate the Spring Festival with their own families. And the wives should spend Chinese New Year at their husbands' homes,' he said. 'I worry how others will look at my parents if I don't go back home every year.'

In ancient times, Chinese New Year's Eve and the first day of the New Year - which this year fall on Jan 22 and Jan 23 - were spent at the home of the husband's parents, and the second day was spent with the parents of the wife. But that was in a time when couples largely married from the same village or town, or a relatively short distance away.

Now China's 1.3 billion people are mobile and rapidly urbanising. The government announced on Tuesday that the country's urban population had surpassed those living in rural areas, compared with just a quarter of the population living in cities in 1990.

That shift, coupled with the one-child policy and other societal changes, has left tens of millions of elderly people living alone, often with little in the way of government aid. China also has few nursing homes, and no tradition of professional caretakers to look after the elderly when they become infirm.

China now has 178 million people over the age of 60, according to government census figures. Mr Li Liguo, the minister of social affairs, said that number will jump to 216 million, or 16.7 per cent of the population, by 2015. At that time, Mr Li said, there will be 51 million 'empty nester' old people over 65 and living alone.

But while the older population is growing, China's current birthrate of about 1.54 children per woman is considered far below the normal replacement rate, which is two children per woman. (The rate in the United States, by comparison, is 2.06).

The problem comes vividly into focus now, with the annual Chinese New Year trek home - a time of year when, psychologists say, many 'empty nest' parents grow lonely and depressed.

WASHINGTON POST

AGC: Robust reviews before discretion is exercised

2012-01-21T19:00:00.000+08:00

THE Attorney-General's Chambers (AGC) yesterday sought to reassure the public that its decisions to charge offenders involved in the same crime differently are done only after thorough reviews by many levels of officers.

By K. C. Vijayan, Law Correspondent

There are internal guidelines that guide its officers and ultimately the finding of guilt or innocence is determined by the courts and not the AGC, it said in a statement.

The reassurance comes in the wake of a recent case that sparked debate on the issue of prosecutorial discretion.

BACKGROUND STORY

Case that sparked the debate

RAMALINGAM Ravinthran and his accomplice Sundar Arujunan seemed destined to face the hangman, after they were arrested in 2006 for trafficking in cannabis.

Sundar, however, escaped the gallows when he was charged with trafficking in a shade less than the quantity that draws the mandatory death penalty.

This, after the Attorney-General exercised its prosecutorial discretion and reduced the amount of drugs specified in the charges against him.

But when Ramalingam was dealt with later, the quantities of drugs in the charges against him still meant the death penalty.

Sundar pleaded guilty to the lesser charges and was sentenced to 20 years' jail and 24 strokes of the cane.

Ramalingam, however, was convicted and put on death row.

After he had exhausted his avenues of appeal in September 2010, he filed a motion in an attempt to reopen his case.

Central to his application was that even though he and Sundar were involved in the same crime, he was prosecuted for capital offences whereas Sundar was accused of non-capital offences.

Ramalingam wanted his charges amended so there would be no difference in their punishment.

Last week, the Court of Appeal dismissed his motion in a 48-page written judgment delivered by Chief Justice Chan Sek Keong.

CJ Chan in his judgment, said it is not unlawful or unconstitutional, for the Attorney-General to artificially reduce the amount of drugs specified in a trafficker's charges, to differentiate from those of his accomplice.

Prosecutorial discretion refers to the powers of the Attorney-General to decide what charges to prefer against an accused person. It is a power that cannot be challenged except under exceptional circumstances such as when the Attorney-General has used it unfairly. The Attorney-General cannot be compelled to explain his use of discretion in deciding what offences to proceed with.

K. C. VIJAYAN

Last week, the Court of Appeal ruled that it is neither unlawful nor unconstitutional for the Attorney-General to artificially reduce the amount of drugs in a trafficker's charges, to differentiate them from those of his accomplice.

But the court, in a written judgment by Chief Justice Chan Sek Keong, stressed that the Attorney-General's decision to prosecute can be called into question if he acted unfairly in the use of his discretion.

In the case, Ramalingam Ravinthran was sentenced to death for trafficking in cannabis, while his accomplice was jailed for 20 years and given 24 strokes of the cane.

Ramalingam had filed a motion to question if the Attorney-General had deprived him of his right to fair treatment and sought to have his charges amended.

Several lawyers, academics and human rights group Maruah had commented on the case, asking the AGC to be more transparent in its decisions to prosecute.

In its statement yesterday, the AGC explained why it might not be appropriate to do so for many reasons, from constitutional right to efficiency and public interest.

It began by noting that prosecutorial discretion is provided for in the Constitution and is a responsibility undertaken with full recognition of its impact on society.

'The public should be assured that each decision is made carefully, with full consideration of the facts and due regard to what is required in the public interest.'

The AGC explained that in everyday matters, prosecutorial discretion is exercised by officers working under the close supervision of the Chief Prosecutors of the various crime divisions. In turn, they are supervised by the Solicitors-General and the Attorney-General.

The decision to charge a person is taken by at least two officers with at least one separate higher level of review in all cases.

'In many cases, including capital cases, there are multiple levels of review including personal review by the Attorney-General.'

Among other things, the officers look at the evidence, the facts as they relate to the law, the investigations done and the public interest in charging the accused person.

Cases in which two offenders may have been caught in apparently similar circumstances but are charged differently could be due to a wide range of factors.

These include the strength of evidence, the cooperation shown by the accused and mitigating circumstances such as mental or physical weakness, which might call for a compassionate approach.

Internal guidelines exist to ensure consistency. But these guidelines are not published and the Attorney-General does not generally explain his prosecutorial decisions because in arriving at the decisions, he and his officers 'consider a large number of often competing interests, including those of the victim, the accused person and society as a whole'.

Also, with the inevitable resource constraints, the AGC has to prioritise and it takes into account enforcement priorities, among other things.

By not publishing the guidelines, the Attorney-General is also able to be flexible when it needs to depart from them. This is critical because each case can then be scrutinised on its own merits 'at a nuanced level, which is the cornerstone of prosecutorial discretion', said the AGC.

Revealing the guidelines would also show which areas the prosecution is focused on and may incentivise offenders to commit crimes where they expect lesser charges.

Demand for reasons behind every decision would also delay proceedings and lead to frequent challenges by people unhappy with specific decisions, said the AGC.

It also noted that in the United States, the Supreme Court too has been reluctant to examine the basis of a prosecution as this is a function of the executive branch of the government.

This is also the case here, as provided for in the Constitution. Any shift would impair the Attorney-General's ability to prosecute.

Noted the AGC: 'While the Attorney-General determines who is charged and what charge is preferred, the determination of guilt or innocence, and consequently, punishment, is solely within the province of the court after it has considered the evidence and heard full arguments.'

It added that the Attorney-General's powers were open to judicial review and correction if it is shown they were exercised wrongly or in an arbitrary manner.

'There are clear remedies in cases where prosecutorial discretion has been exercised unlawfully or contrary to the Constitution.'

Separately, the Association of Criminal Lawyers of Singapore said yesterday that recent calls for more transparency in the Attorney-General's decisions were 'misplaced'.

'There must be an element of trust and faith that the Attorney-General will carry out his duty in good faith. Without such trust and faith the legal system will not work effectively.'

vijayan@sph.com.sg

Model of governance: Big govt or big people?

2012-01-19T12:45:00.000+08:00

SMALL government, the opposite of big government, is aimed at reducing the role of the state in the economy. In taking a laissez-faire approach towards regulating the private sector, it is argued that small government lowers costs and promotes efficiency by allowing the market to determine prices and economic outcomes. Former British prime minister Margaret Thatcher was a champion of small government.

By Peter Ho

But small government has not been seen as an unqualified success. Critics have cited increased costs of public services, unemployment and a widening wealth gap as some of the unintended consequences of small government.

After the 2008 global financial crisis that many blamed on unfettered greed and dysfunction in the private sector, we see evidence that the tide of public opinion is turning against small government. So the jury is out and the debate will continue.

Government in Singapore

WHAT sort of government do we have in Singapore? Is it small government - or is it big government?

Depending on who one asks, different commentators will offer different views on the 'size' and influence of Singapore's Government.

Some analysts see our Government as exercising 'big' or substantial influence across a broad spectrum of areas. But on other measures, Singapore's Government is not particularly big.

One of these dimensions is the size of government spending, which at 17 per cent of gross domestic product is one of the lowest in the world. In the United States, such expenditure totalled 38.9 per cent of GDP. In Australia, it was 34.3 per cent, and in New Zealand, 41.1 per cent.

The paradox of government

THERE is a paradox of government that I discovered after many years in the public service. The law of diminishing returns applies to government as much as it does to economics. The marginal return on government policies diminishes over time, even as the effort to implement policy stays constant or even increases.

I surmise that there are a couple of reasons for this. The first reason is that as government policies lead to improvements, the needs of the people change. This is explained by Abraham Maslow's Hierarchy of Needs - a theory in psychology advanced more than half a century ago. Maslow's proposition was that after the basic physiological needs of a person are met, more complex psychological needs will have to be fulfilled. At the top of this hierarchy of needs is the need for self-actualisation, which is to realise the individual's potential.

So if you accept this proposition, then after the government has delivered on the basic needs of food, security, shelter, transport and health, expectations of the people are going to change, not in demanding more of the basic needs, but in fulfilling their more psychic needs in the upper reaches of Maslow's hierarchy, including social, emotional and self-actualisation needs.

The second reason is what I would term the 'third generation effect'. Singapore is now 46 years old, and into the third generation of Singaporeans. The first generation of Singaporeans lived through the turbulence and uncertainties of Merger and Separation. The next generation started life on a firmer footing, but at the same time imbibed from their parents a sense of the vulnerabilities. But the third generation of Singaporeans have known only the affluence and success of Singapore. For them, the uncertainties of the 60s and 70s are abstractions from their school history books. When their grandparents speak of the turmoil and danger that they experienced, they shrug their shoulders because it is an experience outside theirs.

The changing role of government

THESE and other reasons will change and transform the role of government.

In the beginning, the Government was characterised by strong regulation - big government if you will - seeking compliance with policy rules, and maintaining as efficient a system as possible.

But today, citizens and businesses alike have far higher expectations of the Government than before. Access to information has increased dramatically in scope and speed as a result of the Internet revolution. Social networking platforms like blogs, Facebook, YouTube and Twitter have empowered citizens to express their views. Virtual communities are beginning to shape the debate and context of public policy issues.

What is the appropriate model of governance for Singapore going forward? The question is not simply whether the people have a sufficient input in government policy. It is also how much we should rely on the market to decide on policy outcomes and public deliverables.

Big markets

ONE limit on the size of our Government has been our belief that free market forces should determine prices and economic outcomes. This is the approach advocated for small government.

But our faith in the market has not been uncritical or absolute. We have not been ideological about small government.

Economist Dani Rodrik outlined a framework that can usefully be applied to how Singapore has chosen to blend the work of markets and the Government:

First, the Government has sought to enable markets. This includes ensuring rule of law, property rights, and public infrastructure - functions that most governments perform. In Singapore, enabling markets has also included industrial policy and capability development, subjects of some controversy in policy circles around the world, especially among proponents of small government that believe in the laissez-faire approach.

Second, the Government has sought to regulate markets. This includes supervision of the financial sector, competition regulation, and taxation of negative externalities. But a key feature of Singapore's approach has been the shift towards lighter regulation accompanied by risk-based supervision.

Third, the Government has sought to stabilise markets. This is the bread- and-butter of macroeconomic management. Singapore's basic approach in monetary and fiscal policy is not far different from global practices. But its efforts to address asset price inflation and credit crises are interesting examples of targeted interventions that harness market forces.

Fourth, the Government has sought to legitimise markets. Globalisation, free trade and open markets lead to significant dislocations. Some of the sharpest debates over the role of governments centre on this: To what extent should governments facilitate adjustments, redistribute incomes or provide social safety nets, so as to maintain public support for market-oriented policies?

Engaging big society

COMPLEMENTING government and markets, we will also need a strong society - one that is robust and resilient - to tackle the great challenges of the 21st century.

These challenges will increasingly be 'wicked problems' - characterised by multi-dimensionality and growing complexity. Their causes and contributing factors will not be easily identified ex ante. Today, the Government faces an increasing number of complex public policy issues in which the trade-offs are much more difficult to make, because each could lead to unintended consequences and risks. Many of these public policy issues exceed the capacity of the Government working alone. Instead, they require the active contribution of the private and people sectors.

This approach has been most evident in the economic arena. A succession of four economic reviews - in 1986, 1998, 2003 and 2008 - saw the public and private sectors coming together to produce far-reaching policy recommendations for Singapore's long-term economic competitiveness.

The coming years will see a growing need for governance - which requires collaboration across the public, private and people sectors - rather than the Government acting as the sole, or even dominant, player.

A key part of this governance process will be growing mutual engagement between the public and people sectors. In his 2011 National Day Rally speech, Prime Minister Lee Hsien Loong underscored the importance of such engagement, pointing out that the nation needs to 'harness diverse views and ideas, put aside personal interest and forge common goals'.

There are four broad areas where engagement will be important:

Public information

IN SOME cases, engagement will involve the Government informing the public: Providing objective information clearly and succinctly, that helps the public understand the context, alternatives and choices involved in an issue. Traditional channels for this include fact sheets, websites, open houses and press releases. It calls for good communication skills, such as sharing concise, specific and relevant information in a timely manner.

Public consultation

A SECOND form of engagement is public consultation, which involves gathering ideas and feedback from the public on analyses or proposals by the Government, so that the public's perspectives, concerns and aspirations can be taken into consideration.

An example of this was the Ministry of Health's (MOH's) work on means testing in health care. In a series of dialogues, MOH officers distilled and used the learning from each session to refine the policy, then tested the new ideas out at the next meeting. Dialogues to seek citizens' views on the pegging of subsidy rates were reported in the media. As more people understood the rationale for change, support for it grew.

Consensus-building

A THIRD form of engagement is to partner the public in framing issues, developing alternatives and building consensus on preferred solutions.

An example of such consensus-building is the Land Transport Authority's (LTA's) efforts to work with communities. In some private estates, for instance, the LTA worked with grassroots leaders to facilitate a dialogue so residents could voice their concerns. Together, they agreed on a traffic scheme to optimise roadside parking spaces in the estate. Residents then helped to enforce the scheme by reporting infringements.

More of such conversations will need to be extended into the public space to deepen collective understanding, and build society's capacity to deliberate issues rationally in a safe environment.

Co-creation

IN SOME instances, a fourth form of engagement can involve community co-creation of policies. This can engender greater ownership of outcomes and increase overall public value beyond what any single sector can achieve on its own.

The 'Community in Bloom' programme, initiated by the National Parks Board and People's Association to foster a love for gardening and promote community bonding, is an example of such collaboration between the Government and people.

The future of big society

I HAVE deliberately spent some time on how society can evolve, and how government can play a part in that. This has not been an area where Singapore has had extensive experience. It will be a shift from 'Government to you' and 'Government for you', to 'Government with you'. The imperative is for the Government to move towards a collaborative approach to policymaking, and be prepared to co-create and connect with the people.

The writer is senior adviser to the Centre for Strategic Futures, Prime Minister's Office.

Building booms, economic busts: Watch China and India

2012-01-12T19:15:00.001+08:00

LONDON: The construction of enormous skyscrapers often precedes a financial crash in the country, and investors should, therefore, keep a close eye on China and India, a study has found.

Barclays Capital yesterday warned of an 'unhealthy' link between towering edifices and financial woes, in its latest annual Skyscraper Index survey.

It noted that China is currently the biggest builder of skyscrapers, while booming India is constructing the second largest tower in the world.

'Often the world's tallest buildings are simply the edifice of a broader skyscraper building boom, reflecting a widespread misallocation of capital and an impending economic correction,' it said.

According to the Skyscraper Index, construction of the world's tallest buildings has been linked to impending financial crises over the last 140 years.

For example, the Great Depression hit as the finishing touches were being put on the Empire State Building in New York in 1931, while the Asian financial crisis hit as Kuala Lumpur's Petronas Towers were finished in 1997.

Dubai's Burj Khalifa, completed in 2010, is now the world's tallest building at 828m. As it was being built, Dubai nearly went bust and the world slid into the Great Recession.

'Building booms are a sign of excess credit,' said Mr Andrew Lawrence, director of property research and lead author of the report.

Historically, he noted, skyscraper construction has been characterised by bursts of sporadic but intense activity that coincide with easy credit, rising land prices and excessive optimism. But often, by the time the skyscrapers are finished, the economy would have slipped into recession.

The Barclays Capital report described China as the world's 'biggest bubble builder'. More than half - 53 per cent - of the 124 skyscrapers being built globally are in the Asian giant, which is primed to increase its stock of skyscrapers by a 'staggering' 87 per cent.

Said the report: 'China's skyscrapers are not only increasing in number - it now has 75 completed skyscrapers above 240m in height - but the average height of the skyscrapers that it is building is also increasing as past liquidity fuels the construction boom.'

Mr Lawrence noted that China's property market is already wobbling, with residential property sales dropping in Beijing and Shanghai.

India, too, is 'playing catch-up', the report added.

'Today India has only two of the world's 276 skyscrapers over 240m in height, yet over the next five years it intends to complete 14 new skyscrapers, in what will prove to be its largest skyscraper building boom.

'Worryingly as well, India is also constructing the second tallest building in the world, the Tower of India, which should (be completed) by 2016.'

Meanwhile, the country's non-performing loans - a substantial number of them to real estate ventures - grew by nearly a third in the first half of this fiscal year, far more than it has been growing in the past five years.

'If history proves to be right, this building boom in India and China could simply be a reflection of a misallocation of capital, which may result in an economic correction... in the next five years,' the report said.

AGENCE FRANCE-PRESSE, ASSOCIATED PRESS

Clean wage versus pay with perks

2012-01-10T15:23:00.001+08:00

THERE is no doubt that the issue of ministerial pay is an emotional one, but in the midst of heated debate, it is still useful to reason with cool heads.
By Calvin Cheng

First, not enough attention has been paid to the principle of 'clean wage'. This principle is not only at the heart of the report by the committee to review political salaries, but it is also the premise on which the entire system of ministerial wages is based - from the beginning, when Mr Lee Kuan Yew implemented it, right up till now.

The wage that office-holders in Singapore get is the totality of the remuneration they receive - there are no hidden perks like hospitalisation benefits, housing benefits and tax exemptions. With the exception of the president, the prime minister and the speaker of Parliament, no office-holder or MP is given a car for personal use. And even then, the use of the car is a taxable benefit rather than a perk. This is exceptional compared with in most countries, especially at the ministerial level.

This point cannot be emphasised enough. Much has been said online, in the local press and in the international press about our leaders being the best-paid. The benchmark for this is the salary, specifically the cash component of an office-holder's income. This is not a fair comparison. The most quoted example one sees repeated ad nauseam is the United States president's salary of US$400,000 (S$520,000). But this does not take into account all his other benefits, which include free accommodation in the White House, use of its army of servants and staff, official transport and a whole range of other perks and non-cash benefits.

It is also interesting to note that the reported salary of the president of China is US$11,000. Without being facetious, one wonders how such a salary could possibly allow him respectable accommodation of any sort, even if he were just to rent a home in Beijing. It was also the 'benefits' part of remuneration that led to the scandal involving expense claims, specifically housing claims, of British MPs.

The strength of our clean-wage system is also its weakness. The transparency of this system allows us to know exactly how much our political office-holders get. But the difficulty is that we alone implement this system. When nobody else in the world has a clean-wage system, and all comparisons are made purely on cash income, then our leaders will always look like the highest-paid.

The crucial question then is whether it is foolhardy for the Singapore Government to stand alone in a world where nobody else offers a clean-wage system. As an emotive issue, and with continual unfair comparisons being made purely on cash income, a good system has become a public-relations disaster. No amount of explanation will defuse the issue when the stark contrast keeps getting emphasised in salary league tables. The Singaporean voter could, in the end, be no different from and no less human than any voter or citizen anywhere else in the world, and a remuneration system with perks and benefits could prove more politically palatable than a clean-wage system.

Second, to poll the man in the street about what he thinks of a million-dollar salary is pointless. The problem is one of perspective, and the perspective of top income earners anywhere in the world is something no man in the street can empathise with - whatever method one uses to arrive at the pay is irrelevant once that number is large enough.

To the average man, a pay cut of a third from $1.5 million to $1 million still leaves an unfathomable sum. But the $500,000 difference could lead to a real impact on one's standard of living as it could mean the difference of meeting that mortgage payment on one's house.

We cannot possibly expect our office- holders to sell their houses and downgrade to take up their appointments. By the time some of these potential office- holders reach their 40s, they would have settled into a certain lifestyle that requires a certain income to upkeep. To expect these people to sell their houses, their cars, or forgo their children's education overseas is just an idealism that bears no relation to reality.

In the end, we will end up only like other countries, where only people who are financially independent and secure will enter politics seriously.

Third, while we appreciate and value the ethos of public service, it is unwise to overplay it. The generation of Mr Lee and Dr Goh Keng Swee were born in a time of chaos, revolution and change in a post-colonial world. Even then, it was pure luck that we got these people rather than the rapacious leaders who impoverished many countries that became independent at the same time as Singapore.

We could thus pay low wages and hope that some able, altruistic men and women would step forward, or create a system that increases the chances that we will still get able leaders, altruistic or not.

At the end of the day, we are looking not only for servants but also leaders with specific skill sets to govern our country, manage our economy and make policies that would affect our country's future. Beyond a calling, there is thus also a job to be done, and to get people with the right technocratic skills to get this job done well, there is no shame in paying for it. We must not confuse political governance with charity work.

Finally, in the heated and emotional debate over ministerial salary, it is disappointing to see the often rude and offensive criticism of Senior Minister of State Grace Fu on the Internet in response to her honest reaction to the ministerial wage cuts.

Respect may have to be earned, but surely civility does not.

The writer is a former Nominated MP.

Incredible how dirty India is!

2012-01-09T11:53:00.000+08:00

ITALIAN Elsa Boccalene is drawn to India's monuments, palaces and wildlife reserves, but there is something she misses dearly - a clean toilet.
By Nirmala Ganapathy, India Correspondent

'India is incredible - chaotic, beautiful and spiritual,' said the 30-year-old software engineer as she bought postcards in a Delhi shop to send to friends and family back home. 'But it is also dirty. Toilets are a problem.'

Her sister Maria, 35, an architect, agreed. She said: 'India is an incredible country but you need to prepare yourself (for the lack of cleanliness).'

BACKGROUND STORY

BEAUTIFUL BUT DIRTY

'India is incredible - chaotic, beautiful and spiritual. But it is also dirty. Toilets are a problem.'

Italian Elsa Boccalene

Such complaints from foreign tourists like Elsa and Maria have moved India's Tourism Ministry - which is behind the successful 'Incredible India' publicity campaign - to launch a new campaign, Clean India.

Tourism has been growing in the country. The number of foreign visitors rose 24 per cent and domestic tourism grew 11 per cent in 2010 over the previous year.

In 2010, 5.6 million foreigners visited, a modest figure compared with 56 million in China. In 2009, 5.2 million tourists came to the land of the Taj Mahal.

But the ministry wants to boost these numbers to at least six to 10 million every year - and believes that improved hygiene can help.

'A lack of... environmental cleanliness has a pull-down impact on India's image. The worst-hit is tourism,' said Tourism Minister Subodh Kant Sahay at a recent workshop.

His ministry hopes to turn things around in the next five years at tourist sites, railway platforms, beaches and other areas frequented by tourists, with the help of the state governments, Railway Ministry and private sector.

Plans to be rolled out over that period include an awareness campaign headed by celebrities like southern star Chiranjeevi, advertisements and tie-ups with private partners to clean and maintain attractions. The tourism ministry aims to get large corporate houses to look after heritage sites, building up basic amenities such as public toilets.

By April 1, the ministry, which is still working out the finances for the campaign, will start to mop up the dirty spots in and around top tourist spots.

'This is the first time the ministry has taken such an initiative,' said Indian Association of Tour Operators president Subhash Goyal, who is involved in the campaign.

'There are a lot of ideas but the unique thing is that it is a public-private partnership.'

Mr Robinder Sachdev, founder of the Imagindia Institute, a non-governmental organisation, has been organising cleaning drives, in which people simply take brooms and clean up chosen spots.

'This is something the country totally needs,' he said.

But not everyone is convinced that the tourism ministry can pull off such an ambitious campaign, which basically banks on changing mindsets. For instance, fines for littering in India are as little as 100 rupees (S$2.50) but are rarely enforced.

'It's a great country with a lot of potential but you get off the plane in Mumbai and you see Dharavi, the biggest slum in the country. You go to Agra and you see filth on the road when approaching the Taj Mahal. In many places, there are no washrooms. These are constraints that have to be addressed if you want five to 10 million tourists coming into the country,' said Mr Rajinder Rai, an advisory board member of the Travel Agents Association of India.

He added: 'I essentially think that cleanliness is the single most important issue for India, not just for tourism but economically as well. The idea is good but I don't see how it can actually get enacted or how they will enforce it.'

Roads with potholes, garbage piled up on roadsides and litter on railway tracks are not uncommon sights in India, a country where infrastructure is bursting at the seams to accommodate 1.2 billion people.

Varanasi, called the city of temples, is among the top five tourist destinations in India on any list. But the breathtaking and holy city is equally known for its poor hygiene and sanitation.

Garbage piles up at street corners, roads leading in and out of temples and shops are full of muck, and plastic wrappers and bottles float along the sides of the ghats (platforms for bathing) next to the Ganges River, which flows through the city also known as Benares.

Ms Sunali, a Canadian citizen of Indian descent who is in education training, was warned many times by friends about the lack of cleanliness in Varanasi. So she was prepared for the worst.

'It was bad even outside the main temple,' the 40-year-old said. 'There could be better management. I don't expect this in a city like this.'

But she admitted that she still found the city breathtaking.

A 2009 survey in five tourist areas, including the hill cities of Kullu and Manali, world heritage site Kaziranga park and Pattadakal, the site of ancient temples and monuments, found that tourists, particularly foreign ones, rated cleanliness as a top priority.

Some 634 foreign tourists and 1,953 Indian tourists were surveyed. They ranked hygiene, sanitation and solid waste management around the monuments as ranking low in satisfaction in all five sites. Disappointment over a lack of signs and the quality of wayside amenities followed. Indian tourists also ranked traffic and crowd management among top concerns.

Mr Bobby Rekhi, 62, a Silicon Valley entrepreneur of Indian descent, comes to India every year but is still disturbed that things are not as clean as in the United States. During the last four to five times that he visited, he actually picked up a broom and joined a cleanup operation by Imagindia.

'People keep their houses clean but don't care much about the outside areas,' he said. 'Cleanliness is one thing which bothers you when you land in Delhi. It takes very little maintenance. I wanted to create more awareness.'

Even then, India remains a country of contrasts. In Delhi, the metro rises above buildings before plunging into the depths of the city. Every day, millions travel to their destinations, but the metro has also come to be known for its cleanliness. At the Connaught Place station, the heart of operations, floors are litter-free, platforms are sparkling clean and walls are pristine and white.

But 20 minutes from the metro station, the New Delhi railway station is a shocking contrast. Plastic and paper litter the platforms and railway tracks.

'If you go to the metro stations, it is very clean, but then you go to the railway station and it is very dirty. We have to make railways on a par with the metro,' said Mr Tsering Wange, 42, the president of Arunachal Mountaineering and Adventure Sports Association. His wife Anshu Jamsenpa, 32, the only woman to scale Mount Everest twice in 10 days, is set to be one of the faces of the cleanup campaign.

'I think it is long overdue for the tourism ministry to take this initiative,' he added.

gnirmala@sph.com.sg

Peril or promise in Pyongyang?

2012-01-09T11:51:00.000+08:00

TWO days after North Korean leader Kim Jong Il died in a train in his country, the South Korean authorities still knew nothing about it. Meanwhile, American officials seemed at a loss, with the State Department at first merely acknowledging that press reports had mentioned his death.
By Javier Solana

The inability of the South Korean and US intelligence services to pick up any sign of what had happened not only attests to the North Korean regime's opaque character, but also to their own deficiencies. Little is known of the country, because all vital information is restricted to a small group of leaders obsessed with secrecy.

The leadership change is occurring at the worst possible time. It is known that Chinese leaders had hoped that Mr Kim Jong Il would survive long enough to consolidate support among the country's various factions for the succession of his son Jong Un.

All of the symbolic attributes of power have been transferred to Mr Kim Jong Un - reflected in his official position in the funeral ceremonies, his presidency of the Military Commission, and his assumption of the ruling party's highest rank - with remarkable speed. But such trappings will not make the transition process any easier for a young man of less than 30 years of age in a society where veteran military chiefs retain so much power.

The economic situation, which is still very precarious with many people living close to starvation, constitutes another key challenge. Two examples suffice to illustrate the impact: the price of rice has tripled while consumption of electricity is down by two-thirds from two decades ago.

My personal memories of North Korea, now almost 10 years old, are of a poor and depressed country. Pyongyang, the capital, was dark and deserted, illuminated by the cavalcade taking us from the official housing to the opera house, only to return to darkness behind us. Mr Kim Jong Il was greeted with the same fervour on his entrance to the opera house that today marks public mourning of his death.

My trip took place in April 2002, a somewhat optimistic time. The European Union had joined an agreement initiated by the two Koreas and the United States within the Korean Energy Development Organisation programme, the objective being to persuade North Korea to freeze and later dismantle its nuclear programme. In exchange, two light-water nuclear reactors would be built to generate electric energy, and 500,000 tonnes of oil would be supplied annually until the first reactor began operating. In turn, the EU initiated an extensive humanitarian aid project. The talks with Mr Kim Jong Il and his collaborators seemed promising.

Unfortunately, the agreement did not last long. In 2003, North Korea abandoned the Nuclear Non-Proliferation Treaty. From that moment, all optimism was lost, until contacts were subsequently reinitiated in a complex six-party format (China, Russia, the US, Japan and the two Koreas) that continued, with ups and downs, until the end of 2007. Since the maritime incidents of 2009 and 2010, in which North Korean forces attacked South Korean assets, there has been virtually no contact at all between the two sides.

Given North Korea's behaviour over the last decade, the sudden change of leadership increases the threat of unexpected incidents. In order to limit the risk, it is essential to keep relations with China as transparent as possible. It is China that has the most direct contact with North Korea, and that could best catalyse resumption of the six-party talks.

Beijing recognises that North Korea cannot continue in its present form, and would like to see its leaders transform the economy without undertaking substantial political change. For China, problems are judged according to the country's own history and from the standpoint of domestic policy - all the more so the closer the problem is to its borders. For the West, especially America, every problem should have a solution within a finite period of time. While the US breaks down problems and tries to find solutions for each part, China considers political problems unhurriedly, as an extended process that might have no resolution.

Beyond the six-party talks, it is necessary to create a framework from which a cooperative dialogue between the US and China might emerge. In the case of Korea - as Mr Christopher Hill, one of the most effective US negotiators on these matters, remembers - the US should make it clear that no possible solution for the divided peninsula would mean a strategic loss for China. After the armistice that ended the Korean War in 1953, the 38th parallel was established as the limit for US forces' presence; the importance of that war for China should not be forgotten.

This approach could be one way to stabilise the region during this period of heightened uncertainty. There might be others. The ongoing opening in Myanmar shows that potentially significant political change does not need to be accompanied by regional instability. In the case of North Korea, where nuclear arms are in play, it cannot afford to be.

The writer, a distinguished senior fellow in foreign policy at the Brookings Institution, is president of ESADEgeo. Previously, he served as the European Union's High Representative for Foreign and Security Policy, and as Secretary-General of Nato.

PROJECT SYNDICATE

Anxiety lingers despite outward calm in Wukan

2012-01-09T11:42:00.000+08:00

WUKAN (Guangdong): Thick bamboo poles straining against their shoulders, 12 men hoisted a pale, rough-hewn wooden coffin as villagers watched the funeral procession snake through the village with heavy hearts.

It was the second death in recent weeks in the protest-hit fishing village of Wukan.

Even as the family of village leader Xue Jinbo, who died in police custody on Dec 11, is locked in long, angry negotiations to get his body back, relatives of Mr Lin Zheng laid him to rest last Wednesday.

Tragedy sometimes comes with victory, as Wukan villagers know well.

They triumphed temporarily after the Guangdong provincial government promised late last month to release four villagers arrested earlier, to hold new elections to replace corrupt village officials, and to investigate the allegedly illegal land grabs that had sparked months of marches and protests.

But a gnawing anxiety lingered as villagers counted another death.

Mr Lin, 69, killed himself on Dec 28.

A few villagers declined to talk about whether his suicide was a result of the recent tension.

But his wife, Madam Chen Bizhen, 64, told The Straits Times he had become very stressed and anxious after getting repeated phone calls from the local authorities, telling him to turn himself in for taking part in protests which involved most of the village's 6,000 residents.

'He became very scared when the phone calls kept coming. And there was talk about the authorities coming into the village to arrest more people. He just became very scared,' she said, on the last night of the wake.

On Dec 28, he had left their home in the morning. When she herself returned home later, she found him lying face-down on the floor. He was dead.

'He got a haircut before drinking the pesticide he bought,' she said.

He had not even taken part in the marches or protests, she added, though she herself had joined the villager-run patrol squads to keep a lookout for police.

But every household in the village had been getting phone calls from the authorities, said Mr Lin's nephew Li Junzhou, 28.

'Sometimes they call six or seven times a day, asking us if we had been involved in the protests and telling us to surrender if we had. I tell them if they hadn't been corrupt in the first place, we wouldn't have needed to protest. Others shout some swear words at them and hang up.

'But my uncle was just a very honest man. He didn't know what to do when they kept pressing him.'

Madam Chen said her husband did not have any mental problems. The couple lived in the village while their five children are migrant workers elsewhere.

She said: 'He phoned the children to tell them not to come home for a while because it was chaotic and dangerous here.'

The protests in Wukan, on China's south-east coast, were among tens of thousands of 'mass incidents' in China last year. But the village hit international headlines last month after villagers held a series of well-organised marches, chased out Communist Party officials, fought back the police, and barricaded roads leading into their village.

Their grievances initially centred on land sales which stretch back some 20 years and which they say are illegal. That led them to petition the government more than 10 times in recent years, to no avail.

Then, the death of Mr Xue - one of the 13 representatives the villagers had elected on their own - while he was in police custody galvanised the village. It held 10 days of mass protests until the government announced its conciliatory moves, with Guangdong party chief Wang Yang's endorsement.

The official Xinhua news agency, which had not reported the protests previously, then said Wukan residents had 'legitimate complaints against officials over wrongdoing concerning land use and financial management', citing a provincial investigation team.

Last week, Mr Wang - a rising star who is said to be slated for higher political office - said Guangdong would use the 'Wukan approach' as a template to reform the governance of villages and townships at the grassroots level, a statement observers read as a positive sign.

But on the ground in the village, matters appear far from settled.

'We are still anxious, there is still a lot to work out, and some of it very difficult,' said villager representative Lin Zuluan, 65.

Discussions over the village's land problems have been mired in basics like the total land area at stake and boundaries. Villagers await promised elections to put in place new leaders.

Some of the young men who led the protests have not dared to leave the village for three months now for fear of arrest by local police.

Most pressing of all, Mr Xue's body still has not been released by the authorities, who said he had died of a heart attack while in police custody.

His family members say he was covered with bruises when they were shown his body by the police, who prevented them from taking pictures or holding on to their mobile phones.

His family and village representatives have been asking for his body to be released back to them. Negotiations have proven intractable so far.

Sources close to the negotiations said the authorities had proposed sending the body straight to a cemetery, without releasing it to the family.

As Chinese New Year draws closer, the authorities' calculation might be that the Xue family would get anxious about burying their dead before then, and cave in to their suggestion.

But a family member told The Straits Times: 'What is most important is justice.'

chiyin.sim@gmail.com

The key lesson: Learn how to learn

2012-01-07T19:13:00.000+08:00

THERE'S nothing like a bunch of unemployed recent college graduates to bring out the central planner in parent-aged pundits.
By Virginia Postrel

In a recent column for Real Clear Markets, Bill Frezza of the Competitive Enterprise Institute lauded the Chinese government's policy of cutting financing for any educational programme for which 60 per cent of graduates can't find work within two years.

His assumption is that, because of government education subsidies, the United States is full of liberal-arts programmes that couldn't meet that test.

'Too many aspiring young museum curators can't find jobs?' he writes. 'The pragmatic Chinese solution is to cut public subsidies used to train museum curators. The free market solution is that only the rich would be indulgent enough to buy their kids an education that left them economically dependent on Mommy and Daddy after graduation.'

But, alas, the US has no such correction mechanism, so 'unemployable college graduates pile up as fast as unsold electric cars'.

Bill Gross, the founder of the world's largest bond fund, Pacific Investment Management Co, has put forth a less free market (and less coherently argued) version of the same viewpoint. 'Philosophy, sociology and liberal arts agendas will no longer suffice,' he declared. 'Skill-based education is a must, as is science and maths.'

There are many problems with this simplistic prescription, but the most basic is that it ignores what American college students actually study.

Take Frezza's punching bag, the effete would-be museum curator. It would be only a slight exaggeration to say that no such student exists.

According to the National Centre for Education Statistics, humanities majors account for about 12 per cent of recent graduates, and art history majors are so rare they're lost in the noise. They account for less than 0.2 per cent of working adults with college degrees, a number that is probably about right for recent graduates, too. Yet somehow art history has become the go-to example for people bemoaning the state of higher education.

A long-time acquaintance perfectly captured the dominant Internet memes in an e-mail he sent me after my last column, which was on rising tuitions. 'Many people that go to college lack the smarts and/or the tenacity to benefit in any real sense,' he wrote. 'Many of these people would be much better off becoming plumbers - including financially. (No shame in that, who're you gonna call when your pipes freeze in the middle of the night? An M.A. in Italian art?)'

While government subsidies may indeed distort the choice to go to college in the first place, it's simply not the case that students are blissfully ignoring the job market in choosing majors. Contrary to what critics imagine, most Americans in fact go to college for what they believe to be 'skill-based education'.

A quarter of them study business, by far the most popular field, and 16 per cent major in one of the so-called Stem (science, technology, engineering and maths) fields. Throw in economics, and you have nearly half of all graduates studying the only subjects such contemptuous pundits recognise as respectable.

The rest, however, aren't sitting around discussing Aristotle and Foucault.

Most are studying things that sound like job preparation, including all sorts of subjects related to health and education. Even the degree with the highest rate of unemployment - architecture, whose 13.9 per cent jobless rate reflects the current construction bust - is a pre-professional major.

The students who come out of school without jobs aren't, for the most part, starry-eyed liberal arts majors but rather people who thought a degree in business, graphic design or nursing was a practical, job-oriented credential.

The higher education system does have real problems, including rising tuition fees that may not pay off in higher earnings. But those problems won't be solved by assuming that if American students would just stop studying stupid subjects like philosophy and art history and buckle down and major in petroleum engineering (the highest-paid major), the economy would flourish and everyone would have lucrative careers.

That message not only ignores what students actually study. It also disregards the diversity and dynamism of the economy, in good times as well as bad.

Those who tout Stem fields as a cure-all confuse correlation with causality. It's true that people who major in those subjects generally make more than, say, psychology majors. But they're also people who have the aptitudes, attitudes, values and interests that draw them to those fields (which themselves vary greatly in content and current job prospects). The psychology and social work majors currently enjoying relatively low rates of unemployment - 7.7 per cent and 6.6 per cent respectively - probably wouldn't be very good at computer science, which offers higher salaries but, at least at the moment, slightly lower chances of a job.

(These and many of the other figures in this article come from two studies by the Georgetown University Centre on Education and the Workplace analysing data from the Census Bureau's 2009 American Community Survey: 'Hard Times: College Majors, Unemployment and Earnings' released this week, and 'What's It Worth: The Economic Value of College Majors' released last May.)

Whether they're pushing plumbing or programming, the would-be vocational planners rarely consider whether any additional warm body with the right credentials would really enhance national productivity. Nor do they think much about what would happen to wages in a given field if the supply of workers increased dramatically. If everyone suddenly flooded into 'practical' fields, we'd be overwhelmed with mediocre accountants and incompetent engineers, making lower and lower salaries as they swamped the demand for these services. Something like that seems to have already happened with lawyers.

Not everyone is the same. One virtue of a developed economy is that it provides niches for people with many different personalities and talents, making it more likely that any given individual can find a job that offers satisfaction.

As any good economist will remind you, income is just a means to utility, not a goal in itself. Some jobs pay well not only because few people have the right qualifications but also because few people want to do them in the first place. In a culture where many people hate oil companies, petroleum engineers probably enjoy such a premium. Plumbers - the touchstone example for critics who think too many people go to college - certainly do.

The critics miss the enormous diversity of both sides of the labour market. They tend to be grim materialists, who equate economic value with functional practicality. In reality, however, a tremendous amount of economic value arises from pleasure and meaning - the stuff of art, literature, psychology and anthropology. These qualities, built into goods and services, increasingly provide the work for all those computer programmers. And there are many categories of jobs, from public relations to interaction design to retailing, where insights and skills from these supposedly frivolous fields can be quite valuable. The critics seem to have never heard of marketing or video games, Starbucks or Nike, or that company in Cupertino, California, the rest of us are always going on about. Technical skills are valuable in part because of the 'soft' professions that complement them.

I was lucky to graduate from high school in the late 1970s, when the best research said that going to college was an economically losing proposition. You would be better off just getting a job out of high school - or so it appeared at the time. Such studies are always backward-looking.

I thus entered college to pursue learning for its own sake. As an English major determined not to be a lawyer, I also made sure I graduated with not one but two practical trades -neither learnt in the college classroom. At the depths of the previous worst recession since the Great Depression, I had no problem getting a job as a rookie journalist and, as an emergency backup, I knew I could always fall back on my excellent typing skills. Three decades later, nobody needs typists, and journalists are almost as obsolete.

The skills that still matter are the habits of mind I honed in the classroom: how to analyse texts carefully, how to craft and evaluate arguments, and how to apply microeconomic reasoning, along with basic literacy in accounting and statistics. My biggest regret isn't that I didn't learn Fortran, but that I didn't study Dante.

The most valuable skill anyone can learn in college is how to learn efficiently - how to figure out what you don't know and build on what you do know to adapt to new situations and new problems. Liberal arts advocates like this argument, but it applies to any field. In the three decades since we graduated, my college friend David Bernstein has gone from computing the speed at which signals travel through silicon chips to being an entrepreneur whose work includes specifying, designing and developing a consumer-oriented smartphone app.

When he was an undergraduate, he wrote in an e-mail, his professors 'stressed that they weren't there to teach us a soon-to-be obsolete skill or two about a specific language or operating system ... but rather the foundations of the field, for example: characteristics of languages and operating systems, how one deals with complex projects and works with others, what is actually computable, the analysis of algorithms, and the mathematical and theoretical foundations of the field, to pick just a few among many. That education has held me in good stead and I've often pitied the folks who try to compete during a lifetime of constant technological change without it.'

Whether you learn how to learn is more a question of how fundamental and rigorous your education is than of what specific subject you study.

The argument that public policy should herd students into Stem fields is as wrong-headed as the notion that industrial policy should drive investment into manufacturing or 'green' industries. It's just the old technocratic central planning impulse in a new guise. It misses the complexity and diversity of occupations in a modern economy, forgets the dispersed knowledge of aptitudes, preferences and job requirements that makes labour markets work, and ignores the profound uncertainty about what skills will be valuable not just next year but decades in the future.

Pundits are entitled to their hypotheses, of course, and if they're footing the bill they can experiment on their children. But they shouldn't try to use the rest of the population as lab mice.

The writer is a Bloomberg View columnist and the author of The Future And Its Enemies and The Substance Of Style.

BLOOMBERG

Time for leaders to find the 'fire' again?

2012-01-06T19:04:00.000+08:00

ON WEDNESDAY, a committee commissioned by Prime Minister Lee Hsien Loong to review ministerial pay issued a report recommending a raft of changes to how salaries should be calculated.
By Andrea Ong

This is the second major report since the White Paper in 1994 that brought about the system of pegging ministers' pay to the private sector.

What has changed since 1994 and 1970, when ministers got their first raise? Insight looks at four burning questions over the years.

Does high pay = the best ministers?

ONE key principle behind paying ministers wages that are competitive with the private sector is the need to get the very best of Singaporeans to form the Government.

This principle has not budged over the years. Singapore's three prime ministers have emphasised repeatedly that good government - the nation's most precious asset - did not come about by chance.

It came about by getting capable and committed people to become ministers, a job more challenging and complex than being a CEO or doctor.

The Government believes that the opportunity cost for such talent to enter politics should not be too high. Besides sacrificing privacy and family life, they should not have to suffer financially too.

And as ministers need time to grow in their jobs, they must cross over to politics in their prime.

The review committee headed by Mr Gerard Ee emphasises this point in its report. 'While money should never be the motivation for anyone becoming a politician, the financial sacrifice should not be so large that it discourages outstanding and committed Singaporeans from devoting the best part of their lives to political office,' says the report.

However, detractors over the years have argued that the pay was just too high. Writer Catherine Lim argued in 2007 that the high pay contributed to the 'affective divide' between the People's Action Party (PAP) government and the people.

Others have warned that the idea of paying for the best to join politics may encourage people to join for the 'wrong' reasons, as PAP backbencher Denise Phua argued passionately in 2007.

'The lure of personal prestige and monetary gain can produce a dangerously intelligent and self-interested class of political elites who will readily compromise the national interest to satisfy their own needs,' said Associate Professor Kenneth Paul Tan from the Lee Kuan Yew School of Public Policy in a 2008 article.

However, then-Deputy Prime Minister Goh Chok Tong made it clear in 1989 that men who are in it for the money are unfit to be ministers. 'If you think that the salary is so attractive that you want to be a minister because of the salaries, you are unlikely to pass our screening test.'

Government leaders have also argued for 'a sense of proportion' by comparing ministers' pay to the size of the national economy that they are in charge of.

Does high pay prevent corruption?

ANOTHER reason for competitive ministerial pay is to prevent corruption and maintain transparency.

The committee's report highlights the need to pay ministers a 'clean wage' with no hidden perks.

While other countries may pay their ministers less, the ministers may in fact get much more under the table in benefits.

This argument has been used by government leaders to counter those who compare Singaporean ministers' salaries with those of their foreign counterparts.

A commonly cited example is the US President, who earns less than PM Lee on paper but whose expenses, including housing and his own plane, are borne by taxpayers.

In 2000, then Senior Minister Lee Kuan Yew said that only 'constant vigilance' had allowed Singapore to escape the corruption, collusion and nepotism problems which have plagued the region.

'Our market-based pay and allowances will give no excuse for any slippage,' he said of Singapore's good track record.

However, in a 2010 book on Singapore's public administration, political scientist Jon Quah points out that the PAP government had put in place stringent anti-corruption laws even before it began raising pay for ministers.

Former Potong Pasir MP Chiam See Tong argued on several occasions that high pay would not satisfy a minister bent on being corrupt. It would 'make him only more greedy for more money', said the opposition MP in 1994, citing the late minister Teh Cheang Wan who committed suicide in 1986 after being investigated for accepting bribes.

Should ministers' pay be benchmarked to private sector?

THE decision in 1994 to peg ministerial pay to the top income earners in Singapore has been one of the most controversial aspects of the debate over the years.

MPs have argued that the benchmark is unfair as the top earners in the private sector change every year, while ministers stay put in their jobs for years. The formula could also be skewed upwards as many of the top earners are extreme outliers.

Opposition parties have suggested pegging ministers' pay to the income of the poorest 20 per cent instead.

Other MPs, however, accept that pegging ministers' pay to the private sector is part of the 'market reality'.

The committee's report goes some way in addressing these concerns. It has widened the sample size of top income earners from 48 to 1,000.

Another point of disagreement is how much variable pay ministers should get.

A high variable component means larger swings in salary from year to year.

In line with private sector practice, the variable component of a minister's annual package increased from 30 per cent in 2000 to 47 per cent in 2007.

However, the committee has recommended cutting it.

A 'GDP bonus' introduced in 2000 was seen as an inducement to ministers to focus on economic growth at all costs. The committee now wants to replace the GDP bonus with a National Bonus which includes additional indicators like real income growth of the poorest 20 per cent.

What do we look for in our ministers?

THE debate over ministerial pay boils down, ultimately, to what Mr Lee Hsien Loong asked in 1993: 'What sort of men do you want to hold this job?'

On one side are those in favour of the spirit of public service and moral authority - two commonly used terms. Serving the people should not be about dollars and cents but about being honourable and sacrificing for the nation.

In the other camp are the more pragmatic PAP leaders, who question if it is realistic to expect to get a dream team of ministers without paying them more competitive rates.

The three prime ministers have all dwelt on the changing aspirations and nature of Singaporeans since the 1950s.

In those 'tumultuous times', Mr Lee Kuan Yew once said: 'Asia was in ferment: the shape of our lives was being altered irrevocably. In that revolutionary ferment, any man with any courage, any fire in him, would respond to the challenge.'

Times and the people have changed since. As PM Lee reiterated in 2007, the Government cannot expect everyone to be like that.

Still, the benchmark for ministers' pay has always included a discount from the private sector to signify the personal sacrifice involved in public service. The committee has now recommended increasing the discount from a third to 40 per cent.

Under the terms of reference given by PM Lee, ministers' pay has been reviewed and cut independently of that of the elite Administrative Service for the first time - a signal that elected political leaders should have a calling of their own.

The titles of the 1994 White Paper and the new report are also telling. Where the former emphasised 'competitive, competent and honest' government, the latter speaks of a 'capable and committed' one.

Perhaps it is time for Singapore's political leaders to find that 'fire' in them to shape Singaporeans' lives once more, as the Old Guard ministers did.

Additional reporting by Janice Heng

China's lockdown on truth

2012-01-02T20:01:00.000+08:00

WITH China stumping assertively on the world stage, one might think Beijing would be open, even gracious, about the country's past. To the contrary, history remains an exceedingly sensitive subject here, drawing relentless attention from the authorities anxious to keep all skeletons safely in closets.
By Sergey Radchenko

As a university professor in China, I face the consequences of this official apprehension every day. My young, bright students know little about their country's recent past. What they do know tends to agree with government-sponsored discourse on the pride and glory of China's rise after a century of humiliation by Western powers.

Library and bookstore shelves tell, with enviable conviction, this same story of national grandeur. And it is hard to get around that government-approved tale. Some of us at the University of Nottingham in Ningbo recently attempted to order a standard Western work on China's history, Jonathan Spence's The Search For Modern China.

Our efforts ran aground when Customs officials refused to allow the book shipment into the country. The agent courteously proposed to manually cut out the censored sections - including photos of the Tiananmen Square massacre and Spence's account of the Cultural Revolution - to get the Customs clearance. These are things the Chinese people are not supposed to know.

Historians of China face secrecy and restrictions everywhere as the key archives remain largely inaccessible, even though the Chinese archives law provides for the opening of official documents to the public after 30 years. Some progress has been made with declassification, notably at the Chinese Foreign Ministry, to appease international scholars.

Academics can now read, though not print, digitised memos and telegrams from 1949 through 1965. Still, even these documents have been pre-selected to avoid potential embarrassment for the government. The party archives, which host the records of the Communist Party's holy of holies - the Politburo - are closed. Anyone in China interested in studying the origins of the Korean War, which took place more than 60 years ago, will not get very far. The Great Leap Forward? The Cultural Revolution? Same story. Uncomfortable episodes of China's recent history have become a subject of official amnesia and a victim of the government's monopoly on truth.

Consider the case of Lin Biao, a hero of the Chinese Civil War, and later Mao Zedong's comrade in arms during the Cultural Revolution, who died in 1971. Lin Biao, who is well remembered for his appearances atop Tiananmen Square, the Little Red Book in his hand, supposedly conspired to kill the Chinese leader, even though he was Mao's anointed successor. When the plot was discovered, he fled to the Soviet Union, then China's archenemy, but he never made it: His plane crashed in Mongolia after allegedly running out of fuel.

This is the official story; this is as much as the Chinese government is willing to say 40 years on. We do not know whether Lin Biao really planned to kill Mao. Their fallout could have been a personal feud or, as the chairman later claimed, a policy disagreement (Lin Biao is said to have opposed the Sino-American opening).

In 2003, the crash report, including grisly photos of burned victims, was leaked from Mongolian intelligence archives.

Contrary to the official Chinese explanation, the report (which was made available to me) showed that the plane had plenty of fuel when it crashed. No attempt had been made to land the plane, and weather conditions were fine. Mongolian investigators concluded that the pilot made an error. But they had no access to the plane's black box; the Soviet military took it, along with one of the plane engines. The Soviets later came back and took the heads of the two victims with golden teeth, which, it turned out, belonged to Lin Biao and his wife.

These heads are said to remain at the archives of Russia's Federal Security Service. Moscow has not released its findings about the crash, and China has remained silent. Although we know precious little about Lin Biao's death, we know enough to conclude that at least part of Beijing's explanation is a fabrication.

In the absence of archival openness and amid repression of free historical inquiry, these kinds of myths and fabrications underpin the official discourse on history in China - hence, the need to repulse the infiltration of foreign books. Despite the best efforts of committed Chinese historians who defy government restrictions (and risk jail terms) to learn more, the government still has an iron grip on the past.

The time has come for strong and proud China to cast aside this fear of the past, which is utterly incompatible with Beijing's search for international prestige and acclaim. True, China's history is full of blood and tragedy, often directly caused by leaders' misrule. It is also full of remarkable feats and formidable breakthroughs on the path towards modernity.

Both facets of its history, like the proverbial halves of yin and yang, make China what it is today. World events suggest that government efforts to control how history is read and taught are doomed to failure. The question is when today's China will realise it should not resort to methods of information control handed down from a tyranny.

The writer is a lecturer in the history of American-Asian relations at the University of Nottingham in Ningbo, China, and the author of Two Suns In The Heavens: The Sino-Soviet Struggle For Supremacy, 1962-1967.

LOS ANGELES TIMES-WASHINGTON POST

China's lockdown on truth

2012-01-02T18:00:00.000+08:00

WITH China stumping assertively on the world stage, one might think Beijing would be open, even gracious, about the country's past. To the contrary, history remains an exceedingly sensitive subject here, drawing relentless attention from the authorities anxious to keep all skeletons safely in closets.

As a university professor in China, I face the consequences of this official apprehension every day. My young, bright students know little about their country's recent past. What they do know tends to agree with government-sponsored discourse on the pride and glory of China's rise after a century of humiliation by Western powers.

Library and bookstore shelves tell, with enviable conviction, this same story of national grandeur. And it is hard to get around that government-approved tale. Some of us at the University of Nottingham in Ningbo recently attempted to order a standard Western work on China's history, Jonathan Spence's The Search For Modern China.

Our efforts ran aground when Customs officials refused to allow the book shipment into the country. The agent courteously proposed to manually cut out the censored sections - including photos of the Tiananmen Square massacre and Spence's account of the Cultural Revolution - to get the Customs clearance. These are things the Chinese people are not supposed to know.

Historians of China face secrecy and restrictions everywhere as the key archives remain largely inaccessible, even though the Chinese archives law provides for the opening of official documents to the public after 30 years. Some progress has been made with declassification, notably at the Chinese Foreign Ministry, to appease international scholars.

Academics can now read, though not print, digitised memos and telegrams from 1949 through 1965. Still, even these documents have been pre-selected to avoid potential embarrassment for the government. The party archives, which host the records of the Communist Party's holy of holies - the Politburo - are closed. Anyone in China interested in studying the origins of the Korean War, which took place more than 60 years ago, will not get very far. The Great Leap Forward? The Cultural Revolution? Same story. Uncomfortable episodes of China's recent history have become a subject of official amnesia and a victim of the government's monopoly on truth.

Consider the case of Lin Biao, a hero of the Chinese Civil War, and later Mao Zedong's comrade in arms during the Cultural Revolution, who died in 1971. Lin Biao, who is well remembered for his appearances atop Tiananmen Square, the Little Red Book in his hand, supposedly conspired to kill the Chinese leader, even though he was Mao's anointed successor. When the plot was discovered, he fled to the Soviet Union, then China's archenemy, but he never made it: His plane crashed in Mongolia after allegedly running out of fuel.

This is the official story; this is as much as the Chinese government is willing to say 40 years on. We do not know whether Lin Biao really planned to kill Mao. Their fallout could have been a personal feud or, as the chairman later claimed, a policy disagreement (Lin Biao is said to have opposed the Sino-American opening).

In 2003, the crash report, including grisly photos of burned victims, was leaked from Mongolian intelligence archives.

Contrary to the official Chinese explanation, the report (which was made available to me) showed that the plane had plenty of fuel when it crashed. No attempt had been made to land the plane, and weather conditions were fine. Mongolian investigators concluded that the pilot made an error. But they had no access to the plane's black box; the Soviet military took it, along with one of the plane engines. The Soviets later came back and took the heads of the two victims with golden teeth, which, it turned out, belonged to Lin Biao and his wife.

These heads are said to remain at the archives of Russia's Federal Security Service. Moscow has not released its findings about the crash, and China has remained silent. Although we know precious little about Lin Biao's death, we know enough to conclude that at least part of Beijing's explanation is a fabrication.

In the absence of archival openness and amid repression of free historical inquiry, these kinds of myths and fabrications underpin the official discourse on history in China - hence, the need to repulse the infiltration of foreign books. Despite the best efforts of committed Chinese historians who defy government restrictions (and risk jail terms) to learn more, the government still has an iron grip on the past.

The time has come for strong and proud China to cast aside this fear of the past, which is utterly incompatible with Beijing's search for international prestige and acclaim. True, China's history is full of blood and tragedy, often directly caused by leaders' misrule. It is also full of remarkable feats and formidable breakthroughs on the path towards modernity.

Both facets of its history, like the proverbial halves of yin and yang, make China what it is today. World events suggest that government efforts to control how history is read and taught are doomed to failure. The question is when today's China will realise it should not resort to methods of information control handed down from a tyranny.

The writer is a lecturer in the history of American-Asian relations at the University of Nottingham in Ningbo, China, and the author of Two Suns In The Heavens: The Sino-Soviet Struggle For Supremacy, 1962-1967.

LOS ANGELES TIMES-WASHINGTON POST

North Korean birds still mourn late leader

2011-12-27T21:34:00.001+08:00

SEOUL (AFP) - North Korea on Tuesday reported more grieving by Mother Nature for the death of Kim Jong Il, with a dove-like bird reportedly brushing the snow off a statue of the late leader.

The latest avian intervention was reported by Radio Pyongyang, which said the bird's behaviour last week was 'breaking the hearts of many people' who heard the story.

'As I was unable to calm my heart from a guilty conscience, a white bird larger than a dove suddenly brushed off the snow from the shoulders of the leader's statue,' the radio quoted a witness as saying, according to the South's Yonhap news agency which monitors the North's state media.

The media and other propaganda organs built a vast personality cult around the Kim dynasty, which has ruled the country since its creation in 1948. They are sometimes credited with near-supernatural powers.

The North announced on Dec 19 that the 69-year-old leader had died of a heart attack during a train trip two days earlier. It has proclaimed his son Jong Un as 'great successor' amid apparent scenes of mass grief.

Ruling party newspaper Rodong Sinmun said on Monday that owls had been grieving at the Dec 5 Youth Mine daily since Kim's death.

'Owls flew in through the windows of the condolence venue and added to the commemorating feelings of the grieving people,' it said.

Last week official media reported the case of a Manchurian crane that bowed its head in grief, and said ice cracked around Kim's supposed birthplace at the revered Mount Paekdu with a thunderous sound.

A glow was also seen atop the mountain's Jong Il Peak, it added.

Israeli girl's plight shows up extremism

2011-12-25T19:27:00.000+08:00

Ultra-Orthodox Jews' bullying of child sparks outrage, with plans for a protest in her honour

JERUSALEM: A shy eight-year-old schoolgirl has unwittingly found herself on the front line of Israel's latest religious war.

Naama Margolese is a pony-tailed, bespectacled second-grader who is afraid of walking to her religious Jewish girls school for fear of ultra-Orthodox extremists who have spat on her and called her a whore for dressing 'immodestly'.

Her plight has drawn fresh attention to the simmering issue of religious coercion in Israel, and the increasing brazenness of extremists in the insular ultra-Orthodox Jewish community.

'When I walk to school in the morning I used to get a tummy ache because I was so scared... that they were going to stand and start yelling and spitting,' the pale, blue-eyed girl said softly in an interview. 'They were scary. They don't want us to go to the school.'

The school that Naama attends in the city of Beit Shemesh, to the west of Jerusalem, is on the border between an ultra-Orthodox neighbourhood and a community of modern Orthodox Jewish residents, many of them American immigrants.

The ultra-Orthodox consider the school, which moved to its present site at the beginning of the school year, an encroachment on their territory.

Dozens of black-hatted men jeer and physically accost the girls almost daily, claiming their presence is a provocation.

Beit Shemesh has long experienced friction between the ultra-Orthodox, who make up about half the city's population, and other residents. And residents say the attacks at the school, attended by about 400 girls, have been going on for months. Last week, after a local TV channel reported about the school and interviewed Naama's family, a national uproar ensued.

The televised images of Naama sobbing as she walked to school shocked many Israelis, elicited statements of outrage from the country's leadership, sparked a Facebook page with nearly 10,000 followers dedicated to 'protecting little Naama' and plans for a demonstration late yesterday in her honour.

On Monday, a police officer was injured and several black-robed protesters taken into custody after clashes flared over demands to crack down on zealots.

Beit Shemesh's growing ultra-Orthodox population has erected street signs calling for the separation of sexes on the sidewalks, and dispatched 'modesty patrols' to enforce a chaste female appearance. Walls of the neighbourhood are plastered with signs exhorting women to dress modestly in closed-necked, long-sleeved blouses and long skirts.

Naama's case has been especially shocking because of her young age and because she attends a religious school and wears long sleeves and a skirt. Extremists, however, consider even that outfit, standard in mainstream Jewish religious schools, to be immodest.

Thousands of people were expected at yesterday's demonstration. Ahead of the gathering, President Shimon Peres urged the public to attend.

'The demonstration... is a test for the people and not just the police,' he said. 'All of us... must defend the image of the state of Israel from a minority that is destroying national solidarity and expressing itself in an infuriating way.'

The ultra-Orthodox are perennial king- makers in Israeli coalition politics - two such parties serve as key members of the ruling coalition.

In the past, they have generally confined their strict lifestyle to their own neighbourhoods. But they have become increasingly aggressive in trying to impose their ways on others, as their population has grown and spread to new areas.

ASSOCIATED PRESS, REUTERS, AGENCE FRANCE-PRESSE

Economists: givers or Grinches?

2011-12-23T12:04:00.000+08:00

THE stereotypes about economists are well known: that we're selfish Grinches; that we don't read human interest stories because they don't interest us; that the only reason we don't sell our children is that we think they'll be worth more later.

But are the stereotypes true? And if so is the cause nature or nurture? In other words, are selfish people disproportionately likely to become economists? Or is there something about being an economist (or being on the receiving end of an economics education) that makes people selfish?

Academic research suggests there's a good deal of truth to the stereotype. Many studies have looked at how economists behave in what are called public goods situations. A key feature of these situations is that you can benefit from public goods even if you don't contribute to them. You can watch PBS without making a donation; you can enjoy clean air even if you drive a car that pollutes. But such goods give rise to the so-called free-rider problem: acting selfishly makes sense for each individual (why sacrifice if you don't have to?) but as more and more people choose to act selfishly, the good disappears and everyone loses.

Public goods run counter to Adam Smith's 'invisible hand' theory in that self-interested behaviour by individuals does not, as the theory would have it, lead to good outcomes for society as a whole. These situations flummox just about everybody - look at all the trouble that nations and individuals are having in dealing with climate change - but economists and economics students appear to be especially likely to free-ride and act in ways that are 'anti-social' rather than 'pro-social'.

My recent research with the economist Elaina Rose, published in August in the Journal of Economic Behavior and Organization, has looked at a real-life public goods situation faced by students at the University of Washington. During our study period (1999 to 2002), when students went online to register for classes each quarter, they were asked if they wanted to donate US$3 to support WashPIRG, a left- leaning activist group. Students were also asked if they wanted to donate US$3 to Affordable Tuition Now (ATN), a group that lobbied for 'sensible tuition rates, quality financial aid and adequate funding'.

You may question whether these groups really serve the common good, but that's mostly beside the point. Regardless of the groups' actual social value, a purely self-interested individual would choose to free-ride rather than contribute; after all, a single US$3 donation is not going to make a noticeable difference in tuition rates.

Our data showed that each group received donations from about 10 per cent of the students each quarter. Although students remained anonymous, we could look at all of the 8,743 members of our data set and determine what their majors were, when they took economics classes (if at all) and whether or not they donated to ATN or WashPIRG during each quarter of our study period.

In line with previous research, what we found supported the Grinch stereotype. About 5 per cent of economics majors donated to WashPIRG in a given quarter, compared with 8 per cent for other arts and sciences majors. A similar divide - 10 per cent versus almost 15 per cent - occurred with respect to donations to ATN.

We also found evidence that the giving behaviour of students who became economics majors was driven by nature, not nurture: taking economics classes did not have a significant negative effect on later giving by economics majors.

But taking economics classes did have a significant negative effect on later giving by students who did not become economics majors. One interpretation of these results is that students who were not economics majors suffered a 'loss of innocence' after taking an economics class, presumably because of exposure to certain ideas (like the invisible hand) or certain people (like economics teachers).

In contrast, students who became economics majors did not suffer a loss of innocence. This may be because they lost their innocence in high school - other research suggests that pre-university exposure to economics reduces giving - or perhaps even because economics majors were 'born guilty'.

Our research suggests that economics education could do a better job of providing balance. Learning about the shortcomings as well as the successes of free markets is at the heart of any good economics education, and students - especially those who are not destined to major in the field - deserve to hear both sides of the story.

The writer, a co-author of The Cartoon Introduction To Economics, is an environmental economist at the University of Washington.

NEW YORK TIMES

Kim Jong Il's North Korea

2011-12-20T11:21:00.000+08:00

A personality cult like no other
By Elizabeth Law
ENTERING the Choryu-gwan Cold Noodle Restaurant in downtown Pyongyang, it was immediately apparent that something was going on.

Locals packed the place, waiting for a table, with more queuing outside, despite the 2 deg C cold.

'Today is the 30th anniversary of this restaurant and President Kim Il Sung is giving the people a treat,' said our official guide, Mr Kim Mum Chol.

Noticing our surprised looks, he explained quickly: 'It's what he would have done if he were still alive, to celebrate the culture of our city.'

Everywhere the visitor is shown in the capital, there are reminders of the late founder who died in 1994, and his son, Kim Jong Il, who died on Saturday.

From the tops of buildings and apartment blocks, bright red slogans declare the great work of the party and the leaders.

Despite a lack of electricity to light streets or heat buildings, powerful spotlights are trained on monuments, official pictures and statues of Kim Il Sung.

He inspired his own personality cult while he was president of North Korea. Paintings and murals featuring him were commissioned in bulk and every citizen wears a badge with his image on it.

And when they speak to visitors, North Koreans pepper what they say with references to the two Kims.

We lost count, the day we tried to keep track of the number of times 'Kim Il Sung' and 'Kim Jong Il' were mentioned by those we met - well over 150 times in a single day.

What we kept hearing over and over again was the phrase 'immediate on-the-spot field guidance'.

This refers to instant advice given by the Kims wherever they went, and officials never failed to stress what good advice it was too.

For example, at the Grand People Study House - essentially a library - height-adjustable tables were fitted after Kim Il Sung dropped in and observed that people should be comfortable while reading.

Every room the Kims entered in public buildings is marked by red plaques above the doors to show when they were there.

Museum displays have little red signs to indicate that father or son paused to lay eyes on the artefacts.

Even computers and books have stickers that say they are gifts from Kim Jong Il.

The apparent reverence overflows at the Kumsusan Memorial Palace where Kim Il Sung's embalmed body lies in a glass casket for public viewing.

Here, an endless stream of men and women dressed in their best file past to pay their respects. Many are seen with tears in their eyes, and some sob uncontrollably.

I was in secondary school when I first learnt about the North Korean cult of personality, and was sceptical that such a thing could work.

Seeing it close-up brought home to me starkly that an entire population could indeed be indoctrinated to the point of self-delusion.

Lessons in cognitive bias from the 'day of infamy'

2011-12-16T19:02:00.000+08:00

LAST week, the United States commemorated the 70th anniversary of the Japanese attacks on Pearl Harbor on Dec 7, 1941.

By William Choong, Senior Writer

To many outsiders, the country-wide commemorations so long after the event, and an expression of 'deep emotion' by Japan's Foreign Minister, might seem a tad overdone.

On a working visit to the Pearl Harbor last year, however, I had a first-hand experience of the significance of the event. At Hickam airbase, bullet holes made by Japanese bombers were not patched up at the headquarters building - an apt reminder that the passage of time has not fully healed the emotional scars left by the attacks. The hulk of the battleship USS Arizona, which was sunk with 1,177 sailors on board, still lies at the bottom of the harbour and leaks 2.2 litres of oil daily.

The so-called 'day of infamy' is significant because of two ironies. For one thing, senior US officials knew about Japanese intentions to attack, thanks to a code-breaking system called Magic. But they refused to accept the data, since arousing American anger would have been suicidal (it was). Second, the Japanese knew that attacking Pearl Harbor would only buy time before the US retaliated in force.

The burden of this irony fell on Admiral Isoroku Yamamoto. Typically portrayed in the US as a yellow-skinned warmonger, the Harvard-trained admiral warned his government against fighting the US. He admitted that the Pearl Harbor operation was 'conceived in desperation'.

Through history, there have been many other nameless and faceless Yamamotos who had to contend with the follies of their political superiors. This either led to major intelligence failures or financial crises.

Writing in The March To Folly, Pulitzer-winning historian Barbara Tuchman argues that such follies stem from 'wooden-headedness'. A common phenomenon through history are policies of governments that ran contrary to their national interests, she adds.

The rulers of Troy dragged the 'suspicious looking wooden horse' inside their walls; Charles XII, Napoleon and Hitler invaded Russia despite the disasters suffered by their predecessors, King George III opted to coerce rather than conciliate with the American colonies.

Indeed, the 20th century is replete with similar follies. Every major intelligence failure in the 20th century - China's intervention in the Korean War in 1950, Egypt's surprise attack on Israel in 1973 and the fall of the Berlin Wall in 1989 - was due to rampant failures to 'connect the dots'.

Wooden-headedness - or stubbornness to accept the facts - was largely to blame. In 1950, General Douglas MacArthur was too full of hubris to accept the fact that the Chinese would take on the American military machine. On Nov 9, 1989, CIA specialists were telling then US President George H.W. Bush why the Berlin Wall would not fall any time soon; at that point, another staff member asked the President to turn on the television, which was broadcasting the fall of the Wall.

By the 1990s, one would have thought that wooden-headedness in policymaking would have been eradicated, given decades of research by behavioural economists and psychologists into less-than-rational modes of decision-making. Their conclusions: man is not a computer-like utility maximiser who makes fully rational decisions. This is the result of cognitive biases (a fancy term for wooden-headedness).

For example, people selectively use information that confirms their prejudices (confirmation bias); put a heavy weightage on recent events when predicting future probabilities (availability bias) and overvalue their own skills (overconfidence bias).

Such biases played a major role at the start of the 21st century.

Prior to the Sept 11 attacks, American officials were not unaware of plots to fly hijacked planes into buildings. But confirmation bias - the refusal to accept such a possibility - led to a 'failure of imagination', as the 9-11 Commission pointed out.

The 2003 invasion of Iraq was the result of availability bias - US officials affected by the trauma of Sept 11 sought to avoid a similar intelligence failure. In turn, this led to the overestimation of Iraq's weapons programmes.

Confirmation bias could well afflict American policymakers on the issue of Iran's nuclear programme. They could well be shrugging off disturbing information about Teheran's intentions - say, the repeated threat to use nukes against Israel - and as a result be underestimating the threat.

This does not mean that cognitive biases are altogether bad. After all, they are mental short cuts to help people make faster decisions. Mr Donald Rumsfeld, the former US defence secretary, had the commentariat in stitches when he cited the need to distinguish between the 'known knowns, the known unknowns and the unknown unknowns'.

At the very least, it is useful to be aware of what one doesn't know.

In the end, it is worth noting that for all the powers of artificial intelligence, Google and Apple's Siri, the quality of policy decisions of fallible men remains largely unchanged through the ages. As America's second president John Adams said: 'While all other sciences have advanced, government is at a stand; little better practised than three or four thousand years ago.'

williamc@sph.com.sg

Finnish school system ticks all the right boxes

2011-12-16T18:51:00.000+08:00

PASI Sahlberg, a Finnish educator and author, had a simple question for the high school seniors he was speaking to one morning last week in Manhattan: 'Who here wants to be a teacher?'
By Jenny Anderson

Out of a class of 15, two hands went up - one a little reluctantly.

'In my country, that would be 25 per cent of people,' he said.

'And,' he added, thrusting his hand in the air with enthusiasm, 'it would be more like this.'

In his country, Dr Sahlberg said later in an interview, teachers typically spend about four hours a day in the classroom, and are paid to spend two hours a week on professional development. At the University of Helsinki, where he teaches, 2,400 people competed last year for 120 slots in the fully subsidised master's programme for schoolteachers.

'It's more difficult getting into teacher education than law or medicine,' he said.

He puts high-quality teachers at the heart of Finland's education success story which, as it happens, has become a personal success story of sorts, part of an American obsession with all things Finnish when it comes to schools.

Take last week. On Monday, Dr Sahlberg was the keynote speaker at an education conference in Chicago. On Tuesday, he had to return to Helsinki for an Independence Day party held by Finland's president - a coveted invitation to an event that much of the country watches on television.

On Wednesday, it was Washington, to a party for the release of his latest book, Finnish Lessons: What Can The World Learn From Educational Change In Finland?, that drew staff members from the White House and Congress.

Thursday brought him to the Upper West Side, for a day-long visit to Dwight School, a for-profit school that prides itself on internationalism.

Ever since Finland - a nation of about 5.5 million that does not start formal education until age seven and scorns homework and testing until well into the teenage years - was placed at the top of a well-respected international test in 2001 in maths, science and reading, it has been an object of fascination among American educators and policymakers.

Finlandophilia picked up when the nation placed close to the top again in 2009, while the United States ranked 15th in reading, 19th in maths and 27th in science.

The Finnish Embassy in Washington hosts brunch seminars with titles like 'Why are Finnish kids so smart?', and organises trips to Finland for education journalists eager to see for themselves.

In Helsinki, the Education Ministry has had 100 official delegations from about 45 countries visit each year since 2005. Schools there used to love the attention, making cakes and doing folk dances for the foreigners, Dr Sahlberg said, but now the crush of observers is considered a national distraction.

Critics say that Finland is an irrelevant laboratory for the United States. It has a tiny economy, a low poverty rate, a homogeneous population - 5 per cent are foreign-born - and socialist underpinnings (speeding tickets are calculated according to income).

Its school system has roughly the same number of teachers as New York City's but far fewer students - 600,000 compared with New York's 1.1 million. Finnish students speak Finnish and Swedish, and usually English.

Mr Patrick Bassett, head of the Washington-based National Association of Independent Schools, and a fan of what Finland has been doing, said one of the things he learnt on his own pilgrimage to the country was that the average resident checks out 17 books a year from the library.

'There are things they do right,' said Prof Mark Schneider, vice-president of the American Institutes for Research, 'but I'm not sure how many lessons we get are portable.'

Dr Frederick Hess, director of education policy studies at the American Enterprise Institute, said Finlandophilia was 'totally deified' and 'blown out of proportion'.

But Prof Linda Darling-Hammond, an education professor at Stanford, said Finland could be an excellent model for individual states, noting that it is about the size of Kentucky.

'The fact that we have more race, ethnicity and economic heterogeneity, and we have this huge problem of poverty, should not mean we don't want qualified teachers. The strategies become even more important,' she said.

'Thirty years ago, Finland's education system was a mess. It was quite mediocre, very inequitable. It had a lot of features our system has: very top-down testing, extensive tracking, highly variable teachers, and they managed to reboot the whole system.'

Both Prof Darling-Hammond and Dr Sahlberg said a turning point was a government decision in the 1970s to require all teachers to have master's degrees - and to pay for their acquisition. The starting salary for school teachers in Finland, 96 per cent of whom are unionised, was about US$29,000 (S$38,000) in 2008, according to the Organisation for Economic Cooperation and Development, compared to about US$36,000 in the US.

More bear than tiger, Finland scorns almost all standardised testing before age 16 and discourages homework, and it is seen as a violation of children's right to be children for them to start school any sooner than 7am, Dr Sahlberg said during his day at Dwight.

He spoke to seniors taking a Theory of Knowledge class, then met administrators and faculty members.

'The first six years of education are not about academic success,' he said. 'We don't measure children at all. It's about being ready to learn and finding your passion.'

Dr Sahlberg, 52, an Education Ministry official and a former maths teacher, is the author of 15 books. He said he wrote the latest one, which sold out its first print run in a week, in response to the overwhelming interest in his country's educational system.

It was not meant to claim that Finland's way was the best way, he said, and he was quick to caution against countries trying to import ideas a la carte and then expecting results.

'Don't try to apply anything,' he told the Dwight teachers. 'It won't work because education is a very complex system.'

Besides high-quality teachers, he pointed to Finland's Lutheran leanings, almost religious belief in equality of opportunity, and a decision in 1957 to require subtitles on foreign television as key ingredients to the success story.

He emphasised that Finland's success is one of basic education, from age seven until 16, at which point 95 per cent of the country go on to vocational or academic high schools.

'The primary aim of education is to serve as an equalising instrument for society,' he said.

Dr Sahlberg said another reason the system had succeeded was that 'only dead fish follow the stream' - a Finnish expression.

Finland is going against the tide of the 'global education reform movement', which is based on core subjects, competition, standardisation, test-based accountability, control.

'Education policies (in the US) are always written to be 'the best' or 'the top this or that',' he said. 'We're not like that. We want to be better than the Swedes. That's enough for us.'

NEW YORK TIMES

To restore or not to restore palace?

2011-12-16T18:50:00.000+08:00

BEIJING: Three emperors, two revolutions and a century and a half later, a debate of palatial proportions is still raging in China.
By Peh Shing Huei, China Bureau Chief

Some 150 years after the Yuanmingyuan was razed to the ground by British and French forces, the Chinese remain undecided on whether to rebuild the imperial Old Summer Palace. A new round of pro and con arguments has emerged since the Beijing municipal legislature proposed last month to take yet another look at the issue.

In one corner, the restorationists argue that rebuilding the Yuanmingyuan, which means Garden of Perfect Brightness, would showcase China's glory to the world. 'Our Yuanmingyuan is far more famous than Disneyland. Once it is fully developed, it will surely attract visitors from all over the world,' a Chinese scholar once said.

BACKGROUND STORY

BIG HISTORIC WASTE

'Many people believe that the burning of the Yuanmingyuan was a national humiliation. I think the building of the Yuanmingyuan by the Qing was an even greater national humiliation... If they didn't construct such a luxurious imperial garden, every county in this country could have had a decent college then.'

Analyst Wu Zuolai in The Beijing News

In the opposite corner, however, the 'ruins faction' counters that only by retaining the current 'ruinscape' can the people be reminded of China's suffering at the hands of Western colonial powers.

Such passionate discussions are a result of the Yuanmingyuan's unique role in China's modern history narrative as a symbol of nationalism.

The palace, which was built in the 17th and 18th centuries in north-western Beijing for Qing emperors, was a sprawling summer complex of gardens, villas, lakes, pavilions and hills.

It was like an ancient precursor to today's miniature world theme parks, featuring in its grounds architectural wonders from not only China but also Europe. It housed a vast collection of treasures as well.

But after the Qing court tortured and killed British and French emissaries during the Second Opium War in 1860, the European forces retaliated by looting and torching the palace, which burned for three days.

The order came from the British High Commissioner to China, Lord Elgin, whose father had removed ancient sculptures from the Parthenon in Athens and shipped them back to London.

Yuanmingyuan was sacked again in 1900, when the Eight-Power Alliance of mostly Western powers invaded China to quell the Boxer Rebellion.

The Chinese-style palaces built with timber that survived the 1860 fire, or were restored after, were completely destroyed. The only structures left standing were a cluster of European-style stone pillars, now called xiyanglou (European palaces), which are the main tourist attraction in the gardens today. This twist of tragedy lent Yuanmingyuan its current unique status.

Stanford University's Chinese literature and history professor Lee Haiyan explained in an essay: 'Without the xiyanglou pillars, Yuanmingyuan might have long fallen into historical oblivion, sharing the fate of earlier architectural wonders in Chinese history whose existence is now purely textual.'

But its survival means a long, tortured debate. Since the Tongzhi emperor, China's third last monarch, ascended the throne in 1861, Beijing has struggled with the ruins.

'The successive Manchu rulers did want to restore the gardens but for want of financial resources. Cixi's appropriation of state funds to build Yiheyuan did not sit well with many officials,' said Prof Lee, referring to the infamous Empress Dowager and her new, much-smaller Summer Palace.

Even with the 1911 Revolution and the 1949 communist revolution, the Yuanmingyuan remained on the agenda, the debate intensifying after 1980 with the emergence of the three 'isms' of nationalism, capitalism and tourism.

The restorationists are motivated by the draw of tourist dollars. Only about 25,000 tourists visit the Yuanmingyuan daily on national holidays compared with 120,000 who throng the Forbidden City.

In the past two decades, the restorationists succeeded in restoring or building a temple, a few pavilions and bridges. But each step was accompanied by loud howls of protests from the 'ruins faction', which regards any rebuilding as a 'Disney-fication' of the original complex.

Most Beijing residents think so too. A survey by The Beijing News to the latest government proposal saw 51.6 per cent of respondents opposing restoration.

Analyst Wu Zuolai argued in the paper: 'The craftsmen today do not have the skills of those from the past. If we really try to restore the palace, it would be akin to trying to draw a tiger, but ending up with a dog instead.'

shpeh@sph.com.sg

The slow and steady way to grow

2011-12-16T09:58:00.000+08:00

With many signs pointing to slower economic growth not just next year but over the longer term, Insight examines the implications of this trend.
By Aaron Low & Melissa Tan
LIKE many Singaporeans, Mr Tan See Keong, 41, works long hours to support his family.

He is a driver and earns $1,500 a month. His wife is a supermarket cashier and earns $900 a month. They live in a three-room flat with their son, aged eight.

Most of their income goes to paying off bills but they manage to save $200 a month.

They eat out three times a week but with the economy expected to hit a rough patch next year, Mr Tan expects to cut down on such treats.

'We will cook more at home. My wife can also take food to work. Now, in one week, we go out for dinner three times, but we can cut it to maybe one time,' he says.

Like Mr Tan, many Singaporeans are bracing themselves for a downturn next year.

Last month, the Trade and Industry Ministry forecast that Singapore's economic growth would slow to a crawl of between 1 per cent and 3 per cent next year, largely due to problems in Europe and the United States.

More worryingly, the downbeat assessment may last longer than just a year.

Last week, Prime Minister Lee Hsien Loong warned that growth of 1 per cent to 3 per cent 'will not be too uncommon' in the years ahead.

For Singapore, which has been growing at an average annual rate of more than 8 per cent since its independence in 1965, this much slower pace of growth is both unfamiliar and unsettling.

In recent years, growth has been volatile - bouncing back from the 2008-2009 recession to hit 14.5 per cent last year before slowing to about 5 per cent this year.

Some analysts say the slower pace of future growth is to be expected as the economy matures. Others, however, warn that slow growth will be painful for both individuals and companies.

What do the numbers mean for wages, jobs and prices? How will it affect the drive for more inclusive growth?

Wages, jobs and prices

IN THE short term, the reasons for the slowdown in growth are clear.

Next year, the global economy is expected to grow by 4 per cent, weighed down by weak growth in all three of the world's largest markets - Europe, the US and Japan.

Singapore Management University (SMU) Assistant Professor Davin Chor does not see any easy solutions to the global economy's current funk.

'A lot, then, depends on how long a slowdown the developed countries will go through; namely, whether there will be a sharp rebound or whether we are looking more at a scenario akin to Japan's 'lost decade',' says Prof Chor.

The pain of a cyclical downturn will hurt both companies and workers.

Business confidence, which underpins firms' investment and hiring decisions, has fallen sharply in recent months, according to several surveys.

Wages and jobs are also likely to be hit.

Retrenchment is rising in sectors buffeted by the global downturn, such as electronics. The labour union has warned of more pain to come next year.

Associate Professor Randolph Tan, of SIM University (UniSim), forecasts a slowdown in job creation and a small rise in unemployment next year.

He expects between 70,000 and 85,000 jobs to be created next year, fewer than the expected 100,000 to be created this year.

At the same time, however, inflation will continue to be high, fuelled by persistently high prices of commodities, as well as higher prices of cars and housing.

This year's inflation rate is estimated to be around 5 per cent. The central bank has said that next year, prices should continue to rise between 2.5 per cent and 3.5 per cent.

There is a real worry that inflation might completely eat away any potential wage gains, especially for lower-income earners such as stall assistant Fadilah Ismail.

Madam Fadilah, 47, who earns $900 working in a coffee shop, is seeing more of her wage go towards basic necessities, such as rice and milk.

'I used to be able to save a bit of money together with my husband's salary. But now I am paying more for rice even though I buy cheaper brands, and I can't save any more,' she says.

Analysts say that managing inflation will be all the more critical during periods of slow growth, as high prices will hit low-income earners that much harder.

In Singapore's case, the main tool to fight inflation is the exchange rate policy, as imported inflation through food and electricity directly affects families.

But strengthening the exchange rate will also hurt Singapore's exporters, making the use of exchange rate policy a tricky one during a time of slow growth.

Beyond the regular economic and business cycles, Singapore's economy is also going through a structural change that will affect its ability to grow as fast as it did previously.

Despite its status as a developed economy, Singapore managed to grow at an average of 6per cent from 2000 to last year.

Singapore's most recent experience with protracted slower growth of less than 5 per cent was between 2001 and 2003.

After a sharp recession in 2001, due to the downturn in the global electronics cycle, the economy grew by an average of 4.3 per cent a year for the next two years.

That period sparked intense soul-searching and the formation of the Economic Review Committee. New ways to grow the economy were looked at, culminating in the controversial decision to build the two integrated resorts and to bring Formula One motor racing here.

As Singapore looks ahead to slow growth being a more permanent state of affairs, experts like DBS economist Irvin Seah say it is an inevitable part of development.

'Every economy and country has physical limits, especially for a small economy like Singapore,' says Mr Seah.

'There is only so much that good policy, technological innovation and the Internet can do to push Singapore's production frontiers,' he adds.

Back in 2009, the Economic Strategies Committee had already signalled the onset of slower growth.

It noted that the long-term potential growth rate for Singapore was between 3 per cent and 5 per cent, a rate much lower than the historical average annual rate of 8 per cent.

In one simulation of the future of Singapore's economy, Lee Kuan Yew School of Public Policy Associate Professor Tan Khee Giap set out three growth scenarios.

The base scenario is for Singapore to grow at about 4 per cent for the next 10 years, assuming the Republic manages to raise workers' productivity.

The optimistic scenario is for Singapore to grow at about 5 per cent, closer to what it achieved in the past decade.

But if it does not manage to raise the productivity of its capital and labour inputs, Singapore could grow at just 1.78 per cent a year for the next decade.

Slow growth is not bad growth

SLOW growth over the long term, in Singapore's context, is not necessarily bad growth, say some economists.

What matters more for Singapore's economy is the quality of growth. In other words, it is not how big the pie gets but how nice it tastes and whether everyone gets a bite of it.

Mr Manu Bhaskaran, chief executive of Centennial Asia Advisers, notes that Singapore is already, in per capita terms, one of the richest countries in the world.

'As you approach the existing frontiers of economic potential, growth will inevitably slow down,' he says.

He points out that many successful northern European economies grow at around 2 per cent and still deliver 'very high citizen welfare, enviable public services and continued economic dynamism, so we should not be fixated by our growth coming down to 3 per cent or thereabouts'.

Instead, he says that the aim of economic policy should no longer be to maximise gross domestic product (GDP) growth.

'It should be explicitly to maximise citizen welfare, which might include such factors as per capita consumption,' he says.

OCBC economist Selena Ling says the Government will have to focus more on maintaining high standards of living, while ensuring the lower-income are well supported.

'I think if the economy, which is already at full employment, manages inflation well, there is less to worry about with slow growth,' she says.

She points out that one of the main criticisms of the previous mode of economic growth, which was to grow as fast as the economy allowed, was that it generated huge inflationary pressures.

'So, even if you grew fast, it was unsustainable growth. It might be better to grow slowly but keep prices stable, so that wage increases are kept as real gains,' she says.

Another criticism of the 'grow as fast as we can' paradigm was that it widened the income gap. This is borne out by the latest wage figures from the Department of Statistics, which show that average household income per household member last year for the top 10 per cent was $9,174.

By comparison, the lowest 10 per cent of households had average per capita income of just $354, while the next 10 per cent had per capita income of $675.

Says DBS' Mr Seah: 'Slow growth may not be bad, especially if it allows the Government to tackle the issue of the wage gap in a more effective manner.'

Inclusive growth?

RECOGNISING that the income gap has widened significantly over the years, the Government has said it will focus on growth that is inclusive, instead of simply chasing growth.

It has set a target of raising real median incomes by 30 per cent over the next decade. The Government has also pledged to spend more on education, social safety nets and public transport.

But with growth slowing, economists such as SMU's Prof Chor warn that it will be more difficult to achieve inclusive growth.

'It becomes much harder to generate a rise in the share of wages in GDP when economic conditions are slowing and the size of the overall economic pie is roughly constant,' he says.

But National Trades Union Congress deputy secretary-general Ong Ye Kung disagrees. He admits that a slow growth era may mean companies cutting back on investment and reducing training for their workers.

At the same time, more time is freed up for training.

'In Singapore, the Government is able to support upgrading in a big way. We can take the opportunity to upgrade skills - not just generic skills, but dive deep to build expertise in workers,' he says.

'The Government's message for productivity and inclusive growth must be even louder and clearer in a downturn.'

If there is one thing that all analysts agree on, it is that future growth must be powered by productivity, though the road is hard and long.

The Government has set a target of raising productivity by between 2 per cent and 3 per cent over the next decade, rolling out plans to help different industries achieve this.

Says UniSim's Prof Tan: 'We have to focus on strengthening productivity improvements because this is the one thing that appears to have eluded us. Part of the way forward, I feel, involves realising there is no other way.'

Inclusive growth is also about making sure workers get a share of productivity gains. Firms have in recent years been taking a larger slice of the gains from profits, leaving less for workers' wages.

Singapore workers' share of the national income declined from 47 per cent in 2001 to 41 per cent in 2006. That is lower than the 60 per cent or more that their counterparts in other developed economies enjoy.

To counter this trend, the labour movement launched its own $40 million Inclusive Growth Programme in August last year, which aims to help companies raise productivity. In return, the firm has to share the gains with workers.

But the wage gap has grown so large that it will be difficult to claim success at inclusive growth without spending more on the social safety net and subsidies, some analysts say.

To this end, a greater burden will fall on the Government and its ability to generate strong returns on its investments, to supplement its revenue from taxes.

Prof Tan of the Lee Kuan Yew School of Public Policy says: 'Slow growth means we have to count on Net Investment Returns to top up special transfers.' In fact, special transfers allocated per year have more than doubled to about $7billion over the past three years, from an average of $2.6 billion a year between 2000 and 2008.

DBS' Mr Seah identifies the Workfare Income Supplement (WIS) as one major area that needs to be beefed up. Started in 2007, the scheme tops up the incomes of older workers who earn below a certain threshold.

Likewise, the need to continually ensure social mobility in the system will also mean large investments in education, he adds.

For stall assistant Madam Fadilah, she sees education for her children as the passport out of her current plight.

She hopes that her younger daughter, now in Secondary3, makes it to junior college (JC). Her oldest son is with the Institute of Technical Education, while her youngest daughter is still in primary school.

'I will work till I drop. But if she can make it to JC, she can go to university, get a good job. Then it will be all worth it.'

aaronl@sph.com.sg

melissat@sph.com.sg

The runaway IP train

2011-12-14T18:45:00.000+08:00

NINE-YEAR-OLD Ian Lim spends three evenings a week with a private tutor on mathematics, English and Chinese. Next year, when he enters Primary 4, he will spend four evenings a week, including his Saturdays, on tuition.
By Sandra Davie, Senior Writer

His manager father and housewife mum admit that their son is stressed out from all the studying. They know the $1,100 spent on providing tuition for him is a lot of money.

Not that Ian is at risk of failing. He is already top of his class. His parents just want him to score good enough grades at the Primary School Leaving Examination (PSLE) to get into an Integrated Programme (IP), preferably at Raffles Institution, where the cut-off point for admission is above 260.

If he does not get into an IP school, where he is assured of a place in a junior college, they fear he would have scant chance of getting into a good junior college for his A levels.

The Lims are typical of an increasing number of parents piling the pressure on their young children early, in the hopes of getting them into the elite IP programme.

Their concern is that their children cannot get a place in a premier secondary school or junior college because many top institutions now reserve the bulk of their places for students in the IP.

The IP started in 2004 at eight schools, including the Raffles and Hwa Chong family of schools. It was targeted at the top 10 per cent of the PSLE cohort, who were clearly university-bound.

The idea was to allow these students to skip the O levels and go straight to the A levels or International Baccalaureate (IB). This way, their learning would not be stifled by having to prepare for two major examinations in six years. Instead, the seamless secondary and junior college education would develop their intellectual curiosity and other talents.

The IP - called the 'through-train' programme for skipping the O levels - became so popular that pupils and parents clamoured to get on board. More schools responded by offering the IP.

By 2013, 18 - or just about all the premier secondary schools and junior colleges - will be offering the programme.

This has created a fear among parents that there will be even fewer places in top junior colleges for those not in the IP, who hope to get in after the O levels.

The Ministry of Education (MOE) has assured parents repeatedly that the IP junior colleges are offering just as many places as before to those coming in via the O-level route. But in the absence of hard numbers, parents have resorted to doing their own checks, and cite figures to explain why they worry.

Hwa Chong Institution and Raffles Institution, for example, each give out only 250 places a year to those from the non-IP track. The remainder of the 1,200 places at each of these two colleges go to the IP students from their own institutions.

The through-train that started out as a niche programme for a small elite group risks becoming a runaway train. Some fixes are needed to reduce undue pressure on students racing to be admitted to the IP at Secondary 1.

Right now, students can be admitted into the IP at Secondary 1, Secondary 3 and JC1 after the O levels. MOE can ensure that there are multiple entry points into IP schools, and that a good number of places are given out at each level.

Another simple fix is for schools and MOE to release admission figures.

Schools should make public their admission figures to the IP, giving the number of students who enter at Secondary 1, Secondary 3 and at JC1 after the O levels. This gives parents the assurance that their students can get another chance if they fail to do so at Secondary 1.

Schools should also publish data comparing the performance of their IP students to those who join them after the O levels. The two top junior colleges, Raffles Institution and Hwa Chong Institution, say the performance of students who joined them at JC1 is on a par with those who were on their IP track earlier.

On a more macro level, MOE should consider whether it is good for the education system as a whole if so many top secondary schools should convert to the IP. Some parents and alumni of IP schools have already questioned this.

One of them is an old girl of the popular Singapore Chinese Girls' School (SCGS). She remembers that the school principal then, Ms Rosalind Heng, steadfastly stood by the tried and tested O-level route. When other top schools were debating whether to offer the IP through-train, Ms Heng said that SCGS prepared its students well for the O levels, and it was going to continue that tradition.

But SCGS is among the latest list of schools to announce that it will offer the IP. Laments the SCGS alumna, a mother of two who went on to the elite Raffles JC: 'What is wrong with the O levels? Is there no value in it any more? It prepared me well for the A levels.'

Another issue to consider is whether more schools which offer the IP can do so in parallel with the O levels. After all, some students even at top schools benefit from the more structured O-level track. And there is a small number who fail to get an A-level certificate or IB diploma after six years in the IP.

Without O levels, their highest formal qualification is only their PSLE certificate. There may thus be benefits for schools to retain the O levels and allow students to switch tracks from the IP to the O levels.

Students who entered the IP schools with their O levels and aced the A levels do not regret having sat for the O levels. They say the examination was good practice for the A levels.

The Integrated Programme began as a niche programme for very bright children expected to make it to university, who thus do not have to sit for the O-level sorting examination. But with so many schools jumping on board, is it becoming a default programme, resulting in parents pushing their average kids to get in?

Seven years on, it is time to review the IP experiment and consider the effects it is having on students and parents' behaviour. It might be time to put the brakes on the IP and return it to its original purpose - a programme for a very small minority - and restore the place of the O levels for the rest.

sandra@sph.com.sg

Cultural Revolution memories under threat

2011-12-12T18:42:00.000+08:00

SHANTOU (Guangdong): After a night of rain, a light mist hangs over the green slopes of Mount Ta, shrouding the quiet hills with a cloak of mystique and secrecy that it could probably do without.
By Peh Shing Huei, China Bureau Chief

A pagoda stands near the summit, flanked by a circular temple-like building and inscribed tombstones, silent amid the wild banana trees.

The mountain shares the isolation and serenity of a Taoist enclave, but has neither the harmony nor the balance of the ancient Chinese way.

BACKGROUND STORY

Torture and shaming methods

New corpse bride

After beating and killing a man and a woman, the naked male corpse is placed on top of the female body to simulate sexual intercourse. The pair may not necessarily be married or related.

Plucking pubic hair

The victim is stripped naked and bound, and tormentors aggressively pull out his pubic hair by hand. It is designed to humiliate.

Begging for forgiveness

The victim is made to kneel for long periods in front of Chairman Mao Zedong's statue to ask for forgiveness. He is beaten mercilessly if he makes the slightest movement.

Stone on corpse

Even after being beaten to death, the victim is not left alone. A giant stone is placed on his body so that even in the afterlife, he will not be able to flip around and start anew.

PEH SHING HUEI

As home to China's only Cultural Revolution museum, the desolate hills make for a depressing time capsule for one of the country's most painful tragedies - way too much yin rather than yang; more negative than positive.

Its grief goes beyond the gruesome memories it exhibits. The six-year-old museum, which is almost an hour's drive from the heart of Teochew port city Shantou - more familiar to Singaporeans as 'Swatow' - has been facing official pressure to shut down.

While the Chinese Communist Party (CCP) has been happily encouraging the people to sing revolutionary 'red songs' of the Maoist era, it wants few public reminders of the uglier works from those times.

'A lot of people want to snuff out our tiny flame,' said museum co-founder Peng Qi'an, on the 35th anniversary of the decade-long Cultural Revolution, which started in 1966 when Chairman Mao Zedong encouraged chaos under the guise of class struggle, killing millions in the pro-cess.

The museum was built without official approval and support, the result of a brave project on a taboo subject.

Mr Peng, who is now 80 and a former vice-mayor of Shantou, has with some like-minded friends been gathering private donations since 1997, including 300,000 yuan (S$60,000) from Hong Kong tycoon Li Ka-shing, who hails from Shantou.

'He would like to give more, but this is very politically sensitive,' said Mr Peng of the high-profile donor.

In 2009, the museum was forced to shut down for more than a month, and officials posted four guards at its doors to turn visitors away. It is believed that the nervousness was tied to the 20th anniversary of the Tiananmen Square incident.

Guangdong authorities also muzzle Mr Peng every now and then, banning him from speaking to foreign media.

Cultural Revolution historian Yin Hongbiao from Peking University explained: 'The CCP has decided to 'cold storage' the topic because if people keep talking about how bad it was, it will affect how they view Mao and the party.'

Most of the time, the CCP chooses to simply ignore the museum.

'They could support us, punish us or just pretend we do not exist. But the party has already said the Cultural Revolution is wrong. So if they punish us, it would be like punching themselves,' Mr Peng explained.

'Yet, they do not want to support us. So they choose to ignore.'

All domestic Chinese media has been banned from reporting on the museum, and there are no road signs directing visitors.

'Even some locals do not know there is this museum here,' he said.

What they miss is an impressive display spread across the hills of Mount Ta, capturing the Cultural Revolution's crude violence.

The indoor section of the museum contains about 1,100 photographs chiselled into granite slabs, including images of Mao inspecting the Red Guards, as well as sessions where victims were tortured and humiliated.

Outside the museum stands a giant sculpture of a pen and an open book, a reminder that history of the turmoil has to be recorded.

Curators also etched on stone the 304 labels used to insult class enemies, like 'dog-head advisers' and 'cow'; the 48 political campaigns the CCP waged since taking power in 1949; and the torture methods used during the Cultural Revolution.

A rare giant statue of former CCP leader Liu Shaoqi, who was Mao's main target during the Cultural Revolution and died in prison, marks the spot where annual memorial services take place.

Mr Peng, a Communist Party member, insists the museum is not meant to challenge the CCP's authority. He and his friends merely want China to remember its mistakes and not repeat such tragedies.

The tragedy left him with lifelong personal scars. A brother was tortured to death, while Mr Peng himself was locked up for years before he was placed second on a list of officials to be executed by a firing squad.

He was removed from the list at the last minute - for reasons he has yet to find out - but the trauma from those years left him determined to ensure China never forgets the tragic decade.

He decided to house the museum in Shantou's Chenghai district, where Mount Ta is, because the area saw particularly vicious and bloody struggles during the Cultural Revolution, with more than 400 dead. Some are buried in mass graves in the hills.

Their remains, and the museum, may not be taken care of for much longer.

Said Professor Yin: 'The museum would struggle to find successors. Young Chinese don't know much about the Cultural Revolution and so are not interested. Even here in Peking University, I've found that the students do not know more than foreigners.'

Such succession problems worry Mr Peng.

'No local officials dare to take over this place. No one wants to help out. We struggle for funding and information gathering,' he said.

'The Communist Party is supporting the singing of old red songs, but it wants people to forget the past. Is it possible? I don't think so.'

shpeh@sph.com.sg

Pushing the US govt for plainspeak

2011-12-10T18:18:00.000+08:00

IF YOU want to understand Americans' frustration with Washington, you might start with the very words the government uses to communicate with them.
By Suzy Khimm

Take the Labour Department's explanation of health insurance subsidies for laid-off workers under the 2009 stimulus legislation: 'Generally, the maximum period of continuation coverage is measured from the date of the original qualifying event (for federal Cobra, this is generally 18 months). However, ARRA, as amended, provides that the 15-month premium reduction period begins on the first day of the first period of coverage for which an individual is 'assistance eligible'. This is of particular importance to individuals who experience an involuntary termination following a reduction of hours. Only individuals who have additional periods of Cobra (or state continuation) coverage remaining after they become assistance eligible are entitled to the premium reduction.'

What does that mean? Cobra stands for the Consolidated Omnibus Budget Reconciliation Act, ARRA is the American Recovery and Reinvestment Act. Essentially, it explains that certain laid-off or downsized workers can get special subsidies for 15 months after losing their employer-sponsored health coverage.

It is complicated information to absorb. But does it have to be so complex to read?

Anti-jargon warriors don't think so. A small but growing band of civil servants, lawmakers and consultants is leading the charge against bureaucratic legalese. Their mission isn't just to cut down on government forms in triplicate. They believe that Washington is dysfunctional on a more basic level, and that to fix it, the public must understand what the government is telling them.

It's a movement that's deeply populist in spirit, with its aim to bring the government closer to the people. Ultimately, proponents believe they are protecting the sanctity of not only the English language, but the republic itself.

'How can you trust anyone if you don't understand what they're saying?' asked Dr Annetta Cheek, a 25-year government veteran who now runs the non- profit Centre For Plain Language. 'When you're supposed to be a democracy, and people don't even understand what government is doing, that's a problem.'

Plain-language advocates acknowledge that slaying jargon within the federal bureaucracy often seems impossible. But their ranks are growing in Washington, and officials loyal to the cause are embedded in the highest levels of all three branches of government.

Complaints have made their way to the White House.

'We hear from small businesses in particular that government documents are too unruly and long,' said Mr Cass Sunstein, head of President Barack Obama's Office of Information and Regulatory Affairs. 'It does breed a kind of frustration that isn't good for anybody.'

Under the Obama administration, this populist push to keep legalese from getting between the government and the people has gained ground. Late last year, Mr Obama signed the Plain Writing Act, which mandates that all publicly available government documents be written in a 'clear, concise' manner, requiring all agencies to push new writing standards.

The law converges with Mr Obama's pledge to create a more open, transparent government, Mr Sunstein said. It also builds on a longstanding battle against jargon in Washington. People have been railing against bureaucratic legalese for half a century. But as the government's responsibilities have grown, so have its rules and regulations, plus all the exceptions and carve-outs that interest groups have lobbied to include. Ensuring that all these provisions are technically and legally correct means it's often easier for the government to produce documents that are complicated, and hard for the public to understand, than ones that are simple.

According to the federal government's primer on plain language at www.plain language.gov, the father of the movement was John O'Hayre, an employee of the Bureau of Land Management, who resolved that convoluted prose had made government documents impossible to read.

His 1966 book Gobbledygook Has Gotta Go helped launch the movement. A few years later, then President Richard Nixon required the Federal Register to be written in 'layman's terms' rather than 'government-ese', followed by an executive order from the president after next, Mr Jimmy Carter, which told federal agencies to solicit information 'in a simple, straightforward fashion'.

Though the following president Ronald Reagan rescinded Mr Carter's order, Mr Bill Clinton issued an executive order in 1998 when he was president, requiring all federal employees to use short sentences, the active voice and 'common, everyday words'. But such executive actions haven't stemmed the bureaucratic jargon.

The Plain Writing Act has no penalties for complex writing, and the federal government has yet to appoint its own editor-in-chief to monitor agencies' efforts.

Connecting good governance with plain language has been a long struggle. In his famous 1946 essay, Politics And The English Language, George Orwell argued that the government's 'lifeless, imitative style' produced groupthink. 'One can probably bring about some improvement by starting at the verbal end. If you simplify your English, you are freed from the worst follies of orthodoxy,' he wrote.

But, left to their own devices, agencies tend to develop inscrutably dense vocabularies. Representative Bruce Braley, the House's point man for plainspeak, said: 'Smart people with great educations feel they have to demonstrate that they know what they're doing by writing in complex, impossible-to-understand language with lots of clauses and subparagraphs.'

He singled out lawyers as the movement's most stubborn foe. 'Anything that grew out of legal training that has 'wherefores', 'hereinafter', 'party of the first part, party of the second part', 'as referenced in subclauses A, B and C'. Those types of things are impossible to follow,' said Mr Braley, himself a lawyer.

Often, Dr Cheek said, it's possible to use plain language in such documents without diluting or diminishing their legal meaning. 'It's a very common excuse. Some people try to tell you that it's dumbing down.' A few departments and agencies have taken the early lead in the war against bureaucrat-speak. The Department of Veterans Affairs began a massive effort to rewrite its benefits rules in the early 2000s after an internal review and more than a dozen court decisions cited the need to clarify its confusing, ponderous style, as two officials wrote in a 2004 report. Its Regulation Rewrite Project has taken years, but preliminary feedback has been positive: After recasting one benefits form in plain language, the response rate to it rose from 35 per cent to more than 55 per cent, saving the agency millions of dollars.

Convincing the rest of the government to follow suit may seem like its own bureaucratic nightmare: Every agency must appoint plain-language 'officers', post guides and issue reports to comply with the 2010 Act.

One agency to have openly embraced the movement is among the most loathed institutions in Washington: the Internal Revenue Service. This year, the IRS won the Centre for Plain Language's top prize for intelligible writing in public life, the 2011 ClearMark Award.

Receiving the award in May, Ms Jodi Patterson, who runs the IRS' Office of Taxpayer Correspondence, gave a speech that distilled the essence of the plain-language movement. 'They may not want to hear from us,' she said. 'But at least they'll understand what it is we want them to do.'

The writer is an economic policy reporter for The Washington Post.

WASHINGTON POS

What makes you happy?

2011-12-09T19:46:00.000+08:00

One by one, developed countries are drawing up happiness indices. Their governments realise GDP growth figures alone are a poor measure of people's well-being.
By Andrea Ong
LAST year, Ms J.H Lim, 23, started her first job as a tax associate at an accounting firm.

She quit after seven months, giving up prospects of good pay and career progression to become a physical education teacher at a secondary school.

'I didn't find value or meaning in what I was doing,' she says.

She is now much happier. 'I like sports, I like interacting with the students and I see meaning in encouraging them to enjoy sports and lead a healthy lifestyle at a young age,' says the fitness buff, who ran the Standard Chartered marathon on Sunday.

Several developed countries are going through a soul-search akin to Ms Lim's. They are asking their citizens: Are you happy? What makes you happy?

And they are coming up with indices to measure and track people's happiness levels.

Earlier this week, Japan unveiled a set of draft indicators. The 132 indices put numbers to areas like women's satisfaction with men's participation in childcare, the number of young people who live in isolation, and people's sense of whether they are living as happily as others in the community, reported the Asahi Shimbun newspaper.

By doing so, Japan has become the latest to join the ranks of countries such as Australia, Britain and France, which have acknowledged the need to look beyond pure economic indicators like gross domestic product in assessing their people's well-being.

Two months ago, the topic of happiness came up in Singapore's Parliament when Workers' Party MP Sylvia Lim raised the example of Bhutan, which has a Gross National Happiness index.

She pointed out that Singapore was one of 66 nations to co-sponsor a United Nations resolution initiated by Bhutan in July entitled Happiness: Towards A Holistic Approach To Development.

Ms Lim asked how the Government intended to introduce indicators of happiness, and how these would guide its policies over the next five years.

This sparked a lively debate among MPs about Singaporeans' well-being and the importance of GDP growth.

It also raised two big questions: What is the link between GDP and happiness? Is there a need for Singapore to start measuring its people's happiness?

The happiness paradox

THERE is a growing body of research which suggests that growth in GDP, which adds up all that is produced and consumed in an economy, does not lead to greater happiness.

The paradox was highlighted in 1974 by American economist Richard Easterlin, who found that happiness levels of societies tend to stagnate after a point, even as national wealth continues to rise.

He reviewed his findings last year and concluded that the paradox is usually seen in countries which are developed or rapidly developing. For instance, income per capita has doubled over 20 years in Chile, China and South Korea, but happiness in these places has not kept pace.

The 'Easterlin paradox' appears to be at work in Singapore too, according to research by two National University of Singapore (NUS) business school dons.

Based on three surveys on Singaporeans' well-being and quality of life, conducted over the past seven years, Dr Tambyah Siok Kuan and Associate Professor Tan Soo Jiuan found that happiness levels did not vary much even though GDP grew by an average of 7 per cent each year.

'Despite the quick rebound from the global financial crisis of 2008 to 2009 and the blistering growth rate of 14.5per cent in 2010, Singaporeans are not necessarily happier,' Dr Tambyah and Prof Tan tell Insight.

In fact, the happiness level this year fell by 3.5 points from 72.5 per cent in 2006.

One reason behind the Easterlin paradox is that GDP figures do not capture the stresses and strains in society caused by income inequality and other side-effects of growth.

Dr Tambyah and Prof Tan note that Singapore's 'euphoric economic growth' was accompanied by growing pains, such as a higher cost of living and the strain caused by a foreign worker influx on housing, transport and social ties.

'Singapore citizens perceived that the spoils of success were not adequately shared with them as they felt slighted in the intense competition for jobs, housing and other opportunities,' they add.

A book containing their analyses and findings from this year's survey of 1,500 Singaporeans will be published next year.

Other areas not reflected in GDP measures include work-life balance and satisfaction with life.

Just ask financial analyst Brian Tan, 26. He earns over $110,000 a year - much more than many others his age.

But there is a price. A typical work day for him starts at 8am and ends late at night, with no time for dinner, because Mr Tan has to handle overseas clients. Even on holiday, he is constantly checking e-mail messages on his BlackBerry.

While he enjoys the intellectual challenge and excitement of his job, the lack of a work-life balance takes its toll.

'Sometimes it's very hard to find reasons to be happy when I'm in the office at 2am and I know I have to come back in at 8am,' he says. The bachelor adds wryly that his relationship status on Facebook should say, simply: 'I'm very busy.'

Mr Tan's high income gives him greater purchasing power, but that does not translate into happiness. 'I've felt that I'm spending money just to justify why I'm working so hard,' he says.

'I know I can subsist on much less and still be very happy.'

Economist Nattavudh Powdthavee of Nanyang Technological University (NTU) has another explanation for the Easterlin paradox.

'Human beings care a lot about status. Many people would rather be the second richest person in a poor area, than to live in a rich area where many are better off than them,' says Dr Powdthavee.

Hence, as incomes rise across the board in advanced countries like Singapore, it becomes increasingly harder to improve one's status in relation to others.

Dr Powdthavee offers an example: 'If you tell someone who earns a lot of money to slow down and work less because it's bad for his health, chances are he won't stop unless someone else does. He won't want to fall behind his peers with the same education and income level.'

He adds: 'Money only buys you happiness if it buys you rank and status, but there's not so much rank to go around.'

Measuring happiness

DR TAMBYAH believes 'the time is ripe' for Singapore to introduce national indicators of happiness and quality of life.

Bhutan has tracked its Gross National Happiness since 1972, when King Jigme Singye Wangchuck coined the term. The index has 33 indicators, including equality, literacy, pollution, corruption and time spent with family.

Happiness indices have gained ground since 2008, when French Prime Minister Nicolas Sarkozy tasked a group of economists and social scientists with studying how economic and social progress can be measured in modern economies.

Led by Nobel Prize-winning economists Joseph Stiglitz and Amartya Sen, the group's 2009 report called for measures of well-being and sustainability on top of traditional economic indicators.

Mr Sarkozy declared that France would include happiness and well-being in its measures of progress. Other countries have since followed suit, including Britain, which released the results of its first nation-wide survey on well-being last week.

Earlier this year, the Organisation for Economic Cooperation and Development (OECD) released an index called Your Better Life. It applies 11 indicators of well-being to the OECD's 34 member countries. These are a mix of subjective and objective factors like health, work-life balance, housing, income and social capital.

In October, OECD secretary-general Angel Gurria said such measures are important, as promoting growth 'as usual' is no longer an option in the current climate of slowing growth and a looming financial meltdown.

Introducing a similar index in Singapore would come with its own set of challenges, as well-being is subjective.

Still, researchers say Singapore can take a leaf from the 11 OECD indicators and build on existing research.

Psychologist Christie Scollon of the Singapore Management University suggests the Government may be interested in specific areas, such as work satisfaction, finances, leisure time, family and commuting.

'These seem to be hot topics in public debate these days,' she notes. Research also shows that these factors might play a 'a particularly important role in Singaporean conceptions of the good life'.

A snapshot of Singapore

ONE old bugbear is why Singapore tends to do badly in global surveys on happiness, such as the Gallup World Poll on life satisfaction and the Happy Planet Index.

Cultural differences could play a part, says Professor Scollon. Asian countries usually score lower than North America and Western Europe in many world surveys, she notes.

In a study she carried out which compared Singaporeans and Americans, she found that Singaporeans emphasise wealth more in their conception of the good life than Americans. 'Too much emphasis on wealth has been shown to be detrimental to well-being,' she says.

Different cultures also have different norms about what is considered good and desirable. 'Americans strongly value feeling good and being happy. In Asian societies, pleasant emotions are also desirable but less so,' adds Prof Scollon.

But Dr Powdthavee of NTU cautions that international happiness rankings should be taken in context.

The main purpose of happiness indicators is to track how people within a country fare across time and demographic groups, he argues. The information should also be made publicly available for academics and policymakers to study.

Within Singapore, Dr Tambyah would like to see greater collaboration among academics studying happiness.

'There are many research scholars interested in the study of happiness. If we could pool all our resources, along with funding from the government, we might be able to come up with a sustained programme of research that we can track over time,' she says.

But studies like those she and Prof Tan have conducted already serve to provide a snapshot of Singaporeans' happiness. And with a happiness level which has hovered around 70 per cent for the last seven years, it seems Singaporeans may not be that unhappy after all.

Some factors like satisfaction with family life and national pride also keep cropping up when Singaporeans are asked what makes them happy.

For instance, a survey by Grey Singapore marketing agency, released in October, found that Singaporeans were happiest about these two factors, as well as their religion and spirituality.

'Religion provides you with an outlet and gives answers to things that modern science and modern life cannot give answers to,' says Inter-Religious Organisation president Ashvin Desai, 55.

While the Grey Singapore survey's sample size of 200 is not large enough to be statistically representative, its findings on how happiness varies across age groups squares with global trends.

Singaporeans aged 18 to 29 reported the greatest net unhappiness, while the most number of people who said they were very unhappy came from the 30 to 44 age group.

On the other hand, Singaporeans aged 45 to 59 were the happiest.

Research has shown that happiness levels form a U-shape across the ages, typically rising after middle age, says Dr Powdthavee.

Mr Desai, who falls into the happiest age group of Singaporeans, is not surprised by the finding. 'When you are young, you have a lot of aspirations. But when you reach my age, you tend to accept things as they are and be satisfied with what you have.'

Happiness - a work in progress

TO TAKE happiness seriously is not to neglect economic growth.

Psychologist Ng Wei Ting of UniSIM, who has studied the connection between wealth and happiness, says that income remains a moderately strong predictor of life satisfaction.

Factors linked to poor economic growth - such as unemployment - could also make people unhappy.

Some economists have argued that the Easterlin paradox is flawed as within each country, people with higher income tend to report higher satisfaction with life.

Dr Ng and Prof Scollon explain that income could relate differently to various aspects of well-being. Income tends to have a stronger link to people's satisfaction with life as a whole but weaker links to positive and negative feelings.

'Both well-being and economic indicators are important,' says Dr Ng. 'The issue is how to integrate these well-being indicators such that they can supplement traditional economic indicators, and not to replace the latter.'

Singapore's national pledge enshrines the words 'happiness, prosperity and progress'.

In a 1998 interview with The Straits Times, then Senior Minister Lee Kuan Yew said those words were chosen because 'we wished for a state of well-being opposite to the one we were then in. We were down in the dumps with communal riots, the economy was in bad shape and there was no progress with industrialisation. These words represented our aspirations for the well-being of a people.'

Singapore's circumstances have changed dramatically since then. Perhaps it is time to think anew about how to match those aspirations to the nuts and bolts of policymaking.

Getting to grips with the nebulous idea of happiness is a first step.

As Professor Stiglitz said when unveiling his 2009 well-being report for France: 'What you measure affects what you do. If you don't measure the right thing, you don't do the right thing.'

andreao@sph.com.sg

Tough decisions ahead for S'pore

2011-12-03T22:12:00.001+08:00

POLICYMAKERS in Singapore will face tough decisions on monetary and fiscal policies, as economic growth slows but inflation, while easing, stays fairly high, according to a new report.
By Magdalen Ng

Citigroup economist Kit Wei Zheng notes in the report that inflationary pressures can be curbed with a strong Singdollar, as this holds down import prices.

However, with the economy in the doldrums, a weaker Singdollar may be preferred by businesses and manufacturers, for example, as their exports become cheaper and more competitive, he said.

With these two opposing constraints, the Monetary Authority of Singapore (MAS), which uses the exchange rate as its monetary policy tool, will have a close call to make on whether to let the Singdollar continue to strengthen.

Mr Kit said in the report that Singapore's economy faces challenges from weakened demand in the advanced economies.

The Ministry of Trade and Industry has estimated that economic growth will slow markedly next year to come in between 1 and 3 per cent.

Inflation is expected to moderate from recent high levels, and is forecast at 2.5 to 3.5 per cent, but that is still above historical averages. Core inflation, which excludes accommodation and private transport costs, is projected to be 1.5 to 2 per cent.

Still, said Mr Kit, factors such as labour shortages will put upward pressure on inflation next year.

As unit labour costs continue to rise, profit margins of labour-intensive sectors will come under pressure, and it may only be a matter of time before firms pass on higher wage costs to consumers.

Monetary policy has been tightened - with the Singdollar allowed to appreciate - since last April. The central bank eased the policy in October, so the Singdollar could continue to strengthen but at a more gradual pace than before.

The general consensus among economists seems to be that given the downside risks to growth, the MAS is likely to be more biased towards further easing to neutral.

OCBC economist Selena Ling said: 'Given that they already eased monetary policy in October, and the dovish 2012 growth forecasts, the message is quite clear where the risk lies. What we want to do is to skirt a recession, so it will have to be a fine balance to tread.'

However, Mr Kit added that it will be a tough decision: 'If core inflation remains stable but non-core inflation remains sticky, and if gross domestic product growth in the next two quarters shows sign of bottoming, the odds of easing to neutral would recede.'

In the event that GDP growth continues to slide well into the first quarter of next year, with few signs of turning around, the case for an easing to neutral would be strongest.

A similar story can be told throughout Asia, as the troubled euro zone is Asia's largest trading partner, accounting for 5.2 per cent of Asia's GDP.

Europe is Singapore's largest non-oil domestic export market, and the largest foreign direct investor here.

Bank of America Merrill Lynch economist Chua Hak Bin expects central banks in Asia to step up monetary and fiscal easing next year, as growth concerns will outweigh inflation risks. Other than Singapore, only Thailand and Indonesia have eased monetary policy.

It is possible that the Singapore Government may choose to run a smaller surplus, or even a deficit next year, but the hurdles for a fiscal response on the scale of that seen in 2009 are high.

Mr Kit believes the thrust of fiscal policy for Singapore next year will likely be to keep business costs manageable through a variety of tax rebates and reliefs.

Why have auditors at all?

2011-11-28T13:22:00.000+08:00

SIX months ago, accounting firm PricewaterhouseCoopers (PwC) said MF Global and its units 'maintained, in all material respects, effective internal control over financial reporting as of March 31, 2011'. A lot of people who relied on that opinion lost a lot of money.
By Jonathan Weil

MF Global filed for bankruptcy on Oct 31. Last week, the trustee in the liquidation of its United States brokerage unit said as much as US$1.2 billion (S$1.6 billion) of customer money is missing, perhaps more. Those deposits should have been kept segregated from company funds. It seems they were not.

What is the point of having auditors make reports like this? And are they worth the cost?

When an auditor certifies that a client's internal controls are effective, that is supposed to mean the company can do basic functions like maintain accurate financial records, detect unauthorised transactions, and keep track of its receipts and expenditures. We know MF could not do these things during the final days before its bankruptcy filing, when former New Jersey governor Jon Corzine was still its chief executive officer.

'Their books are a disaster,' Mr Scott O'Malia, a commissioner at the Commodity Futures Trading Commission (CFTC), told the Wall Street Journal in an interview.

The newspaper also quoted Interactive Brokers Group CEO Thomas Peterffy as saying: 'I always knew the records were in shambles, but I didn't know to what extent.' Interactive Brokers backed out of a potential deal to buy MF last month after finding discrepancies in its financial reports.

So, to believe PwC got it right when it blessed MF's controls in May, you would have to accept the notion that MF's controls were effective in March, and did not start going bad until some time later.

Although we should not rule out anything, this scenario seems implausible. One lesson from the 1980s savings-and-loan crisis is that when a financial institution fails, it is almost always true its internal controls were poor - and had been so for a long time. Otherwise, it would not have failed.

There is more at stake here than the missing US$1.2 billion. Besides MF, other companies that use PwC's New York office as their auditor include Goldman Sachs and JPMorgan Chase. Both banks presumably are too big to fail, meaning taxpayers would be on the hook if they ever blew up. If PwC cannot spot control weaknesses at a relatively small shop like MF, which had US$41 billion of assets, it is a bit much to expect it would catch anything materially amiss at Goldman, which has US$949 billion of assets, or at a serial acquirer such as JPMorgan, with US$2.3 trillion of assets.

Fortunately for PwC, there is no better alternative. What can Goldman or JPMorgan do? Switch to KPMG? Ernst & Young? Deloitte & Touche? Their track records are no better.

The reason MF had to get an outside audit report on its internal controls was that the Sarbanes-Oxley Act requires it. That law was enacted in 2002 in response to a wave of audit failures at big companies such as WorldCom and Enron.

Thanks in part to the new workload, audit fees at the Big Four accounting firms skyrocketed. So, too, did the number of financial restatements by public companies, which seemed to show the auditors were drilling down and catching lots of errors. For a while, it looked like the new rules were working.

Then a backlash hit. Corporate executives, lawmakers and even Securities and Exchange Commission officials complained the auditors were too strict. The number of restatements plunged. Audit fees stopped soaring, and overall have been little changed since 2007, according to a July report by Analyst's Accounting Observer editor Jack Ciesielski.

Many companies' audit fees plunged, suggesting auditors there were doing less work. In 2007, MF Global paid PwC US$17.1 million in audit fees. By this year, that had fallen to US$10.9 million, as warning signs about MF's internal controls were surfacing publicly.

In 2007, MF and one of its executives paid a combined US$77 million to settle CFTC allegations of mishandling hedge-fund clients' accounts, as well as supervisory and record-keeping violations. In 2009, the commission fined MF US$10 million for four instances of risk-supervision failures, including one that resulted in US$141 million of trading losses on wheat futures.

Suffice it to say, PwC should have been on high alert.

On top of that, PwC's main regulator, the Public Company Accounting Oversight Board, released a nasty report this week on PwC's audit performance. The agency cited deficiencies in 28 audits, out of 75 it inspected last year.

The tally included 13 clients where the board said the firm had botched its internal-control audits. The report did not name the companies. One could have been MF, for all we know.

In a response letter to the board, PwC's US chairman Bob Moritz and US audit practice head Tim Ryan said the firm is taking steps to improve its audit quality.

But the point of having a report by an independent auditor is to assure the public that what a company says is true. If the reports are not reliable, they are worse than worthless, because they sucker the public with false promises.

Maybe, just maybe, we should stop requiring them altogether.

BLOOMBERG

He returns to China from US, but now he can't leave

2011-11-28T12:20:00.000+08:00

BEIJING: After two decades of working as a successful engineer in the United States, Mr Hu Zhicheng (right) decided to return to China in 2004 and apply his rich experience to designing catalytic converters for its booming automotive industry.

'I saw how polluted the air was here, and thought I could make a difference,' said Mr Hu, a naturalised US citizen who has a doctorate in engineering.

Now, it seems he cannot leave.

The last three times he tried to board an aeroplane and return to his family in Los Angeles, Mr Hu, 49, was turned away by Chinese border agents, who claimed he was a wanted man.

The problem is, he cannot find out exactly who wants him and why.

Mr Hu, an inventor trained at the Massachusetts Institute of Technology with 48 patents and a number of prestigious science awards to his name, was detained for 11/2 years starting in 2008 after a former business associate accused him of commercial theft.

The charges were so spurious that prosecutors withdrew the case - a rare gesture in China's top-down legal system.

But since his release 19 months ago, his life has been in limbo, and his family has grown increasingly frantic.

He writes to powerful Communist Party officials, who he imagines might control his fate. A coterie of influential friends and colleagues has been lobbying on his behalf. And this month, his daughter, a sophomore at the University of California, Berkeley, began a petition campaign that has garnered more than 50,000 signatures.

Mr Richard Buangan, a spokesman for the US Embassy in Beijing, said US diplomats have had little success in pressing his case with Chinese officials.

'No authority has been cooperative with our request for information on the restrictions that block his departure from China,' he said.

Mr Hu's predicament highlights the potential perils of doing business in China, where commercial disputes can easily become criminal matters, especially when the politically well-connected use the country's malleable legal system to bludgeon rivals.

Most worrisome, legal experts say, are the country's vague commercial secret laws, which state-owned enterprises - the companies that dominate China's economy - sometimes wield to protect information related to production, procurement, mergers and strategic planning.

Anecdotal evidence suggests that overseas Chinese are more vulnerable to such abuses than their non-Chinese compatriots.

Last year, Stern Hu, an Australian Chinese mining executive, was detained after a deal between his company Rio Tinto and the state-owned Aluminium Corporation of China fell through. Convicted of stealing trade secrets and bribery, he was sentenced to 10 years in jail after a largely closed trial.

Xue Feng, an American Chinese geologist who is serving eight years in jail on similar charges, said he was tortured during his interrogation. His supporters, including US diplomats, insist that the oil and gas industry data he sold was publicly available.

In 2008, the authorities executed Wo Weihan, a Chinese biomedical researcher who had returned from Europe to start a medical supply company in Beijing. Tried in secret, he was accused of espionage, but details of his crimes were never disclosed.

Even as official policies seek to lure China-born inventors, academics and entrepreneurs with housing perks and financial incentives, lingering anti-Western xenophobia nurtured during the Mao years sometimes taints them as unpatriotic for having left.

'It is kind of a reverse racism,' said Mr John Kamm, executive director of Dui Hua, a US human rights group that frequently advocates on behalf of detained foreign nationals in China. 'If you are ethnic Chinese with a foreign passport, you are really not considered a foreigner.'

Mr Hu Zhicheng, whose long resume includes stints as a researcher in Japan and more than a decade working for US designer of catalytic converters Engelhard Corp, would seem to be the ideal returnee.

In 2006, when he took a job as chief scientist for Wuxi Weifu Environmental Catalysts, a company in eastern Jiangsu province, he also brought along his wife and their two US-born children, in part, he said, because he wanted them to become steeped in Chinese language and culture.

His return coincided with a surge in domestic car production and government-led efforts to reduce emissions. The company prospered, and so did Mr Hu, who eventually became Wuxi Weifu's president. It now provides catalytic converters for half of all China-made cars.

His troubles began after his company refused to buy components from Tianjin-based Hysci Specialty Materials, which once supplied Engelhard.

According to Mr Hu and his lawyers, Hysci would not take no for an answer. They say Hysci's well-connected chief executive, Mr Dou Shihua, sent Tianjin public security agents to Wuxi Weifu to pressure Mr Hu to change his mind.

The police raised allegations of stolen trade secrets, but also suggested that the accusations would evaporate if the two companies did business together. Mr Hu would not budge.

'We have a system of quality control, and even one word from me could not change that,' he said.

In the end, the veiled threats gave way to an arrest, and Mr Hu was put in jail in Tianjin.

The patent infringement case prosecutors eventually built against him cited technology that has been publicly available in the US for decades, according to several scientists who rallied to his defence.

But even after prosecutors withdrew the case and Mr Hu was freed, he found his return home to the US blocked by immigration officials, who claimed he was still wanted by the Tianjin police. Each time he or his lawyer contacted the authorities there, however, they were told there were no such restrictions.

One of his lawyers said he believed Mr Dou was still using his influence to exact revenge or get a deal. Over the phone, a Hysci sales executive refused to comment on the case. The Tianjin Public Security Bureau hung up before answering queries on Mr Hu.

NEW YORK TIMES

'Zeronauts' needed in these dangerous times

2011-11-27T15:17:00.001+08:00

At the stroke of midnight on Oct 31, countries across the world, led by the United Nations, celebrated a series of symbolic seven-billionth babies being born.

While parents were congratulated and babies photographed by local press, one man - a prominent authority on sustainable development - posed a sober thought amid the revelry.

Mr John Elkington, executive chairman of London-based environmental consultancy Volans, notes that though this might be a symbolic moment for humanity, it also marks 'dangerous times'.

Speaking to The Sunday Times in Singapore recently - he was here to speak at a forum held by the Singapore International Foundation - Mr Elkington, 62, says the problem humanity faces today is that it has inherited from the 19th and 20th centuries economic and business models, technologies and ways of thinking about the world which are now 'actively dangerous'.

'When I was born, there were fewer than three billion people in the world. This month, we hit seven billion and in these circumstances, resource availability and environmental security are severely threatened,' he said.

Going by UN estimates, the world population is set to rise further - reaching 10.1 billion in the next 90 years, or reaching 9.3 billion by the middle of this century. Current consumption patterns are simply unsustainable, given this scenario.

Mr Elkington says he recognises that some governments and business leaders have been responding to these concerns by adopting policies and strategies that ensure the sustainable and efficient use of resources.

'But I don't think they are remotely addressing the agenda yet, or introducing the disruptive change we need to see,' he says bluntly.

Mr Elkington is regarded widely as a pioneer thinker on sustainability - he originated the term 'triple bottom line', or people, planet and profit, which has become popular in business speak and often used in conveying the idea of a socially responsible business.

It is a way of measuring success beyond financial performance to include the environmental and social impact of an organisation.

These days, he is working on a new book, to be published early next year, and has coined a new term that describes people who are leading the way in solving the world's problems - the 'Zeronauts'.

He explains to the forum, aptly called 'Ideas for a Better World': In the last century, astronauts launched into space in search of new worlds, and in the process, catalysed the evolution of everything from non-stick frying pans to mini-computers to satellite telecommunications.

Their work forced humans to recognise that Earth is a very rare planet indeed - and our only home for the foreseeable future.

Today, there is a new breed of explorers and entrepreneurs - the Zeronauts - who are pioneering novel ways to create wealth that is in tune with the 21st century reality of a human population pushing towards 10 billion people.

Central to this idea of the Zeronauts is that they are putting the world on a path to a zero impact economy - that is, one with zero risk, zero emissions, zero pollution and waste, zero biodiversity loss and zero population growth, as defined by Mr Elkington.

He cites one person he identifies as a Zeronaut in the book: Microsoft founder Bill Gates.

But Mr Elkington says Mr Gates is a Zeronaut not due to his leadership while he was in Microsoft, but rather now in running the Bill and Melinda Gates Foundation, which is pursuing objectives towards a zero impact economy.

'Unusually, for a business leader in the United States, he's talked about the need to drive towards zero carbon, but he's also addressing it in areas like public health care, in polio and malaria; he's trying to drive these diseases to zero,' notes Mr Elkington.

Professor Simon Tay, chairman of the Singapore Institute of International Affairs, who was in a panel discussion with Mr Elkington at the forum, notes that if Singapore were to measure itself based on this idea of the zero impact economy, then it has not been bold enough.

It was only recently that the local bourse launched voluntary guidelines for companies to report on their operations and their impact, he adds.

So does Singapore have what it takes to produce such a Zeronaut?

To this, Mr Elkington says: 'I'm deeply positive about Singapore, but I do recognise that the entrepreneurial instinct (here) is not as great as it needs to be.'

He explains that, typically, disruptive innovation comes from places where people are 'profoundly uncomfortable' because the current system is not working.

Singapore is an efficient society 'where things work' and this may take away the urgency to change things disruptively, he adds.

Still, Singapore has shown leadership by planning for long-term timeframes in its investments and that is why Volans, in a recent report called 'The Future Quotient', identified the Republic as one of 50 top examples of leaders that have shown the capacity to create value in the long term.

Mr Elkington defines long term as a time horizon of beyond 33 years - the defined age of a generation. The report profiles examples of innovation which are 'future- centric' and inter-generational in nature.

'Singapore has accumulated a huge amount of wealth over time and trained, educated and skilled up its population in a way that is highly unusual,' he says.

'So although the average person might not have this raw hunger to change the world, there's the capacity to do so once the mind is made up, as Singapore has demonstrated with its capabilities in water technology,' he adds.

That said, he admits that ordinary people are 'unlikely to be driven by the concept of zero'.

The Zeronaut agenda is a business and governmental concept which he hopes will help leaders see that they are defining the world's sustainability challenge too loosely.

'A relatively small number will come out of this revolution... but those who do will be the Amazons and eBays of the future.'

jcheam@sph.com.sg

Nothing concrete in earlier plans for Bukit Brown

2011-11-27T15:16:00.001+08:00

Last Sunday's article, 'Bukit Brown road project 'can't wait'', reported that 'strangely, the URA said, no one raised a ruckus when plans highlighting the area's intended future use were displayed for feedback' in 1991 and 2001, when the Concept Plans were released.

This argument is being used to refute current public opinion against the transport and housing developments in Bukit Brown cemetery.

In 1991 and 2001, there were no concrete announcements on the intrusion of physical infrastructure like the road. If there had been a public outcry then, the Government would have replied, understandably, that such an outcry was premature as nothing concrete had yet been planned.

More importantly, we were a different country two decades ago. Thanks to nation-building efforts by the Government, Singaporeans today are more conscious of their national identity and are thus sensitive to any loss of heritage.

With a bigger population now, Singaporeans are hungry for more open spaces and recreational areas, of which Bukit Brown is one.

We also now have new know-ledge of just how rich a historical and ecological resource Bukit Brown is.

Arguments for the conservation of the area were put forth by the Nature Society (Singapore) in its Feedback for the Inter-Ministerial Committee Project on Sustainable Singapore: Lively and Liveable City in 2009, and by the Singapore Heritage Society in the book, Spaces Of The Dead: A Case For The Living, published in May this year.

The Urban Redevelopment Authority Concept Plan is intended for long-term planning and its zones are broad and flexible.

For example, Pulau Ubin was also zoned for residential use in 1991 but it was later re-zoned as 'open space and reserve land' in the 2001 Concept Plan.

To imply that present-day concerns are invalidated by not having been raised 10 or 20 years ago is a flawed premise that leads to sub-optimal decision-making based on outdated information and analysis.

It also denies the possibility for any generation to determine its own immediate future and those of its children.

Chua Ai Lin
Terence Chong
Executive Committee Members
Singapore Heritage Society

Toddler tragedy still haunts market

2011-11-27T15:15:00.001+08:00

The red ink marking the spot where the tragedy took place has grown so faint it is barely visible. The police have stopped coming by to question witnesses. The media throng has disappeared.

By Peh Shing Huei, China Bureau Chief, In Foshan (Guangdong)

More than a month after toddler Wang Yue died after being hit by not one but two vehicles here in an incident that shocked China, much of Guangfo Hardware Market has regained a semblance of normalcy.

But probe a little deeper and the shopkeepers of this sprawling wholesale centre are still struggling to shed their collective cloaks of shame.

BACKGROUND STORY

Alienation

'Unless they are my suppliers or my customers, I don't talk to them. That's just how it is here. I've been here for 10 years but I hardly know the guy next door.'

MADAM XU RUIFANG, whose electrical cables shop is adjacent to the spot where the toddler was run over. Most shopkeepers in the area do not know one another.

Many Chinese pointed fingers at the people in this industrial market, accusing them of being cold and apathetic.

The belief was that the 18 passers-by who ignored the dying two-year-old nicknamed Little Yue Yue, before a rag-and-bone collector picked her up and called for help, were from the market.

Clearly, such criticisms hurt. Several of those in shops just metres from the accident refused to be interviewed by The Sunday Times.

Others quickly said they were not around when the girl was run over by the vehicles.

'I wasn't here. I found out about it on TV, just like you. I left just before it happened,' said Madam Xu Ruifang, whose electrical cables shop is just adjacent to the tragic spot.

A sealant shop owner, who wanted to be known only as Madam Li and whose table faces the spot just a few steps away, also said she had closed her shop when the incident occurred.

Another shopkeeper, from central Hunan province, said he was around but did not hear or see the accident, even though his shop selling hard hats and screwdrivers had a clear line of sight.

'A car blocked my view. A rack also blocked me from seeing anything. It was raining heavily that evening and I didn't hear a thing,' he said, raising his voice as he smoked a cigarette. He declined to be named.

He swore that he would have helped if he had witnessed the incident. 'I would have made a call. It doesn't cost much these days to use your mobile phone anyway.'

He did not know Yue Yue or her parents, who used to run a shop in the market but have since closed it down and reportedly moved to nearby provincial capital Guangzhou.

Neither did any of the other shopkeepers. In fact, most of them do not know one another too.

In this massive market as big as 56 football fields, there are migrants from all parts of the country. Most stick with those from their hometowns and do not even know their neighbours.

They flocked to coastal Guangdong province to make money and improve their lives, but share little else in common.

'We do chat sometimes but don't ask me their names. We just call one another 'boss',' said Madam Li.

'I'm from Guangdong but most of the people here are from other provinces and we speak different dialects. It's hard to communicate.'

They do not share meals either. Most of them cook on makeshift stoves in their shops and wolf down their lunches, sitting on stools with a few colleagues.

There are more than 2,000 shops in the market but little sense of community under the metal roof.

There is no common area to gather. When night falls, the shopkeepers pull down their shutters, retreating upstairs where some of them live or driving off in motorcycles or small vans.

As the Hunan shop owner said: 'Talk to others? Where am I going to find the time? I'm here to run a business, you know.'

Analysts believe the Guangfo market is a microcosm of China as a 'society of strangers', where people are indifferent to those who live and work near them.

This came about as the Chinese enjoyed an unprecedented freedom of movement, leaving their familiar rural communities of longstanding personal relations for urban surroundings where kinship and friendship are usually secondary to the pursuit of wealth.

Madam Xu, who is from central Hubei province, explained their alienating world: 'Unless they are my suppliers or my customers, I don't talk to them. That's just how it is here. I've been here for 10 years but I hardly know the guy next door.'

shpeh@sph.com.sg

How about better parents?

2011-11-23T14:14:00.000+08:00

THERE is no question that a great teacher can make a huge difference in a student's achievement, and we need to recruit, train and reward more such teachers. But here's what some new studies are also showing: We need better parents.
By Thomas L. Friedman

Parents more focused on their children's education can also make a huge difference in a student's achievement.

How do we know? Every three years, the Organisation for Economic Cooperation and Development, or OECD, conducts exams as part of the Programme for International Student Assessment, or Pisa, which tests 15-year-olds in the world's leading industrialised nations on their reading comprehension and ability to use what they have learnt in maths and science to solve real problems - the most important skills for succeeding in college and life. America's 15-year-olds have not been distinguishing themselves in the Pisa exams compared with students in Singapore, Finland and Shanghai.

To better understand why some students thrive taking the Pisa tests and others do not, Mr Andreas Schleicher, who oversees the exams for the OECD, was encouraged by the OECD countries to look beyond the classrooms. So starting with four countries in 2006, and then adding 14 more in 2009, the Pisa team went to the parents of 5,000 students and interviewed them 'about how they raised their kids and then compared that with the test results' for each of those years, Mr Schleicher explained to me.

Two weeks ago, the Pisa team published the three main findings of its study: 'Fifteen-year-old students whose parents often read books with them during their first year of primary school show markedly higher scores in Pisa 2009 than students whose parents read with them infrequently or not at all.

'The performance advantage among students whose parents read to them in their early school years is evident regardless of the family's socioeconomic background. Parents' engagement with their 15-year-olds is strongly associated with better performance in Pisa.'

Mr Schleicher explained to me that 'just asking your child how was their school day and showing genuine interest in the learning that they are doing can have the same impact as hours of private tutoring. It is something every parent can do, no matter what their education level or social background'.

For instance, the Pisa study revealed that 'students whose parents reported that they had read a book with their child 'every day or almost every day' or 'once or twice a week' during the first year of primary school have markedly higher scores in Pisa 2009 than students whose parents reported that they had read a book with their child 'never or almost never' or only 'once or twice a month'. On average, the score difference is 25 points, the equivalent of well over half a school year'.

Yes, students from more well-to-do households are more likely to have more involved parents. 'However,' the Pisa team found, 'even when comparing students of similar socioeconomic backgrounds, those students whose parents regularly read books to them when they were in the first year of primary school score 14 points higher, on average, than students whose parents did not.'

The kind of parental involvement matters, as well. 'For example,' the Pisa study noted, 'on average, the score point difference in reading that is associated with parental involvement is largest when parents read a book with their child, when they talk about things they have done during the day, and when they tell stories to their children.'

The score point difference is smallest when parental involvement takes the form of simply playing with their children.

These Pisa findings were echoed in a recent study by the National School Boards Association's Centre for Public Education, and written up by the centre's director, Ms Patte Barth, in the latest issue of The American School Board Journal.

The study, called 'Back to School: How parent involvement affects student achievement', found something 'somewhat surprising', wrote Ms Barth: 'Parent involvement can take many forms, but only a few of them relate to higher student performance. Of those that work, parental actions that support children's learning at home are most likely to have an impact on academic achievement at school.

'Monitoring homework; making sure children get to school; rewarding their efforts and talking up the idea of going to college. These parent actions are linked to better attendance, grades, test scores, and preparation for college,' Ms Barth wrote.

'The study found that getting parents involved with their children's learning at home is a more powerful driver of achievement than parents attending PTA and school board meetings, volunteering in classrooms, participating in fund-raising, and showing up at back-to-school nights.'

To be sure, there is no substitute for a good teacher. There is nothing more valuable than great classroom instruction. But let's stop putting the whole burden on teachers. We also need better parents. Better parents can make every teacher more effective.

NEW YORK TIMES

Khmer Rouge 'Killing Fields' trial begins

2011-11-22T12:50:00.000+08:00

PHNOM PENH: Cambodians were reminded of their tragic history yesterday as the trial began of three top Khmer Rouge leaders accused of orchestrating Cambodia's 'Killing Fields' in the late 1970s.

The prosecution started its case at the United Nations-backed tribunal more than three decades after the South-east Asian country endured some of the 20th century's worst atrocities. Two-thirds of Cambodians today were not yet born when the communist group's reign of terror ended in 1979.

The defendants are old and infirm, and there are fears they will not live long enough for justice to be done.

BACKGROUND STORY

IENG THIRITH: The most powerful woman in the Khmer Rouge, Ieng Thirith, 79, is Ieng Sary's wife and was Pol Pot's sister-in-law.
Sometimes described as the 'First Lady' of the Khmer Rouge, she acted as social affairs minister and is held responsible for the regime's drastic re-ordering of traditional Cambodian life.

Court-appointed experts told the tribunal last month that she suffers from dementia and most likely has Alzheimer's disease. Trial chamber judges recently ruled that she was unfit for trial.

NUON CHEA: 'Brother No. 2' to ruthless Khmer Rouge leader Pol Pot, ailing Nuon Chea is believed to have been a key architect of the regime's death machine.
One of the last top regime leaders to surrender in a deal with the government, Nuon Chea has acknowledged the deaths that took place under the Khmer Rouge's rule but denies he was in a position to stop the disaster that unfolded.

KHIEU SAMPHAN: A French-educated radical, Khieu Samphan served as head of state for Pol Pot's regime, and was one of its few diplomats who had contact with the outside world.
The 80-year-old claimed he was an intellectual and nationalist who knew little, until long afterwards, of the devastation wrought during the Khmer Rouge regime.

IENG SARY: Known as 'Brother No. 3', the now 86-year-old served as foreign minister under Pol Pot, who was also his brother-in-law.
Ieng Sary was found guilty of genocide in a 1979 Vietnamese-backed trial, widely regarded as a sham. He was granted a royal amnesty in 1996 but a court recently ruled that the amnesty did not bar him from further prosecution.

AGENCE FRANCE-PRESSE

Yesterday, they sat side by side with their lawyers in the courtroom especially built for the tribunal: 85-year-old Nuon Chea, the Khmer Rouge's chief ideologist and No. 2 leader; 80-year-old Khieu Samphan, a former head of state; and 86-year-old Ieng Sary, the former foreign minister.

A fourth defendant, 79-year-old Ieng Thirith, was ruled unfit to stand trial last week because she has Alzheimer's disease. She is Ieng Sary's wife and was the regime's minister for social affairs.

The charges include crimes against humanity, genocide, religious persecution, homicide and torture. Their leader, Pol Pot, died in 1998 in the jungle while a prisoner of his own comrades.

An estimated 1.7 million people died of execution, starvation, exhaustion or lack of medical care as a result of the Khmer Rouge's radical policies, which essentially turned all of Cambodia into a forced labour camp as the movement attempted to create a pure agrarian socialist society.

'This is the first (trial) of the Khmer Rouge leadership responsible for enacting a series of policies that led to the deaths of nearly two million people,' said Ms Anne Heindel, legal adviser to the independent Documentation Centre of Cambodia.

'There is hope that it will help Cambodians understand why it happened, why Khmer killed Khmer, and will teach the younger generation to ensure it will never happen again,' she said.

Mr Meas Sery, 51, said he came to the hearing from his home in Prey Veng province to see for himself the faces of the defendants. He said he lost four siblings under the Khmer Rouge regime.

'I am happy to see these three leaders brought to the court. I believe that justice will come,' he said.

Ms Chea Leang, Cambodian co-prosecutor, recalled for the court the brutalities of Khmer Rouge rule, beginning on April 17, 1975, when they captured Phnom Penh, ending a bitter five-year civil war, and began the forced evacuation to the countryside of the estimated one million people who had sheltered in the capital.

Personal property was banned, religion, press and all personal freedoms abolished. The evidence, she said, would show that the regime presided over by the defendants 'was one of the most brutal and horrific in modern history'.

Some of those attending the trial provided their own vignettes of the terror.

Mr Chim Phorn, 72, was chief of a commune under the Khmer Rouge regime in Bantheay Meanchey province in the north-west. In 1977, he said, he beat a couple to death with an axe handle.

'I was ordered to kill the young couple because they fell in love without being married,' he said. 'If I did not kill them, my supervisor would have killed me, so to save my life, I had no choice but to kill them.'

When the Khmer Rouge led by Pol Pot took power in 1975, they all but sealed off the country to the outside world and sent all city dwellers to vast rural communes. Intellectuals, entrepreneurs and anyone considered a threat were imprisoned, tortured and often executed.

Economic and social disaster ensued. Vietnam, whose border provinces had suffered bloody attacks by Khmer Rouge soldiers, sponsored a resistance and invaded, ousting the Khmer Rouge in 1979 and installing a client regime.

The UN-backed tribunal, established in 2006, has tried just one case, convicting Kaing Guek Eav, the former head of the regime's notorious S-21 prison, last July and sentencing him to 35 years in prison for war crimes, crimes against humanity and other offences.

His sentence was reduced to a 19-year term due to time served and other technicalities.

ASSOCIATED PRESS

Awkward questions about China's reserves

2011-11-21T12:51:00.000+08:00

WHOSE money is it anyway?

That question, referring to China's huge foreign exchange reserves, has been the subject of much recent debate here following news that Beijing's help was being sought to beef up a rescue fund for tottering European economies.

As the world's largest holder of forex reserves, China is under international pressure to join a bailout of Europe, which hopes to double the fund to €1 trillion (S$1.75 trillion).

China's top officials have so far remained non-committal on whether they will go to Europe's aid, but that has not stopped a burgeoning debate at home centred on the country's US$3.4 trillion (S$4.4 trillion) worth of forex reserves.

The issues raised have evolved beyond relatively straightforward economic considerations of investment risks and returns, or how Chinese exports will gain from throwing a lifeline to the Europe Union, whose countries make up China's biggest trading partner.

Instead, the heated discussions among netizens and in the Chinese media have taken an increasingly political tone. Some have called for aid to be linked to conditions that give China more say on the global stage. Others question why China should help developed countries when the money could be better spent on struggling businesses or the poor at home.

At the heart of this clamour is a fundamental question that Beijing is hard-pressed to answer: To whom do China's forex reserves really belong, and whose interests should they serve?

In theory, this is a no-brainer: The money does not belong to the people. 'Forex reserves are the central bank's money and represent the country's wealth, (they are) not to be understood as the common expression of the Chinese people's 'blood and sweat money',' asserted a People's Daily editorial a month ago.

The Communist Party newspaper, which broadly reflects the government's views, said it was a misconception that forex reserves are what millions of Chinese enterprises and workers get in exchange for their toil.

Instead, it explained, the reserves rightfully belong to the central bank, which 'purchased' them from exporters by issuing yuan for the foreign currency they get in trade.

China has a controlled exchange rate and closed capital account, so Chinese businesses and people can hold only limited amounts of foreign currency.

And since the Chinese people cannot participate in currency speculation, the authorities have to do it on their behalf, the People's Daily added.

Such arguments drew derisive responses from scholars such as Geneva-based Chinese economist Xiang Lanxin.

'Despite the convoluted technical jargon employed by the central bank apologists, the logic of their argument appears crystal clear to ordinary citizens: The forex reserves are none of your business, but earning them is your duty!' he wrote in the South China Morning Post.

He further questioned if the reserves were serving the interests of corrupt officials: 'Are there kickbacks involved for purchasing foreign bonds?'

'Jiang Yong, a leading Chinese government analyst of financial securities, revealed recently he had been told that the dirty side of foreign exchange operations was much bigger than in the railway sector,' Mr Xiang added. Billions of yuan are believed to have been lost through corruption in China's huge rail projects.

While such claims are hard to prove, it is widely acknowledged that China's cash-pile is not transparently managed by the State Administration of Foreign Exchange (Safe) and the China Investment Corporation. These agencies are ranked among the world's most secretive government agencies that manage sovereign wealth.

So closely does China guard its information that it does not even subscribe to a set of specific disclosure standards for macroeconomic data that 65 countries, including much poorer states such as India and the Kyrgyz Republic, adhere to. Instead, Beijing has opted for a more general standard that is meant for International Monetary Fund (IMF) members with less developed statistical systems.

Given the opacity and its size as the world's No. 2 biggest economy, it is little wonder that China has reportedly met with resistance to its demands in exchange for helping Europe.

Beijing is said to have wanted a bigger say in decision-making in the IMF and to have a European Union arms embargo lifted. It is also said to have asked for market economy status - which would make it harder for other countries to start trade proceedings against it.

Reports of such conditions are likely to please the 24,000 readers polled by the state-linked newspaper Global Times recently. The respondents not only supported these strings attached, but they also had one more: Stop interfering in China's domestic affairs.

What is becoming clear is that China's huge forex reserves are becoming a matter of public interest, and Beijing is not immune to public pressures.

With rising social discontent and anger at official corruption and mismanagement, it is perhaps unsurprising that Safe put up a list of 16 frequently asked questions (FAQ) some months back to address criticisms that China's reserves were undiversified, losing value and fuelling inflation at home.

In a sense, Beijing is trapped. It refuses to acknowledge that it should provide greater accountability in its handling of the reserves and yet it is facing growing populist pressure on what to do with all that money.

This raises the hazard that political consideration might creep into play in the management of the funds.

Certainly, it is not easy to institute a system that ensures the reserves best serve national interests alone. But for starters, China could be more forthcoming with its figures and sign up to international standards such as the IMF's specific disclosure rules.

With tighter rules on accountability in place, officials deliberating future risky investment decisions would be forced to practise what Safe itself pledged in its July 28 FAQ: More information disclosure and transparency to 'safeguard the security and interests of China's foreign exchange reserves'.

graceng@sph.com.sg

To save the earth, know human nature

2011-11-20T12:46:00.000+08:00

Two years ago, the National Environment Agency (NEA) did a study of anti-littering measures to find out what really worked.
By Grace Chua

It turned out that banners reminding people not to litter - an old campaign standby - were ineffective. Now, the NEA has developed new tactics based on the study, such as using gentle social pressure in the form of Litter-Free Ambassadors, and adding bins for the convenience of people.

In environmental policy here, there is a growing recognition that understanding people's behaviour is more important than sticking dogmatically to campaigns.

And it can be just as important as new, high-tech fixes in getting people to use less fossil fuel.

At the Singapore International Energy Week held at the beginning of this month there was, for the first time, a discussion of the role of behavioural economics in energy use. It was organised by the National University of Singapore's Energy Studies Institute (ESI).

Behavioural economics is a young branch of economics that uses insights from psychology to understand why people sometimes act in seemingly irrational ways.

For instance, researchers once found people bought more cans of soup at a supermarket if the display bore the sign 'Limit: 12 per customer'.

Discussion moderator Tilak Doshi, chief economist and principal fellow at the institute, commented that renewable energy makes up such a minuscule fraction of energy mix that it will not go far towards lowering the nation's carbon footprint.

Getting individuals and businesses to be more energy efficient instead offers a 'bigger bang for the buck' in that arena.

But Singapore has long eschewed energy subsidies, saying the 'true' market cost of electricity encourages people to use less electricity. Has it reached the point where cost alone is not enough to get people to save energy?

'We've always had market pricing, but not to the point where we price externalities,' said Dr Doshi, referring to putting a price tag on carbon emissions from energy use.

'If you do that and other countries don't, then you become less competitive,' he said. That is why few countries have stepped forward to tax or price carbon emissions.

So there is a limit to the usefulness of price alone.

Stanford energy economist James Sweeney, speaking at the Energy Week discussion, outlined several ways to increase energy efficiency that rely on behavioural change.

What would save most energy, said Professor Sweeney, is getting people to buy more energy-efficient appliances in the first place.

For instance, in the United States, most people with programmable thermostats never change the default programming. So thermostats could be sold pre-set to a comfortable temperature when one is at home, and to use less or no heating at night when one is asleep and tucked under the blanket.

Then, it is getting people to use those gadgets more efficiently.

If energy usage, Prof Sweeney explained, was front and centre at the 'point of purchase' of electricity - when viewers turn on the television, for example, they might think twice about turning it on. But the electricity bill comes only at the end of the month, long after people have consumed the electricity.

There is also a social aspect to behaviour change. Yale economist Kenneth Gillingham, also part of the Energy Week panel, found that people in one California neighbourhood were more likely to install solar panels on their roofs if their neighbours also had them.

Singapore already does this - by printing on utility bills the average electricity consumption by one's housing type - but Dr Doshi suggested narrowing it down by neighbourhood or by suburb, which could spur friendly competition between direct neighbours. And the NEA is banking on such social pressure by introducing its 'Litter-Free Ambassadors' - volunteers who run personal campaigns to get friends and family not to litter.

Behavioural solutions, however, are not a magic bullet. They should be thought of as complements to traditional approaches, pointed out Dr Gillingham. One obstacle is the need to understand context. For example, in California, utility bills in some areas showed average consumption in the neighbourhood as well as the energy consumption by one's most efficient neighbours. But only liberal Democrats cut back their energy use in response - Republicans did not budge.

One explanation was that when conservatives learn that they are better than average, they become less vigilant about turning the lights off - in other words, they move closer to the norm. Some groups respond to nudges in unexpected ways, something proponents of behavioural solutions should keep in mind.

Yet such solutions need not mean more regulation, explained Copenhagen Business School researcher Lucia Reisch, if they do away with the need to legislate certain behaviour or energy standards. And they can pay for themselves in energy saved. Professor Reisch, who also studies cross-cultural communication, said these are also applicable to Asia as human nature, ways of thought and biases are similar everywhere.

But social norms can vary, she said. For example, people in the US are more likely to say that someone driving badly is a bad driver, and those in India are more likely to believe he or she is having a bad day.

Dr Doshi said Singapore has been 'nudging' its citizens into good choices for decades - one example is automatic payroll donations to self-help groups Sinda, Mendaki and the CDAC (Chinese Development Assistance Council).

So behavioural economics is worth paying attention to when it comes to encouraging people to adopt green efforts. In terms of the cost of cutting carbon emissions, it has the potential to be as effective as pouring money into the most advanced solar-energy research, which is necessary for progress but insufficient on its own.

More fine-tuned 'nudges' should be introduced and the private sector could seek to capitalise on human behaviour - for example, by selling smart meters that measure energy use up front. Also, more research should be done here and throughout Asia to find out which aspects of so-called human nature are truly universal, and which are peculiar to the US university undergraduates involved in so many such studies.

As one civil servant asked during the Energy Week panel discussion: How to convince decision-makers that these measures work? Run more tests and collect more empirical data, came the reply.

If human nature is irrational anyway, said Prof Sweeney, 'why don't we use that irrationality as a nudge to get people to accomplish things we want to accomplish'.

Values education version 2.2

2011-11-20T12:44:00.000+08:00

The Government has a grand scheme to get values education back on track, but a similar and, by now, largely forgotten campaign in 1991 to do the same has raised questions among educators about its application, even as they welcome the new plan.
By Yen Feng

The plan integrates character education into various aspects of school, including sports and co-curricular activities.

Of those who said they supported the new programme, few recalled a similar initiative introduced 20 years ago: The White Paper on Shared Values.

Those who did could not say what the values were.

Former MPs Chng Hee Kok and Hong Hai, who had debated passionately on the subject in Parliament, were unable to recall what the row was about.

'I must confess that I have little recollection,' said Dr Hong, 68, a People's Action Party (PAP) MP from 1989 to 1991, when asked about the public debate that ensued when the paper was introduced in 1991.

The White Paper on Shared Values, which extolled the virtues of 'nation before community, society above self', was the first codified, made-for-Singaporeans set of values to promote and guide ethical behaviour.

It provided the road map for a nationwide, moral education syllabus the following year, and later, paved the way for schools to devise their own values curricula.

It was not until 2003 that it was replaced by a set of new values after discussions with school leaders and teachers in a curriculum review.

The Ministry of Education (MOE) said the new values were adopted to provide a 'more focused approach' in the light of changing social trends, in response to queries from The Sunday Times.

Thus was born 'Respect, Responsibility, Integrity, Care, Harmony, and Resilience' - qualities that underpinned subsequent values curricula, including the latest Character and Citizenship Education (CCE) programme.

The CCE programme is said to be an integrated approach combining various values education curricula over the years. Educators said it signalled a sign of changed times.

Instead of exhorting students to put nation and society before self, the CCE's aim today is for students to build personal character, before applying themselves socially.

Over the years, the changing profile of students has made less effective, 'one-way' methods of teaching values, said Mr Michael Muhunthan, vice-principal of Pioneer Junior College.

'Students now engage better in a discussion. Telling them what is right and wrong does not work well any more.'

Ms Rohanah Mohd Ali, a teacher of more than 20 years, said that with globalisation and a growing culture of consumerism, students have become more self-centred.

The focus on individuals is necessary so students can learn to better themselves, the head of English at Greenview Secondary, who is in her 40s, added.

Overwhelmingly, educators welcomed the ministry's move to update their schools' values curricula, although some remain unsure of its impact on existing programmes.

These range from small-group discussions to outdoor activities that foster values of self-reliance and kindness. Almost every school makes compulsory some form of community work, which educators say teaches compassion.

At Westgrove Primary, Mr Mark Eric Nadhan, 33, who teaches English, mathematics and science, said that apart from the school's weekly pupil well-being classes, teachers are already encouraged to find 'teachable moments' daily when values education can mesh with subject learning - a point raised at a recent CCE conference.

In his English class earlier this year, for example, Mr Nadhan said he used reports of the tsunami in Japan to teach his pupils about resilience and empathy.

Teachers with longer memories said they hoped the renewed focus on values would not go the way of its 1991 predecessor - forgotten after a period of time, or worse, during school exams.

'I'm optimistic, but I wonder how long this 'high' on morals will go on,' said education consultant Sonia Sng, 38.

Others said the CCE programme should not be seen as a signal for teachers to pull back on academic rigour in place of teaching values.

Mrs Lee Cheng Leung, 39, a part-time marketing executive and mother of two teenagers, said: 'I expect teachers to teach, not parent.

'I hope the schools will involve parents when discussing what new programmes to introduce.'

zengyan@sph.com.sg

S'pore rebuts article on its Timor Leste stance

2011-11-18T16:08:00.000+08:00

NUSA DUA (Bali): The Singapore Embassy in Jakarta yesterday rebutted an article in the Jakarta Post that said Singapore continued to reject Timor Leste's application to join Asean.

In a letter to the newspaper, the embassy said the article published yesterday was 'completely inaccurate and misinformed, particularly about Singapore's position on Timor Leste's application to join Asean'.

Deputy chief of mission Gerard Ho wrote: 'Singapore welcomes the interest of Timor Leste and other countries to join Asean.

'Singapore sees this as an indication of confidence in the centrality of Asean in the region, and its standing and credibility as an organisation, which we have always supported.'

The Jakarta Post report, headlined 'Asean to review Timor Leste's bid', said that during the grouping's foreign ministers' meeting on Wednesday, 'foreign ministers from Cambodia and Malaysia directly questioned Singapore's insistence on rejecting Timor Leste's bid'.

This is not true, Mr Ho wrote in the letter, which was seen by Singapore media.

He explained that in fact, at the Asean Coordinating Council meeting on Wednesday, 'there was consensus on Singapore's proposal to establish an Asean Coordinating Council Working Group to discuss all relevant aspects related to the application by Timor Leste, as well as its possible implications on Asean'.

Singapore Foreign Minister K. Shanmugam and his Indonesian counterpart Marty Natalegawa had also made this point in their remarks to reporters on Wednesday.

Mr Ho added that the working group will assess whether Timor Leste is able to meet the requirements of Article 6 of the Asean Charter on the admission of new members, which relates to the obligations of membership.

'Moreover, there was also consensus among the foreign ministers on how this would be presented to the public in the Chair's Statement of the 19th Asean Summit,' he said.

Asean has affirmed Timor Leste's membership bid, but is still working out the timing, as there are concerns over whether the new nation could meet the obligations of a member.

The Jakarta Post article had also named Singapore's foreign minister as Masagos Zulkifli.

Wrote Mr Ho: 'For the record, the name of Singapore's minister for foreign affairs is K. Shanmugam.'

The case for curbs on foreign property buyers

2011-11-16T16:06:00.000+08:00

SOME Singaporeans are clearly worried that the growing numbers of foreigners buying private homes are driving prices ever higher - and out of the reach of some local buyers.
By Esther Teo, Property Reporter

This concern has been heightened by a fairly new trend for foreigners to buy mass-market homes, a segment in which they had previously taken little interest.

These, of course, are the same homes that many upgraders aspire to buy.

Are restrictions on foreigners' purchase of private homes, proposed by some, warranted?

First, consider the figures. In the first eight months of this year, one in three buyers of non-landed private residential properties was a non-Singaporean.

Among buyers of private homes - excluding landed property which is more regulated - the proportion of foreigners, including permanent residents (PRs), is creeping up. Last year, it was 28 per cent.

Foreigners are also increasingly turning to new developments. A recent Business Times report showed that foreigners, excluding PRs, bought 843 uncompleted private homes from developers in the third quarter, up nearly 20 per cent from 703 homes in the previous quarter. Their share of the total number of uncompleted private homes sold by developers rose from 16.3 per cent in the second quarter to 20.1 per cent in the third quarter.

Foreigners, excluding PRs, accounted for 16 per cent of all private home purchases in the first half of the year, up from 12 per cent last year.

Perhaps the biggest worry for many Singaporeans is the fact that foreigners are now encroaching on the mass-market segment.

Foreigners' share of homes sold at price tags of under $1 million - taken as a proxy definition of a mass-market home - rose to 28 per cent in the first nine months of this year. It was 19 per cent in 2009 and 22 per cent last year, according to caveats lodged with the Urban Redevelopment Authority.

At recent launches of mass-market developments such as Parc Vera in Hougang, foreigners and PRs made up about 20 per cent of sales, compared to below 10 per cent a few years ago.

In the past, foreigners largely went for expensive homes in districts nine, 10 and 11, and this had minimal impact on the average Singaporean, said Dennis Wee Group director Chris Koh. However, they are now making a splash in the suburban leasehold mass market, he noted.

Faced with such statistics, it is little wonder that some attribute the surge in private home prices to record highs - up 18 per cent last year and a further 6 per cent in the first nine months of this year - to purchases by foreigners.

Amid this concern, some experts like Chesterton Suntec International research head Colin Tan have suggested that curbs on foreigners buying private residential properties could temper the rapid rises in prices.

To a certain extent, foreigners already face curbs on property purchases. Foreigners can buy landed homes only in Sentosa Cove. If they are PRs, they may buy some types of landed housing elsewhere, but only with approval.

The sale of resale Housing Board flats is also restricted to Singaporeans and PRs who meet certain criteria.

But the market for private condominiums is largely open to foreigners, who invest in this market on a level playing field with citizens.

Those who call for curbs point out that Singapore's real estate sector is vulnerable to speculative capital flows.

With interest rates set to stay low for the next couple of years, the plentiful funds washing around the market seeking better returns could well cause price volatility if there are no curbs, they argue.

Last month, MP Christopher de Souza (Holland-Bukit Timah GRC) suggested restrictions on foreigners buying homes. He cited Australia, which has rules that limit foreigners to buying only new properties, which they can subsequently sell only to Australians.

Singapore, like other open economies such as Hong Kong and Britain, does not restrict foreigners from purchasing private condos and apartments.

Others have suggested less onerous financing-related measures such as caps on the number of mortgages foreigners can take out or reducing further for them alone the proportion of a property's value they may borrow.

Dennis Wee's Mr Koh suggested one way would be to introduce a capital gains tax for foreigners who make gains from selling private property here. Or simply keep or impose an additional sellers' stamp duty on foreigners who sell within a stipulated period, he said.

Another suggestion from Knight Frank group managing director Danny Yeo is to differentiate between those who have a stake here and those who do not.

Long-term residents, such as PRs and foreigners working here, should not be subject to restrictions as they also need a home in Singapore. But the purchases of foreigners who do not live or work here could be subject to curbs, he said.

But as National Development Minister Khaw Boon Wan noted last month, it is important to ensure that housing policy shifts do not unwittingly harm the economy and society. Rising prices also cannot be attributed solely to foreign purchases. There are many factors at play, such as low interest rates and Singapore's strong economic fundamentals, he emphasised.

In any case, foreigners are already subject to the same anti-speculation measures as locals - including a sellers' stamp duty of up to 16 per cent. This has creamed off some speculative froth, with prices moderating for the past eight consecutive quarters - inching up just 1.3 per cent in the three months to Sept 30.

Taken together, the case for more curbs on foreign purchases is mixed. A further surge in demand from foreigners can raise prices beyond the reach of locals.

At the same time, any measure that curbs demand in one segment risks cooling down the entire market, especially with a slowing economy.

There may be a case for more calibrated measures: for example, to dampen demand for mass-market homes from foreigners who do not live or work in Singapore.

But the timing and extent of any such move are critical. For now, the trend of foreigners buying into mass-market homes is certainly one that bears careful watching.

esthert@sph.com.sg

The Jews: Ultra-orthodox at odds with secular

2011-11-11T18:00:00.000+08:00

TEL AVIV: At an ice cream parlour in the ultra-orthodox Jewish neighbourhood of Mea Shearim, a sign warns men and women not to lick cones.
By Jonathan Pearlman, For The Straits Times

Still, for some of the community's more fanatical residents, the sign was not enough. The store was recently vandalised for fear that public licking - even of ice cream - promotes promiscuity.

Although it is only a short stroll from Jerusalem's main pedestrian shopping mall, there is no mistaking where the border of this ultra-orthodox, or Haredi, community lies.

Large signs on the streets leading into the neighbourhood 'beg' women not to enter if they are wearing tight-fitting dresses or 'immodest' clothes.

And anyone who attempts to drive through the neighbourhood on the Sabbath - when driving is banned under Jewish law - risks a rock thrown through their windscreen.

For most Israelis, who are largely secular, entering such neighbourhoods is like entering another world.

But it is a world that is rapidly expanding. The ultra-orthodox community has the country's highest birth rate, prompting fears of a 'demographic threat' to Israel.

There are more than 700,000 Haredim in Israel - about 9 per cent of the population - but the proportions are rapidly changing.

A University of Haifa report last November found that Haredim account for about a quarter of the country's births. By 2040, a majority of the country's high school students will be Haredim.

Haredi families have an average of seven children - treble the national average - but are not required by the government to serve in the army.

Most do not even work. The community has the country's lowest workforce participation rate: About 30 to 40 per cent of Haredi men and half of women hold jobs.

Encouraging Haredi to integrate - and work

Instead, most of the men devote their lives to studying religious scriptures at seminaries, largely funded by the government and philanthropy.

Both Israeli Finance Minister Yuval Steinitz and Bank of Israel Governor Stanley Fischer have warned that the situation is 'unsustainable'.

'We cannot have an ever-increasing proportion of the population continuing to not go to work,' Mr Fischer said last year.

Almost 60 per cent of Haredi families live below the poverty line.

The government says the cost of the community's low level of employment is about US$1.2 billion (S$1.6 billion) a year.

However, the government and several non-governmental organisations have begun working with the community to encourage more Haredi to go to college, get jobs and enlist in the army.

These have included a special army programme which allows Haredi men to study scriptures and serve separately from women soldiers. An expert on the Haredim, Professor Amiram Gonen, a professor of geography at Hebrew University, said the community has shown signs of change in the past five years.

The main catalysts, he says, have been the global financial crisis - which dried up philanthropic funding for seminaries - and the impact of the surrounding consumer society.

In its outward appearance, a Haredi neighbourhood can seem like a throwback to an 18th-century Jewish European shtetl, or village. Most men have beards, long, curling sidelocks, and wear black suits and hats. Women wear long dresses and, if married, a headscarf or wig.

But the community, as Prof Gonen says, is not as isolated as it may appear.

For a start, many Haredim do work. Even in Mea Shearim, virtually every man seems to be clutching a prayer book or speaking on a cellphone - or both.

While many households are reluctant to expose themselves to the Internet, a growing number - about 40 per cent - have computers.

The government has budgeted US$140 million over the next six years to make education more accessible for Haredim.

'It is not a barricaded fortress,' Prof Gonen said. 'Ideas come in, new norms and tastes develop.

'The images in the media are usually of the hardcore. But the fanatics are a minority. For the most part, they want a car and furniture and a new telephone and a new computer. They do consume - they are not cut off.'

jonathanmpearlman@gmail.com

'Merkozy' calls the shots in euro zone

2011-11-10T17:58:00.000+08:00

LONDON: Europe spent decades searching for an inspirational leader. And it finally appears to have found one: 'Merkozy'.
By Jonathan Eyal, Europe Correspondent

The term was recently coined to describe the duo of German Chancellor Angela Merkel and French President Nicolas Sarkozy who effectively run the continent, disciplining misbehaving nations while rewarding those deemed good pupils.

The fate of Greece now rests entirely in Merkozy's hands: The German and French leaders put together the financial bailout plan for that stricken country, and when the Greek Prime Minister George Papandreou demurred, he was told that he could be kicked out of the European Union altogether.

BACKGROUND STORY

To some extent, the emergence of the Merkozy couple is unsurprising. For France and Germany founded the European Union and have ruled it ever since.

Italian Prime Minister Silvio Berlusconi also discovered the power of Europe's ruling couple. With only a few hours' notice, he was recently summoned to appear before Merkozy, and ordered to cut his government's budget or face bankruptcy.

Mr Berlusconi complied, but the episode finished his political career: The Italian leader who survived numerous domestic scandals over his 'bunga-bunga' parties proved no match for Dr Merkel and Mr Sarkozy.

Even those who are outside the euro currency zone have felt Merkozy's wrath: British Prime Minister David Cameron was told by Mr Sarkozy to 'shut up' and stop complaining about the continent's financial condition. The French and German leaders no longer bother with diplomatic niceties.

To some extent, the emergence of the Merkozy couple is unsurprising. For France and Germany founded the EU and have ruled it ever since. The two leaders routinely meet before each European summit to coordinate their policies, and then present them to the other member states as accomplished facts.

As Europe's biggest economies, France and Germany now contribute about €370 billion (S$647 billion) to the bailout fund created to save the continent from disaster, more than all the other European countries combined. So, Mr Sarkozy and Dr Merkel are entitled to decide what is done with their money.

Besides, 'the euro area institutions were not designed for crisis management', points out a senior EU official; the Merkel-Sarkozy tandem is the only structure which works.

Still, Merkozy's grip over Europe is not as solid as it seems.

To start with, the personalities of the two leaders could not be more different. Dr Merkel is methodical and well-briefed, while Mr Sarkozy is an unpredictable improviser of the kind ordinary Germans find infuriating.

As the daughter of a Lutheran pastor, Dr Merkel does not appreciate Mr Sarkozy's 'Latin lover' behaviour, complete with frequent hugs and kisses. And Mr Sarkozy often jokes about Dr Merkel's demeanour: He recently giggled about the German leader's inability to lose weight. The link between the two is a political marriage of convenience, rather than a meeting of minds.

And despite the appearance of equality, Mr Sarkozy remains the junior partner. For the French economy is facing the same excessive budget deficits and high debts which plague the rest of Europe.

This week, Mr Sarkozy was forced to introduce new austerity measures in an attempt to maintain France's triple-A status with international credit-rating agencies, without which France will be shut out of financial markets. So, Mr Sarkozy is clinging to Dr Merkel's coat-tails out of desperation.

And Dr Merkel is happy to pretend not to notice, because this serves Germany's interests. As Europe's paymaster, Dr Merkel knows that she is admired and dreaded in equal measure.

By sharing power with France, she protects herself from accusations of dominating other European nations. Mr Sarkozy does the unpleasant talking, while Dr Merkel does the sums.

Still, the backlash against the Merkozy duo is rising. Mr Anibal Cavaco Silva, the President of Portugal, a country which had to be bailed out, recently expressed his public concern over the emergence of a 'board of directors, which treats European institutions with disdain'. Meanwhile, smaller but rich countries, such as Austria, Finland or the Netherlands, are angry that France and Germany no longer consult them, but still demand their cash.

Dr Merkel and Mr Sarkozy have tried to answer this criticism by co-opting into their magic circle a handful of other decision makers. The recently established 'Frankfurt Group' includes the bosses of the International Monetary Fund and the European Central Bank, as well as a handful of top EU officials. The group met no fewer than four times on the margins of the recent G-20 summit, including once with US President Barack Obama.

But other European countries dismiss the Frankfurt Group as just another Franco-German directorate, and remain determined to oppose it. On Monday, finance ministers of the 10 EU countries outside the euro zone organised their own separate gathering.

'This is not a club, just an informal meeting,' said Swedish Finance Minister Anders Borg. However, the implicit message was clear: France and Germany will not be allowed to act alone.

The real danger is that, in an effort to save Europe, Dr Merkel and Mr Sarkozy could tear up the continent's existing political arrangements without putting anything else in their place.

And, to make matters worse, they may also fail to rescue the euro.

jonathan.eyal@gmail.com

Chinese students cheat to get into US colleges

2011-11-07T17:54:00.000+08:00

NEWARK: Dozens of new students crowded into a lobby of the University of Delaware's student centre at the start of the school year. Many were stylishly attired in distressed jeans and brightly coloured sneakers; half tapped away silently on smartphones while the rest engaged in boisterous conversations.

All but one - a lost-looking soul from Colombia - were from China.

Among them was Mr Fan Yisu, whose flight from Shanghai had arrived six hours earlier. Too excited to sleep, he had stayed up all night waiting for orientation at the English Language Institute to begin. Like nearly all the Chinese students at Delaware, he was conditionally admitted, and can begin taking classes only after he completes an English programme.

BACKGROUND STORY

90 per cent of Chinese applicants submit false recommendations, 70 per cent have other people write their essays, 50 per cent forge high school transcripts and 10 per cent list academic awards and other achievements they did not receive, says Zinch China, a consulting company that advises US colleges and universities about China.

He plans to major in finance, he said, and return home to work for his father's construction company after graduating. He had chosen to attend college more than 10,000km from home, he added, because 'the Americans, their education is very good'.

That opinion is widely shared in China, which is partly why the number of Chinese undergraduates in the United States has tripled in just three years to 40,000 - making them the largest group of foreign students at US colleges.

While other countries, such as South Korea and India, have for many years sent high numbers of undergraduates to the United States, it is the sudden and startling uptick in applicants from China that has caused a stir at universities.

It is also a trend that many countries are seeing, as rising incomes allow more Chinese to seek an overseas education. In Singapore, the 50,000 or so Chinese students at all educational levels form one of the largest groups of foreign students.

At Delaware, the growth has been stark. In 2007, there were just eight Chinese students; this year, there are 517.

At first glance, the trend is a boon for colleges and students alike. While China's rapidly expanding middle class can now afford to go overseas, they are also a godsend for universities that have faced sharp budget cuts in recent years.

On closer inspection, however, it can be a tricky fit for both.

Colleges eager to bolster their diversity and expand their international appeal have rushed to recruit in China, where fierce competition for seats at local universities and an aggressive admissions-agent industry feed a frenzy to land spots on US campuses.

But college officials and consultants say they are seeing widespread fabrication on applications, whether that means a personal essay written by an agent or an English proficiency score that does not jibe with a student's speaking ability.

US colleges, new to the Chinese market, struggle to distinguish between good applicants and those who are too good to be true.

Ms Tang Wenting, a junior majoring in management and international business, for instance, had very poor English when she first applied to Delaware.

An agency helped her with her application, charging her US$4,000 (S$5,060) for it. Because her English was not good enough for her to write the admissions essay, staff at the agency asked her questions about herself in Chinese and produced an essay.

Now that she can write in English herself, she does not think much of what they wrote. But it served its purpose: She was admitted, and spent six months in the English-language programme before beginning freshman classes.

As for allowing an agent to write her essay, she sees that decision in pragmatic terms: 'At that time, my English not better as now.'

Zinch China, a consulting company that advises US colleges and universities about China, interviewed 250 US-bound Beijing high school students, their parents, agents and admissions consultants.

It concluded that 90 per cent of Chinese applicants submit false recommendations, 70 per cent have other people write their essays, 50 per cent forge high school transcripts, and 10 per cent list academic awards and other achievements they did not receive.

The 'tide of application fraud', it predicted in a report, will only worsen as more students go to America.

At an orientation in September, the director of the English Language Institute at Delaware's Newark campus, Dr Scott Stevens, mixed compliments and warnings as he reminded his audience of primarily Chinese students not to cheat. 'You are all very intelligent,' he said. 'Use that intelligence to write your own papers.'

But he was candid about the challenges Delaware is facing as the population of Chinese students grows - and confronting plagiarism is near the top of the list.

Dr Stevens told of how one student memorised four Wikipedia entries so that he could regurgitate whichever one seemed most appropriate for an essay - an impressive, if misguided, feat.

For those on the ground, there is deepening concern that US colleges have entered China without truly understanding it. For officials like Dr Stevens, who has been dealing with international students for nearly three decades, Chinese undergraduates are like a code he is still trying to decipher.

'How can we reach them? How can we get them to engage? That,' he said, 'is something that keeps me up at night.'

NEW YORK TIMES

Warning over 'crisis of faith' in China

2011-11-04T12:13:00.000+08:00

BEIJING: China's top official paper yesterday warned that the government is facing 'a crisis of faith' among its people, and urged local officials to win trust in the face of rising discontent.

Anger over forced demolitions and corruption has led to a daily rash of 'mass incidents', an official euphemism for protests, worrying officials determined to defend one-party rule and ensure a smooth transition of power to a younger generation of leaders.

The call came in an editorial of the People's Daily, the official paper of the ruling Communist Party. While such an editorial does not amount to a statement of government policy, it reflects official concern.

BACKGROUND STORY

PEOPLE POWER

'If the mistrust deepens, it will bring a negative impact to the development, harmony and stability of society. A ruling party's governing position and governing power, fundamentally speaking, come from the people.'

A People's Daily editorial

'We must pay attention to the 'crisis of faith' in the relationship between grassroots cadres and the people,' the editorial said.

'If the mistrust deepens, it will bring a negative impact to the development, harmony and stability of society.

'A ruling party's governing position and governing power, fundamentally speaking, come from the people.'

China's leaders have pinned the legitimacy of one-party rule on delivering quick economic growth and higher standards of living that spread more widely among the population.

But the Communist Party has not succeeded in tackling problems that have long plagued the nation, including rampant corruption and a yawning income gap that could doom its efforts to create a more 'harmonious society'.

In a speech in July to mark the party's 90th birthday, Chinese President Hu Jintao said the anti-graft fight was the key to 'winning or losing public support and the life or death of the party'.

The central government announced on Wednesday that all civil servants will have to undergo at least six hours of ethics teaching by the end of 2015.

Topics to be taught to China's nearly 10 million civil servants will include the 'conscientious discharge of duties' and the 'justness and honesty' of government employees, the State Administration of Civil Service said in a statement.

Ethical standards will be a factor in the selection, assessment and supervision of government employees, it added.

Apart from corruption, rising land prices form another top source of public discontent. The high prices have given rise to patronage networks of officials and businessmen eager to procure more farmland for development.

A recent poll found that rural land grab disputes are hitting new highs in China, and spreading to the country's undeveloped west.

The poll, involving 1,700 households in six provinces, found disputes over land acquisitions had reached a new peak amid rampant development across the country, and was a leading cause of rural clashes, according to Outlook Weekly, a magazine run by Xinhua, China's state-run news agency.

In September, thousands of villagers in the southern Chinese region of Lufeng rioted and ransacked government offices, in a major flare-up of violence over brazen land requisitions.

Official statistics on China's rural conflicts are hard to come by, but a former deputy editor-in- chief of the People's Daily said they consistently numbered above 90,000 a year from 2007 to 2009.

Meanwhile, a 65-year-old grandmother who organised a protest in Shanghai demanding better benefits for retirees has been sentenced to 31/2 years' jail for disturbing public order, a relative and court official said yesterday.

Zhang Weimin is the leader of a group of Shanghai residents - now retired - who were sent to the far western region of Xinjiang in the 1960s to work, as part of a policy of dispatching so-called 'educated youth' to rural areas.

REUTERS, AGENCE FRANCE-PRESSE

A multifaceted look at ageing issues

2011-11-04T12:11:00.000+08:00

IF BOOKS on serious subjects like health care and dying can ever be said to be a treat, this is one of them.
By Chua Mui Hoong, Review Editor
Singapore's Ageing Population: Managing Healthcare And End-Of-Life Decisions.
Edited by Chan Wing Cheong.
Routledge Contemporary Southeast Asia Series. 222 pages, $140.

It is an intellectual treat for the sheer range of perspectives on ageing: from the medical, sociological, legal and anthropological. It also scores in offering a macro- and micro-perspective, a rare feat for academic books. The 19 contributors to the book, most of whom based their chapters on papers presented at a conference on ageing earlier, come from different academic disciplines, and quite a few are policy practitioners. So there are insights into the flesh-and-blood experience of ageing, thanks to sociologists' first-hand interviews, and policy suggestions from researchers.

One chapter describes Singapore's demographic changes in the context of an ageing Asia-Pacific, offering a macro view of ageing. (See other story.)

Yet another zooms in in some detail on the experience of ageing among men in Singapore, using its ground-up perspective to offer suggestions on ways to help elderly men age in place: go beyond health-care needs to provide meals, social support and daily assistance.

Another chapter - by Chan Wing Cheong, an associate professor at the National University of Singapore with an interest in elder law, who is also the editor of the volume - gives an insight into elder abuse victims. This is based on a study of 89 cases at TRANS SAFE Centre, a voluntary welfare organisation that handles elder abuse. This study does a useful service in confirming or overturning some commonly held assumptions about elder abuse: It is true that elderly women are more prone to being abused than elderly men. And among the different types of abuse, sons are more likely to use neglect as a form of elder abuse than other forms such as physical abuse, psychological abuse and financial abuse.

The issue of a society's rapid ageing is invariably bound up with health financing issues. The introduction of the book rightly zooms in on this Gordian knot on health financing thus: 'How can long-term medical expenses be dealt with?'

Perhaps because there are no health economists among the contributors, this important issue is not sufficiently discussed in this book. (Those who want a more thorough discussion of health-care financing can turn to another book, Social Policy In An Ageing Society: Age And Health In Singapore, by David Reisman, a professor of economics at the Nanyang Technological University, published in 2009.)

But what Chan's book on ageing lacks in economic insight, it makes up for in conceptual interest, especially when it comes to the legal and intellectual issues of end-of-life matters.

When is a person dead - when the brain has no decipherable function or must the heart also stop? How does a society represent the interests of the person at the end of life, when that person is no longer mentally capable? How much authority should a proxy carer be given to make decisions? On what basis should a proxy carer make such decisions?

Since a patient has autonomy to refuse treatment, does he also have a right to determine time and manner of death?

These difficult ethical and moral dilemmas are dealt with excellently in the last four chapters that illumine the issues with an incisive presentation of concepts.

Consider: how does one begin to make a decision for an incapacitated person? Tracey Evans Chan, an assistant professor of law at the National University of Singapore, guides the reader through the legal morass. Three usual standards apply. First, 'advance decision', which is when a patient has already indicated his or her wishes, for example via an advance medical directive or verbal instructions. Second is 'substituted judgment', which is based on one's best assessment of what the person would have chosen were he or she mentally competent. The third is 'best interests', which is making a decision based on what one thinks is in the best interest of the infirm patient.

It is interesting to know that 'the first finds clear support in the common law generally, while the second has widest support among the various US states but has been rejected by the highest courts in Britain and Canada in favour of the third'.

What of Singapore? What direction will the legal and philosophical debate here take? The chapter gives a lucid assessment of existing legal frameworks and points out their limits.

One of the most ground-breaking - and radical - proposals in the book comes towards the end, when two contributors bravely take on the sensitive issue of physician-assisted suicide (euthanasia), look at different legal models and even draft a proposed legal framework for such a law in Singapore.

This book does not claim to offer clear answers on how a society should best prepare for a rapidly ageing population. But the intelligent and varied views in this slim 222-page volume will reward both the layman and the specialist reader.

The book can be ordered online from the publisher's website http://www.routledge.com/books/details/9780415609753/). It is also available at the National University of Singapore Library and the National Library.

Wen recalls Mao's persecution

2011-11-03T11:37:00.000+08:00

BEIJING: Chinese Premier Wen Jiabao said his family was 'constantly attacked' in Maoist political campaigns that convulsed the country over past decades, giving a rare glimpse into his tumultuous past as he prepares to leave office.

China's wary leaders rarely talk about their past. But Mr Wen opened up in comments to students and teachers that were published in the China Education News yesterday, saying his father was dismissed as a teacher and sent to tend pigs.

'After I went to high school and university, my family suffered constant attacks in the successive political campaigns,' Mr Wen told the audience at Nankai Middle School, his alma mater in the northern port city of Tianjin near Beijing.

Mr Wen, 69, has stood out among China's ruling Communist Party leaders as the most persistent advocate of measured political relaxation under party control, and his published comments to the students perhaps help explain why.

Mr Wen comes from a family of teachers, and during Mao Zedong's era of fervent communism, the party attacked and demoted citizens deemed to have bad 'class' backgrounds or suspect pasts. Mr Wen's father and grandfather were among the victims. 'In 1960, my father was also investigated for so-called historical problems. He could no longer teach and was sent to work on a farm on the outskirts of the city to tend pigs, and then later worked in a library,' Mr Wen told the students when he visited the school on Oct 25, according to the transcript in the Chinese-language paper.

Surviving files about Mr Wen's grandfather from the school where he taught showed he constantly had to write 'self-criticisms' before he died of cerebral haemorrhage in 1960, Mr Wen said. 'I was the one who carried him on my back to the hospital.'

His grandfather's files 'are filled with one self-criticism after another, written in small, neat characters', he added.

Mr Wen retires as premier in early 2013 as part of a generational leadership shift that begins late next year.

As he prepares to leave power, he has made a habit of calling much more forthrightly for political reform than more cautious comrades in the Communist Party elite. But his proposals have remained vague, and Mr Wen lacks the backing from other leaders needed to act on such ideas.

To sceptics, Mr Wen's hazy words are vanity, burnishing his reputation without venturing to secure real change. More sympathetic observers have said he is defending a moderate agenda that could gain ground after the leadership transition.

'I come from the people, and had a hard childhood, so I feel sympathy for all poor people and have given all I can for the sake of their happiness,' he said.

'My childhood was spent in war and hardship, and the poverty, turmoil and famine left an ineradicable imprint on my young soul.'

China has made huge economic strides, he said, but remains beset by imbalances, inequality and corruption. 'Income distribution is unfair, and in some areas social conflicts are very sharp, with mass incidents occurring.'

'Mass incidents' is the government's euphemism for protests, demonstrations and strikes.

'If a government ignores the public and people's well-being, it ignores its foundations,' he said.

'Fairness and justice are the pillars of society, and if they are lost, then the great house of society will collapse.'

REUTERS

Not all inequality is created equal

2011-11-02T11:29:00.000+08:00

Income gap a problem but bigger issue is divide between grads and non-grads

WE LIVE in a polarising society, so perhaps it's inevitable that our experience of inequality should be polarised, too. In the first place, there is what you might call Blue Inequality. This is the kind experienced in New York City, Los Angeles, Boston, San Francisco, Seattle, Dallas, Houston and the District of Columbia. In these places, you see the top 1 per cent of earners zooming upwards, amassing more income and wealth. The economists Jon Bakija, Adam Cole and Bradley Heim have done the most authoritative research on who these top 1 per cent are.
By David Brooks

Roughly 31 per cent started or manage non-financial businesses. About 16 per cent are doctors, 14 per cent are in finance, 8 per cent are lawyers, 5 per cent are engineers and about 2 per cent are in sports, entertainment or the media.

If you live in or around these big cities, you see stores and entire neighbourhoods catering to the top 1 per cent. You see a shift in social norms. Up until 1970 or so, a chief executive would have been embarrassed to take home more than US$20 million (S$25 million). But now there is no shame, and top compensation zooms upwards.

You also see the superstar effect that economists have noticed in the income data. Within each profession, the top performers are now paid much better than the merely good or average performers.

If you live in these big cities, you see people similar to yourself, who may have gone to the same college, who are earning much more while benefiting from low tax rates, wielding disproportionate political power, gaining in prestige and contributing seemingly little to the social good. That is the experience of Blue Inequality.

Then there is what you might call Red Inequality. This is the kind experienced in Scranton, Des Moines, Naperville, Macon, Fresno, and almost everywhere else. In these places, the crucial inequality is not between the top 1 per cent and the bottom 99 per cent. It's between those with a college degree and those without. Over the past several decades, the economic benefits of education have steadily risen. In 1979, the average college graduate made 38 per cent more than the average high school graduate, according to the Federal Reserve chairman, Ben Bernanke. Now the average college graduate makes more than 75 per cent more.

Moreover, college graduates have become good at passing down advantages to their children. If you are born with parents who are college graduates, your odds of getting through college are excellent. If you are born to high school grads, your odds are terrible.

In fact, the income differentials understate the chasm between college and high school grads. In the 1970s, high school and college grads had very similar family structures. Today, college grads are much more likely to get married, they are much less likely to get divorced and they are much, much less likely to have a child out of wedlock.

Today, college grads are much less likely to smoke than high school grads, they are less likely to be obese, they are more likely to be active in their communities, they have much more social trust, they speak many more words to their children at home.

Some research suggests that college grads have much bigger friendship networks than high school grads. The social divide is even starker than the income divide.

These two forms of inequality exist in modern America. They are related but different. Over the past few months, attention has shifted almost exclusively to Blue Inequality.

That's because the protesters and media people who cover them tend to live in or near the big cities, where the top 1 per cent is so evident. That's because the liberal arts majors like to express their disdain for the shallow business and finance majors who make all the money. That's because it is easier to talk about the inequality of stock options than it is to talk about inequalities of family structure, child-rearing patterns and educational attainment. That's because many people are wedded to the notion that our problems are caused by an oppressive privileged class that perpetually keeps its boot stomped on the neck of the common man.

But the fact is that Red Inequality is much more important. The zooming wealth of the top 1 per cent is a problem, but it's not nearly as big a problem as the tens of millions of Americans who have dropped out of high school or college. It's not nearly as big a problem as the 40 per cent of children who are born out of wedlock. It's not nearly as big a problem as the nation's stagnant human capital, its stagnant social mobility and the disorganised social fabric for the bottom 50 per cent.

If your ultimate goal is to reduce inequality, then you should be furious at the doctors, bankers and CEOs. If your goal is to expand opportunity, then you have a much bigger and different agenda.

NEW YORK TIMES

Half of rich Chinese want to emigrate

2011-11-02T11:28:00.000+08:00

SHANGHAI: Nearly half of Chinese who have assets worth more than 10 million yuan (S$2 million) are considering emigration, mainly to seek better opportunities for their children's education, results of a new survey showed.

According to the survey released at the weekend by the Hurun Report and Bank of China, 46 per cent of the 980 millionaires surveyed are considering leaving China.

Fourteen per cent have either emigrated or applied, said the survey, which was done in 18 Chinese cities from May to September this year.

Some 60 per cent want to leave to seek a better education for their children. Many also cited concerns about the security of their assets in China.

One-third of the people surveyed have engaged in 'investment immigration', which allows a person to emigrate after he agrees to first invest a certain amount of money in the host country. Some countries offer residency to foreign citizens who are prepared to invest large sums.

After education, protecting assets and retirement, other reasons listed for wanting to emigrate included the lack of a sufficient legal framework on the mainland leading to too many grey areas, a worsening environment for investment, and rising living costs and taxation.

The survey did not list the most popular destinations for China's rich emigrants, though state news agency Xinhua said last month that Canada and Australia are the two most favoured.

The Hurun survey said the average respondent was 42 years old and worth over 60 million yuan.

China now has 271 US-dollar-billionaires, according to Hurun's 2011 rich list, up from 189 last year, despite the global economic crisis.

The latest survey said that 960,000 people in China are now worth more than 10 million yuan, up by 9.7 per cent from last year.

More than 30 years of booming economic growth have allowed some Chinese to build up vast fortunes. Many of the country's richest have made their money in the construction and property sectors, as well as in a growing domestic retail market.

A woman surnamed Luo, who has emigrated to Britain, said: 'To buy a house in Beijing, the price now is the same as that abroad, but you enjoy no other benefits.

'To live abroad, the cost is not higher, but you definitely enjoy it more,' she was quoted as saying in a recent issue of popular magazine Lifeweek.

The survey was greeted with envy online. Many users on microblogging website Sina Weibo said they would have done the same if they were rich.

'If you can flee, flee immediately,' a microblogger using the name 'Jiang Langzi' said.

REUTERS, AGENCE FRANCE-PRESSE

China needs property tax to get out of bind

2011-11-02T11:24:00.000+08:00

PROPERTY is fast becoming one of the biggest headaches for the Chinese Communist Party (CCP).
By Grace Ng, China Correspondent

It has become the chief cause of social unrest and a key threat to the party's rule, as land disputes and fury about housing prices spark growing protests among the poor and middle class.

It has spawned destabilising forces in China's economy, from a debt crisis in the southern city of Wenzhou to price manipulation tricks by developers.

Last Thursday, officials announced plans for a nationwide property tax to address distortions in the property market, in a bid to cool the unrest.

But unless they put in a serious effort to get the tax proposal off the ground, China can expect more violent protests like those that erupted recently in Shanghai and Lufeng.

How did it come to this - that well-shod, white-collar types are driven to smashing property showrooms in Shanghai, and angry farmers trash the Communist Party's headquarters in Lufeng? And how will a national property tax address the underlying problems?

The answers to these can be traced in part to Chinese policies aimed at combating the financial crisis in 2008. A flood of loans were given as stimulus. These fuelled rampant property speculation, which overheated the market and caused prices to soar, angering buyers.

In March, Premier Wen Jiabao moved on several fronts to tackle the problem. The government pledged to build 10 million housing units for the poor. More immediately, officials also slapped curbs on purchases of multiple houses, raised down payments and restricted credit.

But these stop-gap cooling measures have created their own set of problems.

One is the recent debt crisis in Wenzhou. Many of its businessmen had speculated in property to make quick profits. But when the housing market started to soften, several dozen fled as they could not pay back the millions they owed - some to local officials who were secretly involved in shadow lending at interest rates reportedly as high as 90 per cent.

Meanwhile, property developers across the country rushed to sell off units before the market fell further. Last week, developers in Shanghai and other major cities slashed prices of unsold units in some projects by a third or more.

Many of these companies have huge outstanding loans, and several had been ticked off by the government just a few months ago for manipulating prices to record highs. Their tactics included restricting supply or delaying their projects' release to incite a buying frenzy.

But the response to lowering prices has not been the joyous one officials might have hoped for. Instead, hundreds of home owners, furious at the drop in their property value, stormed developers' offices. Many had bought into the view that government curbs on multiple property purchases had weeded out speculators and used their savings to buy homes this year, believing the still-high prices reflected real demand. Instead, values plunged overnight by up to 40 per cent.

The ferocity of the city dwellers' response matched that of aggrieved farmers in Guangdong province's Lufeng city in September, who ransacked the local CCP headquarters in protest against seizure of their land by local officials.

Local governments sell land-use rights to developers. This accounts for a big chunk of local government revenues, especially when prices doubled last year. Developers paid top dollar for the land, expecting to be able to pass on the costs to home buyers via higher prices.

As the market started to soften, some officials were reportedly scrambling to seize and sell more land to maximise their future income, while compensating farmers as little as possible.

The state-run magazine Outlook Weekly reported this week that every day, several hundred rural land-grab disputes like the one in Lufeng are happening across China. Independent estimates put last year's total figure for riots and other demonstrations at 180,000; in the countryside, land and property disputes were responsible for 65 per cent of protests.

Against this simmering social cauldron, the government's move to introduce a national property tax comes at a critical time. It is no silver bullet to China's complex land and housing woes, but will go a long way to defuse some problems responsible for such flare-ups.

In fact, the idea of a nationwide tax, paid regularly on a property's annual assessed value, was first floated in 2003. Roll-out was slow due to resistance from local officials and difficulty in enforcing it.

Yet this tax is necessary if China is to remove the root problem of perverse incentives for officials, speculators and developers to keep the market overheated.

For one, it will make prices reflect real demand more accurately. It deters speculators by imposing higher costs for hoarding properties.

It would also offer a more sustainable source of income to local governments, who would then have less incentive to jack up land sale prices for developers.

Owners, obliged for the first time to pay a regular tax on their properties, may also demand better accountability and services from local officials.

So far, tax trials under way in Shanghai and Chongqing have been too limited in scale - with rates of 0.4 per cent to 1.2 per cent - to yield substantial revenues. Some scholars say a meaningful property tax rate has to be higher, closer to Singapore's general 10 per cent rate, with 4 per cent for owner-occupied homes.

Another consideration is for the rate to be high enough to raise enough money from well-to-do home owners to help fund low-cost housing for the poor.

The authorities said last week they planned to replace the temporary home purchase restrictions with a national property tax. While no date was given, it's perhaps the strongest signal yet that Beijing is aware it has to go beyond piecemeal measures to tackle China's property bubble - or risk even greater turbulence.

graceng@sph.com.sg

Baby you're one in 7 billion

2011-11-01T12:25:00.000+08:00

MANILA: The first of the world's symbolic 'seven billionth' babies arrived yesterday, to celebrations that were somewhat tempered by worries over the strain that humanity's exploding population is putting on a fragile planet.While countries across the globe held lavish ceremonies for newborn infants symbolising the demographic milestone, these came with warnings that there may be too many people for the Earth's resources.But these concerns were put aside for the moment at Manila's Jose Fabella Memorial Hospital when Danica May Camacho, weighing 2.5kg, arrived to cheers just before midnight on Sunday.RELATED LINKSPOPULATION EXPLOSIONRISING FASTERAmid an explosion of media flash bulbs in the delivery room, mother Camille Dalura cradled her tiny baby as father Florante Camacho looked on. 'She looks so lovely,' she whispered softly. 'I can't believe she is the world's seven billionth.'Top UN officials in the country presented the child with a small chocolate cake marked '7B Philippines', and a gift certificate for free shoes.Amid the millions of births and deaths around the world each day, it is impossible to pinpoint the arrival of the actual seven-billionth occupant.The United Nations had, however, estimated that this baby would be born yesterday, prompting many countries to hold events to celebrate the milestone.The Philippines was the first country to declare its symbolic contribution to humanity; although Danica came two minutes before midnight, doctors say that was close enough. Three minutes later, the Bangladeshi authorities named another baby girl, Oishee, as the world's seven billionth.Zambia had plans to throw a seven-billion song contest; Vietnam was staging a '7B: Counting On Each Other' concert; the Russian authorities showered gifts on selected newborns; and Papua New Guinea handed out goodie bags to new mums.But while parents and local officials were all smiles, top leaders and population experts were less sanguine.'We shouldn't be celebrating the birth of the seven billionth child,' Indian Health Minister Ghulam Nabi Azad told the Times of India. 'For us, a matter of joy will be when the population stabilises.'UN chief Ban Ki Moon had warned about the implications of the 7 billion milestone when speaking to students at a New York school last week.'This is not a story about numbers. This is a story about people,' he said. 'Seven billion people who need enough food. Enough energy. Good opportunities in life for jobs and education. Rights and freedoms. The freedom to speak. The freedom to raise their own children in peace and security.'Everything you want for yourself - seven billion times over.'Indeed, the numbers tell a worrying tale. The world's six billionth inhabitant, a Bosnian child named Adnan Mevic, was born on Oct 12, 1999. In just 12 years, humanity added a billion more babies - or almost another China.The world's population took thousands of years to pass the one billion mark. Demographers say this milestone was reached in 1804. It took more than a century - 1927 - before the number doubled. The 20th century, though, saw numbers begin to accelerate: three billion in 1959; four billion in 1974; five billion in 1987; six billion in 1999.With about two babies being born every second, the population is forecast to hit eight billion by 2025 and 10 billion by 2083 - and possibly as many as 15 billion by 2100.India is predicted to overtake China as the world's most populous nation by 2025, when it will have almost 1.5 billion people.A new UN Population Fund (UNFPA) report highlights how the world will face growing problems finding jobs for the new army of young people, especially in poor countries, and also sounds alarm over how climate change and population growth are adding to drought and famine crises, the management of megacities like Tokyo, and ageing populations such as Europe's.Ironically, the population explosion is taking place in countries that can afford it least. Prosperous nations have slashed their fertility rates to the point that some have to address a looming population decline, while developing nations, especially those in Africa and Asia, are having more problems providing their citizens with access to employment, education and health care.The report noted that high fertility rates hamper development and perpetuate poverty in the poorest countries.Simply put, it might mean that the world may not be able to feed itself in 100 years' time.'Our record population can be viewed in many ways as a success for humanity - people are living longer, healthier lives,' UNFPA executive director Babatunde Osotimehin said in the report, but added: 'How did we become so many? How large a number can our Earth sustain?'Mr Ban was not seen cuddling a newborn yesterday, as his predecessor Kofi Annan did with little Adnan. Instead, Mr Ban warned that the seven-billionth baby will be entering a 'world of contradiction'.'Plenty of food, but still a billion people going to bed hungry every night,' he said. 'Many people enjoy luxurious lifestyles, but still many people are impoverished.'AGENCE FRANCE-PRESSE, ASSOCIATED PRESS

Free markets cannot be totally free

2011-10-30T10:45:00.000+08:00

Next year will mark the 100th anniversary of Milton Friedman's birth.
By Dani Rodrik

Friedman was one of the 20th century's leading economists, a Nobel Prize winner who made notable contributions to monetary policy and consumption theory. But he will be remembered primarily as the visionary who provided the intellectual firepower for free-market enthusiasts during the second half of the century, and as the eminence grise behind the dramatic shift in the economic policies that took place after 1980.

At a time when scepticism about markets ran rampant, Friedman explained in clear, accessible language that private enterprise is the foundation of economic prosperity. All successful economies are built on thrift, hard work, and individual initiative. He railed against government regulations that encumber entrepreneurship and restrict markets. What Adam Smith was to the 18th century, Milton Friedman was to the 20th.

As Friedman's landmark television series Free To Choose was broadcast in 1980, the world economy stood in the throes of a singular transformation. Inspired by Friedman's ideas, Ronald Reagan, Margaret Thatcher and many other government leaders began to dismantle the government restrictions and regulations that had been built up over the preceding decades.

China moved away from central planning and allowed markets to flourish - first in agricultural products and, eventually, in industrial goods. Latin America sharply reduced its trade barriers and privatised its state-owned firms. When the Berlin Wall fell in 1990, there was no doubt as to which direction the former command economies would take: towards free markets.

But Friedman also produced a less felicitous legacy. In his zeal to promote the power of markets, he drew too sharp a distinction between the market and the state. In effect, he presented government as the enemy of the market. He therefore blinded us to the evident reality that all successful economies are, in fact, mixed.

Unfortunately, the world economy is still contending with that blindness in the aftermath of a financial crisis that resulted, in no small part, from letting financial markets run too free.

The Friedmanite perspective greatly underestimates the institutional prerequisites of markets. Let the government simply enforce property rights and contracts, and - presto - markets can work their magic. In fact, the kind of markets that modern economies need are not self-creating, self-regulating, self-stabilising, or self-legitimising. Governments must invest in transport and communication networks; counteract asymmetric information, externalities, and unequal bargaining power; moderate financial panics and recessions; and respond to popular demands for safety nets and social insurance.

Markets are the essence of a market economy in the same sense that lemons are the essence of lemonade. Pure lemon juice is barely drinkable. To make good lemonade, you need to mix it with water and sugar. Of course, if you put too much water in the mix, you ruin the lemonade, just as too much government meddling can make markets dysfunctional. The trick is not to discard the water and the sugar, but to get the proportions right. Hong Kong, which Friedman held up as the exemplar of a free-market society, remains the exception to the mixed-economy rule - and even there the government has played a large role in providing land for housing.

The image most people will retain of Friedman is the smiling, diminutive, unassuming professor holding up a pencil in front of the cameras in Free To Choose to illustrate the power of markets. It took thousands of people all over the world to make this pencil, Friedman said - to mine the graphite, cut the wood, assemble the components and market the final product. No single central authority coordinated their actions; that feat was accomplished by the magic of free markets and the price system.

More than 30 years later, there is an interesting coda to the pencil story (which in fact was based on a commentary by the economist Leonard E. Read). Today, most of the world's pencils are produced in China - an economy that is a peculiar mix of private entrepreneurship and state direction.

A modern-day Friedman might want to ask how China has come to dominate the pencil industry, as it has so many others. There are better sources of graphite in Mexico and South Korea. Forest reserves are more plentiful in Indonesia and Brazil. Germany and the United States have better technology. China has a lot of low-cost labour, but so do Bangladesh, Ethiopia and many other populous low-income countries.

Undoubtedly, most of the credit belongs to the initiative and hard work of Chinese entrepreneurs and labourers. But the present-day pencil story would be incomplete without citing China's state-owned firms, which made the initial investments in technology and labour training; lax forest management policies, which kept wood artificially cheap; generous export subsidies; and government intervention in currency markets, which gives Chinese producers a significant cost advantage.

China's government has subsidised, protected and goaded its firms to ensure rapid industrialisation, thereby altering the global division of labour in its favour.

Friedman himself would have rued these government policies. Yet the tens of thousands of workers whom pencil factories in China employ would most likely have remained poor farmers if the government had not given market forces a nudge to get the industry off the ground. Given China's economic success, it is hard to deny the contribution made by the government's industrialisation policies.

Free-market enthusiasts' place in the history of economic thought will remain secure. But thinkers like Friedman leave an ambiguous and puzzling legacy, because it is the interventionists who have succeeded in economic history, where it really matters.

Dani Rodrik, professor of international political economy at Harvard University, is the author of The Globalisation Paradox: Democracy And The Future Of The World Economy. Project Syndicate

Pit stop in poverty raises questions of value

2011-10-29T11:41:00.000+08:00

NEW DELHI: They screech in on private jets and party with the rich and famous, but Formula One's pampered drivers admit the poverty in India has given them a reality check.

Although the brand new Buddh International Circuit is ready for the inaugural Indian Grand Prix, the plush facilities cannot hide the slums outside.

Britain's Jenson Button said coming to India was 'difficult' for the drivers, who have been stunned at the living conditions glimpsed outside their luxury hotels.

'You can't forget the poverty in India,' he said.

'It's difficult coming here for the first time, you realise there's a big divide between the wealthy people and the poor people.

'Hopefully the race here is going to help everyone. It's good to see that we've got a lot of workers here and hopefully that's helping them out in terms of making their life a little bit easier.'

German double world champion Sebastian Vettel caught his first glimpse of Indian life on the 200km drive from New Delhi to the Taj Mahal, and he said it was a humbling experience.

'It definitely brings your feet back on the ground in many ways and makes you understand a lot of things,' he said.

'It's an inspiration and makes you appreciate things you take for granted.'

The jarring spectacle of lavish Formula One coming to Greater Noida, a dusty satellite of New Delhi, has prompted some disquiet.

'I feel very bad because such business has nothing to do with 99 per cent of Indians. It is a criminal waste,' said former Olympic hurdler P.T. Usha, who runs an athletics academy for young Indian women.

'First, Twenty20 cricket spoiled the spirit of Indian sports, and now here comes another avatar which will mostly attract corporate money, who rarely spend for sports promotion. Only God can save Indian sports.'

Shooter Gagan Narang said F1 was out of reach for the vast majority of Indians, as witnessed when organisers had to slash ticket prices to try to fill the 120,000-capacity circuit.

'Let's face it that the sport is not for everyone and only people with money will have access,' he said, according to the Economic Times.

Button's McLaren teammate Lewis Hamilton said Indian fans had shown a passion for F1 - which could translate into big profits for the sport.

'They're incredibly fanatical about it, they're crazy about F1,' he said. 'The energy that I've got from the fans from coming here has been mesmerising.

'They were so excited to see me or touch me or whatever, they were coming over the fences. It was really quite special. I hope we get the same reaction here.'

AGENCE FRANCE-PRESSE

Euro zone crisis: the Icelandic way

2011-10-29T11:37:00.000+08:00

FINANCIAL markets are cheering the deal that emerged from Brussels early Thursday morning. Indeed, relative to what could have happened - an acrimonious failure to agree on anything - the fact that European leaders agreed on something, however vague the details and however inadequate it may prove, is a positive development.
By Paul Krugman

But it's worth stepping back to look at the larger picture, namely the abject failure of an economic doctrine - a doctrine that has inflicted huge damage both in Europe and in the United States.

The doctrine in question amounts to the assertion that, in the aftermath of a financial crisis, banks must be bailed out but the general public must pay the price. So a crisis brought on by deregulation becomes a reason to move even further to the right; a time of mass unemployment, instead of spurring public efforts to create jobs, becomes an era of austerity, in which government spending and social programmes are slashed.

BACKGROUND STORY

Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and expanded its social safety net.Where everyone else was fixated on trying to placate global investors, Iceland imposed temporary controls on the movement of capital to give itself room to manoeuvre.

This doctrine was sold both with claims that there was no alternative - that both bailouts and spending cuts were necessary to satisfy financial markets - and with claims that fiscal austerity would actually create jobs. The idea was that spending cuts would make consumers and businesses more confident. And this confidence would supposedly stimulate private spending, more than offsetting the depressing effects of government cutbacks.

Some economists weren't convinced. One caustic critic referred to claims about the expansionary effects of austerity as amounting to belief in the 'confidence fairy'. Okay, that was me.

But the doctrine has, nonetheless, been extremely influential. Expansionary austerity, in particular, has been championed both by Republicans in Congress and by the European Central Bank, which last year urged all European governments - not just those in fiscal distress - to engage in 'fiscal consolidation'.

And when Mr David Cameron became Britain's Prime Minister last year, he immediately embarked on a programme of spending cuts in the belief that this would actually boost the economy - a decision that was greeted with fawning praise by many American pundits.

Now, however, the results are in, and the picture isn't pretty. Greece has been pushed by its austerity measures into an ever-deepening slump - and that slump, not lack of effort on the part of the Greek government, was the reason a classified report to European leaders concluded last week that the existing programme there was unworkable. Britain's economy has stalled under the impact of austerity, and confidence from both businesses and consumers has slumped, not soared.

Maybe the most telling thing is what now passes for a success story. A few months ago various pundits began hailing the achievements of Latvia, which in the aftermath of a terrible recession nonetheless managed to reduce its budget deficit and convince markets that it was fiscally sound. That was, indeed, impressive, but it came at the cost of 16 per cent unemployment and an economy that, while finally growing, is still 18 per cent smaller than it was before the crisis.

So bailing out the banks while punishing workers is not, in fact, a recipe for prosperity. But was there any alternative? Well, that's why I'm in Iceland, attending a conference about the country that did something different.

If you've been reading accounts of the financial crisis, or watching film treatments like the excellent Inside Job, you would know that Iceland was supposed to be the ultimate economic disaster story: Its runaway bankers saddled the country with huge debts and seemed to leave the nation in a hopeless position.

But a funny thing happened on the way to economic Armageddon: Iceland's very desperation made conventional behaviour impossible, freeing the nation to break the rules. Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and expanded its social safety net. Where everyone else was fixated on trying to placate global investors, Iceland imposed temporary controls on the movement of capital to give itself room to manoeuvre.

So how's it going? Iceland hasn't avoided major economic damage or a significant drop in living standards. But it has managed to limit both the rise in unemployment and the suffering of the most vulnerable; the social safety net has survived intact, as has the basic decency of its society. 'Things could have been a lot worse' may not be the most stirring of slogans, but when everyone expected utter disaster, it amounts to a policy triumph.

And there's a lesson here for the rest of us: The suffering that so many of our citizens are facing is unnecessary. If this is a time of incredible pain and a much harsher society, that was a choice. It didn't and doesn't have to be this way.

NEW YORK TIMES

No house, no bride

2011-10-29T11:31:00.000+08:00

BEIJING: Kind. Upright. Career-minded. Loves literature. Such were the top attributes Chinese women wanted in a husband, according to 1980s marriage ads.
By Ho Ai Li, China Correspondent

These days, most women will consider only men who own houses.

In the three decades since communist China embraced the free market and the pursuit of material wealth, property ownership has largely come to be seen as an intrinsic part of marriage - marital unions with no title deeds are deemed incomplete, or in local speak, 'naked'.

BACKGROUND STORY

THE WEDDED BLISS LIST

What does it take to tie the knot? Here is a look at how changes in Asian societies are having an impact on the institution of marraige.

'I don't have a boyfriend now, but a house must come with marriage. Only then do I feel secure,' said Ms Mi Chunxiao, 22, a receptionist in an estate office.

Her views put her in the mainstream: 60 per cent of 1,000 women polled earlier this year by the Jiayuan match-making website say 'naked marriages' are not for them.

Indeed, 'has house, has car' has become one of the most frequently seen phrases in marriage ads, along with good personality and looks, according to a survey by the Netease online portal.

In the past, houses did not matter that much. At least not in Maoist China when most couples did not have to fret over where to live after marriage as their work units would allocate apartments.

These days, steep residential property prices, especially in the big cities, have meant that housing has entered into marital calculations, especially for women who still tend to earn less.

So much so that a Chinese real estate official was reported to have infamously remarked in 2009 that China's bullish property market was being driven by mothers-in-law who would not marry off their daughters unless the man owned a house.

Mr Xin Yan, 30, an operations manager, explains his plan to make a property purchase first before getting hitched: 'It is customary.'

Even China's laws had to be revised recently to keep up with the changing role of property in marriage.

As much as two-thirds of the 19 new clauses under the Interpretation On Marriage Law released this August concern matrimonial property, noted retired academic Wu Changzhen, who was involved in their drafting.

As China becomes more developed economically, property disputes have become a common feature of divorce cases, but the Marriage Law had little to say on these, she told People's Daily Online.

In particular, one of the new clauses seems to give the men an edge in claiming the house upon divorce. That has sparked an outcry and underscored how property is a big deal in a marriage.

Under the new rule, whoever buys the house owns it after divorce. The party who pays the downpayment for an apartment before marriage is considered the owner even if both spouses pay the housing loan together after marriage.

As men are still more likely to be the ones purchasing the home - due to traditional expectations and their stronger economic position generally - many women feel that they stand to lose out.

'I don't understand why they have to change the law. Women don't have security in a marriage even though they contribute a lot,' said Ms Mi. 'Men tend to become richer as they grow older, women don't and end up losing their youth.'

Like her, nearly 80 per cent of the women polled by a Henan newspaper feel that the new laws are detrimental to the interests of women.

In particular, some women fear it would make it easier for husbands to stray as they no longer have to worry about losing their house after divorce.

'I feel the law should have as its starting point the protection of women and children, and not the eradication of social ills like gold-diggers,' Ms Liu Chen, a 37-year-old homemaker.

Lawyers say the changes are meant to make it clearer who owns what when a marriage breaks up. Divorces have risen from 3.2 million in 2007 to 4.5 million last year. There were 5,000 divorces a day on average in the first quarter of this year.

'Traditionally, the Chinese tend to put more stress on personal relations,' said Beijing-based divorce lawyer Ye Wenbo. 'We feel we are one family after all and don't need things like nuptial agreements.'

This has led to problems over how to divide the assets in a divorce, he added.

The new laws also stipulate that a house bought by one party's parents and given to their child is deemed the sole property of their child and not his or her spouse. This additional amendment reflects the fact that many parents are the ones making the property purchases to set their children up for marriage.

IT executive Deng Zhuo, 30, is all for the change as it would protect the interests of parents who pour their savings into property for their children.

Nor are all women against the new laws. 'It does put a stop to people who are marrying for money,' said a 23-year- old bank teller.

But many insist they will not marry unless their future husbands put their names on the title deeds.

'Because if you love me, you have to give in to me,' said Ms Mi. 'If not, what's the point of marrying you?'

hoaili@sph.com.sg

Additional reporting by Carol Feng

The happiness of a nation

2011-10-27T11:15:00.000+08:00

IT IS sad that MP Sylvia Lim's recent call in Parliament for Singapore to measure its sense of well- being (happiness index) degenerated into an off-point discussion on the merits of life in Bhutan and a rejection of her call. Reading her speech, it is clear that life in Bhutan was not what she wanted debated.
By Joseph Chong, For The Straits Times

'Happiness' is currently the subject of significant socio-economic research. Nobel laureate for economics Joseph Stiglitz, among other notable thinkers, has highlighted its importance. Many developed countries are incorporating it into their economic management; even conservative governments in Britain and France are adopting it. Gallup publishes a well-followed well-being index for the United States every month.

Even China is adopting a happiness index. Premier Wen Jiabao recently declared this publicly as a necessity to ensure a more balanced and sustainable development for China going forward.

Happiness is linked to many other socio-economic variables. Many of these are in turn drivers of the policies we have today and may have tomorrow.

My interest in measurements of happiness is personal and occupational. Like many other professional investors, I am interested in the sense of well-being of a society because it correlates to many other economic and social variables which have an impact on return- risk considerations.

Happiness is linked to consumer confidence data published monthly in most developed economies. It is a measure of the propensity to consume and invest going forward. Bond and equity markets are sensitive to readings of consumer confidence.

Happiness is also correlated to fertility rates. My own in-house research has shown how tight the correlation is across countries. This was first published in The Business Times on March 2 (Demographics, fertility and happiness) and can still be accessed freely at www.ni.com.sg

Other researchers appear to have reached the same conclusions. This is not surprising if you see nature in action and zoos' breeding programmes. If you cannot be happy, you are doomed as a species because you will fail to produce enough babies.

Happiness is also linked to other economic variables. My own preliminary internal research indicates correlations with an individual's income growth, inflation rates, societal income inequality (Gini coefficient). Based on Associate Professor Tilak Abeysinghe's work at the National University of Singapore on fertility and housing affordability, happiness is also probably correlated to housing affordability (which is a subset of inflation). Intuitively, we could guess it, but the scientific research is now backing this intuition.

Unfortunately, there appears to be the misconception that happiness is an airy-fairy independent variable.

It is clearly not a stand-alone concept. Mathematically speaking, happiness is a function driven by other variables. In other words, get the other key variables right and the happiness index will take care of itself, because it is an aggregate of these other happiness-inducing factors. One is very unlikely to get a high happiness reading if incomes are falling, inflation is soaring and the rich-poor gap widens.

Happiness also appears to be linked to productivity. Again, this is not surprising, because if you have rising incomes with low inflation, you are getting productivity - which is high-quality economic growth. Given the necessary directional change in Singapore's economic-growth strategy to be more productivity-driven, happiness should be taken seriously.

Economic considerations aside, a sense of well-being or happiness is linked to serotonin levels in human beings. Serotonin is a chemical produced by the body that helps regulate our sense of well-being. Deficiency of serotonin is very clearly linked to mental illnesses, such as depression, anxiety disorders and excessive anger. Elevated serotonin levels make humans more tolerant to mental stress.

This is important in crowded, multi-religious, multiracial Singapore, where intolerance is the major threat to social cohesion. Indeed, being happy makes it less likely that we will have religious or racial riots. Happiness is important for social stability.

However, in the final analysis, the happiness issue is a question of human existence. Surely we live our lives not for the purpose of growing our nation's gross domestic product. Black or white, God-fearing or atheist, rich or poor, our wish to be happy or happier is universal. We are indeed all different as human beings, but we are one in our quest to be happy.

The writer is chief executive officer of financial advisory firm New Independent