Wednesday, July 3, 2013
Alternative Economic Growth Possibilities - Singapore
Singapore positions herself as an open, laizzez-faire economy with a fairly low tax rate. Our growth is dependent on the global economy as we are too small to generate meaningful numbers unilaterally. Nonetheless, we had, and will, survive whatever economic activities and numbers we generate locally. This was proven from the days of fishing village, to entrepot trade, to labor intensive industries, to hi-tech, value add businesses, to today's high-finance & services.
We have been able to survive, outwit & outshine our competitors since our colonial Singapura era to the days of Malaya and Majulah Singapura aka Singapore.
Singapore did well in post-independence with jobs creation (labor intensive industries), provision of housing (Singapore Investment Trusts - SIT, then succeeded by Housing & Development Board - HDB) & defence. The development of the financial sector was swift and tourism was identified too. Except for strategic industries, most others were left to private entrepreneurs. Singapore's economy grew and local demand & the multiplier were in overdrive. Happiness was found in diversity and adversity; most, if not all, have a bite of the cherry. Income inequality was minimum and acceptable and Singaporeans were master of their own destiny.
Singapore entered globalisation and the 'Big Bang' with the foresight and hope that we will become global players one day. But, the consolidation, especially banks & financial houses, in my opinion, were and still remain, detrimental to private entrepreneurship.
*With fewer banks, come fewer loans. The bigger banks may not be interested in small loans; the 'mom & pop' businesses. Cottage industries died along the way. By extension, there were fewer finance-related jobs, lesser competition (banks become the 'buy side' and borrowers the 'sell side'), costs of borrowing go up and the multiplier contracts.
*(Note: Money is the lifeline of businesses. If there were more (small & big) banks around, credit creation would be amplified).
The need to 'grow overnight' through mergers and acquisition and to 'act big' on the global stage is not without faults. Deficiencies in management skills, international exposures, global 'games-rules', cultures, politics and practices were potent threats. Success were far and few in between.
A well planned immigration policy would have resulted in a booming 'local' economy with the building of more infrastructures, houses, telcos-capacity, provision of services to 'new comers' and benefited most sectors. Instead, we hear of shortages of schools, hospitals beds, MRT/transport bottlenecks, higher costs of living as a result of more demand created by more (new) migrants. Has someone forgotten that the local wing (of the economy) is equally important as the overseas business adventures? Have we missed out an internally generated economic opportunity?
We are not late to re-invigorate the local economy and to lessen our dependency on globalization. The government should look towards reducing costs of operations locally so as to encourage a vibrant internal economy. The sprouting of 'mom & pop' shops, cottage industries and niche services will provide employment, boost entrepreneurship and create 'a sense of achievements'; the made in Singapore 'feel'.
It is not enough to encourage hawking or 'hawkering'. Worst, if a big proportion of our university- and professionally- qualified citizens turn into insurance and property agents and taxi-drivers or are permanently displaced (I have high respect for every professions but I thought the years of education may have ended as broken dreams to many & wasted resources).
When tourists visit China, Australia, UK, Thailand, Taiwan and others, they look for night-markets, local 'roadside' food, flea markets, arts & crafts joints; these are small enterprises, alive and kicking. They bring in tourism dollars as well.
What's the point of bringing in foreign investments if they were to employ wholly, or almost fully, their own nationals? Perhaps, it is nice on the GDP but how does this benefits the citizens?
Our internal economy will provide some level of decent demand and earnings if adequately supported and encouraged. The injection of vibrancy, commerce and a sense of belonging will go a long way towards making a happier Singapore.
We need foreign investments. We must take to the global stage but let us also not forget and retard our internal economy.
Maybe, not all can be big time businessmen but you have to start somewhere.
http://www.todayonline.com/voices/made-spore-feel - published in Todays Papers on 2nd July 2013