How can Singapore win despite being out of favor with China?

November 8, 2016

Q: I was told never to interrupt you during a reply. But the question is – how can Singapore win despite being out of favor with China?

A: I am not going to comment on the no interruption detail. To the best of my knowledge. It didn’t come from me. Maybe from a navigator rank, but certainly not me.

Is Singapore out of favor with China? I really don’t know. I suppose a lot of it depends on who will become the next president of the US. That I imagine will have quite a big impact on whether the TPP will be shelved or put on track.

Q: But you mentioned earlier. No matter who wins the TPP will be passed.

A: Now you are interrupting me. Yes I certainly did. And I still believe that to be the case. In the event Hillary Clinton or Donald Trump wins – I still believe the TPP will be passed. It will of course be given a major make over and the spin doctors will probably repackage it as a new improved version of the great American deal of the 21st century to pull the wool over the general public. But all things considered. I still believe very strongly the TPP will come into effect albeit with very minor changes.

What the general public doesn’t seem to be able to understand is too much has been invested in the TPP. It is easier for it to go thru than to die. Even with all the anti TPP talk that is shadowing the presidential elections – the day after the last votes have been counted the TPP will be the first thing in the inbox of whoever gets elected. And it will be signed. As the forces that are pushing this grand design as so very unimaginably powerful at every level of persuasion.

Q: Coming back to the original question – how can Singapore win despite being out of favor with China?

A: I already mentioned. I am not so sure Singapore is really out of favor with China. After in realpolitik there is really not such thing as permanent enemies, only perhaps eternal interest that need to be furthered.

But let us assume the very worst, Singapore is cold shouldered and made an example by China to serve as a warning to the rest of the countries in the periphery of the SCS not to get to close to the US.

If that happens – nothing prevents Singaporeans from relocating to those countries that stand to benefit from China’s generosity and long term plans to establish a beach foot regionally.

There are a lot of stuff in the pipeline, not just trains. And when power shifts from one superpower to another – corporate primacy will also shift from the US to Chinese firms. They will eventually be the new creators of value. It will take some time but it will happen.

Try to see this way, if an Indian, Brit or even a Malaysian can uproot and transplant himself in Singapore why can’t the tide go the other way?

Why does it have to be a one way street?

The government would of course need to provision incentives to encourage people to uproot and transplant themselves elsewhere.

Q: What sort of incentives are you referring too?

A: Dual citizenship. Possibly tax breaks as well for those who work outside Singapore.

Q: Dual citizenship has been mentioned repeatedly as undesirable as not only does it dilute the notion of what it means to be a Singaporean. But it will also compromise Singapore’s dependence on national service as a means of defense.

A: I don’t necessarily agree for one moment it would compromise Singapore’s defense. After all when the Egyptians invaded Israel during Yom Kippur many Jews thru out the world dropped everything, put on their No.4 and flew back to defend their homeland.

Perhaps what I mean to say is in the past – it was possible to set aside this question of dual citizenship without incurring real penalties. These days I am not so sure Singapore has the luxury to say no to dual citizenship without incurring very real long term penalties.

Q: What are those penalties?

A: A lot of Singaporeans are already working abroad. Or at least thinking about that option quite seriously for the very first time in their career. I wouldn’t exactly categorize it as a diaspora – but it’s certainly happening or will intensify simply because locally the aperture for job opportunities is narrowing due to the global slow down – and if you don’t make it easy for those Singaporeans to assimilate in those countries they choose to work in – how can they maximize their scope of opportunities. In Singapore for instance there exist restrictions on foreigners to work, start businesses and maximize on their tax returns along with access to goodies.

In the Ukraine for example you can’t get a land concession unless you’re an Ukrainian.

The other thing is cross marriages are increasing – this is natural, so what is the spouse married to a foreigner supposed to do if he or she decides to follow his foreign wife a live abroad for a couple of years. Without the provision for dual citizenship – they have to give up their Singapore citizenship.

Thirdly, businesses are no longer country specific. They don’t have to be at least. They can pack up and relocate elsewhere – so having dual citizenship is a very effective way to mitigate the low birth rate. As it will replenish the human pool.

Q: Wouldn’t the government lose tax revenue if citizens relocated and worked abroad?

A: Of course they would. But the question you asked is how can Singapore win despite being cold shouldered by big brother China?

In the short term the revenue loses from taxation would definitely hit the tax man very hard. He might even lose sleep in the short term. Because the most mobile people are also the most educated and they also happen to command highest salaries in the job market – so you would certainly be losing the top band of the cream.

But always bear in mind not every single one of them will choose the option to work abroad. As doing so is a form of change and that is quite unnatural to the Singaporean psyche.

Besides most of them wouldn’t be going abroad and doing stuff that humpbacks like me do like farming and growing turnips etc etc. Many of them would be cosmopolitan, highly educated and may probably settle elsewhere.

Q: So how does Singapore stand benefit from this cross broader human capital flow?

A: Like I said in the short term either way you splice it, up or down, left or right – it’s a nett loss. It’s like having a baby or planting saplings. Short term wise it’s lose lose. All you can do is manage to lose big or small that is all. Because what you’re engineering is a form of brain drain.

But I can argue that’s already happening already as many capable Singaporeans are placed in an untenable position where they want to continue to work abroad yet because there is no provision for dual citizenship. They are forced to give up their Singaporean citizenship.

These are of course things you don’t hear about in Singapore because no one seems to want to talk openly about. They only seem to want to discuss about how WP mismanaged town council finances.

But always remember what goes around will ultimately come around – now if you look at the industrial technological revolution of Taiwan, South Korea and many Asian countries that has successfully managed to move up the value chain by leveraging on innovation and creativity – most if not all the entrepreneurs had once worked abroad and at some point in the careers they said, I’ve learn enough. It’s time to go back home and do this and that with my work experience in Silicon Valley, New York or London.

I am not saying all these high flyers will come back home to roost. A certain percentage will definitely sink permanent roots abroad. But those who do return will come with new knowledge and hopefully revivify the economy.

Q: Will this affect the Singapore scholarship program?

A: I don’t really know. But what I do know is some scholars are already breaking their bonds – and if they already doing this, then there has to be a compelling reason that at least deserves serious consideration concerning the philosophy of how best to win – there is a whole gamut of set pieces that need to be redefined when we moot dual citizenship – first the simple binary quitter and stayer way of seeing organizational and personal success needs to be jettisoned. Secondly people need to really think hard and long about their life style choices. Singaporeans like to do the HDB thing when they get married and spend money renovating their love nest etc etc. Mind you. I am not saying all those life choices are necessarily wrong. Only it’s conceivable many natives have fallen into a very dogmatic and ritualistic way of living. All this will have to change.

I mean there are limits to what governments can do. It’s finite. They can certainly encourage people to go abroad and work, but if people are set in their ways and they only gravitate towards what then next couple seems to doing as well – then it’s very hard to break out of that sort of mind trap.

Q: What about upgrading and learning new skills to enhance one’s occupational attractiveness?

A: What about it? This has been like a ground hog day thing that Lim Swee Say keeps doing – from time to time, he comes out and says, wages are rising too high, productivity needs to go up etc etc. Then he returns back to his box again. But let’s get real how much can one really upgrade skills. The valence between skills and salary is sound to a point only. Beyond that and I say at best you’re chasing rainbows. At worst all you’re going to end up with diminishing returns.

The way I see it – I much prefer to see people go abroad and work than for everyone to stay in Singapore for just the sake of staying and fighting it out to make a living in a very small pond – that’s really a recipe for a race to the bottom.

I mean if professionals from other countries can come over here. Then why can’t the flow go the other way as well – sure, you may say it’s sweeter here that is why it’s a one way traffic and they are all here. But I say, keep your options open. I mean if you’re working and a foreign posting comes up. Go for it! Consider it seriously.

Q: I want to go back to what you said about people who go out to work, gain valuable knowledge and returning back to start enterprises. Is that even financially possible given that the cost of living in Singapore is so high and even if you happen to work in a third world country the conversion rate to Sing dollar is so low?

A: You know it goes back to what I said earlier about how do you measure organizational and personal success – I mean if you look at it from a purely economic return on effort standpoint. Maybe you may have to bear a real nett financial loss. But in opportunity cost terms – I rather be employed than be unemployed. I could even argue when it comes to committing yourself to an apprenticeship, what do you get in the short term except maybe a lousy deal – you probably get just enough to get by and very little else goes to the piggy bank.

But then again when we look at it things only from a purely accounting standpoint it will always produce a loss or deficit – that’s because we are using a very narrow metric of measurement that can never capture other plus points such as experiential knowledge, skill building, confidence or just being able to tough it out in places where there’s no 7/11.

The way I see it even if you commit yourself to do something really menial like prawn or fish breeding in some black hole in the third world – and all your friends and colleagues are laughing at you and your in laws to your next door neighbor thinks you’re an epic Singaporean best of the best loser.

In my book. In my private book where I see things in terms of gains and losses, pluses and minuses, advantage and setbacks – it will never be a real lost providing you have a strategy to one day perhaps to return back to Singapore and breed expensive red fin or Garoupa in fish tanks in some industrial lot in Boon Lay to supply to hotels and high end restaurants.

With exposure to skills and experiential knowledge – there is a lot of scope for improvisation. But if you’re just sitting in the room and watching reruns in YouTube and you’re unemployed. Don’t think you’re staying the same – you’re not, like metal. You’re slowly corroding away.

The way I see it – having a strategy is key. If you’re just working day in and out in Singapore and even if you get a so called decent salary that allows you eat out and even go abroad for holidays from time to time – but you never ever bothered sitting down and crafting a strategy to win long term wise…or there is no coherent plan to break out from salaried life….then even if you have all that. In my book. In my private book. You have nothing. You’re in the red zone. You’re just a meaningless cog in some really big machine, turning and turning on your axis like some hamster wheel going absolutely nowhere. To put it crudely, you’re already dead – you just think that you’re alive! But it’s an illusion.

Q: What’s your take on this statement – workers today especially the youth are like strawberries, they can’t take hard knocks and that is why it’s so difficult for them to succeed.

A: Leaders who make such statements have to be either mental or they’ve been living high up in tree house disconnect from the world. Look around you! Everything is not only just changing at a frenetic pace – but it’s not necessarily changing for the best either. Not for the ordinary cookie cutter or someone starting off in life. It may benefit corporations and maybe a few people at the very top of the food chain – but for the mass majority of humans life is getting incomprehensibly tough and hazardous. Nowadays you have ghost companies – firms that do really well in balance sheet terms and even turn a profit but because of extensive reliance on global outsourcing to optimize cost and manpower – they literally don’t employ anyone except maybe a receptionist and even if they do have workers it’s only contractual terms. Many set pieces are going thru revolutionary change – as a whole new generation is doing things very differently from the those who came before them. Even malls these days have to be differentiate themselves from just locales where people may go there to shop – as people are buying less stuff from physical shops. They may go there to look at it – but when it comes to the actual purchasing it’s online. To exacerbate matters things are going up, salaries stay either the same and even should one get promoted it remains the same. Job life’s are getting shorter and there is less incentives to hire older workers. So to say things are easy for people who are just stating off in life now is really very misleading.

Q: What would you do if you ever return back to Singapore one day?

A: Its very complicated in not only my case but many of my colleagues as well. Some are in plantations. Many others are invested in mining in South America and Africa. We never ever talk about it of course. But I think for my generation at least – we all knew deep down it could only be a one way trip with no possibility for a return. Besides fuel gauge is empty. There’s not enough for a round trip. For me it would take a miracle.

But I think if you start young and you begin with a strategy in mind – it doesn’t have to be like that at all. For the first generation – we all started way too late. We didn’t have a choice, if we didn’t go first – the rest would never follow. It’s always been like that with us. They would say, it all big talk and no action – so that shaped the decision nexus.

But if I could return. If that were really possible. Maybe I would try my hand at growing grapes to produce the first wine in a tropical country. Can be done. Not reds definitely. But a robust Reisling is just doable. I’ve got a lot of ideas like sucking up all the cold air from water desalination plants using heat exchangers to create temperate ambient. It’s all very symbiotic. There’s no extra cost – it’s a by product energy that can be harnessed with present technology. Grapes is the ultimate for every planter looking for an opportunity to prove his salt – oil palm, iceberg lettuce, mushrooms, Orchids – you can be the best, but all you’re really just doing is churning out first generation Beetle Volkswagons. It doesn’t test you. It’s the KFC of farming. It lacks the element of a sophistication along with having a delightful mystery to work with. But with grapes and wine it’s all about cultivation and craftsmanship at the highest level of the farming game – that’s like lovingly making handmade Swiss watches. It’s a game of cerebral fitness. And finesse because you need to have the discipline of have the end in mind from the very beginning and élan as well. Because the grape will only grow when every thing is just perfectly right – that’s what I dream about most of the time.

Growing grapes.

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