June 28, 2017

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by Bertha Henson

IT DIDN’T escape notice that Prime Minister Lee Hsien Loong wasn’t at the biggest diplomatic event held in China over the weekend. The guest list was filled with luminaries including his counterparts in the Philippines, Malaysia and Indonesia. There were in all 29 heads of state or government. Singapore was represented instead by Minister Lawrence Wong.

Asked why the PM Lee wasn’t there, he said that the invitation was decided by the Chinese.

So on Sunday, PM Lee was giving out flowers to his Ang Mo Kio constituents on the occasion of Mother’s Day, rather than hobnobbing with other leaders over what seemed to be the most ambitious economic project in recent time.

His absence in Beijing is intriguing and only serves to raise questions about whether Singapore and China had papered over their differences since the seizure of Singapore Armed Forces vehicles by Hong Kong authorities in November last year. Or are the Chinese still pissed off at Singapore’s lack of empathy over its position on the South China Sea?

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You wonder if the invitation was extended to a Deputy Prime Minister or a senior co-ordinating minister like Mr Khaw Boon Wan. After all, Mr Wong, in charge of national development, told the media himself that Singapore didn’t have any infrastructure projects under the One Belt, One Road initiative. In fact, he spoke more about “brokering’’ opportunities for Singapore banking and city planners.

Even as it seemed that the PM had been snubbed by the Chinese, we’re told that a Chinese delegation is in Singapore to discuss leadership development. The Singapore side was led by Mr Teo Chee Hean, who is also Coordinating Minister for National Security and Minister-in-charge of the Civil Service. The Chinese were headed by Mr Zhao Leji, Communist Party of China (CPC) Politburo member and Central Committee Organisation Department Minister.

Is this a meeting of political equals? Or should we be glad that a Chinese delegation has deigned to visit Singapore even as China chose not to invite its PM over for its biggest shindig? And we’ve been asserting that Singapore is its “all-weather friend’’ – who also wants to be a friend to all. In other words, we don’t want to take sides. The question then is the definition of an “all-weather friend’’.

All this illustrates the rather prickly situation of the little red dot. Obviously, the Chinese want Singapore firmly in its camp, and might even be wondering why a Chinese majority country isn’t behaving like Muslim-dominated Malaysia and Indonesia or a Catholic country like the Philippines.

Education Minister Ong Ye Kung tried to explain this in TODAY : “In Singapore, we have a majority Chinese population. But other than the Chinese traditional culture, what is very deeply rooted in Singapore is a collective awareness that there is also the tradition and wisdom of the Malay and Indian cultures. We are small, and we are open. We have been very much affected by Western cultures, but basically, we are still an Oriental* society.” Presumably he means Oriental as Asian opposed to Occidental or Western, rather than the perception that Oriental means Chinese.

To business people here, the chief concern is probably whether the political atmosphere would affect the economic environment and their chance of exploiting the massive One Belt, One Road project.

It doesn’t help to read about the deals inked by Asean counterparts with China, even though most of them are for infrastructural projects which aren’t relevant to Singapore.

Is the initiative a boon or a bane for Singapore?

There is the question of whether the plans for rail links cutting through Europe, Asia and Africa would affect Singapore’s premier port status. Maybe not, as the One Belt initiative includes a maritime route which cuts through Singapore and it’s still cheaper to go by sea.

Then again, there is the other question of whether ships will skip Singapore since the Chinese are helping different countries build their ports and industrial parks along the route. “With the Belt and Road (initiative), new infrastructure will be built all around us… Trade routes will be adjusted as these new roads and ports get built and developed,” noted Mr Wong.

That’s why Singapore is going full-speed to expand its port and airport facilities to gear up for the competition, he said.

The competition looks daunting. We’ll need to make and save money, if we don’t want to ask for Chinese money. And even if we do, there will be an insistence that significant projects must remain in Singapore hands rather than those of foreign (Chinese) companies.

It’s interesting that after Chinese leader Mr Zhao met PM Lee at the Istana, a statement was released which affirmed the “strong and substantial relationship’’ between the two countries. (Of course, nothing was said about the snub)

The statement also harked back to the old days: “The two leaders noted that bilateral relations dated back to 1976, when then-Prime Minister Lee Kuan Yew first visited China, and 1978, when then-PRC (People’s Republic of China) Vice-Premier Deng Xiaoping visited Singapore. Mr Lee and Mr Deng provided a strong foundation for the friendship and cooperation that the two countries now enjoy.’’

That was a long, long time ago. Circumstances are different now and China is a mighty power with the ability to project its military and economic might. Singapore is its biggest investor and it is Singapore’s biggest trading partner. How do we proceed from here and on what basis so as to secure our own independence and prosperity? Despite exhortations about strong ties, everything still looks pretty murky.

*According to the Mandarin speech delivered by Mr Ong, the appropriate word is Asian.

 

Featured image by Sean Chong.

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Morning Call, 0830, clock

PRESIDENT Tony Tan Keng Yam and Prime Minister Lee Hsien Loong sent congratulatory letters to United States President Donald Trump on his inauguration, emphasising bilateral ties and the longstanding trade relationship between Singapore and the United States. Yet Mr Trump’s first executive move to withdraw his country from the Trans-Pacific Partnership, the TPP – a trade agreement with the 12 Pacific Rim countries, representing about 40 per cent of global GDP – and the strong focus in his inauguration speech on putting America first will have broader implications for free trade arrangements and globalisation, both of which Singapore remains dependent upon.

“From his day onward, it’s going to be only America first,” Mr Trump said. “Every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families.”

Singapore is one of the biggest trading nations in the world, and Ambassador-at-Large Ong Keng Yong too highlighted the immediate loss of the TPP. On the other hand China and its President Xi Jinping – the first Chinese head of state to address the World Economic Forum – have emerged as champions of global trade and globalisation, and have argued against the growing protectionism of the West. In this vein, it will also shape economic integration in Asia. Home Affairs and Law Minister K Shanmugam said that free trade has been important for the world, and with these changes around the world Singapore, as a small country, “will have to adapt to the environment”.

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In other news, closer to home, Mr Shanmugam said that penalties for irresponsible drivers will be toughened. “If you have destroyed people’s lives… there must be some responsibility,” and he added that “It’s not just a question of being fined, going into jail, coming out after a few months.” There were on average 11 fatal accidents each month in the first three quarters of 2016, and an average of 700 traffic accidents each month, though traffic incidents – often captured by in-car cameras or devices – are making more frequent rounds across social media platforms, hosted by different groups.

And finally, if you are planning to donate items to charities over this festive season, be sure to check that they are not mouldy, soiled, or even crawling with maggots. Charities and thrift shops interviewed by ST revealed that they discard up to 40 per cent of the in-kind donations they receive. Some items may have expired years or decades ago, and even half-eaten or used items – which could contaminate other donations – have been found. Not only do the organisations allocate more time and effort to sieve through or inspect these donations, they also have had to change the ways or the frequencies of these collection drives. New collection strategies include awareness campaigns or wish-lists for beneficiaries.

 

 

Featured image from TMG file.

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by Ryan Ong

MENTIONING the Trans-Pacific Partnership (TPP) is a good way to start fights on the Internet. Depending on who you ask, it’s either the highway to economic freedom, or a capitalist agenda to enslave your children. Whatever the case, it’s taken centre stage: Prime Minister Lee Hsien Loong emphasised it at the White House dinner. It was a conversation which Singaporeans listened to intently, and emerged with enlightened views about his wife’s purse and footwear. Because we’re a nation that succeeds where it counts.

 

What is the TPP?

The TPP is a free trade agreement, involving 12 countries. These are the United States, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. The TPP aims to remove trade barriers between these countries, and create a common regulatory framework.

The main advantage is to businesses.

For example, say you run a business that produces cup noodles. If you want to export those noodles to Japan, you’ll need to pass a slew of different regulations – you need to meet their safety standards, you need a certain amount of capital, you have different taxes to deal with, etc.

And if you want to bring your product to Australia, Mexico, Canada, etc., you’ll have to go through the whole problem again. That makes it troublesome (and expensive) to expand a business abroad.

Now with the TPP in place, those barriers are removed. You could export your noodles to any of those 12 countries, without having to jump through all the regulatory hoops. In effect, Singapore businesses get access to customers in the US, Canada, Mexico, Australia, and so forth. This overcomes one of the key struggles we’ve had over the decades: the fact that the local market is too small.

The TPP opens up a market of over 800 million people, with an estimated combined GDP in excess of $34 trillion. Singaporean businesses could potentially bring in billions more over than they do at present, if the TPP becomes a reality.

Another key advantage of the TPP is the allowance of greater freedoms to Singaporean workers. Millions of young Singaporean will have greater opportunity to work in TPP countries.

 

The controversy

The problem is that the TPP is more than a simple trade agreement. Common criticisms, based on information leaks, focus on:

  • Draconian Intellectual Property laws, which will allow pharmaceutical companies to impose high cost on essential medicines, and harsh penalties for even accidental violations (imagine getting a $50,000 fine, because your little brother ripped a video of YouTube for a school project)
  • The off-shoring of jobs, in which cheaper foreign workers can gain access to local jobs. While Singaporeans like to worry about foreigners taking their jobs, remember that the US, Canada, Japan, and so on feel the same way about us: plenty of people in those countries worry about cheaper Singaporeans taking their jobs.
  • The establishment of a system that would allow corporations and private investors to sue governments. For example, imagine a cigarette company deciding to sue the Singapore government, for raising taxes on tobacco. In reality, developed TPP countries like Singapore, Canada, the US and so on are fairly safe from this, as we have the resources to fight back. But poorer TPP countries, like Chile and Peru, may be bullied by powerful corporations in member countries.
  • Workers rights issues are always a worry, with free trade agreements. There is a fear that some companies will use lax regulations to set up sweat shops. While the TPP sets up a regulatory framework on human rights, this has met with skepticism. For example, many Americans protest to Malaysia being accepted as a TPP member, despite labour rights violations.

We could go on for quite a bit, but that’s not the point of this article. Suffice it to say that the TPP is controversial. It’s a toss-up:

On the one hand, the TPP means Singaporeans will have the means to find employment in 11 other countries. It also means our businesses will no longer be hampered by our tiny domestic market. On the other, it means making certain concessions to external powers.

 

We’re bringing the TPP up at the White House, because the clock is ticking

The window to make the TPP a reality is closing, even as it grows more urgent. What makes it such a big deal now?

  • The US President’s successor is not likely to be supportive
  • The TPP counterbalances China’s growing aggression
  • Singapore’s economy urgently needs a boost

 

1. The US President’s successor is not likely to be supportive

President Barack Obama’s eight year term is coming to an end. His likely successor is either Hillary Clinton, or an idiot Reality TV star. Should President Obama’s term expire before the TPP, neither of those successors is likely to be supportive.

Ms. Clinton was formerly supportive of the TPP, at one time referring to it as the “gold standard” of trade deals. Now that the terms of the TPP have been finalised, she’s changed her tune. Clinton has cited lack of controls against currency manipulation, lack of controls against pharmaceuticals companies, and potential threat to jobs in America as reasons.

Her rival in the upcoming Presidential elections has always been against the TPP, because it’s one of numerous things he fails to understand.

This is probably PM Lee was emphatic about it at the White House dinner – if President Obama doesn’t push the TPP in the US, odds are we won’t see it happen.

 

2. The TPP counterbalances China’s growing aggression

China has made increasingly bold moves in Asia, particularly in our own region of South East Asia. China aims to seize control of the “nine dash line” in the South China Sea, and has openly ignored international court rulings about its right to do so. The TPP thus has strategic value, in allowing the US to remain an economic presence in Asia, and checking China’s advance.

The White House has issued a statement saying that delaying the TPP would allow Beijing to “write the rules” of global trade. While many chafe at the thought of America writing those rules, the alternative is not much better: China’s tolerance of weak labour laws could mean a surge in human rights violations, as businesses cut corners to raise profits.

One of the TPP’s goals is to establish a labour rights framework, permitting trade access only to countries that don’t abuse their workers.

(Which makes it ironic that some of Singapore’s opposition parties are against the TPP, given their labour rights platform.)

China’s encroachment grows by the day, and time is running out for South East Asia to find some way to restrain them.

 

3. Singapore’s economy urgently needs a boost

With last month’s PMI falling before 50, a record number of job layoffs in 2015, and widespread devastation in the oil and gas sector, Singapore’s economy has been hammered. Thus far, our significant reserves have seen us through – but if things carry on at this rate, SG 100 will be celebrated by four people under a rock and some big papaya leaves.

Now, say every one of Singapore’s bold initiatives succeed – we automate factories, we raise productivity to record highs, and we have innovative businesses. What then? Our market is tiny. There’s only so far a business can go. We need access to wider markets, and the costs involved are tremendous.

The TPP is the most practical way to over come the problem. But given the dire situation facing our economy, we can’t wait around too long for it to happen.

 

Featured image 07290126 by Flickr user SumOfUs. (CC BY 2.0)

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by Ryan Ong

THE International Monetary Fund (IMF) has accepted the yuan as one of its reserve currencies. This has sparked a lot of debate on potential consequences. You’ll find three schools of thought: one group is furious that China’s being rewarded for currency manipulation, another thinks it marks the end of American dominance, and a third group believes all this is about as relevant as Sun Ho’s music career:

by Rohini Samtani

ASEAN leaders from all 10 Southeast Asian countries gathered in Kuala Lumpur over the weekend to declare the establishment of a formal community in the Asean region, named the Asean Economic Community, or AEC. Here are seven aspects of the agreement you should know about.

1. Combined market

A major feature of the agreement, which has been eight years in the making, posits the creation of one united market across the region. “We now have to ensure that we create a truly single market and production base, with freer movement of goods and services,” said the Malaysian prime minister Najib Razak, who is also the chairman of Asean. As such a bloc, it will be the seventh largest economy today, and has the potential to be the fourth largest in the world as early as 2030.

2. Free trade 

The Asean countries have already taken economic measures in the past, including removing most tariff barriers, increasing the competitiveness of Asean’s manufacturing industry in the global market and reducing costs for all stakeholders. But currently politically sensitive sectors including agriculture, auto-production and steel remain protected. “Now we have to assure freer movements and removal of barriers that hinder growth and investment,” Mr Najib said.

3. Cheaper production overseas

The short-term impact of the creation of this integrated Community would be that more Singaporean firms could now move production of lower value goods to countries elsewhere in Asean, where labour is cheaper. Experts said that the creation of the Asean Community has various salient features which will encourage Singaporean firms to shift its production to lower-cost countries in the region. The creation of the Community firstly brings more awareness of the advantages of expanding overseas, a standardisation of customs procedures and in turn easier shipment of goods.

4. Changing landscapes in the South China Sea dispute

Chinese premier Li Keqiang, who was present at the Asean Summit in Kuala Lumpur, urged Southeast Asian nations to set aside their differences as tensions rise over the disputed South China Sea islands, the state news agency Xinhua reported. The newly formed Asean Community, which promises deeper political ties, includes Vietnam, the Philippines, Malaysia, Taiwan and Brunei who all have territorial claims in the South China Sea. Deeper cooperation between Asean nations might lead to a new found political relationship between these nations and China in their claims over South China Sea territories.

5. Easier work visas

It would now be easier for citizens of Asean countries to work in other countries in the region. Semi-skilled workers will be able to move around for jobs, but they will be limited to jobs in eight sectors: engineers, architects, nurses, doctors, dentists, accountants, surveyors and tourism professionals. However, these account for only 1.5 per cent of the total jobs in the region, and host countries still would still be able to impose constitutional regulatory hurdles restricting the inflow of talent.

6. Benefiting the elites not the masses?

Mr Jerald Joseph, the head of Malaysian rights group Dignity International, has cited the annual haze as a metaphor for an impending problem the free movement of goods and services across Asean might bring. Calling the haze a by-product of what AEC plans to achieve – by giving cheaper labour and untapped resources to Asean businesses in any member country – he fears that the union could end up benefitting the region’s elites, not the masses. Just as the haze was a result of high profits for palm oil companies, but ended up harming everyone else.

7. An integrated Asean identity

Singapore Prime Minister Lee Hsien Loong highlighted that “Apart from these specific, tangible items [referring to economic and political guidelines], we will be able to discuss with our other Asean partners on ideas [like] how we can strengthen the sense of Asean one-ness and identity.” The lack of a strong sense of Asean identity is one reason why Asean finds it difficult to make progress together, he said. However, Wathshlah Naidu of Women’s Aid Organisation Malaysia (WAO) called the human rights agenda of Asean in the Asean Community Vision 2025 “rather fragmented and established in silos”, adding that gender equality and the diversity of Asean was not comprehensively reflected in the vision. “Eliminating all forms of discrimination and human rights violations is fundamental towards achieving regional integration that is rooted in achieving equality of all Asean countries and its peoples,” she said.

 

Featured image Signing Ceremony ASEAN 2025-4 by Flickr user ASEAN Secretariat. 

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