Tuesday, October 15, 2013

Half Empty Or Half Full

Is the glass half empty or half full? Should you break out the bottle of champagne to celebrate? The lame stream media boasts of "strong showing" due to recovery in manufacturing and expansion in services that resulted in better-than-expected third quarter growth of 5.1%. Just the thing to kick in a GDP related bonus.

Look at the table carefully. The bottle half has more negative numbers.

Vishnu Varathan, senior economist at Mizuho Bank told CNBC on Monday, pouring cold water on the jubilation, "I expect growth to be rather volatile. Singapore is vulnerable through trade and financial channels, I think it's going to be a bumpy recovery." He was pointing to the advance estimate showing the city-state's economy shrinking 1.0 percent on quarter in the July-September period, instead of a gloomier expected 3.6 percent contraction, and a significant deceleration from 16.9 percent growth in the previous three months. Hang on to those bonus cheques. Unlike Ngiam Tong Dow's astute observations, once issued, these cannot be retracted.

Somebody gets the credit, and somebody gets shafted when the economy tanks. Singapore’s Minister of Finance, Tharman Shanmugaratnam, was just named "Finance Minister of the Year 2013" and is slated to receive the award during a private presentation at the World Bank/IMF annual meetings in Washington this week.

In conferring the award, Euromoney painted Tharman as having played “an over-arching role in enabling Singapore to shift its growth model from population-driven to productivity-driven expansion”. Euromoney must have missed out on the Population White Paper report. As for productivity, they should check up on the Ministry of Manpower (MOM) website to get a better picture of the struggle to stay above water. Business Times ("Need to tweak policies on productivity and workforce") summarised it quite succinctly:
"It is indeed vital for Singapore to reduce reliance on cheap foreign labour and raise productivity. This mantra needs to be taken more seriously and more effort needs to be put in place, especially if we want to reduce the widening gap between top and low earners here."

IMF must have good reasons for the vote of confidence. It was in September 2009 when Singapore first announced it will "significantly expand" its contribution to the resources of the International Monetary Fund (IMF) to the tune of 2 billion U.S. dollars under its New Arrangements to Borrow (NAB). This represented an increase of US$1.5 billion from the then existing contribution under the NAB. Singapore had been a contributor to the NAB since its inception in 1998.

Questions were raised in Parliament in July 2012 about the US$4 billion generosity pledged to the IMF. The Prime Minister's explanation was not convincing: “In the event that Singapore’s commitment is tapped upon, the money will not come from the Government Budget." As long as the Monetary Authority of Singapore (MAS) has unfettered access to the cookie jar via all sorts of inventive accounting entries, there is nothing to stop the Singapore government from making bad investment decisions and squandering our hard earned reserves. Once again, is the glass half empty or half full?


  1. Look at how sarcastic the foreigner said to tharman when they give him the title.

    "“Not content with resting on his laurels and relying on low taxes to attract foreign direct investment and business from Asia and elsewhere, finance minister Shanmugaratnam has spearheaded a push to find new sources of economic growth, while building a social safety net to address discontent over strained infrastructure and rising living costs.”"


    We know very well why he is given the award just like awards given to the old fart when they give dumb money to foreigners and help foreigners to make money . Where else in countries where the government become the one of the wealthiest in the world other than by exploiting, milking and disadvantaging the citizens, gerrymandering, has the police force, military, law, legal, press, media, education and everything under the control of one family ?

    This finance minister didn't answer the question raise by Christopher Balding, and best of all, has this nonsense

    "Mr Low Thia Khiang: I'm simply asking information of Temasek: What is the strategic difference, and when (did) it emerge? I'm not asking the Government to intrude.
    Mr Tharman: The board together with Mr Goodyear issued a carefully crafted statement. Both sides agreed on the statement. I do not think it's advisable for the Government to comment further on the matter and add grist to the mill. People do want to know. There's curiosity. But that is not sufficient reason to disclose information. It is not sufficient that there be curiosity and interest.
    This applies to private sector organisations, listed companies. Sometimes they disclose the reasons, sometimes they don't. It depends on the circumstances of departure. Is it mutual, amicable, is there an understanding between the parties as to what should be kept private and what should be made public?
    It will not be advisable, nor in the interest of Temasek or Mr Goodyear, for us to comment further. It serves no strategic purpose. I understand the interest but it serves no strategic purpose.

    Not even accountable to the people and yet has the thick skin to receive the award ?

  2. Yes, you nailed it. They have to give Singapore something in return for the unlimited/generous line of credit. Awarding the (useless) "Finance Minister of the Year" title is definitely a much easier sell than giving him the top post at the IMF.

    Trust me, this award is purely political. But it will certainly be played up by the local MSM. (Yeah, I can already hear some Singaporeans bragging about this distinction to their foreign friends.)

  3. Unlike gambling which has been described as something for nothing we pander to these cunning and ruthless western powers so that we can glorify ourselves at the expense of the toiling citizens. We then boast that we puch above our weight. These accolades mean nothing to the citizens who are suffering the indignities of being unable to retire, always fearing the worst for themselves and their families despite being one of the richest countries in the world.

    1. Everyone should read this


      Notice the similarities of china's dictatorial system with singapore system of few people running the show. No wonder pap loves china. Same species of bird.

  4. Err... Glass? What glass?

  5. Despite these numbers.. and you can interpret it either way, businesses here seem to be thriving.

    There is no news about lay offs, shut down or pull outs... not even in cyber space. F&B is thriving with lots more vacancies. Financial services is thriving with companies looking for people.
    Stock market is thriving despite threats of debt defaults.

    The numbers indicate a healthy economy.. and what "recovery"??
    were we ever in recession in the past 8 quarters????

  6. Just to note this is not even "prelim", its "advance" meaning September numbers were left out and Sep numbers were truly a chapter from nightmare. The usual practice is to use this "advance" figure for tabling of cabinet note to approve the year-end GDP bonus: above 3% yoy, so max it out civil masters. And about that MAS "policy" of "strong sing dollar" mambo jambo, the banks say thank you and for the elites and foeigners, its another way the MAS is telling you - "keep speculating in real estate". All foreigners are entitled to a guaranteed 2% annual return from sing dollar appreciation against the toilet paper USD. Will attracting more and more QE money into red dot ever lower inflation? Has the MAS ever achieve its inflation projections at the beginning of the last 5 years? If not, we can all agree that kojak is the worst finance minister, except for that little US$4b of present to christine and the european bank creditors of Greece and Cyprus.

  7. Tharman seems like a nice fella. Hey he was once arrested and fined for releasing govt figs that he shouldn't have. Now he wont release info on subjects that he should. Definitely the man's a dreamer, seeing as how he claims one can own a $100,000 HDB flat on a $1,000/month family income.

    Seems appropriate that the reasons he is getting his award make as little sense as his claims re flat ownership. But while they are the kind of stuff the PAP likes to feed the public, because those reasons so blatantly don't fit in with reality, it is embarrassing for Spore that he is given the award.

    1. He did Nothing, Zilch, Nada, about shifting us from a population-driven to a productivity-driven growth model. Productivity -- which was something we worked hard at improving once upon a time, and which now and then someone says we have to improve -- has been abysmally awful for years. This country is still very dependant on boosting people numbers to raise GDP numbers - and intends to continue on that route!

    2. As for Tharman's building of a ''social safety net'' to address discontent -- what social safety net???!!!

    The IMF scores MINUS 100 in interpreting and describing a situation correctly. It's highly disturbing that Spore allows this lot access to $4Billion of our money. It could be going to building that so-called social safety net.

    1. What about our more than $1 billion put into the IMF's Poverty Reduction and Growth Facility. The irony of it all when they did so little to reduce our own poverty and promote economic (not population) growth.

  8. Sounds like Obama's Nobel award. For some future achievement yet to be realized rather than something successfully accomplished.

  9. If he can be an excellent Finance Minister, why is it then that PAP or rather LHL or rather LKY will never allow Tharman to qualify as our Prime Minister for the rest of his entire life ?

    Can anyone honestly tell us ?

  10. Tharman is a very smart man but he does not have enough merit. The FamiLee do not trust him to be a seat warmer.


    1. Disagree, he has a great deal of merit ,hence is disqualified to warm any PM position... as any Lee in waiting may not be able to step into his shoes.

    2. Maybe it's not me-ri-tocracy.
      Maybe it's me-Lee-tocracy