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Wednesday, February 15, 2012

An indictment of the PAP’s policy by LKY

At an international conference held in Singapore in 2010, former Minister Mentor Lee Kuan Yew made a shocking admission that our GDP growth was based purely on foreign workers. He said, “We’ve grown in the last five years by just importing labour.” (Emphasis added)

Did Mr Lee just issue a damning indictment of his Government’s economic policy? Never one to mince his words or use them without due care, MM Lee confirmed what Singaporeans had been suspecting all along, that our GDP growth was fueled largely — Mr Lee says exclusively — by a foreign workforce.

The sheer volume of foreigners coming onto this island would give any GDP a bump. The tragedy is that growth has neither improved the quality of our economy nor added value to our workforce. Like the empty calories that alcohol provides but with little nutritional value to the body, our dependence on foreign workers boosts the GDP in the short term but does nothing to raise our productivity and skill-level.

And like alcohol, it is intoxicating and creates dependence as evidenced by the inability of the Government to wean our economy off the easy highs that exploitation of cheap labour brings.

But the GDP is what the PAP relies on. For one thing, our Ministers salaries are GDP-dependent, they reap much reward when this index goes up. This is independent of the fact that Singaporeans are forced to compete unfairly with their foreign counterparts who are able to accept much lower wage levels. Such an arrangement ensures that while the Ministers remain motivated, it crushes the morale and spirit of our workers, not to mention their livelihoods.

Such an approach does nothing to sharpen our economic competitiveness nor does it prepare us for what lies ahead.

The problem is not that the Government is blind to all this. Minister for Manpower Gan Kim Yong explained the need to reduce our reliance on a foreign workforce because this adversely impacted on productivity: “We have to ensure that our productivity improvement will catch up. We don’t have a lot of time — the other countries are improving, our competitors are improving and therefore we have to step up our efforts to do so.”

Mr Lee even announced a time frame to achieve the goal. “The next five years, we have decided we will tier down our need for foreign workers,” he promised in 2010.

The real problem is that the PAP does not have the will and the courage to go through with such its own plan because like someone who is inebriated, the party is not thinking beyond the next drink. The temptation is simply too powerful.

As quickly as the words left the MM’s mouth, the Ministry of Manpower was taking them back. In 2011 it reversed course and recruited 85,000 foreign workers, up 38 percent from 53,000 in 2010.

Our economy is drifting. Worse, the Government doesn’t have any idea on how we should proceed. The fact that we have had four recessions in the past 15 years is indicative of the quality of the PAP’s economic policy.

We went into a deep downturn following the Asian financial crisis in 1997. Before we could fully recovery, the economy plunged by -1.2 percent in 2001 and did not receive until 2003. In 2008, we were hit again and registered the steepest decline in GDP growth in our history; the GDP shrank 16.4 percent between October and December, in 2008. The next year it rebounded to 14.9 percent. But even before anyone had time to say “hurray” we were back down in a slump in 2011 and continuing into the present.

These wild economic gyrations make the roller-coaster rides at Universal Studios look tame. They tell us that the PAP is not in control. Worse, they signal a ruling party bereft of ideas and drunk on foreign labour.

Mr Lee just confirmed it.



.http://www.tremeritus.com/2012/02/15/an-indictment-of-the-paps-policy-by-lky/

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