Cost of staging a bomb attack

Cost of staging a bomb attack: as little as US$10,000, says terrorism expert

By Chong Chee Kin (The Straits Times)

BOMBING attacks in the Southeast Asia cost terrorists as little as US$10,000 (S$14,126) to stage, but the damage to properties and businesses can easily spiral into the millions.
The amount is spare change compared to the US$2 million to US$3 million that terrorist groups raise in the region every month.

The series of attacks in Bali in 2002 and 2005, which included the bombings of the JW Marriot Hotel and the Australian Embassy in Jakarta in 2003 and 2004, each cost only between US$10,000 and US$40,000 to stage.

Terrorism expert Rohan Gunaratna gave this regional perspective on terrorism when he spoke at a conference organised by British commercial insurer Lloyd's on Thursday for insurers and business leaders around the world.

Citing a report by Lloyd's and the International Institute for Strategic Studies, Lloyd's chief executive, Richard Ward, said the main threat to businesses operating in Southeast Asia were their proximity to Western targets, such as embassies and hotels and possible attacks on the companies' transport routes and supply chains.

'If a company's supply chain is attacked or shut down, it simply can not survive. While many businesses are aware of possible attacks on their premises and take precautions to avoid this, too few take into account their operating systems and transport routes,' he noted.

Crucial to managing the risks is the need for businesses to tap on the expertise of academics and non-governmental organisations, he said.

Intelligence agencies should also build up their 'human intelligence capacities' - getting information through a network of people rather than surveillance equipment.

Citing the example of how an Al-Qaeda member had his hand cut off for using a mobile phone at his camp, Dr Gunaratna said terrorists know that they can be tracked through technological means.

'It is getting increasingly difficult to track them because they know they can be traced easily when they use hi-tech equipment,' he said.

Goodbye Comrade Fidel

Fidel Castro leaves Cuba stage to brother Raul

HAVANA - RETIRED Cuban leader Fidel Castro will play the role of elder statesman after nearly 50 years of absolute rule of Cuba, leaving the stage clear for his brother Raul Castro to assert himself.
Fidel Castro, who stepped down on Tuesday as president and commander-in-chief of Cuba's armed forces, stays on as first secretary of the ruling Communist Party and will continue to hold forth on domestic and world affairs in articles.

'We will continue waiting for the 'Reflections of Comrade Fidel', which will be a powerful arsenal of ideas and guidance,' the party newspaper Granma said on Wednesday.

Mr Castro, 81 and in poor health, will now be known as 'comrade Fidel' instead of 'El Comandante", as he has long been called, an indication that times are changing half a century after the bearded revolutionary seized power in 1959.

His retirement appeared to be the final stage of a carefully laid transition to Raul Castro, dashing the hopes of their enemies that Fidel Castro's end would send thousands of Cubans onto the streets to demand democratic reforms.

'Raul is the man of the hour. He is firmly in charge. Fidel is off-stage. The Fidel era is over,' said Brian Latell, a former CIA analyst and author of a book on Cuba's next leader called 'After Fidel'.

Raul Castro has provisionally held power since his brother underwent emergency intestinal surgery in July 2006. He is expected to be chosen as president when the rubber-stamp National Assembly meets on Sunday.

Cuba faces big problems from a weak economy to decrepit transportation and a frustrated younger generation, Mr Latell said in Miami, adding that Raul Castro would address them in a diligent way.

'He's a problem solver. Fidel couldn't admit to problems in the first place. There's no doubt that Raul is running Cuba,' Mr Latell said.

How much of a reformer?
It is unclear how much of a reformer Raul Castro will be.

He has been his brother's closest advisor since they were guerrilla fighters in the Sierra Maestra mountains and had a reputation as a hardliner who could be brutal with his enemies.

But he is also seen as a good manager and delegator.

Analysts say Fidel Castro's continued presence behind the scenes will ensure a certain caution as his brother considers economic reforms.

University student and Communist Youth leaders said on Wednesday they would continue studying and applying Fidel Castro's ideas as 'the leader of the Revolution' if not the head of state anymore.

'We young Cubans, above all, believe in Fidel and trust his decision. Even though it is painful to accept, it could be best for the country,' Patricia Flechilla, head of the University Students Federation, said on a state television newscast.

But Raul Castro should be able to rule without too much interference, said Uva de Aragon of Florida International University's Cuban Research Institute.

'Fidel sees himself as playing the role of the great statesman, the grandfather, comforting the people. There was a hint of nostalgia in his resignation letter,' she said.

'Raul has a space to make some changes ... not that I expect significant change right away.' The National Assembly meeting will be important to see what roles are given to vice-president Carlos Lage, seen as a pragmatist, and to reformers, the experts said.

Even if Raul Castro does not take on both of the posts vacated by his brother, he will wield significant power.

'You have to see this as part of a process that started a long time ago,' Ms de Aragon said.

US President George W. Bush, who has tightened a decades-old US economic embargo against Mr Castro's government, said his retirement should begin a democratic transition.

The reaction from Cubans has been subdued. Some were saddened by Mr Castro's retirement and others hoped it would herald economic changes, but no one was predicting major changes to Cuba's one-party rule.

'I wish it were so, but I don't believe it,' said Pedro, a 74-year-old retiree who was lining up outside a bank at dawn on Wednesday to collect a monthly pension of 164 pesos (S$10).

'This is not enough to live on. A pound of pork costs 40 pesos,' said Pedro, who supplements his pension working as a night watchman. 'A man my age should not have to work.' -- REUTERS

Help grads who do as well as foreign talent

ST Forum (Feb 20, 2008)

Help grads who do as well as foreign talent

RECENTLY, I befriended a group of scholars from China studying at my alma mater, Nanyang Technological University (NTU). They were in their late teens and were attending foundation courses in English and maths before starting their undergraduate studies. In their five-year sojourn at NTU, they will be given free lodging and a monthly allowance of $500 each. Needless to say, they do not have to pay for their tuition fees. When they graduate, they must work in Singapore for six years as part of their 'payback'' bond.
A highly conservative calculation of their five-year tenure at NTU suggests that each will cost the Government or NTU some $70,000. That is, $30,000 for their five-year tuition fees, including the charges for their foundation courses, and some $40,000 for hostel accommodation and their monthly stipends. I graduated from NTU five years ago, with a good honours degree.

I was in the top 15 per cent of my cohort - and performed better than some of these scholars. While studying at NTU, I had to work as a pizza delivery boy to earn my allowance. Upon graduation, I had to start paying off a $24,000-student loan.

Why are Singaporeans like me not treated as considerately as such scholars? My study loan took five years to pay off after I started working. The China scholars receive financial support, a free education and start their working lives debt free. Their six-year bond is seen as a contribution to Singapore.

Am I not contributing as much, if not more? Non-scholar Singaporeans are not treated in quite the same way as foreign talent, regardless of how well we perform. The disparity is disheartening.

Don't Singaporeans like me who have done well deserve some relief? True, local scholarships are available. But not every Singaporean who graduated well, gets one.

Can the NTU or the Education Ministry tell me why graduates like myself don't deserve some relief or reward for doing as well as, or better than, some of the foreign talent?


Zhou Zhiqiang

Feb 1, 2008 - Foreign Talent

Feb 1, 2008
S'poreans and foreigners gain from job boom
By Goh Chin Lian and Keith Lin
THE economy grew so fast last year it created a record-busting 236,600 jobs, with six in 10 of them going to foreigners as there were not enough locals to fill all the openings.
That is up from the 2006 figure of five in 10 jobs going to foreigners.

The Manpower Ministry said in its statement yesterday that both Singaporeans and foreigners gained from the job boom.

The number of new jobs that went to locals rose last year to 92,100, up from 90,900 in 2006.

But foreign employment soared to 144,500 last year.

The services sector was the main engine of growth, adding 144,100 jobs. Most of these were in the financial and professional services. The construction sector grew by 40,900 jobs, double that of the previous year, and manufacturing by 49,400.

Record 236,600 jobs created last year


Six in 10 went to foreigners
... more
At the same time, the overall unemployment rate fell to a 10-year low of 2.1 per cent last year. On average, 56,900 Singaporeans and permanent residents were unemployed last year, down from 67,600 in 2006.

Retrenchment dipped to a 14-year low, with 7,200 workers laid off, the bulk from manufacturing. The ministry said that reflected the ongoing restructuring in the electronics industry.

National University of Singapore labour economist Park Cheolsung said it was unsurprising that in such a buoyant labour market, a larger share of the new jobs went to foreigners.

'The labour market situation is so rosy that most Singaporeans should have jobs if they want to. For many companies, turning to foreigners is the only way they can find workers right now.'

The ministry, which has relaxed foreign worker quotas and hiring requirements in recent years, said the injection of foreigners enabled the economy to 'grow beyond the limits of Singapore's indigenous workforce'.

Singapore registered GDP growth of 7.5 per cent last year.

Foreigners are key to the boom being enjoyed by the construction and marine sectors, where they are taking up posts that Singaporeans find unattractive.

In the shipping industry, workers from Bangladesh, India, China and Myanmar are employed as tradesmen - who do work such as welding - as well as technicians and assistant engineers.

Shipbuilding and Marine Engineering Employees' Union president Wong Weng Ong said: 'A welder gets $400 to $500 a month. Most Singaporeans won't work for you for less than $1,000.'

An increasing number of foreigners are also working in the services sector, doing jobs that range from waiting on tables to high-end ones in finance, logistics and information technology.

As of December last year, one in three workers here - or 900,800 - were foreigners.

But job growth could moderate this year, economists say. Dr Chua Hak Bin of Citigroup said: 'Already, the global credit crunch has resulted in some retrenchment in certain sectors, such as financial services.'

chinlian@sph.com.sg

Jan 31, 2008 - Keeping Traffic Flowing

Jan 31, 2008
Keeping traffic flowing smoothly
Visiting the Kallang-Paya Lebar Expressway yesterday, Transport Minister Raymond Lim outlined the Government's plan to tackle increasing congestion on Singapore roads.


INCREASING road capacity and deploying traffic engineering measures will not in themselves guarantee smooth-flowing roads. Additional lanes and new roads attract more traffic and congestion soon returns. As a Time Magazine writer put it: 'Traffic is like water; it oozes across all available surface.'
The insatiable appetite for more cars has led to an uphill battle against gridlock in many cities. In fast-growing economies like China, the car population grows at more than 20 per cent a year and peak-hour traffic in mega cities such as Beijing and Shanghai crawls at 5km an hour.

In the US, motorists spend more than 4.2 billion hours stuck in jams, enough time to fill 65 million iPod Nanos with music, and used up enough extra fuel to fill 58 supertankers. The 'congestion invoice' in the US stands at some $78 billion each year while congestion costs are estimated to be 1 per cent of GDP in European countries such as Britain and France.

Singaporeans, likewise, desire to own cars and our policies, in particular the use of Electronic Road Pricing (ERP) to manage traffic, have made it possible for many Singaporeans to do so. And so the vehicle population has grown steadily to the 850,000 vehicles today. With rising affluence, not only are more Singaporeans owning cars, they are also using them more intensively. While the number of cars increased by 10 per cent between 1997 and 2004, the number of car trips increased by 23 per cent, more than double.

The effects are telling. Congestion levels have increased by about 25 per cent since 1999, with more roads congested during the peak hours. A December 2007 Singapore Business Review article entitled Gridlocked Nation warned that 'if Singapore's growing traffic problems (were) not solved soon, the surging economy could feel the crunch'.

Against our ever growing appetite for car use, we are faced with the immutable realities of Singapore's situation: a compact city state with 12 per cent of its land already used up for roads. While we will continue to build roads like the North-South Expressway, going ahead, the pace of road expansion will have to slow down, from 1 per cent a year over the last 15 years, to 0.5 per cent a year over the next 15 years.

KEY TRADE-OFF

The only way to move large numbers of people efficiently in our densely populated city is by public transport...The more cars Singaporeans own, the more extensive ERP coverage and the higher the charges would have to be. This is the key trade-off we have to make, to maintain smooth-flowing roads.

There are three inescapable conclusions from these observations. First, as more and more Singaporeans own cars, it is clearly not possible for all of them to drive their cars to and from work every day. The only way to move large numbers of people efficiently in our densely populated city is by public transport. It is therefore critical that we make public transport much more attractive to the vast majority of Singaporeans, including those who have access to cars.

Second, the trade-offs we are faced with have become much sharper. The more cars Singaporeans own, the more extensive ERP coverage and the higher the charges would have to be. This is the key trade-off we have to make, to maintain smooth-flowing roads.

Third, even with more extensive ERP, the current vehicle growth rate of 3 per cent is not sustainable, given the already large vehicle population and the slowdown in road growth. We have to lower vehicle growth.

These are not easy issues but we have to make these difficult decisions and act decisively to manage car growth and usage to ensure that Singaporeans will continue to enjoy a quality living environment.

Public transport

FIRST and foremost, we are taking major steps to make public transport a choice mode of travel. We will plan our bus and rail network as an integrated system from the commuters' perspective, with more frequent services and seamless transfers. We will also spend billions of dollars to double our rail network, enabling many more people to benefit from fast and reliable MRT connections. These measures will transform our bus and rail services, reduce journey times and increase comfort and convenience for commuters. Beyond these, we will make immediate improvements to public transport - both bus and rail - so that people will have a good alternative to cars.

Improving bus services

LONG waiting times, long journey times and overcrowding are the three most common complaints amongst bus commuters. These are the same reasons that discourage more people from taking public transport today.

The bus priority measures such as bus lanes which we are putting in by June 2008 will help reduce waiting and journey times. These measures will help improve average bus speeds to 20kmh-25kmh, up from today's 16kmh for feeder buses and 19kmh for trunk buses. In addition, we will:


Increase frequencies of basic bus services, including feeder services.
To shorten bus journey and waiting times, and reduce crowding, we will enhance the frequency of basic bus services. In particular, we will put priority on corridors affected by impending ERP expansion, where the bus operators will raise the peak period frequency of all basic bus services from 15 minutes to 12 minutes by June 2008 and 10 minutes by August 2009.

Many commuters use feeder bus services to connect to MRT stations and bus interchanges. To reduce their waiting time, we will increase the frequency of feeder services. Over and above the minimum frequencies which the Public Transport Council (PTC) specifies for all bus services, the PTC will also be spelling out a separate and higher Quality of Service (QoS) standard for peak-hour feeder bus services. The PTC will announce changes after consultation with the public transport operators.

The bus operators will have to procure additional buses to run the trunk and feeder bus services at higher frequencies. As this will take time, LTA will, in the interim, extend the statutory lifespan of existing buses to expedite implementation.


Allow basic bus services to duplicate parts of the rail network.
Today, trunk buses are not allowed to run routes that are parallel to rail lines. This avoids wasteful duplication of resources, which would increase the overall cost of our public transport system. However, LTA has reviewed and will relax this rule for the mature rail lines, namely the North-South and East-West lines, where ridership is high and the scope for expanding rail capacity quickly is limited.

From June 2008, we will allow new bus services to ply the North-South and East-West lines where there is persistent heavy passenger loading during peak hours. For example, it will now be possible to have a more direct bus that runs parallel to the North-South Line, from Ang Mo Kio to Orchard Road, compared to existing services which have more indirect routes. This would give commuters an attractive alternative to trains.


Expand premium bus services to provide more choices.
We will also expand premium bus services which provide more comfortable and direct journeys. We currently have 42 services. We will work with the bus operators to increase the number to at least 72 by June 2008, putting priority on routes affected by ERP expansion. For example, premium bus services will provide direct connections from residential areas such as Katong, Holland, Bukit Timah, Choa Chu Kang, Sengkang, Tampines and Yio Chu Kang to the Shenton Way, Robinson Road, Suntec City and Orchard Road areas. The operators will also provide return trips in the evening on high demand services.

Increasing train capacity

EVEN as we improve bus services, we will also increase the frequency and capacity of our trains, for a more comfortable ride.

I mentioned in an earlier speech that an immediate improvement is the addition of 93 train trips a week during the morning and evening peak periods from February. For commuters, this will mean less crowded trains and a cut in waiting time by about 10 per cent to 15 per cent during peak hours.

Further, as part of LTA's effort in revising the rail Operating Performance Standards, more frequent services will be required during peak-time periods. For example, commuters should only have to wait for about two to three minutes during the morning peak-of-peaks when commuter volume is highest. During the lunch period, the frequency would be improved to about five to six minutes, down from the current seven minutes. LTA will work with the rail operators to bring about these improvements.

Ensuring ERP remains effective

BESIDES vastly improving public transport, we will also need to enhance our ERP system. As with putting in more roads and traffic engineering measures, simply improving public transport on its own will not solve the congestion problem. Of all the different measures to deal with congestion, ERP is the only one that addresses the problem directly by requiring individuals to take into account the costs of congestion caused by their driving to others.

Many other cities are coming to the same conclusion that there is no choice but to introduce congestion charging on heavily used roads. London, Stockholm and Milan have done so and New York and Amsterdam are considering it. Without ERP, Singaporeans would be spending many hours in traffic snarls, just like people in Tokyo, Los Angeles and many other US cities, who pay for congestion, not with their wallets, but with the time they have lost, stuck in traffic gridlock.

However, it is a growing challenge to keep our roads smooth-flowing. On the one hand, road growth is slowing; on the other hand, we are packing more and more cars onto our roads. In the last 10 years, the car population grew by almost 40 per cent, from 370,000 in 1997 to 515,000 today.

Coupled with this is the fact that our cars are among the most intensively used in the world, averaging 21,000 km a year, compared to 9,100km in London, 13,900km in Melbourne and 19,800km in Chicago. Not surprisingly, all these have resulted in the crowded roads and frequent peak-hour congestion that we see today.

Our ERP system has served us well, but it is coming under strain. We often hear feedback that ERP has not helped to ease congestion on the highest-demand roads like the CTE beyond a temporary respite; that ERP rate increases have little impact on travel behaviour; and that even though people pay ERP, they still face congestion on priced roads. There is some truth in this. The reason is that rising affluence has led to a greater propensity to drive which in turn has caused a dramatic rise in traffic volumes; so much so that the scale and intensity of traffic congestion today are far different from what they were a decade ago.

Increasingly, given the more pervasive congestion today, the emphasis must be on encouraging motorists to shift to public transport, rather than drive on alternative roads to their destinations. This is why the Government is spending billions of dollars to improve our public transport system to make it a viable alternative to the car.

Further, our ERP system has essentially remained unchanged since 1998. Hence, it is critical that we review the ERP system and enhance it to better address current and future traffic conditions. As a Thomson resident told me when I visited the area recently, people are willing to pay ERP charges but they must see the benefit from it. In other words, the ERP system must be made more effective.

LTA has studied the matter carefully and assessed that, to manage congestion effectively, it is necessary to make the following changes:


Refine the method of measuring traffic speeds: The optimal traffic speed thresholds of 45kmh on our expressways and 20kmh for arterial roads have been set to ensure smooth-flowing traffic. Yet, very often, motorists who pay ERP charges still find themselves caught in slow traffic, and even experiencing 'stop-start' conditions, despite fine weather and with no accident in sight.
LTA did a study which found the 45kmh and 20kmh threshold speeds which were set 10 years ago are today close to the point where traffic flow can deteriorate very rapidly to what traffic engineers call the 'unstable zone', where 'stop-start' traffic conditions become common. When this happens, all it takes is a minor disturbance in the traffic flow and the traffic speeds can drop quite sharply. This is undesirable and we need to create a buffer to ensure better traffic conditions.

After careful review, LTA has decided to address this problem by adopting a more representative method of measuring actual traffic conditions for ERP rate reviews, with speeds determined using the 85th percentile speed measurement method. The 85th percentile speed measurement method is also an international traffic engineering practice for assessing traffic conditions.

The 85th percentile speed measurement method will result in better driving conditions for more motorists than the current methodology of using the average or mean speed, as it ensures that 85 per cent of motorists will experience speeds above the threshold. The nature of averaging is such that lower speed readings would be evened out by higher speed readings. Hence, even if the average speed on an ERP- priced road is recorded as being above the threshold, the actual speeds may well be lower than the threshold for a significant part of the time. For example, even though the average travelling speed on the PIE from 7.30 to 8am was above 45 kmh in early January this year, up to 38 per cent of the motorists were actually travelling at speeds below 45kmh.

On Thomson Road in October 2007, about half of the motorists travelled at speeds below 20kmh between 8.30-9am, even though the average speed was 20kmh. Thus, using average speeds aggravates the risk of traffic falling into the unstable zone. This also explains why there is at times a disconnect between what LTA says and motorists' actual driving experience. LTA is correct that the average speed is above the speed thresholds but a good number of motorists are not actually experiencing such speeds.

Hence, LTA will no longer use average travelling speeds to determine ERP rate changes. Instead, LTA will use the speed taken at the 85th percentile level. With this change, at least 85 per cent of motorists will be assured of smooth travel on ERP-priced roads.


Update ERP rate structure: Traffic volumes have increased substantially in the last few years. This has resulted in the need to make more frequent rate changes on ERP-priced roads and expressways, from nine times in 2006 to 25 times in 2007, based on the same number of gantries. Instead of resorting to so many small adjustments, it would be more effective to make larger rate increments. Indeed, many people have said the 50-cent rate increment has only a temporary impact on driving behaviour as it is not significant enough to cause people to change their travel behaviour.
Therefore, for ERP charges to remain effective in influencing motorists' behaviour, LTA will raise the incremental ERP charge from $0.50 to $1. In addition, the ERP base charge, which is the starting charge for a new ERP gantry point, will be increased from the current $1 to $2. These changes will improve the effectiveness of the ERP system, so that each time ERP rates are adjusted, motorists who still choose to drive on these roads would see a visible improvement in traffic flows.


Manage congestion in city area: City traffic has been building up. Compared to five years ago, speeds on major roads in the CBD have fallen by more than 25 per cent. For example, five years ago, a motorist crossing the city from Bugis to Chinatown in the evening enjoyed travelling speeds of 25kmh. Today, the speeds have fallen by almost 30 per cent to 18 kmh. At major cross junctions between North Bridge Road and Bras Basah Road, as well as South Bridge Road and Cross Street, the build-up of traffic has resulted in motorists having to wait for three or more traffic light changes before they are able to cross the junctions. We cannot let conditions deteriorate further.
LTA has carefully studied the traffic situation and will introduce additional ERP gantries in the city area in July 2008 to manage traffic more effectively. These gantries will run roughly along the Singapore River from Clemenceau Avenue to Fullerton Road. Their purpose is to reduce the through traffic, which currently makes up about 38 per cent of the traffic, in this very busy area.

Phasing in changes

THE revised speed measurement criteria and the new rates will be introduced from July 2008, only after the public transport improvements have been rolled out by June. These public transport measures will increase rail and bus passenger capacity by 15,000 trips and 6,800 trips, respectively, during the morning peak hours. These are more than sufficient to cater to the 6,000 passenger car trips that LTA estimates may be affected by these ERP changes during that period.

LTA will phase in the ERP changes, starting with the CBD and Orchard cordons in July as the city area is a key priority. It will then extend the new criteria and rates to other roads progressively, with six new gantries put up to deal with peak-hour congestion in November. This is to give time for people to adjust their travel plans and allow for the impact of changes in the city area to work its way through the rest of the road network. Hence, if as a result of the new ERP rates in the city area, fewer motorists drive on the arterial roads and expressways leading to the city, we may not need to adjust the ERP rates even with the new criteria. LTA will give more details of the new ERP gantries later.

Lower vehicle ownership taxes

WITH all these changes to the ERP system, the expected increase in ERP revenue will be about $70 million a year. In line with our policy to shift progressively towards taxing on the basis of vehicle usage rather than ownership, the Government will reduce road tax by 15 per cent for all vehicles, including taxis. I urge taxi operators to pass on the savings to taxi drivers.

This permanent road tax reduction will cost the Government about $110 million annually. It underlines the point that the higher ERP charge is to address congestion and is not a revenue- raising measure. If motorists were to drive less, the Government would be happy to collect less ERP revenue.

In addition, to lower the upfront cost of car ownership, we will also reduce the Additional Registration Fee (ARF) for cars, lowering the rates from 110 per cent of Open Market Value (OMV) to 100 per cent of OMV with effect from March 2008. The Government will collect about $200 million less annually.

Lower vehicle growth rate

BESIDES enhancing the effectiveness of ERP, we will need to lower the vehicle growth rate.

Every weekday morning and evening, we feel the impact of our 850,000-strong vehicle population on the roads. When I go to dialogue sessions, I often get questions like 'Don't you think there are too many cars on the roads?' People tell me it is not just the city areas that are getting congested but also suburban areas like Serangoon and Thomson, which they say get chock-a-block full of cars in the evenings.

One of the reasons for this rising congestion is that in applying a 3 per cent growth rate to the vehicle population base, we have been adding 25,000 vehicles to the roads each year, compared to 16,000 vehicles back in 1990 when the Vehicle Quota System was introduced. If we continue at a 3 per cent growth rate, we would have enough vehicles, packed bumper to bumper, to turn our entire road network into a giant carpark in the not-too-distant future. If we take into account that road growth will go down to 0.5 per cent a year, then clearly the 3 per cent vehicle growth rate is no longer tenable.

We will, therefore, lower the vehicle population growth rate from the current 3 per cent to 1.5 per cent from Quota Year 2009 (beginning in May 2009). We will review the growth rate after three years, and assess then whether a further reduction is necessary, in light of the slowdown in road growth.

Moving a nation

QUITE a number of people have suggested to me that I should just focus on improving the public transport system and leave these tough car demand measures to the future. They argue that since we are making such significant improvements to our public transport system, this should be sufficient to deal with our congestion problems. I wish it were so.

But unfortunately, I know that it is not the case. The reason is that even if we free up some roads because some motorists decide to switch to public transport, other motorists will soon take their place, attracted by the smooth-flowing traffic and very soon, these roads will again be congested. So improving public transport is necessary but not sufficient in itself to deal with congestion. We need both - public transport improvements and congestion measures.

There is always tension between the individual's personal interest in wanting unrestrained driving and the social goal of a liveable city. We have to decide whether as a people, we are willing to take hard decisions that will benefit our country; or whether we will, like many other cities, postpone the necessary, store up the trouble and suffer future gridlock, with the attendant costs to the economy and living environment.

So we must move - building up our public transport so that people will have a viable alternative to the car, and taking firm steps to curb excessive car travel demand so that all of us will enjoy a quality urban environment now and into the future

New Transport Plan Jan 31 2008

Jan 31, 2008
ERP network widened, charges going up
16 new gantries and other changes are aimed at ensuring that 85% of motorists enjoy a smooth ride

By Christopher Tan, Senior Correspondent
THE bitter medicine aimed at easing road congestion was spooned out yesterday.
Motorists will have to pay more to use the roads, said Transport Minister Raymond Lim, as he unveiled the third and final instalment of the Land Transport Review.

Congestion levels have gone up by about a quarter since 1999, he noted. To arrest this, 16 new gantries will go up between April and November, making 71 in all.

On top of this, a new price structure will be introduced gradually from July: From then, passing each gantry will cost motorists at least $2, up from $1 now; and subsequent jumps in the road pricing fee will be $1, instead of 50 cents.

'Instead of resorting to so many small adjustments, it would be more effective to make larger rate increments,' Mr Lim said.

The Government will change the criteria for deciding which roads will be priced under the Electronic Road Pricing (ERP) system. It will also change the 'trigger point' for increasing the ERP rates along roads already priced.

RELATED LINKS
More gantries
Now, as long as average speeds on expressways and arterial roads fall in the 45kmh to 60kmh and 20kmh to 30kmh ranges respectively, all is well.

Soon, 85 per cent of road users must be able to move at these speeds to stave off ERP or a rise in the ERP fee.

Bitter as the medicine is, the Government is also offering some sugar to go with it.

Road tax, cut just last September by 8 per cent, will be cut by another 15 per cent - which will more than offset motorists' ERP expenses. This tax cut will cost the national coffers $110 million a year.

Mr Lim stressed that ERP was never meant to be a Government revenue earner, and that the long-term policy was to shift vehicle taxes from ownership to usage.

And by beefing up public transport - changes to the bus and rail systems have been announced over the last two weeks - the Government also hopes to coax car owners onto buses and trains.

Two other sweeteners were unveiled yesterday for motorists: a cut to the additional registration fee (ARF) and new road projects.

The ARF, now at 110 per cent of the vehicle's open-market value, will be cut by 10 percentage points from March and cost the Government $200 million a year. The change will apply to cars bought with certificates of entitlement secured from the March tender on.

As for road projects, $14 billion will be spent on building roads over the next 12 years, a leap from the $3.4 billion spent in the last decade.

One of them is the 21km North-South Expressway to link Woodlands to the East Coast Parkway. Ready by 2020, it will cut commutes from the north-east by 30 per cent.

The Marina Coastal Expressway linking the Kallang Expressway to the Ayer Rayah Expressway will be ready in 2013; the Tampines Expressway and the Central Expressway will be widened.

Going forward, fewer roads will be built, said Mr Lim. This is because 12 per cent of Singapore's land space is already taken by roads, nearly as much as the 15 per cent now sitting under housing.

Besides, he said, building more roads 'is like telling a person who's suffering from obesity that the solution...is to buy bigger trousers'.

To give motorists an attractive alternative to driving, the frequency of bus services along corridors affected by the ERP expansion will be upped to one every 12 minutes by June, from one every 15 now.

And for the first time since mass transit started here two decades ago, bus services will be allowed to duplicate sections of mature MRT lines.

The land transport masterplan, the result of a year-long review, aims to get 70 per cent of morning peak-hour trips made on public transport, from 63 per cent now.

The medicine may already be working, at least with marketing executive Loh Ye Ling.

The 23-year-old is revising her year-old plan to buy car. She realises now that if she drives daily from her Hougang home to her Bugis office, she would spend far more than if she were to take a bus.

She said: 'I can't afford to spend so much on ERP, though road tax will be cut.'

Mr Cedric Foo, who heads the Government Parliamentary Committee for Transport, said: 'I don't think it's easy, once you get a car, to move to public transport. But as we narrow the gap between private transport and public transport standards, motorists would, over time give up their cars.'

christan@sph.com.sg

Battle to save Malaysia's Chinese dropouts Jan 30 2008

Jan 30, 2008
UPFRONT
Battle to save Malaysia's Chinese dropouts
By Chow Kum Hor, Malaysia Correspondent

TRAPPED: The number of young Chinese dropping out of school is rising. Without proper qualifications or skills to land a job and with few other options, the youth are more likely to turn to crime. -- PHOTO: AFP

KUALA LUMPUR - MRS Chong, a mother of two, is deeply worried about her 11-year-old daughter's studies.
The reason: The Standard Six pupil does not seem to have much homework from her Mandarin-medium school in Seri Kembangan, a predominantly Chinese middle-class enclave that is 30 minutes' drive from Kuala Lumpur.

Although school has just started, others in her daughter's year have already been inundated with schoolwork in preparation for the year-end government examination that Standard Six pupils take.

But her daughter and her classmates 'appear to have been spared the burden', although they are 'not very good' in their studies, said the 38-year-old housewife, who declined to give her full name.

Those familiar with the Chinese school system in Malaysia will understand Mrs Chong's anxiety.

It is not uncommon for these schools to neglect the less academically inclined, and lack of homework is one of the signs. Teachers are too busy coaching the potential top-scorers to spend time on the weaker pupils.

'Some schools are overly focused on those who can score a string of As. These are the students who give their schools a good name. But they (the good students) are the minority,' said Chinese educationist Goh Kean Seng.

The result is that those who fail to keep up with their schoolwork drop out of school in later years, said Mr Goh, principal of a private Chinese secondary school in KL and an active member of an influential Chinese education group.

The situation is worsened by the switch from Mandarin to Malay as the medium of instruction when the pupils go on to secondary school, he added.

Government primary schools use either Malay, Mandarin or Tamil as the medium of instruction. But all government secondary schools teach in Malay.

About 90 per cent of Chinese children in Malaysia go to Mandarin-medium primary schools, which are run by the government.

But less than 5 per cent go on to Mandarin-medium secondary schools, which are privately-run and fee-paying. Parents prefer to send their children to government schools, where education is free.

'Many drop out because they cannot cope with the change in the medium of instruction,' said Mr Goh.

It does not help that some parents refuse to send their children to 'Remove Classes', a year-long preparatory programme in secondary schools to bring children up to speed in the Malay language.

Pupils who fail their Malay language exam at Standard Six are required to go on this programme before they can start Form One. But those who do so are often perceived to be slow learners, so parents try to get their children exempted from it.

Deputy Education Minister Hon Choon Kim told The Straits Times: 'Many parents see Remove Classes as a dumping ground, which should not be the case.'

The Malaysian Chinese Association (MCA) estimates that 25 per cent of Chinese students quit studying before they are 18, when they are due to sit for a government exam equivalent to the O levels.

This estimate puts the annual dropout figure at over 100,000 - what the party's youth wing calls a 'silent epidemic'.

There are no official figures on the number of dropouts among the Chinese, but feedback that the MCA gets from the community suggests that the situation has deteriorated, especially over the past five years.

Among the dropouts, some become apprentices in workshops, picking up skills like plumbing or motor-repair. But many more, eager to make a quick buck, find themselves in illicit trades, such as peddling pirated DVDs or collecting debts for loan sharks.

Police statistics do not show the number of dropouts involved in criminal activity. But MCA officials say anecdotal evidence suggests that more youngsters these days are prepared to break the law to earn a living.

Malaysia's crime rate has been soaring over the years, going up by 7 per cent last year compared with 2006.

'It's very sad to see young Chinese dropping out of school at the age of 15 to 17 and ending up trying to evade police arrest every day,' MCA Youth's education bureau chief Wee Ka Siong told The Straits Times.

The party is deeply concerned, not only because education has always been important to the Chinese community.

'With globalisation, not having the paper qualification puts you at a disadvantage. We do not want young, able Malaysians to lose out,' said Mr Wee, also a lawmaker from Johor.

The MCA has set up a series of programmes to address this problem, one of which helps the less academically inclined enrol in vocational schools.

This way, they not only acquire skills like electrical wiring or tile-laying, but also have a piece of paper that says they are qualified.

The party also arranges for students with mediocre or poor grades to get extra coaching after school.

In addition, it has set up a RM6 million (S$2.6 million) fund to subsidise dropouts undergoing skills courses.

Datuk Hon said that the Education Ministry, together with the MCA, has undertaken a pilot project in about 10 Mandarin-medium primary schools nationwide to reduce the number of dropouts. It is aimed mainly at boosting the self-confidence of those who are not exactly star students.

'Sometimes, we hold essay-writing competitions that exclude straight As students. If we open the contest to all, only the good students will win,' he explained. Parents are invited to the prize-winning ceremonies of these contests.

He noted that the programme has had encouraging success, with students showing more enthusiasm for their studies. The ministry plans to expand the programme to more schools.

'We just do not want anyone left out. Every student counts,' Datuk Hon said.

kumhor@sph.com.sg

Rail demand and capacity Jan 29 2008

Rail demand and capacity

RAIL commuters here, like those in cities with much larger populations, judge service satisfaction by peak-period frequencies and coach loading. On these measures the prevalent view has been that the MRT system has been passable: Reasonably good, but should be better. The Land Transport Authority (LTA) and the operator of the older and more heavily used lines serving the city centre and its immediate environs will have noted the rising volume of gripes about crowded coaches and inconsistent scheduling during the morning and evening rush. Riders would want an interval of no more than two minutes between trains either way during the extreme peak. They are prepared to give due allowance for the operators' limited fleet size and pool of drivers, but expect them to be more responsive to need by investing continually in these two factors. Population size has been growing with the immigrant influx.

Commuters should now allow the two operators, SMRT and SBS Transit, a fresh start. The first service augmentation in some years starts next week when 93 more trips a week will be added to the schedule of the North-South, East-West and North-East lines, partly at the urging of the LTA. The Transport Ministry expects waiting time during peak periods to be reduced to about two minutes. Can 93 more trips swing it? SMRT will get the lion's share of 83 more trips. SBS will have 10 trips added to the slightly patchy NEL. Divided by the two lines SMRT runs, it will amount to a notional six trips daily on each of the two. If weekends are excluded, the number rises to a more commodious eight. Depending on how widely or narrowly 'peak' is defined, the effect may be dispersed. After due evaluation, the LTA could be forced into making adjustments to serve better the North-South line, where present traffic and anticipated demand are heaviest. The stretch between Ang Mo Kio and Raffles Place and most stations in between (especially Orchard, Somerset, Dhoby Ghaut, City Hall) are at peak capacity. To achieve the two-minute target, which riders in the commercial and financial zones expect as the minimum, the peak-period window may have to be constricted, based on service capacity. This will bring a new set of complaints,

Moreover, weekends are not considered peak. This is a curious anomaly for an Asian city of seven-day commerce and weekend meals out. Western cities not on the tourism trail have little commuter traffic on Saturdays and Sundays, but weekends are bonanza time in any Asian city of size. It is time the operators updated their practice by extending peak-hour definition to include Saturday, Sunday and public holidays.

Tao Li taken to task over comments

Tao Li taken to task over comments
They slam her reluctance to donate 6% of her earnings to youth
By Wang Meng Meng

TAO Li's view that she should not part with a portion of her winnings for youth development has not gone down well with the sports fraternity.
The swimmer is reluctant to give 6 per cent, or $1,425, back to youth development, as part of the newly introduced 15 per cent levy imposed by the Singapore Swimming Association (SSA).

That sum is derived from the $23,750 the 17-year-old schoolgirl will receive under the Multi-Million Dollar Award Programme (MAP). She earned the incentive after winning three individual titles and one team gold at last year's South-east Asia Games.

SingaporeSailing president Low Teo Ping was one of those who faulted her stand, saying: 'This is what I call a GGA - a Greedy, Grabbing Athlete. Very sad, you know.

'Every time my sailors go out and perform well, I thank them for making my job easier because when they do well, I continue to get funding.

'On top of that, they will be contributing to our development fund and they're happy to do so.'

Singapore Athletic Association supremo Loh Lin Kok was similarly critical, saying: 'It's not wrong for the association to stipulate a certain percentage be taken out from the MAP award to be pumped into youth development.

'To quarrel about it after the association puts in money to promote an athlete's interest is insincere. It doesn't leave a good taste in the mouth either.

'It is good that the SSA wants to show its transparency in exactly what it is doing with the money.

'Tao Li's still a teenager. She's also going to benefit from the money put back into development.'

For Singapore Table Tennis Association general manager Jackie Tay, the levy has not caused any friction between the association and its athletes.

He said: 'Our players donate 20 per cent of their MAP award, which will be used for the development of our academy players.

'This practice has been implemented for years and it is also explained clearly to our players. That is why there has been no adverse reaction from our paddlers.'

Bodybuilder Simon Chua, who has two Asian Games and three SEA Games golds, is also supportive of the levy.

He said: 'I believe in loyalty. The federation has been loyal to me throughout my career. Likewise, I must show the same.

'That's why I don't mind signing the agreement for my winnings to be 'taxed'.

'Altogether, I have made $530,000 from the MAP. The federation takes 15 per cent and this is an amount I have given willingly.'

But there are also those who stand in Tao Li's corner.

Freddie Choo, a reader, wrote: 'Instead of taking from Tao Li and other champions, the SSA should approach the government for more funding for youth development, using the track records of these champions to leverage their application.

'Why must the SSA feel they must take something back just because they have given to the swimmers?

'The swimmers have given too. The SSA could have spent 10 times more and not groomed any winners. So let's honour our champions instead of 'taxing' them.''

Parliamentary Secretary (Community Development, Youth and Sports) Teo Ser Luck has urged national sports associations (NSAs) to be transparent in the implementation of such levies.

He said: 'I believe the SSA has supported Tao Li, sent her for overseas competitions and these things cost money.

'Maybe she didn't have enough information and she has her own point of view.

'On the other hand, if the SSA wants to implement policies, it would be good to have dialogues with stakeholders for feedback.'

Sailor Maximilian Soh, who bagged an Asian Games gold in Doha, agreed with Mr Teo's call for the levy process to be transparent.

He said: 'I don't mind giving money back to the association. After all, they groomed the athletes and it is good that money is going back to the roots of the sport.

'But I'm concerned about transparency. I have given $52,000 from my MAP awards back to SingaporeSailing and I would like to know what it went to.

'I hope the money can be used to reward the coaches, to boost youth development and to be used as financial assistance to former sailors.'

The Singapore National Olympic Council, which administers the MAP scheme, declined comment. The Singapore Totalisator Board, which is the scheme's primary sponsor, did not reply by press time.

meng@sph.com.sg

S'pore backs code of practice for SWFs

S'pore backs code of practice for SWFs
But guidelines should apply to other investors as well, says Tony Tan
By Warren Fernandez, Deputy Editor & Foreign Editor
DAVOS - SINGAPORE supports the initiative to establish a code of best practices for sovereign wealth funds (SWFs), which would help ease concerns about their operations, Dr Tony Tan has said.
The deputy chairman of the Government of Singapore Investment Corporation (GIC) disclosed that Singapore was among several SWFs which had been asked by US Treasury Secretary Henry Paulson last October to offer suggestions for guidelines being drawn up, and had thrown up some ideas.

Among its suggestions: any new code should neither be overly prescriptive nor a one-size-

fits-all affair, given the wide diversity of funds which were labelled SWFs.

The guidelines, which should be largely voluntary, must also be kept general and flexible and be applied to other investors, such as hedge and private equity funds, so as to ensure a level playing field, he said.

More disclosure on the purpose and intention of investments made, whether they were for commercial reasons or some other purpose, as well as the governance processes within the funds would also be helpful, he said.

For its part, GIC was now working, in consultation with the Finance Ministry, on a document which would give more information on the processes, governance and purposes for its investments. This might be made public in the second quarter of this year. GIC would also report the rate of return on its investments more regularly, he added.

'The SWFs are here to stay. We believe it is good to have better understanding, some form of code of good practice, so that operations of the SWFs, and the reactions of the recipient countries, will not lead to further problems,' Dr Tan said.

'The SWFS can play a role... It is just a matter of working out a process whereby they can continue their operations, which is good for them and good for the companies they invest in.'

He was speaking to reporters at the end of a trip to Davos, Switzerland, where he participated in several high-level discussions on SWFs - a hot topic at this year's World Economic Forum meeting, which wrapped up yesterday.

GIC had drawn attention with two high-profile deals in recent months, investing US$6.88 billion (S$9.8 billion) in US banking giant Citigroup soon after forking out 11 billion Swiss francs (S$14.3 billion) for a stake of about 9 per cent in troubled Swiss bank UBS.

Dr Tan said that given the concerns about SWFs, he had decided to come to Davos to listen and exchange ideas on the issue. It was understandable, he said, that there would be some concerns about the purpose and intentions of SWFs, as there were many more players these days, including some large new ones from Russia and China.

'Our view is that the concerns are valid, and have to be addressed,' he said.

GIC had decided not to take up an invitation by the UBS to have a nominee elected to its board. GIC's position was that it was a long-term commercial investor in the Swiss bank, with no intention of taking control of its operations, he said.

Giving an insight into GIC's operations, he said it preferred to stick with the low-key approach it had adopted over the past 27 years, taking small stakes in a wide range of companies for the long haul.

But an unusual set of circumstances in recent months had led to some American and European banks needing to raise large sums of capital quickly. As it was difficult for them to do so from their traditional sources and shareholders, they had sought out the SWFs.

GIC decided to proceed only after careful consideration of the risks, he added, stressing that GIC was not in the business of making headlines.

Nor did he see the role of GIC and other sovereign funds to be white knights 'riding to the rescue of financial systems in the US or Europe'.

Instead, GIC had a duty to the Government and people of Singapore to protect their hard-earned national reserves and make sure they were not invested recklessly, he said.

GIC had decided in the middle of last year to convert some of its equity holdings into cash, given concerns about the direction of the markets. This was how it had the US$16 billion needed to invest when the opportunity arose, he said.

'In retrospect, GIC was right in determining the direction in which the markets would go. What surprised us was the fact that when the market actually turned, it did so at such a speed and the contagion effect was so broad that it affected even some of the best-known and well-regarded banks.'

DR TAN ON SWFs

'Sovereign wealth funds are here to stay. And that's why we believe that it's good to have some form of understanding or code of practice so that the operations of the SWFs and the reactions of the recipient countries will not lead to further problems, because the SWFs can play a role. They are not going to go away. And it's just a matter of working out a process whereby they can continue their operations, which is good for them and good for the companies in which they invest.'


ON INFLATION WORRIES

'My overall worry for 2008, even more than this economic recession, is inflation. If inflation increases, then it is going to have very serious impact for the US economy and the economies of the whole world, and ultimately for Singapore. Oil prices are high, food prices are going up, we've already felt the effects in Singapore.'


ON 'DECOUPLING'

'I do not believe that if the US runs into a deep recession, the rest of the world will be unaffected.'


ON GIC'S DECISION TO CONVERT SOME EQUITY HOLDINGS INTO CASH

'In retrospect, GIC was right in determining the direction in which the markets would go. What surprised us was the fact that when the market actually turned, it did so at such a speed and the contagion effect was so broad that it affected even some of the best known and well-regarded banks.'

GIC takes long-term, responsible approach

Jan 28, 2008
GIC takes long-term, responsible approach

GIC's deputy chairman, Dr Tony Tan, spoke with ST Deputy Editor Warren Fernandez and correspondent Bhagyashree Garekar about the key themes at this year's World Economic Forum meeting in Davos, which wrapped up yesterday. Here are excerpts from the hour-long interview:

THE whole issue of sovereign wealth funds (SWFs) is a matter of great concern at this year's Davos forum. Our view from Singapore is that these concerns over SWFs are valid and have to be addressed.
In the past, when there were only a few SWFs - Kuwait, Abu Dhabi, Singapore - there really wasn't very great discussion about them. Because obviously, Abu Dhabi, Kuwait, Singapore are too small to have any impact on economies or politics of the United States and Europe.

But now new funds are being set up - China, Russia, possibly more of the Middle Eastern countries. So it's understandable that there should be some worries about what the SWFs will do.

Do they have a political agenda, are they investing for other than commercial and financial reasons?

Our view is we understand these concerns, we believe the situation concerning SWFs has changed fundamentally, and that it's best to bring it out into the open.

Last October, at the IMF- World Bank meeting in Washington, the US Treasury Secretary convened a dinner at which several SWF countries were present, including Singapore as well as, I believe, the OECD countries and representatives from the IMF and World Bank.

Mr (Hank) Paulson suggested that the IMF and WB be tasked to work out some codes or best practices for SWF and their investments.

In general, Singapore supports this initiative. We believe it's a good starting point. Whatever code will arise remains to be seen, but our view is that it should not be too prescriptive.

The code should be general, it should be flexible. To an extent, it should be voluntary because SWFs are not the same, countries are not the same. Even the definition of SWFs hasn't been agreed.

GIC, I suppose, is a classic example of an SWF. We are a fund management company. We manage the foreign reserves of the Singapore Government. But the other entities, such as holding companies, state pension funds, are sometimes classified as SWFs, sometimes not. It's still a very vague area. But we believe further discussion is helpful, not only with regard to the SWFs, but also with regard to the recipient countries.

The big danger is that if we do nothing, then these worries build up, and may lead to some form of financial protectionism where barriers may be erected to hinder the flow of capital. I think this would be detrimental to world trade and to the world economy.

Different countries have expressed different views of SWFs. In Europe, Germany and France seem to have some reservations. Britain seems to be very relaxed about it. The Prime Minister of Britain, Mr Gordon Brown, has just been to China and has suggested that Chinese Investment Corporation set up an office in London and that Britain welcomes investment from China.

In the US, various congressmen have made some comments and, of course, it's an election year so the candidates who are vying for the Democratic and Republican nominations have also made some comments, basically to catch the headlines. So everything is in a state of flux.

That's why we think discussions should go on to clarify a lot of confusion regarding this area. What is important is that whatever code of practice is set up, it should not disadvantage the SWFs.

There has been a suggestion that copying the model in Norway, which is transparent for their own needs, the SWFs should be required to publish all of their shareholdings. I think that will not be fair.

It will not provide a level playing ground if other funds, hedge funds, private equity, hedge fund managers by Wellington, Capital group do not have to do so. And they will put the SWFs at a competitive disadvantage. So we don't think that it is necessary.

But even with a code of practice, it'll still be a code, what is more important is how each of the SWFs conducts itself.

In the case of GIC, because of the way it has conducted its operations over the last 27 years, it is generally well regarded as a professional investor. GIC is not a trader like a hedge fund.

Neither are we a strategic investor which takes stakes in companies for strategic or political reasons. We are a long- term financially-oriented investor. And the companies which we have invested in have generally welcomed GIC as a responsible, supportive investor.

GIC's general preferred mode of operations is to take a very low key, take stakes on a relatively small scale. Less than half per cent in a large number of companies.

We made two investments in December and January, in UBS and Citigroup, which is a bit unusual. This is a departure from our norm brought by an unusual set of circumstances. But it does not change the way in which GIC intends to conduct its investment operations.


New environment

THE environment in which GIC was able to operate in the 1980s for example, where we kept very much below the radar and actually there was very little notice taken of GIC, is the way we would like to conduct our business.

But we also know that with all these worries now, we cannot. We have to change some modes of our operation. The Ministry of Finance (MoF) has agreed that in the coming months, GIC will disclose more. We'll be more transparent in some of our operations. We have already put up a lot of information on our website but we'll probably do more.

For example, with regard to our rate of returns. The last time we announced our rate of returns was in 2006, when GIC chairman Minister Mentor Lee Kuan Yew, at our 25th anniversary dinner, announced that on average, GIC had made a return of 9.5 per cent in US dollar terms each year for the last 25 years; 5.3 per cent on real return rate, accounting for inflation.

It's impossible to do it only once in 25 years, we'll do it at regular intervals. But we've not yet settled on how often we should do it, probably won't be every year.

Because GIC is a long-term investor, it doesn't make sense to report year-to-year figures which may vary widely. So we'll probably do it in some form of average 10-year return. But we still have to settle this, discuss it with MoF.


New code

IT'S STILL at the very early stages. First of all, we don't think the one-size-fits-all code of practice is going to work. Countries are too different, the SWFs are too different. So we would suggest that we should start in a very general way with a code of practice which is flexible and to some extent voluntary.

We have also stated our view that what is important is to clarify the purpose of the investment made by each SWF. What is the reason, what is the motivation? Is it for commercial gain, financial reasons or is there any other agenda? We think that is fundamental.

The second area in which we think there should be more disclosure is governance. How is an SWF governed? To whom is it responsible? In the case of Singapore, of course, GIC is responsible to MoF which provides the funds. We manage and pay GIC a fee for managing the funds.

It should be quite clear what the role of the board of directors is, what is the role of management, and that we'll provide more information.

We're in the process of starting to draft some form of document which will provide more information in these areas. We still have to agree on the areas with MoF, but we would expect, hopefully, to make available more information on GIC's process, governance purposes of investment by possibly in the second quarter of this year.


GIC's recent investments

GIC has always had a very conservative approach to its investments. Today we conduct our investments under the risk parameters which have been specified by MoF. We adhere rigorously to these risk parameters. We don't breach them at all.

When we consider an investment, we always look at the risk first, whether it comes within our risk management framework, whether it is not excessive. Having decided that the risk is acceptable, then we look at the return. Our philosophy is if you look after the downside, the upside will look after itself.

In the case of two large investments in UBS and Citigroup, we have structured our investment in the form of convertible notes which pay GIC a rate of return over the next few years before we convert the notes into shares in UBS or Citigroup.

So this gives us a downside protection which we think is necessary in these turbulent circumstances. It doesn't mean we have taken no risk at all, we can't. If we take no risk at all, we would do nothing at all.

Our job is try to minimise risk as much as possible and we've done so in the case of UBS and Citigroup. But then the risk is if something terrible happens to Citicorp or UBS, and they go bankrupt, then we would have lost the investment.

But if we try to eliminate all risks, you will do nothing at all and keep all your money in cash, which is just as risky because then, if inflation is high, oil price is US$100 (S$144), then you'll face steady erosion of the purchasing power of your reserves.


SWFs not saviours for troubled banks

I SHOULD make it clear that when GIC invested in Citigroup and in UBS, we did so because we thought this was a good opportunity which only comes maybe once in two or three decades.

GIC did not do these investments to bail out the banks or to help stabilise the US financial system. With our investments, with a stronger capital base, we expect the prospects of UBS and Citicorp being able to overcome their problems, return to normal levels of profitability, will become more possible. It's good for all shareholders, including GIC. But I don't see SWFs riding to the rescue of the financial system in the US or in Europe.

For us in Singapore, GIC has a responsibility to the Government and the people of Singapore to make sure the funds which are entrusted to us are managed for the good of Singaporeans. It's not our job to try to be a white knight, to save the world's economic systems. That's the job of the IMF.


Why major banks turned to SWFs

WHEN a bank raises capital, it's different from a company raising capital. The bank has to do it quickly and the bank must succeed because banks run on confidence.

I'm sure that when the management and boards of directors of UBS, Citigroup, Merrill Lynch, Morgan Stanley decided to raise capital to rebuild their capital base after their writedowns over their mortgage-backed securities, they must have thought first - can we do it from our shareholders through a rights issue? That's the obvious thing to do. But a rights issue is uncertain and takes a long time.

Under the circumstances, the management decided this was not possible, and they decided to approach SWFs to see if they can inject the funds at very short notice. The fact that this has been done has helped the banks.


GIC's US$16b cash for investment

WE HAVE been very worried about the financial markets for many months. We thought the level of leverage in the US market was excessive, risk was not being priced correctly, asset prices were going up at a rate which was not sustainable. These worries have been growing over the years.

In the second quarter of last year, looking at all of these developments, we took a fundamental review of the GIC portfolio. Up till then, GIC had been fully invested in the markets. They had served us very well, giving us very good returns.

But under these circumstances, we felt we should move towards a more conservative portfolio and convert part of our equity holdings into cash, which is something we have not done for many years. We did that in the third quarter of 2007, in order to raise cash - because we were very worried about the outlook for the economies and the financial markets.

Even as late as the third quarter, the markets were still doing well - there had been modest falls, but they were still strong. Then in the last quarter, everything fell apart. By that time, we had raised a considerable amount of liquid resources. So when the invitation from UBS and Citigroup came to invest in their equity, we had the resources.

In retrospect, GIC was right in determining the direction in which the market would go. What surprised us was the fact that when the markets actually turned, they did so at such a speed and the contagion effect was so broad that they affected even the best-known and well-regarded banks such as UBS, Citigroup and Morgan Stanley.

There are worries about what happens in the first six months of this year, and we are right to be concerned.

But my real worry is the second six months...that's the real test. If it goes down in the first six months and it recovers, then I think we're all right, it's a downturn, but I think we can manage that. If it continues in the next six months, then we're in new territory. We don't know what will happen.'


GIC's decision not to sit on UBS board

WHEN we agreed to the investment of 11 billion Swiss francs (S$14.2 billion) in December, a seat on the board was not a condition of the investment. Subsequent to the investment, UBS chairman (Marcel) Ospel wrote to me to invite GIC to nominate a representative to be elected to the UBS board of directors. This was in December.

Over the last few weeks we have considered the invitation seriously. And our view is that as a financial investor, investing not only in UBS but also in other banks, and in the light of our intention to clearly not seek any control of UBS, or to have a say in the direction and management of UBS, we've decided that we will not be taking up a seat on the board.

I saw Mr Ospel on Thursday, thanking him of course for the invitation, but informed him that GIC will not be taking up his invitation. He said he understood the reasons and he agreed that under these circumstances, it's best for GIC not to accept.

We feel we have adequate access to the UBS board and management as a shareholder. As a shareholder, we've a right to express our views. We already have a small investment in UBS, in less than half a per cent of their equity, even before this large investment. We give our views. But we have also been making it very clear to them that these are views as a shareholder.

It is up to the management and the board of directors to make the decisions. They are the ones who are running the bank, we are not running the bank. And we want to make that clear. By not having a seat on the UBS board, I think this clarifies the situation.

A fresh look at terrorism

BOOK REVIEW
A fresh look at terrorism's roots
By David Isenberg

THE LINKS: According to Prof Sageman, members of Al-Qaeda are 'part of a violent Islamist born-again social movement' which is formed through the spontaneous self-organisation of informal, trusted friends. -- PHOTO: AFP

Title: Leaderless Jihad: Terror Networks In The Twenty-First Century
Author: Marc Sageman
Publisher: University of Pennsylvania Press (December 2007); 176 pages; US$24.95

AVOID MISTAKES OF COLD WAR

The most important thing the US can do in countering global Islamic terrorism is to avoid the mistakes of the early Cold War era when policymakers assumed communism was one global monolithic movement. It wasn't. Nor is Al-Qaeda.

WHEN considering solutions to really important problems, it is useful to step back and ask whether everything we know is wrong.

The question, of course, is not asked nearly enough. Questions that are complex and difficult often require solutions that are equally complex and difficult. Sometimes they require us to shake off our preconceived blinders and think in entirely new ways,

Take, for example, the issue of terrorism. To look at a document like the White House's National Strategy For Combating Terrorism is to read statements such as this:

'The terrorism we confront today springs from: political alienation; grievances that can be blamed on others; subcultures of conspiracy and misinformation; and an ideology that justifies murder.'

But what if that is wrong? What if all the platitudes and cliches about why people turn to terror, such as claims by US President George W. Bush's administration that Islamic terrorists hate democracy and freedom, are based on myths and sound bites, signifying nothing?

What if most of the terror experts are guilty of the same sin that the intelligence agencies were accused of in regard to the reason the United States invaded Iraq, that is, cherry-picking the evidence?

If that is the problem, then the answer is this book.

Marc Sageman is a University of Pennsylvania professor of psychiatry and ethno-political conflict and a former foreign service officer. He worked closely with Islamic fundamentalists during the Afghan-Soviet war in the 1980s and gained an intimate understanding of their networks.

His 2004 book Understanding Terror Networks gave the first social explanation of the global wave of terrorist activity. In Leaderless Jihad, he gives us a book that chooses to boldly go where few books on terrorism have gone before; namely, to use scientific methods to study terrorism.

In so doing, he chooses not to focus on individuals and their backgrounds, or 'root' (micro and macro approaches respectively) causes, to explain how the extremists who carried out the Sept 11, 2001 attacks and those like them are radicalised to become terrorists.

Professor Sageman takes the common-sense view that you cannot defeat an enemy until you know him and understand what drives him. Instead, by using ordinary social science methods, he studies how people in groups influence each other to become terrorists.

By building his own evidence-based, independently checked database of more than 500 terrorists, he has been able to see what various members of Al-Qaeda had in common. He finds them to be 'part of a violent Islamist born-again social movement'.

And this social movement, similar to the Russian anarchists of the late 19th century, is actually motivated by idealism. Prof Sageman's data show them to be generally idealistic young people seeking glory by fighting for what they perceive as justice and fairness.

This runs against the Bush administration's counter-terrorist strategy, which is framed in terms of promoting democracy and freedom - a concept that is readily grasped by the American domestic audience.

But these are not terms with which Middle Eastern Muslims identify. To them, democracy means leaders who win elections with almost 100 per cent of the vote. And if a Salafi Islamist party does win an election, as was the case with the Islamic Salvation Front in Algeria in 1992, or Hamas in the Gaza Strip in 2006, the election results are cancelled or the world shuns the victor.

Thus, those who eventually become terrorists see Western- style democracy as a harmful 'domination of man over man', undermining their theocratic utopia (Salaf). In their view, that was the only time in world history that a fair and just community existed.

The Salafis, like other religious fundamentalists, see the Muslims' gradual decline over the centuries as evidence that they have strayed from the righteous path.

Among Prof Sageman's most useful points is his description of Al-Qaeda as both a social movement and an ideology. The most important thing the US can do in countering global Islamic terrorism is to avoid the mistakes of the early Cold War era when policymakers assumed communism was one global monolithic movement. It wasn't. Nor is Al-Qaeda.

Even before Sept 11, it had evolved beyond the group that formed in the aftermath of the Soviet-Afghan war, and it has evolved again several times since, and will continue to do so. Increasingly, to paraphrase the old cliche about politics, all terrorism is local.

Prof Sageman also does an excellent job of debunking the conventional wisdom as to how people become terrorists, i.e, that they are brainwashed when they are immature children or teenagers, that they lack family obligations, act out of sexual frustration or that there is something intrinsically wrong with them (the 'bad seed' school of thought).

Prof Sageman finds that one of the greatest motivators for joining an Islamic terrorist social movement is the one that is most easily understood: relationships with friends and kin.

In other words, there is no top-down recruitment into Al- Qaeda. Rather, the movement forms through the spontaneous self-organisation of informal, trusted friends.

And despite much right- wing fear-mongering, Prof Sageman finds that there are far fewer home-grown Islamic terrorists in the US than in other regions like Europe. He attributes this to the fact that the Muslim community in the US is far less radicalised due to America's greater acceptance of immigrants as a part of its integrationist, religiously tolerant, 'American Dream', 'melting pot' mythology. In short, inclusion, as opposed to exclusion, pays dividends.

In conclusion, Prof Sageman finds that as Islamic terrorism has evolved, it has also been increasingly degraded, out of necessity due to its own lack of appeal, into a 'leaderless jihad'.

To the extent it still has an agenda, it is set by general guidelines found on the Internet, allowing it to maintain a facade of unity. Without the Internet, it would dissipate into a political vacuum.

In truth, Islamic terrorism is not an existential threat to the existence of the US. No number of ominous predictions of Al-Qaeda acquiring chemical, biological or nuclear weapons will change that.

He feels the only thing that can keep Al-Qaeda from ending up on the dust heap of history is if the US 'transforms its fight against global Islamic terrorism into a war against Islam, which would mobilise all Muslims against the US'.

Thus, the answer to the terrorist threat is the same one proffered by American historian and diplomat George Kennan with respect to the Soviet Union: containment.

The goal is to accelerate the process of internal decay already taking place within Al-Qaeda and its copycat cells.


The writer is an adjunct scholar with the Cato Institute, contributor to the Straus Military Reform Project, a research fellow at the Independent Institute and a US Navy veteran.


Copyright: Asia Times Online

Jan 28, 2008 - Muslim Youths to seek Muis guidance

Jan 28, 2008
Muslim youths urged to seek Muis' guidance
Muis will use rational debate to address their views: Yaacob
By Zakir Hussain

DR YAACOB Ibrahim has this message for young Muslims who may be drawn to radical ideas: Don't wait till it's too late.
He urged them to approach the Islamic Religious Council of Singapore (Muis) to clarify their doubts early without fear of repercussions.

'We want to embrace you, help you, guide you, not put you in jail,' said the Minister-in-charge of Muslim Affairs at a constituency event yesterday.

'We want to understand what your views are so we can discuss and debate rationally, so you understand where we are coming from... that these ideologies are not healthy.'

He was speaking to reporters on the recent arrest of two 26-year-olds for planning acts of terror.

They had become radicalised not through contact with terror groups but, like a new breed of 'do-it-yourself' or DIY radicals, through publications, videos and websites.

The pair, Muhammad Zamri Abdullah and Maksham Mohd Shah, nursed radical beliefs as early as 2003 and were detained last month.

They had gone abroad to try to join militant networks and fight in places like Afghanistan, ready to die as martyrs.

Another 26-year-old, who had fallen under their influence, was issued with a restriction order limiting his activities.

Dr Yaacob, who is also Minister for the Environment and Water Resources, said he was 'disappointed' and 'unhappy' these three had crossed the line, but the community had to be realistic as it was impossible to monitor the Internet. The community could help to minimise the occurrence of such cases, however.

He urged young Muslims who are interested in Islam to call the Mufti's office at Muis or recognised teachers for guidance, instead of developing extreme views.

He said: 'We have a group of young religious teachers coming out from the universities, very attuned to the modern world, comfortable with the English language.'

Like other community leaders, Dr Yaacob called on parents, families and friends to guide those they know who may have, through the Internet or books, developed such ideas that do not gel with how Islam is practised here.

DIY radicalism, he said, is 'a phenomenon which will persist for a long time, therefore we must be on our guard'.

The Internal Security Department and Malay-Muslim MPs have engaged community leaders to help deal with this challenge, he added.

'There is no more denial that there is a problem, a challenge. The sooner we bring the information to them, the better they trust us, therefore they can help us with this particular challenge.'

Four leading religious bodies also issued a statement on Saturday expressing concern over the recent arrests, saying they 'underline the need for continued vigilance on our part to stamp out terrorism'.

The leaders of the Singapore Buddhist Lodge, the Singapore Catholic Archdiocese, the Hindu Endowments Board and Muslim group Jamiyah Singapore said: 'We will not allow the trust and confidence that has been built up among the various races in Singapore to be undermined by such activities.'