Singapore 'should nurture wealth creators, not just wealth managers'

[arthur]

My sentiments exactly. Let those who have eyes see and ears, hear.

I highlighted in bold that paragraph to repeat my point that capital inflow and outflow can be gone in an instance and ends our economic miracle we have built for last half century.

Economic sustainability is the key to move ahead of our regional competitors, not drawing their funds here and managing for their rich citizens. When someday all the regional countries around grow strong and prosperious, we will be delegated to a dark corner of the world, unimportant and ignored.


SINGAPORE - Singapore has to decide, going forward, whether it aims to be a "Jurong Island" or a "Shenton Way", said retired top civil servant Ngiam Tong Dow at a forum yesterday.

Pitting the two models against each other and as metaphors of "wealth creators" and "wealth managers", Mr Ngiam expressed concern that Singapore might be nurturing more of the latter, at the expense of the former.

"I believe that, while many Singaporeans are competent in our jobs, few among us are brilliant," said Mr Ngiam, the former Ministry of Finance permanent secretary, who is now Pro-Chancellor at the National University of Singapore.

What would differentiate the wealth creator from a wealth manager, he felt, would include attributes such as tremendous reserves of energy, the ability to think out of the box and "seeing possibilities where others can only see rocks".

Speaking to a group of around 250 engineering students, academics and industry representatives at NUS Engineering Auditorium, Mr Ngiam was asked during the one-hour dialogue why Singapore could not possess both wealth creators and wealth managers. He replied that a job in the technology sector has got more multiplier effects than one in the services sector.

"Even if you take banking and wealth management, there's no reason why people should come to Singapore to manage their funds. It can be in the middle of the Indian Ocean with a computer. The barriers to entry are very low," said Mr Ngiam.

Lauding the late Dr Goh Keng Swee's contribution to the wealth creation of Singapore, Mr Ngiam noted how Dr Goh, who was Defence Minister, had established Sheng-Li Holdings to build up Singapore's defence technology. Sheng-Li was later renamed Singapore Technologies (ST) Holdings.

Under Dr Goh, Mr Ngiam said that ST engineers refurbished fighter aircraft and built battle tanks, which were comparable to others internationally.

"After Dr Goh retired from the Government in 1986, there is no one to replace him as our wealth creator," he added. "The Government of Singapore Investment Corporation and Temasek (Holdings) are sovereign wealth managers for our national savings and reserves. They are not wealth creators."

Temasek in particular, Mr Ngiam felt, is supposed to be a wealth creator, but are just being "fund managers".

Going forward, Mr Ngiam said the direction Singapore takes will have an impact on its political, economic, educational and labour policies.

Asked what Singapore can do now to nurture wealth creation, Nr Ngiam said: "The engineering faculty should be given more resources." Later, he suggested that the Government could provide funding for university final year students of any discipline to start their business aspirations.

"At the end of the day, if 10 per cent succeed out of 100, there will be 10 future companies," said Mr Ngiam.

http://www.todayonline.com/Singapore/EDC...h-managers

[Temperament]

Of course, if you belong to the the comfortable PAPY"S "Elitist Group", 99.9 % of them think moving money around the world is so much easier than moving army tanks or engineering products. So of course they are wealth managers. Besides it is so easy to get money(GST, COE, ERP.. etc..) from the so called daft (i think coined by old man) but slot like donkey, Singaporeans. Don't think we ever going to have companies like Taiwan's. Yet i think some of the Papys dare to "make fun of Taiwan.

[arthur]

So many interesting things I pondered in this post.
But above all, the last paragraph struck me the most.
Warning: Long post.

As a policymaker, Mr Ngiam Tong Dow has shepherded the Singapore economy through its transition from Third World to First. He retired in 1999 after 40 years in the civil service. -- ST FILE PHOTO

'Strategic pragmatism, that is my song,' declares Ngiam Tong Dow, in the course of our two-hour conversation amid the lunchtime hubbub and clatter of porcelain at a Chinese restaurant in the Singapore Island Country Club.

Many of his favourite quotes and sayings are pointedly practical: Give a man a fish and you will feed him for a day, teach him to fish and you will feed him all his life. Forget about cutting edge research; what we need above all is competence. And this one from Minister Mentor Lee Kuan Yew, when he was still a young prime minister and Singapore was poor: Give a man a job and help him buy a house, and he won't riot any more.

Arguably the most outspoken of Singapore's policymakers, Mr Ngiam is also among the most experienced.

During his 40 years in the civil service, from which he retired in 1999, he has served as Permanent Secretary in four ministries, in addition to the Prime Minister's Office.

He has also been chairman of the Economic Development Board, DBS Bank, Housing Board and the Central Provident Fund Board. He has dealt with at least two generations of civil servants, ministers, chief executives and external advisers.

His view of policymaking in Singapore is panoramic, informed by an acute sense of history and political reality, an instinctive feel for what will work and what will not.

After his retirement from the civil service, Mr Ngiam, now 73, has been doing the rounds of the lecture circuit, sharing his views on policy as few retired civil servants in Singapore have ventured to do. He has earned a reputation for candour, challenging many of the Government's policies. Some people ask why he did not speak up while he was in office the way he is doing now. Mr Ngiam claims he did, but as a civil servant, he was careful to keep his views within the Government.

But many of those views are now public knowledge and are about to be disseminated more widely. His speeches have been collected in a book, entitled The Dynamics Of The Singapore Success Story, which was launched last Friday.

'I would like to describe my book as a study in political economy,' he says. 'Political economy is one part politics and two parts economics.'

Singapore's political economy is his forte. Few can tell the story of its transformation as he can, from the days of high unemployment, slums and tin-shed factories when he started his career, to a modern high-tech economy with a First World per capita income when he finished.

Raise competence levels
For about 30 years, Mr Ngiam worked closely with then Finance Minister Goh Keng Swee, of whom he has fond memories.

In the 1960s and 1970s, Singapore went into shipbuilding and shiprepair and several defence-related companies - the forerunners of ST Aerospace and ST Engineering - as well as Singapore Airlines.

While he agrees that these companies were necessary, Mr Ngiam is not generally in favour of targeting industries, as was sometimes done, as with, for example, semiconductors and biotech.

'Let the MNCs take the big bets,' he says. 'Our big bet should be on people, on education. If we try to do cutting-edge science, we can never beat the West or the Chinese and Indians, because we don't have the talent base. So our policy should be to raise competence levels. That's why I supported Philip Yeo when he said he wants to train 1,000 PhDs.'

But on Singapore's thrust into the biotech industry, he is circumspect. 'When we make such investments, we must ask, what comparative advantage do we have? If we do not have a comparative advantage, we should not go into it.

'We should train engineers who can do research for big companies. It's the same MNC-centric strategy, but at a higher level. In the early days we trained our people to become machinists. Today, if we want big pharma to come in, we should train the chemists and PhDs to be able to work for big pharma.'

On creativity, Mr Ngiam likes to differentiate between 'thinking within the box' and 'thinking outside the box'.

'I tell this story,' he says. 'When a Chinese boy goes home after school, his mother asks him: 'What did you learn from your teacher today?' But when a Jewish American boy goes home after school, his mother asks: 'How many questions did you ask your teacher today?'

'Which boy do you think will grow up to be more creative? I think, in the contest for intellectual hegemony, the Americans will win. Because the Chinese think within the box. The Americans are more open, they are encouraged to think outside the box.'

Although Mr Ngiam favours meritocracy, he believes that Singapore companies should be run by local CEOs. 'We must have our own people,' he says. 'Because unless you're a Singaporean you will not have the emotional attachment. You can be very competent, but if you don't feel for Singapore, I don't think you can grow a Singapore company.

'But someone like David Conner, the CEO of OCBC Bank, he's been here so many years that I would regard him as a Singaporean even if he had American citizenship. So by Singaporean in this context, I mean more the mentality than the colour of the passport.'

Mr Ngiam takes issue with some aspects of Singapore's immigration policy. He explains: 'We increased the size of our population by one million people in 10 years. It's true that in the 1970s, we had a shortage of labour and we did tell the Government we need to increase our population which was 3.5 million. At that time, it would have been the right policy to increase the numbers.

'But today, it's no longer a question of numbers, it's a question of technology. Thirty years ago, $1 million of output could be produced by 100 people. But today, it can be produced by 50 people, because the technology has changed. So numbers of people are not so important any more.'

What matters is the quality of immigrants, he points out.

'If I was in charge of population policy, I would have said: Every immigrant that we take in, his or her education level must be above our average. Our average is O levels. So the people we take must be above O level, then they can value-add. If they are below O level, they would be negative value-adders. I find it odd that people from China have come and taken over our hawker centres. What's the value- add there?'

He acknowledges that Singapore faces chronic labour shortages, but suggests that this is because employers take the easy way out.

'The only way for us to grow is to skill up - we must raise our productivity, which we have neglected for 30 years,' he explains. 'If we had been tough and told building contractors, we are not going to allow so many construction workers, they would have automated long ago. But even today they are not doing it. Look at a Japanese construction site, and see how many fewer people they use than our contractors.'

Raising wage levels
Skilling up is also his prescription to raise wage levels and to narrow the income gap. He opposes the idea of a minimum wage. 'That is namby-pamby thinking,' he says. 'You get higher wages by improving skills, not by legislating. We need to take skills training much more seriously. A lot of the short courses offered these days by professional firms are like wine tasting. They are not real training.'

The Chinese take training very seriously, he points out. 'I teach Chinese mayors at NTU (Nanyang Technological University). You know, under the Chinese system, if you want to get promoted, you must go overseas, not for a short course; you must get a degree. Without their degrees, my NTU students won't be promoted.'

While remorselessly pragmatic and generally pro-market, Mr Ngiam favours government intervention to help the poor.

'About 10 per cent of people need to be helped and here, the state should intervene,' he says. 'My wife is a teacher. She had students who used to go to school without breakfast. How do you expect them to do as well as other students?

'We should use old school buildings to run hostels for these children. They should live there Mondays to Fridays. Meals should be provided and they can go to different schools. It's worth our investing in this. We could help 10 per cent of our students, which would run into the thousands, and the cost would not be that high.'

The state should pay for this, he adds, 'because those in the social sector who try to help others should not be in the business of fundraising. That is not their job; their job is to show kindness to people'.

There are two areas where Mr Ngiam is emphatically critical of policies because he believes they do not serve the average citizen. One is the CPF Investment Scheme, under which account holders are permitted to use their CPF to buy shares. 'Allowing people to buy shares with their CPF money is like sending lambs to the slaughterhouse,' he says.

'The average CPF member is not stock market savvy. When I was CPF chairman, I said my duty is to the members. CPF is already used for housing loans and medical care. I don't see why it should also be used for stocks. It's unconscionable.' But Mr Ngiam was overruled, because, he says, 'one of the KPIs (key performance indicators) of MAS (Monetary Authority of Singapore) was to promote Singapore as a financial centre'.

The other policy of which Mr Ngiam has been a long-time critic is the move to allow integrated resorts (IRs) that include casinos. 'By going in for IRs, Singapore has taken the low road,' he says. 'Casinos undermine our moral fibre.'

He does not believe the gaming industry has fundamentally changed from the 1960s, when Singapore shunned it. 'It's the same. It only has more lights and glitter.'

Nor is he impressed by the argument that the IRs will create 30,000 jobs. 'Such jobs don't have much of a multiplier effect,' he suggests. 'It's different from creating 30,000 jobs in rig building or pharmaceuticals.'

Whether they agree with him or not - and people sometimes do not - nobody denies that Mr Ngiam has always had Singapore's best interests at heart when crafting policy; his pragmatism has been not only strategic, as he likes to say, but also compassionate.

As a policymaker, he has shepherded the Singapore economy through its transition from Third World to First. I ask him what should come next, after material prosperity.

'We should become a highly educated society and keep adding to our knowledge,' he says. 'We should also be a humane society where people have respect for each other. Then we can survive. That's the Singapore I would want for my grandchildren.'

http://www.askmelah.com/ngiam-tong-dow-thepolicymaker

[Bibi]

If we try to do cutting-edge science, we can never beat the West or the Chinese and Indians, because we don't have the talent base. So our policy should be to raise competence levels. That's why I supported Philip Yeo when he said he wants to train 1,000 PhDs.'

The Chinese take training very seriously, he points out. 'I teach Chinese mayors at NTU (Nanyang Technological University). You know, under the Chinese system, if you want to get promoted, you must go overseas, not for a short course; you must get a degree. Without their degrees, my NTU students won't be promoted.'

We do have the talent base. But unfortunately 100% of these talents became managers instead of doing research and ground work. I hope these 1000 PhDs wont end up becoming CEO/Dir/Managers.

Now, if you want to get promoted, you must do management work. Research in Spore is doom to fail.

[sgd]

I read the article in the straits times, I think Mr Ngiam Tong Dow has a good suggestion but personally I think singapore culture does not support risk takers. Risk taking is frown upon in singapore and that's a fact.

We tend to "follow" other people but not strike out a path.

Take at look at the made in Singapore JooJoo Tablet, this was way before ipad made the scene. JooJoo came out first, the big companies caught on to the idea and started to launch their own tablet and Apple also joined the fray.

In the end JooJoo didn't even manage to sell 50 units while Apple sold huhdreds of thousands of units to singaporeans.

I read that they spent 3-4 years of time and money in the end was a let down by our own people. Tell me that we are a culture here that rewards risk taking.

I dare say if Creative Technology launched it's sound card here first instead of in US it will never have taken off because our people have no faith in new ideas and products made in singapore and that's the truth of it. It has to be accepted by overseas before our people here will accept it.

We have the homegrown talent but our culture is our obstacle

[wsreader]

I have another example to show "......We tend to "follow" other people but not strike out a path......"

According to a news report, back in 1987, the company tasked to design and manufacture components of the MRT system had proposed an improved new design rail claw of the third rail system that will ensure that claws would not jump out, even under severe vibration.

As the new design has not been in service, MRTC was naturally "nervous about introducing" it into the system and felt it was "better not to" change the claw design.

The new design has since been used in other metro systems like in Taipei, with no failures reported.

Morale of the story is, there is less risk to follow others and be proven wrong, then to be the first user and be proven right.

[Thriftville]

Great article! Summing up, the old method has fulfilled its purpose to bring so much wealth to SG. Now, its time to work on innovation... Hopefully not too late!

[CityFarmer]

I have another example to show "......We tend to "follow" other people but not strike out a path......"

According to a news report, back in 1987, the company tasked to design and manufacture components of the MRT system had proposed an improved new design rail claw of the third rail system that will ensure that claws would not jump out, even under severe vibration.

As the new design has not been in service, MRTC was naturally "nervous about introducing" it into the system and felt it was "better not to" change the claw design.

The new design has since been used in other metro systems like in Taipei, with no failures reported.

Morale of the story is, there is less risk to follow others and be proven wrong, then to be the first user and be proven right.

Let's look at a different prepective of the issue.

If history went into different route, MRTC had chosen the new design, and the new design did prevented the claw from jump out, but causing new problem(s) which gave a major disruption to rail system.

The comment will change to "MRTC has chosen a un-tested design over a proven one, that causing a major disruption. It is a major lapse of professionalism and responsibility to ensure a reliable rail system"

I had worked in mission critical projects, which reliability is highly value over "innovation". Only after a "innovation" be proven either in Lab or real operation, then the "innovation" will be introduced with great caution.

NSEWL is in operation more than 20 years before the problem arises. I do not familiar with Taipei system, i assume it is much newer than NSEWL.

I would like to share another view. MRTC's conservative design approach is meeting the commuters expectation i.e. low tolerant on fault. They are expecting near-perfect rail system i.e. 2 (as far as i remember?) major discruptions over 20 years of continuous operation is consider a major fault.

My 2 cts.

[Temperament]

I have another example to show "......We tend to "follow" other people but not strike out a path......"

According to a news report, back in 1987, the company tasked to design and manufacture components of the MRT system had proposed an improved new design rail claw of the third rail system that will ensure that claws would not jump out, even under severe vibration.

As the new design has not been in service, MRTC was naturally "nervous about introducing" it into the system and felt it was "better not to" change the claw design.

The new design has since been used in other metro systems like in Taipei, with no failures reported.

Morale of the story is, there is less risk to follow others and be proven wrong, then to be the first user and be proven right.

Let's look at a different prepective of the issue.

If history went into different route, MRTC had chosen the new design, and the new design did prevented the claw from jump out, but causing new problem(s) which gave a major disruption to rail system.

The comment will change to "MRTC has chosen a un-tested design over a proven one, that causing a major disruption. It is a major lapse of professionalism and responsibility to ensure a reliable rail system"

I had worked in mission critical projects, which reliability is highly value over "innovation". Only after a "innovation" be proven either in Lab or real operation, then the "innovation" will be introduced with great caution.

NSEWL is in operation more than 20 years before the problem arises. I do not familiar with Taipei system, i assume it is much newer than NSEWL.

I would like to share another view. MRTC's conservative design approach is meeting the commuters expectation i.e. low tolerant on fault. They are expecting near-perfect rail system i.e. 2 (as far as i remember?) major discruptions over 20 years of continuous operation is consider a major fault.

My 2 cts.

Well , NSEWL has been in operation for > then 20 years is true. That also means NSEWL has been designed for a population of maybe 3-3.5 million people. What's our population now? 4.5 to 5.5 million? So just imagine your car is designed for 4 passengers and a driver. But due to your unplanned family "explosion" you have to drive 5 or 6 passengers around. So not because of car's age alone, your car will break down again and again. So will be our SMRT. i think some of our newer lines is breaking down for ............??? due to overloading or what...??? Not so sure due to aged assets alone??? IMHO

[propertyinvestor]

The solution to create wealth is to print more money. MAS is very good at doing that. One $1000 SGD note only cost $1 to print but adds $9999 in value to the real economy.