Insourcing: A political slogan in US

Obama’s call for bringing jobs back to the US is populist sloganeering and lacks economic foresight. Demands of the global market work against insourcing as a winning strategy

By Nayan Chanda, Published The Straits Times, 31 Jan 2012

THE American presidential election year has begun with a new mantra for business: insourcing. Bring back work that America sent abroad.

In his State of the Union address and campaign speeches, President Barack Obama presents it as a key strategy to boost economic recovery. But demands of the global market and changing technology work against insourcing as a winning strategy to restore the millions of jobs lost in the past decade.

To thunderous applause, Mr Obama declared that 'if you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it'. He promised pain for the outsourcers and reward for the insourcers.

But the fact is that amid the populist rage in America about high unemployment and high profit of corporations, insourcing as a new strategy may garner votes, if not jobs.

In a recent gathering of industry leaders in the White House, Mr Obama hailed companies that are bringing jobs back to America. 'These companies are choosing to invest in the one country with the most productive workers, the best universities, and the most creative and innovative entrepreneurs in the world.'

To encourage companies to invest in the country he promised tax deductions. He also proposed that every multinational company should pay a basic minimum tax, while 'every penny should go towards lowering taxes for companies that choose to stay here and hire here in America'.

He praised automaker Ford, a lock-maker and a furniture manufacturer for bringing production back from Mexico and China, and also a software company for hiring local talent.

Patriotism is not the only impetus for bringing business home. Mr Obama himself noted the economic rationale that makes insourcing a smart move: rising labour costs in China and higher US productivity and larger American markets. Indeed the confluence of rising wages in China, and increasing costs of transportation as well as focus on high-tech industries may see a shift in outsourcing strategies. But the scale of its impact on job creation in the United States may be limited.

The limits of insourcing strategy were clearly evident even in the few examples of insourcing that Mr Obama offered. They amounted to just a few thousand jobs. An estimated 2.4 million jobs were lost to China because of the substantial cost advantage of cheap semi-skilled labour, abundant engineering and management skills, large manufacturing facilities, often with government subsidy, and the ability to scale up production and speed up delivery. For example, industry leader Apple has 43,000 employees in the US but uses 700,000 subcontracted employees abroad, mostly in China.

President Obama once asked Apple's late CEO Steve Jobs what would it take to manufacture iPhones in the US. According to The New York Times, Mr Jobs was blunt: 'Those jobs aren't coming back.'

The fact is that even if the wage differential narrowed, cost and production advantage and the benefit of locating R&D near manufacturing facilities and big markets, plus the cost of building new facilities in the US, would argue against bringing back major manufacturing facilities.

As company executives privately note, improving productivity and profit is their concern, not creating American jobs. Mr Obama's call for moral responsibility of businesses to help their own country may sway some but ultimately profitability will be the principal determinant of where in the world production would be located.

Technological advances have always been a key factor in the transformation of once dominant sectors of the economy. In 1900, some 41 per cent of American labour was engaged in farming: thanks to mechanisation it is just 2 per cent now.

In the past two decades, the share of manufacturing jobs in the total labour force dropped from 22 per cent to 9 per cent, thanks to automation and offshoring.

New types of manufacturing jobs that could be created in the US will require skills that Mr Obama himself admitted the country does not have. He said that half of manufacturing positions remain unfilled because the companies can't find workers with the right skills. He called on Congress to provide funds to train two million Americans with skills that will lead directly to a job. Given the deep political division, such a move could come only after the American electorate has given its verdict in November.

For now, insourcing remains a political slogan rather than an effective economic strategy.

The author is director of publications at the Yale Centre for the Study of Globalisation, and editor of YaleGlobal Online.

How the US lost out on iPhone work

Not long ago, Apple boasted that its products were made in America. Today, few are. Why? It is not just because workers overseas are cheaper,

WASHINGTON: When Mr Barack Obama joined Silicon Valley's top luminaries for dinner in February last year, each guest was asked to come with a question for the President.

But as Mr Steve Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: What would it take to make iPhones in the United States?

Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can't that work come home, Mr Obama asked.

Mr Jobs's reply was unambiguous. 'Those jobs aren't coming back,' he said, according to another dinner guest.

The President's question touched upon a central conviction at Apple. It is not just that workers are cheaper abroad. Rather, Apple's executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts' that 'Made in the US' is no longer a viable option for most Apple products.

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned more than US$400,000 (S$503,000) in profit per employee, more than Goldman Sachs, ExxonMobil or Google.

However, what has vexed Mr Obama as well as economists and policymakers is that Apple - and many of its high-technology peers - is not nearly as avid in creating American jobs as other famous companies were in their heyday.

Apple employs 43,000 people in the US and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple's contractors: An additional 700,000 people engineer, build and assemble iPads, iPhones and Apple's other products. But almost none of them work in the US. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

'Apple's an example of why it's so hard to create middle-class jobs in the US now,' said economist Jared Bernstein, who until last year was an economic adviser to the White House.

'If it's the pinnacle of capitalism, we should be worried.'

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into bevelled frames. Within 96 hours, the plant was producing more than 10,000 iPhones a day.

'The speed and flexibility are breathtaking,' the executive said. 'There's no American plant that can match that.'

Better to get medical insurance while young and healthy

By Joyce Teo, Published The Sunday Times, 29 Jan 2012

Some people say they fear sickness and disability more than death, as the former will drain their wealth.

But you can easily avoid this problem by buying health insurance, and by buying it early when you are healthy.

Do not think that you need insurance only when you are old, as the risk of illness goes up as you age. Once illnesses develop, insurers may slap on an extra charge, or choose not to cover your pre-existing conditions. A pre-existing medical condition is a condition, disability or illness that you have before you apply for health cover.

Apart from basic medical expense insurance or hospitalisation plans, which pay for hospital and surgical expenses, there are hospital cash insurance plans which pay a fixed amount of cash should you be warded. You can also choose a critical illness plan or a disability income insurance. Then, there is long-term care insurance, which gives you a regular cash payout if you are too ill to look after yourself.

The common mistake many people make is to hold off on taking out a basic hospital plan as they are already covered under their company's insurance plan.

Most companies do not offer portable group health insurance plans. So the coverage ceases once the employee leaves the company. Those who have an existing illness may then realise too late that they are no longer insurable, or that the insurer will not cover their illness.

Singapore's health-care financing system offers three tiers of protection - through heavy subsidies in acute public hospital wards; Medisave; and MediShield and the private Integrated Shield plans.

Reflections by Singaporean students living abroad

Get out of comfort bubble, see the world
By Ethan Lou, The Straits Times, 28 Jan 2012

DAZED, I awoke, my eyes crusted from slumber, and my mouth reeking with the previous night's alcohol. I was pretty sure I was still drunk.

I found myself on a bus full of Europeans, all of whom were relieved that I did not vomit. They told me that the bus was going to Cambodia, and I, glad that I was on the right bus, drifted quickly back to sleep.

I had been on the road for two weeks, and I went on to spend two more months in five more countries.

Last May, I embarked on a three-month journey through the Asia-Pacific. I was alone and carried little more than my rock-climbing equipment and two T-shirts. Besides a vague direction to head for, I made absolutely no plans.

It was the period between the end of national service and the start of university. I had seven months, and I wanted to do something interesting with my time.

I wanted something exciting. I longed for travel and adventure. I wanted to be alone and far away, with no itinerary or even knowledge of the local language. To me, that was freedom in its most absolute sense.

I had intended to head north, through the Malay peninsula, Indochina, and East Asia, and then fly east to North America, making my way to Toronto where I was due to begin university in August. I did not plan to return to Singapore until the December holidays.

But the journey ended prematurely two months later, in July, when an expiring visa left me nine hours to buy a desperate ticket out of China before I became an illegal immigrant.

I narrowly missed a flight to Seoul and the only other available destination - as fate would have it - was Singapore. That was where my journey ended.

A fellow traveller once asked me if I would ever miss my time spent backpacking.

I gave an inconclusive answer. I was barely two weeks into my travels and could not really appreciate that question.

But now - yes. I do miss it.

I had an amazing time. I experienced many things for the first time and forged bonds that will never be broken. Every ounce of resourcefulness I had was put to the test, but I emerged stronger. I opened my eyes to the world, and the world opened itself to me.

It was something I will never forget and I believe everyone should have a similar experience.

5 myths about China's power

By Minxin Pei, Washington Post, 27 Jan 2012

AS CHINA gains on the world's most advanced economies, the country excites fascination as well as fear, particularly in the United States, where many worry that China will supplant America as the 21st century's superpower. Many ask how China has grown so much so fast, whether the Communist Party can stay in power and what Beijing's expanding global influence means for the rest of us. To understand China's new role on the world stage, it helps to rethink misconceptions that dominate Western thinking.

China's rise is marginalising American influence in Asia

Just the opposite. Certainly, China's power in Asia is growing; its economy is now the biggest in the region, and the country is the largest trading partner for every Asian nation. And its military modernisation has made the People's Liberation Army a more lethal fighting force.

But instead of marginalising or supplanting US influence, China's expanding power is pushing most Asian countries closer to Washington and elevating America's status. Uncle Sam's presence is still welcome because it prevents a regional power from dominating its neighbours and promotes strategic balance. Today, the more power China gains, the more critical the US commitment to the region becomes, and the greater the influence Washington exercises.

No surprise, then, that when the Obama administration recently announced a strategic pivot towards Asia, China bristled while most countries in the region felt reassured and applauded quietly. Today, US security ties with key Asian nations such as India, Japan, South Korea and even Vietnam are better than ever.

China's massive foreign exchange reserves give it huge clout

China owns roughly US$2 trillion (S$2.5 trillion) in US Treasury and mortgage-backed debt and US$800 billion in European bonds. These massive holdings may cause anxiety in the West and give Beijing a lot of prestige and bragging rights, but they have not afforded China a lot of diplomatic sway.

The much-feared scenario of China dumping US sovereign debt on world markets to bend Washington to its will has not materialised, and probably won't. China's sovereign wealth fund, which invests part of those reserves, has favoured low-risk assets (such as a recent minority stake in a British water utility) and has sought to avoid geopolitical controversy. And in the European debt crisis, China has been conspicuously absent.

China's hard currency hoard adds little punch to its geopolitical power because its stockpile results from a growth strategy that relies on an undervalued currency to keep exports competitive. If China threatens to reduce its investment in US debt, it will either have to find alternative investments (not an easy task these days) or export less to the US (not a good idea for Chinese manufacturers). With so much invested in Western debt, China would suffer disastrous capital losses if it spooked financial markets.

The Communist Party has the Internet under control

In spite of its huge investments in technology and manpower, the Communist Party is having a hard time taming China's vibrant cyberspace. While China's Internet-filtering technology is more sophisticated and its regulations more onerous than those of other authoritarian regimes, the growth of the nation's online population (now surpassing 500 million) and technological advances (such as Twitter-style microblogs) have made censorship largely ineffective. The government constantly plays catch-up; its latest effort is to force microbloggers to register with real names. Such regulations often prove too costly to enforce, even for a one-party regime.

At most, the party can selectively censor what it deems 'sensitive' after the fact. Whenever there is breaking news, whether a corruption scandal, a serious public safety incident or a big anti-government demonstration, the Internet is quickly filled with coverage and searing criticisms of the government. By the time censors restore some control, the political damage is done.

China's regime has bought off the middle class

Hardly. Three decades of double-digit economic growth has elevated about 250 million to 300 million Chinese, mainly urban residents, to middle-class status. Since the regime crushed the Tiananmen democracy movement in 1989, the middle class has been busy pursuing wealth, not demanding political freedoms. But this does not mean this group has thrown its support behind the ruling party. There is a world of difference between political apathy and enduring loyalty.

At most, the Chinese middle class tolerates the status quo because it is a vast improvement over the totalitarian rule of the past, and because there is no practical or immediate alternative. But as the Arab Spring shows, a single event or a misstep by authoritarian rulers can transform apathetic middle-class citizens into radical revolutionaries.

That can happen even without a precipitating economic crisis. Today, China's middle class is becoming more dissatisfied with inequality, corruption, unaffordable housing, pollution and poor services.

The party knows it cannot bank on middle-class support. Such insecurity lies behind its continuing harshness towards political dissent.

China's rapid economic growth shows no signs of slowing

The pace of growth is already cooling from above 10.3 per cent in 2010 to 9.2 per cent last year, and the downward shift will accelerate in future years.

The Chinese economy will encounter strong headwinds. The population is ageing; citizens aged 60 and older accounted for 12.5 per cent of the population in 2010 and are projected to reach 17 per cent in 2020. This will reduce savings and the supply of workers, and raise the costs of pensions and health care. If China wants to keep its high growth rate, it must graduate to making Chinese-designed high-tech and high-value-added products. It will need more innovation, which demands less government control and more intellectual freedom.

Most critically, the investment-driven and state-led economic model responsible for China's rapid growth must give way to a more efficient, consumption-driven, market-oriented model. Such a shift will be impossible without downsizing the state and making the party accountable to the Chinese people.

The writer is director of the Keck Centre for International and Strategic Studies at Claremont McKenna College.

Singapore must find its own way: PM Lee Hsien Loong at Davos 2012

More political openness not enough, Singaporeans have part to play, he says

By Chua Lee Hoong, The Straits Times, 28 Jan 2012

SINGAPORE'S political landscape is in a new situation, but Prime Minister Lee Hsien Loong says more political openness should not be the only response.

Singaporeans themselves have a part to play by paying more attention to what is happening in their country and to themselves as citizens.

This is because effort is required on the part of both government and people to ensure that the country plots its direction correctly.

'We are in a new situation and we must govern in a new way, but we can't do it by just going with the tide,' Mr Lee said in an interview here on Thursday with CNN anchor Fareed Zakaria.

Singapore must find its own way, he stressed, adding that it is not so simple as saying that 'if we have more political parties, we will have more functioning government'.

Mr Zakaria had asked for his take on the results of the general election in May last year when, despite rising prosperity, the ruling People's Action Party obtained its worst electoral result since Independence, losing six seats and garnering just 60.1 per cent of the vote. That prompted talk of a 'new normal' in Singapore politics.

Referring to the election results, Mr Zakaria said: 'People say the system is too closed, you need more political openness.'

Mr Lee replied: 'If only it were so simple.'

He argued that changes in Singapore society in recent years had caused 'a certain unease and disquiet among certain segments of the population', exacerbated by social media and what he called the 'global mood of dissatisfaction with the status quo'.

Alluding to rising income inequality as a source of dissatisfaction, he said: 'Every society changes, new generations have new experiences. In an earlier stage, the economy grew very rapidly and very evenly, everyone could see their salaries going up... effortlessly almost. Now, it's slower and less even.

'In the last five years before the election, we went through a crisis, we came out better than most others, but nevertheless it was a bumpy ride... and the rapid changes in our society caused a certain unease and disquiet among certain segments of the population.'

On whether more political openness is needed, he said: 'You need more openness, you need more engagement, but at the same time you need people to pay more attention to what is happening in their lives and think about what is happening to their country and to us as Singaporeans.'

During the interview, he explained Singapore's approach to tackling inequality.

The first step is ensuring that everybody has a good education, so that those who are able have every chance of rising all the way, regardless of their background.

Second, through a public housing programme and public subsidies on health care and education, the Government makes sure that 'everybody starts with some chips in life'.

'If you're poor in Singapore, it's no fun, but I think you're less badly off than in any other country in the world, including in the US,' he said.

Human Rights Watch’s (HRW) remarks are 'false assertions' and 'inaccurate', says Law Ministry

TODAY, 28 Jan 2012

The Ministry of Law (MinLaw) has rebutted the comments of Human Rights Watch (HRW) on Singapore's human rights record, describing HRW's remarks as "false assertions" and "inaccurate".

HRW had said in an article on its website on Monday that the Singapore Government should stop making "lame excuses" and "cease violating fundamental free expression rights citing self-serving historical and cultural justifications that only tarnish Singapore's global image", referring to Singapore's submissions to the United Nations Human Rights Council's Universal Periodic Review last year. 

It also cited the use of preventive detention, the use of defamation suits to silence critics and tight media control among its concerns. 

MinLaw said in a statement yesterday that HRW's assertions were false. For example, while HRW had said that mandatory death sentences violate international law, "capital punishment is not prohibited by international law", the ministry pointed out.

"A large number of countries, including many modern, developed countries (like the US) impose the punishment. In Singapore, capital punishment has contributed to low rates of crime and drug use; and is overwhelmingly supported by Singaporeans," said Minlaw.

The HRW article had cited the case of British author Alan Shadrake, 76, who was convicted of contempt of court after parts of his book, Once a Jolly Hangman: Singapore Justice in the Dock, had scandalised the judiciary. 

MinLaw said: "Singapore's Constitution guarantees the freedom of speech and freedom of peaceful assembly. The Shadrake trial, which your article mentions, was fully reported by local, international and alternative media. Mr Shadrake was charged because he had alleged, among other things, that the Singapore courts conspired with State agencies to suppress material evidence. Such a statement would be considered to be in contempt of court in several countries."

It added: "HRW's casual approach towards research and analysis, has been criticised by none other than its founder, Robert Bernstein, who has said that HRW 'often relies on witnesses whose stories cannot be verified and who may testify for political advantage'." Mr Bernstein's remarks, referring to the Middle East conflict, were published in The New York Times in 2009. 

As for Singapore's submissions to the Human Rights Council, MinLaw said HRW had dismissed them without dealing with them, and urged Singaporeans to read and "judge for themselves". 

It said: "Every society strikes its own balance between the rights of the individual and the society. National issues are openly debated in Parliament. Elections to Parliament are free and fair, and contested fiercely. Singapore's stability, public healthcare, education and security have made it one of the most livable cities in the world: Singaporeans enjoy dignity, welfare and security - much more so than many cities and countries which HRW seems to be happier with."

Ministry of Law’s response to Human Rights Watch’s January 2012 country report for Singapore, quoted on Yahoo!News Singapore

27 Jan 2012

1. We refer to Human Rights Watch’s (HRW) January 2012 country report for Singapore (Report) and the comments of its deputy director Phil Robertson, as quoted on Yahoo!News Singapore.

2. The Report dismisses Singapore’s Submissions to the Human Rights Council at the Universal Periodic Review (http://www.mfa.gov.sg/upr/), without dealing with the Submissions. Readers are encouraged to read the Submissions and judge for themselves.

3. HRW also made false assertions. For example, contrary to assertions in its news article[1] , capital punishment is not prohibited by international law. A large number of countries, including many modern, developed countries (like the US) impose the punishment. In Singapore, capital punishment has contributed to low rates of crime and drug use; and is overwhelmingly supported by Singaporeans.

4. Statements in HRW’s Report relating to detentions, freedom of speech and association, and the civil rights, as reported in your article, are likewise inaccurate. Singapore’s Constitution guarantees the freedom of speech and freedom of peaceful assembly. The Shadrake trial, which your article mentions, was fully reported by local, international and alternative media. Mr Shadrake was charged because he had alleged, among other things, that the Singapore courts conspired with State agencies to suppress material evidence. Such a statement would be considered to be in contempt of court in several countries.

5. HRW’s casual approach towards research and analysis, has been criticised by none other than its founder, Robert Bernstein, who has said that HRW “often relies on witnesses whose stories cannot be verified and who may testify for political advantage”.[2]

6. The Singapore government is committed to creating and defending an environment where Singaporeans are secure, where their well-being is ensured, and where everyone can realise his or her full potential. Every society strikes its own balance between the rights of the individual and the society. National issues are openly debated in Parliament. Elections to Parliament are free and fair, and contested fiercely. Singapore’s stability, public healthcare, education and security have made it one of the most livable cities in the world: Singaporeans enjoy dignity, welfare and security – much more so than many cities and countries which HRW seems to be happier with.

[1] http://www.hrw.org/news/2012/01/23/singapore-stop-hiding-behind-old-excuses

[2] http://www.nytimes.com/2009/10/20/opinion/20bernstein.html

Singapore: Stop Hiding Behind Old Excuses

Civil and Political Rights Getting Short Shift

HRW, 24 Jan 2012

(New York) – The Singapore government should cease violating fundamental free expression rights citing self-serving historical and cultural justifications that only tarnish Singapore’s global image, Human Rights Watch said today in its World Report 2012.

Singapore’s rights record went before the United Nations Human Rights Council’s Universal Periodic Review (UPR) process in May 2011. The government either rejected outright or contested the premises of many recommendations for improvements in civil and political rights. Concerns cited included the use of preventive detention, the use of defamation suits to silence critics, restrictions on public protests, regular use of corporal punishment for a wide range of crimes, and criminalization of same-sex relations between men.

“Singapore’s claims of exemption from human rights standards are just lame excuses for abuses,” said Phil Robertson, deputy Asia director at Human Rights Watch. “The people of Singapore deserve the same rights as everyone else, not more clever stories justifying government oppression.”

In its World Report 2012, Human Rights Watch assessed progress on human rights during the past year in more than 90 countries, including popular uprisings in the Arab world that few would have imagined. Given the violent forces resisting the “Arab Spring,” the international community has an important role to play in assisting the formation of rights-respecting democracies, Human Rights Watch said in the report.

In Singapore, the ruling People’s Action Party (PAP) remained in power in 2011 in an election that saw the party garner its lowest winning margin since it took power in 1959.

The government maintained virtually unlimited powers to detain suspects without charge or judicial review, using the Internal Security Act and the Criminal Law (Temporary Provisions) Act. These laws have been used to incarcerate outspoken activists for prolonged periods without trial, as well as criminal suspects who should be charged under the penal code. In dealing with terrorism suspects, the government should use the criminal code to prosecute in accordance with international due process standards, Human Rights Watch said.

The Singapore government also kept tight control over broadcast, radio, and print media, using a web of interlocking laws and policies that enable censorship and control over media, films, video, music, sound recordings, and computer games. The Newspaper and Printing Presses Act requires publications to renew registration annually and gives government officials a free hand to control circulation of foreign publications that allegedly “engage in the domestic politics of Singapore.”

The right to freedom of association is also sharply curtailed. The Registrar of Societies is empowered to deny registration to associations of 10 or more members on the grounds of being “prejudicial to public peace, welfare or good order.” Police permits are required for any public event involving five or more people. And the government uses contempt of court, criminal and civil defamation, and sedition charges to rein in critics.

Police rejected an application by the advocacy group Singaporeans for Democracy to hold a “Singaporeans United Against Racism” rally at the Speaker’s Corner, a legally designated spot for rallies, on December 10, International Human Rights Day.

On July 9 the 76-year old British author Alan Shadrake completed his contempt of court sentence for “scandalizing the judiciary” by alleging in his book, Once a Jolly Hangman: Singapore Justice in the Dock, that the ruling party had interfered in court decisions involving capital punishment. He was immediately deported.

“Use of court sanctions for criminal defamation or ‘scandalizing the judiciary’ discourages Singaporeans and foreigners alike from digging too deeply into problems of Singaporean governance,” Robertson said.

The government also maintains mandatory death sentences for 20 drug-related offenses and judicial sentences that include caning, which amounts to torture. Both punishments should be banned for being in violation of international law, Human Rights Watch said. The government should also repeal antiquated British colonial laws on same-sex relations that are discriminatory and an invasion of privacy.

Singapore took measures to improve rights protections for the approximately 196,000 foreign domestic workers in the country, Human Rights Watch said. But the government should take the next step and ensure that these workers are included under the Employment Act so they can fully access their rights under law.

“Singapore’s leaders may sometimes listen to the electorate’s concerns over social and economic rights, ­­but they are apparently deaf to pleas for political space to organize and speak out without fear of prosecution,” Robertson said. “It’s telling that Prime Minister Lee Hsien Loong in his 2012 New Year’s message didn’t say a single word about civil and political rights.” 

Help seniors stay healthy, happy and attract immigrants

IT IS heartening to learn that our elderly are living longer and staying healthy and active as they age ('Greying society? Yes, but with a silver lining'; Monday).

There are two areas of work in tackling a greying population.

First, help the elderly stay healthy and live their remaining years happily.

Second, slow down the greying process through immigration and boosting births. Sometimes, these efforts may be misconstrued.

Many do not understand an ageing population would add mounting fiscal burdens and erode the competitive edge for our future generations to survive. The nature and size of our greying problems in the coming decades need to be told and digested.

When the Institute of Policy Studies (IPS) released its population projections for 2050 in September last year, parliamentarians and policymakers should have discussed it seriously, at least the four scenarios published in the press ('Population will shrink without immigrants'; Sept 8).

In the scenarios where zero net migration was allowed, IPS showed that support ratios - working-age persons to one elderly person - could drop from 8.2 in 2010 to as low as 1.7 by 2050.

In the other two scenarios where 30,000 and 60,000 net migrants were allowed yearly, the support ratio would drop to 2.7 and 3.5 respectively.

We need to be concerned about the various implications when our support ratio drops to five or four from about eight now.

Policymakers should project how much more taxes Singaporeans would have to pay because of the declining tax base and increasing costs to keep the expanding grey population healthy when our support ratio drops to various numbers. We need to know also the projected average age of workers and the shortages of manpower in each scenario with varying numbers of yearly immigrants.

Citizens would then understand better why allowing 30,000 immigrants a year, if not more, is a basic necessity for Singapore to survive in the long term.

We would also give more urgency to dealing with ageing problems.

Ng Ya Ken
ST Forum, 28 Jan 2012

Government to focus on elder care in 2012: Health Minister Gan Kim Yong

Overwhelming demand for such services, says Gan in his blog
By Salma Khalik, The Straits Times, 28 Jan 2012

THE Salvation Army runs day care, dementia and rehabilitative services in Bedok, and also provides nursing care for nearby residents in the comfort of their own homes.

Demand for such services is overwhelming, noted Health Minister Gan Kim Yong yesterday, in a posting on his blog, Health Matters.

But he was citing examples of such services in Bedok only to underscore the importance of tackling the issue of care for the aged on a national scale as well.

This will, in fact, be an area his ministry will focus on this year.

He said: 'Aged care involves not just responding to the functional or health-related issues of our seniors, but their social and emotional needs as well.

'Ultimately, what matters is the quality of life they have as they age.'

This is the second of three blogs from his ministry ahead of the unveiling of the Budget statement on Feb 17.

The Ministerial Committee on Ageing (MCA), which he also heads, plans to build in the heartland more centres like The Salvation Army's Multi-Service Centre in Bedok.

This is in line with the push to have the elderly 'age in place', that is, grow old in their own home, instead of in an institution.

Mr Gan, who took over the health and MCA portfolios last year, added: 'Even as we all age or become frail, we will want to be cared for at home and be together with our loved ones.'

It is for this reason that the MCA will spearhead the building of more day-care centres in residential areas.

He told The Straits Times: 'When I visited the Salvation Army centre in Bedok, it appeared very popular with the residents there, and was operating at full capacity.'

The new day-care centres are likely to be bigger than the existing ones and provide a range of services and facilities, for both the elderly who are still functional and healthy, and those in need of care.

These centres will be where they can socialise, as well as get nursing and other rehabilitative services, even as they continue living with their families.

By 2020, the number of elderly folk they will cater to should be three times the 2,100 that the existing centres now handle.

As Mr Gan said in his blog: 'Seniors living with their children who are working can then be supported by these centres, while their children have the peace of mind that their parents are being cared for by professional staff in the day.'

Stronger leadership makes for a better Singapore

Letter from Raymond Chua Soo Chew, TODAY, 21 Jan 2012

Singapore's first generation of leaders won our respect by doing what was truly good for our country.

Many policies then were bold and visionary, such as attracting multinational investments, implementing the Central Provident Fund, road pricing, high road and petrol taxes, taking a hard line on crime and drugs, and constructing Jurong Island.

These were the subject of ridicule amongst academics and other politicians but, nevertheless, laid the foundation of Singapore's success. Many of these policies are now emulated in many countries.

Government to beef up Community Care Endowment Fund (ComCare)

Channel NewsAsia, 26 Jan 2012

Although the impending economic slowdown may not be as severe as the previous recession in 2008, the government is prepared to set aside the same amount of ComCare funds, if needed.

Minister of State for Community Development, Youth and Sports, Madam Halimah Yacob, said this on the sidelines of a visit to Northeast Community Development Council (CDC) on Thursday.

Community Development Councils are also beefing up their services on the ground as more residents apply for social assistance.

A team of case managers attend to needy residents twice a week at a satellite office in central Tampines.

It is part of the North East CDC's Proactive Ground Engagement programme to further strengthen its social services within the community.

The next step is to have a centre that serves as a permanent work space for staff, so that residents can access services more easily.

Mayor of North East District, Teo Ser Luck, said: "Currently, CDC staff are on a flexi work arrangement. They are (situated) in the headquarters, which is in Tampines on hot-desking basis, so they don't actually have a fixed place.

"They work at the CC, they work from home. I think with a centre, you can have a full service, and they can still be hot-desking there but also getting closer to the community itself."

With economic growth expected to slow down this year, Mr Teo also wants to increase the number of job placement centres in the district in the event that companies scale down their operations.

Khaw Boon Wan on raising construction productivity

Channel NewsAsia, 26 Jan 2012

National Development Minister Khaw Boon Wan said the local construction industry needs to raise productivity through standardisation and prefabrication.

In his latest blog entry, he said Singapore can try to build more flats with fewer foreign workers, if construction productivity is raised.

Singapore is adding another 25,000 public flats this year through the Build-to-Order scheme, and needs some 30,000 foreign construction workers to meet its building programme.

Mr Khaw said prefabrication technology is now indispensable in HDB's building programme.

Seventy per cent of public housing building components such as walls, floors and toilets are now precast.

These parts are fabricated off-site and then transported to the construction site for assembly.

But Mr Khaw added that at the next stage of development, prefab plants themselves also need to be transformed to up their own productivity.

He cited local company, Tiong Seng Contractors, as an example of how companies can raise their productivity by implementing the Construction Productivity Roadmap.

Tiong Seng has set up Singapore's first computerised and semi-automated multi-storey precast plant at Tuas, with some funding support from the Building & Construction Authority.

Known as Integrated Construction and Precast Hubs, these plants optimise land use and achieve higher productivity through automated production processes. 

Tiong Seng's precast plant only needs a third of the workers to produce almost double the tonnage of precast components.

An existing plant would need 150 workers to produce 60,000 cubic metres of precast components, while a new integrated construction and precast hub only requires 50 workers to churn out 100,000 cubic metres of precast parts.

Mr Khaw said BCA will make more land available for such integrated construction and precast hubs in its masterplan.

He hopes more contractors will come forward to participate in implementing the Construction Productivity Roadmap to transform Singapore's construction industry and raise its productivity.

This, he says will help Singapore cut down on its reliance on foreign construction workers.

Chinese clans plan centre for new citizens

Aim is to better integrate them into Singapore

By Rachel Chang, The Straits Times, 26 Jan 2012

A NEW Chinese cultural centre to integrate newcomers to Singapore and showcase the local Chinese identity will be set up by the Singapore Federation of Chinese Clan Associations (SFCCA).

It will be a one-stop venue that Chinese community bodies can use for anything from performances and exhibitions to networking events and seminars.

The cost and site of the centre have yet to be finalised.

The integration of new citizens will be one of the centre's primary goals, said the federation's president Chua Thian Poh yesterday when announcing the plan of the umbrella association.

This will be done by showcasing Singapore's local multicultural identity through performances and exhibits.

The cultural centre will also be a central venue for new immigrant groups to interact with the established and longstanding clans in Singapore, he said.

The federation aims to have the centre up in five years' time.

Mr Chua announced the plan at a Chinese New Year event organised jointly by the SFCCA and Business China, a networking group for building links between Singapore and China.

The project follows an amendment to the federation's constitution about six months ago to let new immigrant groups join the federation.

Its recognition of the importance of the Government's foreign talent policy was praised by Prime Minister Lee Hsien Loong, who was the guest of honour at yesterday's event.

It has done its part to facilitate integration, Mr Lee said, through initiatives like organising tours for new citizens to the different clan buildings in Singapore.

Speaking in Mandarin, he said the Government is happy to help the federation's cultural centre plan become reality. With a laugh, he added a caveat: 'It's easy to talk about it, but we have a lot of work to do.'

New welfare programme for elderly - "Hands For Homes"

By Evelyn Choo, Channel NewsAsia, 23 Jan 2012 

A new welfare programme, providing housekeeping services for the elderly living in the central district, will begin in April.

Called "Hands For Homes", it will replace mattresses to prevent bedbug infestations - a common problem among senior citizens living in rental flats.

Some 6,000 households stand to benefit over the next three years.

A rental flat of 72-year-old Yeo Hock Soon used to be infested with bedbugs.

But with his mattress replaced, Mr Yeo can now sleep comfortably at night.

"We threw away everything, but then the dog still managed to sniff out two bugs! If it didn't, the bugs would have multiplied. We needed to get rid of everything," said Mr Yeo.

The issue had been a bugbear for many living in the block of flats at Chin Swee Road, with four in ten households facing this problem.

Mr Koh Chui Seng, programme coordinator at the Kreta Ayer Seniors Activity Centre, said: "A few of our members, because their house has a lot of these bedbugs, when they come down to our centre, it makes a few of our members feel very scared - they want to keep away from (them)."

Two-thirds of Singapore's HDB rental flats are housed in the central district, with most of its residents being elderly with little or no income. They are the targets of this programme, which aims to provide housekeeping services and distribute elderly-friendly household items.

Besides mattresses, residents will receive induction cookers to enhance kitchen safety, and have energy-efficient light bulbs installed in their homes. They will also receive non-slip mats to prevent falls.

It will take an estimated S$200,000 a year to run the programme.

Spearheading it is the Member of Parliament for Tanjong Pagar GRC, Dr Lily Neo, who admits that manpower will also be an issue.

Dr Neo says Hands for Homes will require six to 10 volunteers per flat.

She said: "There are days when I can't find volunteers to help me with the eradication process, then I will tap on some of the residents - elderly or those who are capable - who are willing to volunteer their time. So I'm tapping on them by reimbursing them."

Hands for Homes will be piloted in Tanjong Pagar GRC from April 2012. The programme will then be expanded to other GRCs in the district, such as Ang Mo Kio, Bishan-Toa Payoh and Moulmein-Kallang. 

PM Lee gives transport workers a boost on the first day of the Chinese New Year

He thanks them for hard work during a 'demanding year'

By Toh Yong Chuan, The Straits Times, 25 Jan 2012

AMID public frustration over last month's train breakdowns, the Prime Minister has urged Singaporeans to understand that SMRT staff are toiling to get at the root of the problem, even as they strive to rebuild public confidence in the MRT system.

Mr Lee Hsien Loong made this appeal after visiting public transport workers on the first day of the Chinese New Year to thank them for their hard work after a 'demanding year'.

'We've had some mishaps on the MRT, and Singaporeans have been upset with it,' he said. 'The MRT and SBS staff have been under considerable pressure but they have been working away quietly to try and put right the problem and improve the service.

'So I came to say thank you to them, and also on behalf of Singaporeans, to express our appreciation and to encourage them to keep up the good work.'

Speaking in Mandarin, he added: 'Their work is not easy and they are trying their best, so we should understand that while there are problems, our MRT staff deserve our respect and thanks.'

Two massive breakdowns struck the MRT system on Dec 15 and 17, affecting some 200,000 passengers. They were the worst in the train system's 24-year history. SMRT chief executive Saw Phaik Hwa has since resigned, and investigations into the breakdowns are under way.

Mr Lee spent over three hours early on Monday morning meeting 220 workers at seven MRT stations and the Jurong East bus interchange. He distributed mandarin oranges and hongbao, and joined the workers in tossing yusheng (raw fish salad).

He was accompanied by his wife, Ms Ho Ching, labour chief Lim Swee Say, union leaders, and senior executives from SMRT and SBS Transit.

The Prime Minister traditionally visits workers on the first day of the Chinese New Year to thank them for keeping things running while the rest of Singapore is celebrating or resting.

Striving in the uncertain digital future

By Ho Ching, Published The Straits Times, 25 Jan 2012

AS A small, open society in a highly interconnected world, Singapore will be buffeted by the deep global changes taking place around us.

On the demographic front, it took the world 120 years (1804-1924) to double from one billion to two billion people. But it took less than the last 15 years for it to increase by another billion, from six billion to seven billion.

It is a big and fast-growing world of people, all hungry for a better life for themselves and their children. This creates enormous pressure on resources, and thus the challenges of sustainability and global warming.

We are living much longer too. Up till the 1950s, people lived until their early 50s. Today, the 60s are the new 40s. We live longer, thanks to better education, better nutrition and better health care. Globally, among those over 60, the number of those who are 80 years old and older is growing the fastest - at the rate of 4 per cent a year. So we not only are living longer, we are having more and more old folks above 80 years old.

At the younger end, the fertility rate is plummeting globally. In Britain, it took 130 years to go from a fertility rate of five to a rate of two. But mothers in developing countries today can expect to have three children, when their mothers had six or more. Sometime between 2020 and 2050, the world's fertility rate as a whole will fall below the replacement rate of 2.1. So the issue of replacement fertility is not just a Singapore issue.

World faces a 600 million jobs challenge, warns ILO

Global Employment Trends 2012:

The world faces the “urgent challenge” of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report on global employment by the International Labour Organization (ILO).

24 Jan 2012

GENEVA (ILO News) – The world faces the “urgent challenge” of creating 600 million productive jobs over the next decade in order to generate sustainable growth and maintain social cohesion, according to the annual report on global employment by the International Labour Organization (ILO).

“After three years of continuous crisis conditions in global labour markets and against the prospect of a further deterioration of economic activity, there is a backlog of global unemployment of 200 million,” says the ILO in its annual report titled “Global Employment Trends 2012: Preventing a deeper jobs crisis”. Moreover, the report says more than 400 million new jobs will be needed over the next decade to absorb the estimated 40 million growth of the labour force each year.

The Global Employment Trends Report also said the world faces the additional challenge of creating decent jobs for the estimated 900 million workers living with their families below the US$ 2 a day poverty line, mostly in developing countries.

“Despite strenuous government efforts, the jobs crisis continues unabated, with one in three workers worldwide – or an estimated 1.1 billion people – either unemployed or living in poverty”, said ILO Director-General Juan Somavia. “What is needed is that job creation in the real economy must become our number one priority”.

The report says the recovery that started in 2009 has been short-lived and that there are still 27 million more unemployed workers than at the start of the crisis. The fact that economies are not generating enough employment is reflected in the employment-to-population ratio (the proportion of the working-age population in employment), which suffered the largest decline on record between 2007 (61.2 per cent) and 2010 (60.2 per cent).

At the same time, there are nearly 29 million fewer people in the labour force now than would be expected based on pre-crisis trends. If these discouraged workers1 were counted as unemployed, then global unemployment would swell from the current 197 million to 225 million, and the unemployment rate would rise from 6 per cent to 6.9 per cent.

The report paints three scenarios for the employment situation in the future. The baseline projection shows an additional 3 million unemployed for 2012, rising to 206 million by 2016. If global growth rates fall below 2 per cent, then unemployment would rise to 204 million in 2012. In a more benign scenario, assuming a quick resolution of the euro debt crisis, global unemployment would be around 1 million lower in 2012.

Young people continue to be among the hardest hit by the jobs crisis. Judging by the present course, the report says, there is little hope for a substantial improvement in their near-term employment prospects.

Global Employment Trends 2012 says 74.8 million youth aged 15-24 were unemployed in 2011, an increase of more than 4 million since 2007. It adds that globally, young people are nearly three times as likely as adults to be unemployed. The global youth unemployment rate, at 12.7 per cent, remains a full percentage point above the pre-crisis level.

The report’s main findings also include:

There has been a marked slowdown in the rate of progress in reducing the number of working poor. Nearly 30 per cent of all workers in the world – more than 900 million – were living with their families below the US$2 poverty line in 2011, or about 55 million more than expected on the basis of pre-crisis trends. Of these 900 million working poor, about half were living below the US$1.25 extreme poverty line.

The number of workers in vulnerable employment2 globally in 2011 is estimated at 1.52 billion, an increase of 136 million since 2000 and of nearly 23 million since 2009.

Among women, 50.5 per cent are in vulnerable employment, a rate that exceeds the corresponding share for men (48.2).

Favourable economic conditions pushed job creation rates above labour force growth, thereby supporting domestic demand, in particular in larger emerging economies in Latin America and East Asia.

The labour productivity gap between the developed and the developing world – an important indicator measuring the convergence of income levels across countries – has narrowed over the past two decades, but remains substantial: Output per worker in the Developed Economies and European Union region was US$ 72,900 in 2011 versus an average of US$ 13,600 in developing regions.

“These latest figures reflect the increasing inequality and continuous exclusion that millions of workers and their families are facing”, said Mr. Somavia. “Whether we recover or not from this crisis will depend on how effective government policies ultimately are. And policies will only be effective as long as they have a positive impact on peoples’ lives”.

The report calls for targeted measures to support job growth in the real economy, and warns that additional public support measures alone will not be enough to foster a sustainable recovery.

“Policy-makers must act decisively and in a coordinated fashion to reduce the fear and uncertainty that is hindering private investment so that the private sector can restart the main engine of global job creation”, says the report.

It also warns that in times of faltering demand further stimulus is important and this can be done in a way that does not put the sustainability of public finances at risk. The report calls for fiscal consolidation efforts to be carried out in a socially responsible manner, with growth and employment prospects as guiding principles.

1 A person who has decided to stop looking for work because they feel they have no chance at finding a job is considered economically inactive (i.e. outside the labour force) and is therefore not counted among the unemployed. This also applies to young people who choose to remain in schooling longer than they had hoped and wait to seek employment because of the perceived lack of job opportunities.

2 Vulnerable employment is defined as the sum of own-account workers and unpaid family workers.

Restoring hope and public trust

By Juan Somavia, Published The Straits Times, 27 Jan 2012

CAPITALISM has gone through crises of legitimacy before but this one is unprecedented. The underlying causes are complex, yet the net effect is plain - inequality is great and rising. Sixty-one million individuals have the same wealth as 3.5 billion people.

And the macroeconomic outlook is worsening. According to the International Labour Organisation's (ILO) annual Global Employment Trends report out this week, one out of every three workers - some 1.1 billion people - is unemployed or living in poverty. At the present rate, it will take us 88 years to eradicate extreme poverty. Over the next decade, we need to create 600 million jobs - 200 million for today's unemployed and 400 million for those entering the labour market.

Given this, it is not surprising that this year's Global Risks reports of the World Economic Forum (WEF) rate severe income inequality and high unemployment, especially among young people, as the most likely global risks over the coming 10 years.

Last year's Gallup polling data showed that globally, people are perceiving their living standards to be falling and expressing diminishing confidence in their government's ability to reverse this. In the United States, a recent survey by the Pew Research Centre showed conflict between rich and poor as the biggest source of societal tension. In far too many places, there is a sense of receding hope for the future.

Clearly, this cannot go on. We need to be bold and not just tinker at the margins (the recovery after the 2008-2009 crisis was short-lived because the 'quick fix' option prevailed). Nothing short of a new paradigm will do - the bonding of people, the economy and society.

This is why this year's WEF theme, 'The great transformation: shaping new models', is spot on. I will be arguing that we must urgently put in place a much more effective model for strong, sustainable and balanced growth that is people-oriented.

First, we must rethink how we measure growth beyond percentage changes in gross domestic product or average income per capita. The measure of success must be tangible improvements in people's lives.

Second, full employment, with low inflation and financial stability, must be a top macroeconomic goal as well as a central bank policy goal, as in the US and Argentina. We know this works. Countries that invested in job creation (and social protection) as a way out of the 2008 crisis fared better than those that prioritised bailing out their banks. China invested in labour-intensive infrastructure projects. Germany's work-sharing programme kept 1.5 million workers employed at the height of the crisis. 

Third, we must put the financial system back at the service of the productive economy, not the other way around. The distortion of this fundamental notion is at the heart of the current crisis, yet the markets are once again calling the shots. Risky and unproductive operations must become less profitable for financial institutions and taxpayers should not pick up the losses.

Fourth, we need to strengthen the framework for productive investment, including through an income-led growth strategy. This ignites demand through consumption and leads to savings to fuel future growth, rather than debt.

Fifth, we need social protection for the most vulnerable. In Brazil, income inequality, as measured by the Gini coefficient, is largely declining due to a national conditional cash transfer scheme that supports poor families. Boosting jobs reduces poverty. 

Sixth, we need to build strong institutions to assist in the creation of new businesses, including through long-term partnerships between banks and enterprises, as in Germany and South Korea. Promoting decent work and labour rights is part of the process.

Finally, we need more coherence between economic and social policies to connect people's aspirations for social justice with the management of a sustainable global economy.

This is an achievable agenda. But governments cannot deliver it alone. We need what WEF founder and executive chairman Klaus Schwab calls 'collaborative power' - and what the ILO calls social dialogue.

Businesses have a vital role to play to make this global shift possible, from leading in debates like those in Davos, Switzerland, to their job-creating capacity. An ILO/University of Maryland study projects that US companies could create 2.4 million new jobs in 2014 by investing the US$500 billion (S$630 billion) extra corporate reserves accumulated over 2010 to last year. The highest priority should go to small and medium-sized enterprises as they are engines of growth.

Above all, we need creativity and innovative thinking to seriously address the social dimension of globalisation. It is a political responsibility and a sound business decision as an investment in a peaceful and prosperous future.

In Davos this week, leaders must focus on restoring not only hope and confidence but also public trust. Never again must people feel that, while some banks are too big to fail, they are too small to matter.

The writer is the director-general of the International Labour Organisation.