What he
meant by making the population bigger is that, in the event of a
recession, the domestic market has to drive the economy. Generally,
he means large enough local consumer demand to soak up the
excessive supply.
But
wait a minute, this Song falla is another FT from Sarawak. What he
said is only half-truth and not all the whole truth.
For a
domestic market to drive the economy during a recession there must
be (1) horizontal diversity within the economy (2) vertical
diversity within the economy (3) diverse consumer base. Simply
increasing the population without considering these factors will
not make us better off.
(1)
Horizontal diversity, ie presence of primary, secondary and
tertiary industries. One such country is China. For example, if the
tertiary industry such as Banking and other service sectors are
down, the government can relies on the primary and secondary
wings.
In
Singapore, we don’t have primary industry. Our manufacturing sector
is sun setting and the first to suffer in a recession. If we bring
in more FT, it has to be those with tertiary skill-sets.
Increase FT with tertiary skill-sets that are comparable to the
locals makes no economic logic as far as stimulating domestic
consumption is concerned.
(2)
Vertical diversity. Currently, most of our industries are small,
linked or related.
Construction is not a stand-a-lone but linked to service and
manufacturing. Massive infrastructure construction to stimulate the
economy is getting fewer as the country gets built-up.
Newer
industry such as Biotechnology is too small to stimulate other
sector.
We lack
economic diversity and industrial decoupling. We bring FT in the
name of supplementing our skills when we should only bring them in
the name of driving economic diversification and helping us
kick start those economic wings that we covert but
lacking.
Without
strong economic diversity and industrial decoupling, bringing in
more FT will only exacerbating the problem of recession, albeit on
a larger scale than before.
(3)
Diverse consumer base. Most Singaporean and FT have similar
skill-sets such as IT, banking and broking servicing. In a
recession, all will be affected in the same way.
If the
locals or the FT are retrenched, all would be looking for the same
type of jobs. All will be clamouring to stay
afloat by tightening their belt.
What is
this nonsense about increasing the FT to stimulate the economy?
Except for the F1 session, will the tycoons want to settle here and
stimulate our economy?
I
wonder if the Song fella has agenda when he gives such
swiping statement. Is he a mouthpiece of the
government?
Great observation.
Singapore lack the critical mass for economies of scale - even
for the sake of security, where there is lack of depth in
defense towards any aggression and require us to dictate
an alternative defense posture.
This weakness in size had LKY worked feverishly to create an
opportunity to be independent from Colonial Rule, as the British
were willing to give independence to the Federation of Malaya, and
keeping Singapore as a Jewel that is too precious to be given
up.
It was LKY's idea in creating Malaysia consisting the Federal
States of Malaya, merged with the British Colonies of Sarawak,
Sabah and Singapore - so as to secure Singapore's independence
without upsetting the sensitve racial numbers that exist in
the Federal States.
All this scheming was done to achieve LKY's ambitious plans for
an independent Singapore with the pooling of manpower and resources
in larger setting.
Unfortunately, a young LKY could not contain himself in the
politics of the 1960s, and resulted in the constant friction that
resulted in Singapore being kicked out of the Federation of
Malaysia.
This Song fella could be given the benefit of speaking his mind
on a personal basis, but perhaps done so without giving time for a
wider and deeper analysis - during an on-the-spot interview.
