Truth Exposed: How The PAP Will Crash The Singapore Economy

As explained, the PAP’s four-prong strategy has caused the wages of Singaporeans to be depressed, which has also diminished our purchasing power.

Driving Up Loans To Increase Prices And Forcing Singaporeans Into Debt

More importantly, this has caused Singaporeans to sink further and further into debt. “Singapore households are (now) among the most indebted in Asia,… (where) households had borrowings worth 151 per cent of their annual income last year.” Also, “Household assets grew by 7.8 per cent year-on-year in the third quarter of last year, but household debt grew by a bigger 10.4 per cent, driven largely by housing loans, (which) has led to Singapore’s household debt to GDP ratio” being at the most dangerous level.

As Jesse Colombo had written, “Low interest rates are helping to inflate a credit bubble in numerous sectors of the Singaporean economy”. What this also means is that because Singaporeans are facing higher and higher debt, the government had lower interest rates to encourage spending. Not only that, now, it is more and more common for us to receive calls from banks asking if we could like to receive a cash advance. However, according to Investopedia, “cash advances should be viewed as a method of last resort” because “cash advances typically carry a high interest rate – even higher than credit card itself – and the interest begins to accrue immediately”.

In short, what this means is that by the banks’ tactics, this would push Singaporeans further and further into debt. Singaporean consumers are led to believe we are still able to spend on borrowed savings, and thus the demand drives up prices which allows the PAP to earn from the profits. But this is all at the expense of Singaporeans going into heavier and heavier debt, and being less able to pay off these debts. But, who owns the banks? You guessed it.

Slide9

As Jesse Colombo had explained, “Singapore’s ratio of household debt to gross domestic product recently hit approximately 75 percent, which is up from 55 percent in 2010 and 45 percent in 2005. Singapore’s household debt has risen by 41 percent since 2010, while household income has increased by only 25 percent and wages by a paltry 15 percent in comparison.”

But what’s worse is this – with your declining real wages and diminishing purchasing power, the PAP has allowed HDB flat prices to escalate, which means further dipping into your CPF to offload the mortgage, thus further entrapping you into a debt cycle, which imprisons Singaporeans into a long-term debt situation, which you would have to work for the rest of your lives to pay off for, since your CPF wouldn’t be able to function as what it should have – rightfully, as a retirement fund. Leong Sze Hian has estimated that 1 in 8 Singaporeans would not be able to meet the CPF Minimum Sum. What can the nearly 90% of us Singaporeans do if the CPF cannot be counted on for us to retire on, and we are so mired in debt? We have to continue to work until our deaths and never be able to retire.

Slide10

PAP’s Greed Has Corrupted The Singapore Economy

Earlier, we had seen how an equilibrium economy is one where everything is well-balanced and the economy can run like clockwork – but what has the PAP’s selfish profit-motives led Singapore to?

The PAP’s selfish motives have led to the equilibrium economic model completely collapsing. In its want to earn more and more money for itself, the PAP has siphoned off money which should have rightfully gone into the wages of the people and took it for themselves. This is why Singaporeans only earn 42% of the wage share of our GDP, as compared to the 60% that workers in the other high-income countries earn.

Not only that, our purchasing power gets dramatically reduced, and with it productivity. How so, you ask? Dr Seet Min Kok had explained that, “higher wages can encourage more workers to queue up more eagerly for the higher-paying jobs thereby enabling the firm to select better, more productive workers from a larger pool”.

As such, the PAP’s selfish motives might precisely be the cause of Singapore’s undoing. The equilibrium economic cycle has now malfunctioned and has become imbalanced. The incentive to work and innovate has now been removed from the system which has thus caused the stagnation in our labour productivity and efficiency.

Slide11

Singapore’s High GDP Figures: More Than Meet The Eye, Singaporeans Not Earning

In fact, Jake van der Kamp and Tom Holland had both written about how even though Singapore’s GDP per capita had grown tremendously, this is a superficial growth that does not benefit the lives of Singaporeans.

Jake van der Kamp had shown that, “In Singapore, personal consumption expenditure has steadily fallen over the years as a percentage of GDP and, at 35 per cent, is now barely half of what it is in Hong Kong,” and that, “Singapore’s high GDP numbers are mostly an anomaly created by very generous industrial concessions to foreigners. ”

2371a1bf8bd579fa5986ee9168f86a5a

Chart: South China Morning Post Singaporeans not as wealthy as GDP figures suggest

So, the question is – so what if the Singapore Prime Minister had said that, “if I can get another 10 billionaires to move to Singapore and set up their base here, my Gini coefficient will get worse but I think Singaporeans will be better off, because they will bring in business, bring in opportunities, open new doors and create new jobs, and I think that is the attitude with which we must approach this problem”? Because the statistics show otherwise. Sure, the Prime Minister and the rich with him might get richer, but the rest of the wealth does not go back to Singaporeans and is flowing out of the hands of Singaporeans.

Slide8

Tom Holland had also explained that as “Hong Kong people spend an average of US$24,000 a year each, while Singaporeans can manage only US$16,000” (after adjusting for purchasing power), “Hongkongers are considerably better off than their Singaporean peers”. In fact, “over the past 10 years the differential has widened in Hong Kong’s favour… In 2003 the average Hongkonger was 20 per cent better off than the average Singaporean. In 2012 he or she was nearly 50 per cent better off.” He ended off by saying that, “while all of Singapore’s immigration and reclamation might have inflated official egos, it has done little or nothing to boost ordinary people’s living standards”. Singaporeans are getting relatively poorer by the minute, precisely due to the PAP’s unrestrained policies.

5c70affd0c75f7b4d3ea7583aef10a80

Chart: South China Morning Post Immigration and reclamation won’t raise living standards

In simple terms, the diminishing purchasing power is forcing Singaporeans to spend less. In the long term, this will threaten the economic growth and prosperity of Singapore.

Slide12 cropped

I am not sure if most Singaporeans realise this.

Please note that there are 5 pages to this article:

Pages 12, 3, 45

Page 1: PAP’s Big Four Profit Strategies

Page 2: PAP’s Profit Strategies Increasing Income Divide

Page 3: Lower Wages which Increases Debt and Reduces Spending

Page 4: PAP’s Faux Solutions to Fix the Economy

Page 5: The Real Solutions to Fix the Economy

54 comments

  1. Marcus

    Quite true. The PAP monopolies everything. They even use “anchor operator” as an excuse to award themselves (PCF and NTUC MyFirstSkool) subsidies on the rental of HDB void decks to grab a big mouth of the childcare business pie. Then now they try to rope in their cronies so that it would be seen less “unfair” to the public.

  2. Marcus

    One just need to look at EM Services to see how far and wide their tentacles can spread. Even the appointment of SMRT CEO has to go through LHL’s wife.

      • Bobby

        Well, Firstly, economics doesn’t really always rebalanced itself. In economics, there are many school of thought but i am not which school of thought you are belong to. Secondly, for PAP Profit #1 monopoly, Could you describe what is monopoly? There are three telco in singapore, Starhub, Singtel, M1. Both three are owned by temasek holdings directly or in directly though various companies such as, Keppel as for M1 case. If there is monopolization, is there a need to have three telco, why not just allowed Singtel to be there. One of the purpose for this, is to let them be competitive. Companies such as telecom are hard entrants play due to high cost and financing involve. Let say if they want to privatize, privatize to who? Who is capable to run it? Property prices had been a hot topics in Singapore for this few years. Do you know of any reasons for property prices rise except rambling at the government? When the government influx of foreigners, you are rambling, imposing levy on business to curb the influx of foreigners, you are too rambling. So if you are the government what you will do?

      • Roy Ngerng

        Hello,

        (1) To answer your first question, please look up the definition of “free market”: http://www.investopedia.com/terms/f/freemarket.asp

        (2) To answer your second question, please read this link: http://opinion.financialpost.com/2010/09/08/fake-competition/

        (3) HDB is a public organisation. It is not in the business of competition. The HDB sets its own price. If there is a price increase, there can only be one reason why.

        (4) On the solutions, please read page 5 of the article here: https://thehearttruths.com/2014/03/19/truth-exposed-how-the-pap-will-crash-the-singapore-economy/5/

        I would appreciate if you read carefully before rambling in your comment.

        Thank you.

        Roy

    • yevets

      Bobby. Of course M1, Singtel and Starhub are monopoly because they are all subsidiaries of Temasek. If only I can have provide internet service in Singapore and I want maximum profit without being call a Monopoly, I will form 3, 4, 5, 10 companies selling internet service to Singaporean to create the illusion of competition! I will instruct them to create the illusion of competition among themselve but at all time keep the price higher than if there is free competition. This the same for our transport industries. Do you believe there is guinuine competition between SMRT and TIB ?

  3. Bobby

    Do you believe in free market? By being a public organization doesn’t means that it would need to set a price that can be beneficial to anyone just like in the world of economics. I believe from what you mentioned, they are deliberately setting prices that high to profits themselves. Let me tell you, this a not the reasons. Since 2008 sub prime market crisis, the world is recovering due to the so called recored low interest rates and cheap or Quantitative Easing (One day, they will suffer). Cheap money and low interest would fuel up property prices especially singapore since we are small. Take a look at the other parts of the world, China, Hong Kong just to name a few, They are having these problems. You might want to take a look at the SIBOR. The good thing about it is those people who had properties are getting richer due to the property prices. I don’t see people getting rich through property are complaining. Those people are complaining about property are those who wanted to buy properties not seller. Just like the economics, you can’t satisfy both. You think HDB can manipulate the pricing? If they can manipulate the pricing in accordingly, Free market wouldn’t be exist. We can go back to Economics 101 Chapter 1, supply and demand. If you will to remove the foreign worker levies, this will cause the the supply and demand curve of labor force to shift. By removing foreign workers levies, Supply pool of labor cause will be more and this will in turn depress wages other than that tax revenues would decrease. What make you think that those foreign levies can be channeled to the workers? Businesses wouldn’t book that as their profits? Increasing health care, who is going the pay for it? Take a look at the US or the western world, these country had a huge health care expenditure to GDP but what happen to their budget? All in debt and deficit and their government are living their fiscal year in borrowing of money nevertheless, i do not see their health expectancy increase much. Indeed, there are some of the things that i am also unhappy as a Singaporean but if they are not in charge, who do you think that they are suitable for this job, Opposition party? I don’t think so though there are one or two capable, Anyway is nice reading your articles on various issues on singapore.

    • Lee

      thank you bobby… i read part of roy’s dissertation and couldn’t continue… there isn’t anywhere i could even start correcting because its full of assumptions, fallacies and textbook definitions. roy needs to take out your economics textbook and burn it because that’s full of precedences (the past is irrelevant at this juncture). thank you for being a voice of reason bobby!

      • Natasha

        There is no such thing as free market. Even US impose sanctions on import of cheap solar panels from China. Why? To protect their own people. Singaporeans, living in a developed nation with high cost of living can never compete on equal ground with cheap labour from the third world. A government’s first priority is to look after its own people. Even the US and Europe have anti-dumping laws and tight control of migrant workers. The PAP government does not care about us. It just want us to compete with these cheap workers so that our pay will be low and that their businesses can reap more profit. Enough is being said. Only the blind cannot see something that is so obvious.

  4. TheCow

    Hence competition is immoral. It’s like putting the wolves and the sheep on an open field to fight for their survival . No prizes for guessing who will be having buffet for lunch, dinner and supper and who will be getting crumbs and doing dead end jobs(no rest).

  5. Bobby

    Roy. You do not really need to care what established economist said. Generally speaking, academicians such as economist can be really right in their form of theory or whatsoever but in practical they are not that capable as it seems if they are that capable why there is such a thing called financial crisis or efficient market hypothesis. All this are just hypothesis. For the foreign worker levies, it is just as simple as supply and demand which all the economist would agree no matters what school of thought they are from.

    • Roy Ngerng

      Bobby,

      You’ve been very interesting.

      First, you claim to speak about the different schools of thought in economics, but gave a baffling explanation of economic theory.

      Then, you countered yourself by saying it is not necessary to “care (about) what established economist(s)” say.

      Clearly, you are not interested in logic or discussions on the fundamentals of economic principles.

      It is evident that your claim of economic thinking would be as much as what would convenient to your own way of belief or current monetary practices.

      As such, I can only conclude that your resistance towards a government that would care for Singaporeans is due to self-interest. But that would square with the PAP’s motivations, which might explain your defence.

      I think readers here can see the truth for themselves. Your opinion was appreciated.
      Thank you.

      Roy

      • Bobby

        Hey Roy, I do not think that you understand the fundamental of economics. Look, how many economist are right in the sense by looking back historically. I do not give any baffling explanation, it is just supply and demand even some kids would understand.

      • david

        Hey Bobby, nice try. I do not think you understand the purpose of having a government. Your rambling baffles me.

  6. Elijah

    Bobby,

    You are not entirely wrong. You can’t buy(demand) and sell(supply) without kowtowing.

    Revelation 13:17 >>
    And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

    So how should the game be played?

    • yevets

      No religion please. Nobody can argue with a person who has direct communiction with god and quote god’s word.

      • 7seals

        It is religion if you don’t understand. The good news is..it is purely secular and hence, accessible and relevant.

  7. johhson

    Ha..ha…Mr Bobby must be dreaming. Speaking about demand & supply, u have to ask who is the main supplier/controller of housing in Singapore. It’s the government that supply 80% of the housing to Singaporeans. When there was demand in housing, how come the government didn’t supply enough housing for the citizens, resulting in huge price escalation. Prices rise in 100 to 200% in last decade is phenomenal! Where is the free market when government is the only one who owns the land & supply our public housing?

    • Bobby

      If government wouldn’t be the one to own land and supply our housing, who going to supply? You? Private Sector? If so, prices would be even worst. What causes the demand of housing? Like i said cheap money, low interest rates was one of the main cause to the shift of demand curve.

      • Saviour

        My grandpa used to own large tracts of land but forced to sell to government at the cheap so that the government can build HDB flats and roads for the benefit of all Singaporeans. When Lim Kim San was the minister, he did precisely that. After Mah Bow Tan took over, everything becomes like private sector business. My father and many of the pioneers were able to single-handedly pay off their HDB mortgage and feed a family of six due to the good policies of yesteryears. Now, instead of helping, the younger generation is burdened with a lifetime of debt to buy these 99 year leasehold flats. If you don’t know what is the duty of the government, you better keep your mouth shut.

  8. Gaba

    Nice article. Fully agree. All the PAP cares about is the upper class and rich foreigners. Once upon a time, being middle class in Singapore meant owning a car. Now, cars are priced out of Singaporean’s hands, reserved for the rich. They’re just grabbing and grabbing, while claiming that the rich help job growth. Yah right… look at poor Singaporeans who barely earn $800 a month, such as the baggage handlers at Changi Airport. The government really tries to take every penny that it can from Singaporeans. Shameful greedy buggers.

  9. Layman

    @Bobby,as a layman like me can see what the pap are doing !!! Though you are educated but can’t tell right from wrong…..sigh….!!!

  10. Bobby Pom Pee Pee

    Bobby is confirm a ball carrier. One track mind can only see one tree and miss the entire forest.

  11. sanjay perera

    Hi Roy

    Many interesting things and good graphics. Many issues need to be highlighted
    but wanted to give a focus on what is at stake. You ask good questions then have a
    fundamental problem in what your entire article hinges upon, which is something many
    academic economists subscribe to:

    a. that there is something called an equilibrium that is optimal for an economy
    b. governments tend to interfere with the ‘free market’ which it shouldn’t do
    c. things left as they are will balance out well, no need to interfere in anything

    But your correctly point out that at the heart of the matter is power.

    Reorient yourself to another way of looking at this: money/capital is power.
    How it is utilised is an expression of power. Think about this carefully not just about
    governments, but the ultra-rich, megabanks, megacorporations and big financial players.
    Big wielders of Capital are the players who shape political/economic forces the world over.

    In other words, let go of the neoclassical economic narrative you are clinging onto that
    there are ‘free markets’ and that private banks and companies left alone will work for the
    benefit of mankind, people in a specific state and workers of the world — do you really believe this?

    Take some time to go through this essay and mull over the concept of Capital as power:
    http://philosophersforchange.org/2012/05/29/capital-as-power/

    Even the PAP cannot hijack the world economy and cause economic and socio-political
    havoc worldwide. Am not asking you to reduce your criticism of them, please carry on: am
    suggesting that you have to start understanding that there are greater forces at work.

    The truth about what is happening over Crimea and the Ukraine will come out one day — be
    assured all is not as it seems as portrayed by talking heads in the media.

    All the best and take it easy 🙂

  12. Bumbler

    Temasek’s takeover of Olam is a perfect example of this. According to Muddy Waters Olam is a failing company but Temasek bought it anyway at 1.5 times earnings. way above the industry average valuation of about 1.1. It looks like a bad deal for Singaporeans. To make matters worse, Olam’s share price rocketed 50% in the week before the takeover, which is extremely suspicious, and in any other country would almost certainly attract an insider trading investigation.

    • Kok

      The takeover make sense. Olam is not a bad company, just bad management and some bad investment The price Temasek paid for however is totally illogical . The share is at $1.4~$1.6 before Temasek pay $2.2 for it . (50% more)
      Of course , when Temasek said they are going to pay $2.2 for it, it logical that the share price will rocket to that price.

  13. sanjay perera

    hello again

    something your readers may find interesting as a follow-up to comments on
    Capital as power and the Ukraine situation: “Behind the U.S.-backed coup that
    ousted the democratically elected president of Ukraine are the economic interests
    of giant corporations – from Cargill to Chevron – which see the country as a potential
    “gold mine” of profits from agricultural and energy exploitation.”

    please do read:

    http://consortiumnews.com/2014/03/16/corporate-interests-behind-ukraine-putsch/

    Have a good weekend.

  14. Samuel Adams

    Hi Roy
    I just stumbled onto your website for the first time. I like the way you put together your thoughts & facts to support your thesis.

    I believe in free speech and real “meritocracy”.
    If what you say is rubbish, why should a government that is genuinely working hard to improve our lives be afraid?
    Are they so weak and fragile?

    Free speech on the internet is the ultimate in genuine meritocracy.
    Talk rubbish and eventually you will be ignored.

    As a Singaporean citizen, I can be arrested if I were to stand in front of the Istana to protest against the PAP government policies.
    But America will allow a Singaporean citizen to stand in front of the White House to protest against American government policies.

    http://www.goodreads.com/author/quotes/31693.Samuel_Adams

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  16. Cognose Solvere

    I attended classes by Samuelson and the like. They look at economy as a close loop among monetary fiscal policies supply and demand. They do not consider wealth creation, especially disciplined educated work force like us. So Joseph Stiglize said it is not Politicians nor Economist who created growth..

  17. Cognose Solvere

    The key is we have retarded to rely on oldest trade Gambling and Massage Parlour in heart land during 3PM hours of watch. We have not invited EDB to expand our capabilities. When did u last heard of EDB? When did u hear of mass AFFORDABLE housing n factories. 3PM basically go against all our founding principles. It demolished our critical success factors. It is not only commoners, the founders of Singapore are the most offended by such foolish disregards, disrespect.

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  20. lim

    Truth may not be simply what you can see what you cannot see. Importantly is to be responsible for Singaporean’s future in whatever you write. If economy is as simple as what you have illustrated, a nation would be easy to manage. Singapore is not a self-sustaining economy unlike most other nation where they have natural resources and plenty of land to grow their own food. Singapore has to trade in order to get our daily necessaries. In Singapore, we are talking about global economy. We are competing for rice bowl with big powerful nation like China and India.
    Once you start to hold yourself responsible for the people around you, you will start to realised what you should so to bring food for your people. Theory is useless if it is only in words and on paper. Do it, proof it.

    • Roy Ngerng

      Once you start holding yourself responsible, you would not pay yourself extravagant salaries while your own people are left to languish on low wages – the lowest wages among the high-income countries.

      Once you start holding yourself responsible, you will want to help your people grow, and grow with them – not grow yourself first while letting them languish.

      • mariasharapova

        Let’s be very clear – if the current crop of PAP politicians had failed to plan for Singapore properly, then they jolly well apologies, go back to the drawing board and rethink how to develop Singapore. It’s irresponsible and lazy to simply decide that Singaporeans are the problem when Singaporeans had no choice but to go along with a system that is dictated to us.

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  22. Hardeep Saini

    Dear Bobby.
    I left Singapore in ’89 and has been residing happily in Australia ever since.
    I thank Roy for his untiring research (without costs to any of us) in educating not in Singaporeans but people around the world.
    Thanks to his selfless efforts, we are all better informed.
    Bobby, you are a bloody idiot and no doubt a P.A.P. stooge.
    Keep posting your ideas on this website and keep proving to us all what an ignoramus you are.

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