I read Rolf Suey’s recent articles ” Is the Singapore Economy In Danger for Long Term Decline? with a lot of interest. He wrote quite frankly and with no bs. And I think he is absolutely right.
If things don’t change, we are in for a long-term decline. Recovery won’t be quick or assured.
And I want to go a bit further and point out who are those I think are really digging the hole.
It’s the Towkays
The world is changing. We are moving towards a digital future. One where money can be transferred seamlessly across borders, and where one company can dominate market share from half the world away.
I’ll illustrate with an example that many people would find familiar.
Before Netflix was invented and came to Singapore, most Singaporeans got their TV entertainment from providers such as Starhub, Singtel, and Mediacorp. This created a steady stream of income flowing through Singaporean hands, creating good jobs and demand for land here.
But when happened when Netflix came along? Droves of Singaporeans left. They were fed up with the predatory contracts, high costs, and poor services. It was a happy day when I finally ended my TV contract.
It isn’t limited to TV. Advertising by SMRT and local news outlets were decimated by Facebook and Google. The revenue for cloud computing for working at home goes mainly to companies such as Microsoft, Nvidia, and Amazon.
In these cases, near 100% of the profit went straight out of Singapore. There are hardly any middleman to add value. These products were far superior to anything created by locals.
Attracting these MNCs to come and set up here is probably our best way to survive. These are good places for Singaporeans and they provide great opportunities and wages. We need more of them.
Much more than the SME bosses who expect their employees to suffer and moan the lack of “hunger” in Singaporeans.
What utter rubbish. What most people don’t understand is that SME bosses like that are the true robber barons. They are the ones quietly profiting by exploiting cheap labour, while the average Singaporean instead blames the government and the foreigner. These towkays are the ones that get a massive amount of tax dollars to build mediocre businesses that can’t compete outside of monopolies. These are the landlords who force their tenants to sign one-sided contracts, and needed to be forced to pass on rental rebates. These guys have been laughing all the way to the bank for years.
This is called rent-seeking behaviour, deriving wealth from gaming and manipulation. Everyone wants to be landlords, and simply collect a steady stream of income at little to no risk. But simply squatting on land doesn’t add value. It is in fact kills innovation and discourages entrepreneurs from creating value.
A Turning Point?
Recessions aren’t necessarily a bad thing. It clears away inefficient businesses and models, allowing for new growth. That’s why retrenchments have to happen, so that the labour is more effectively deployed somewhere else. For years the government has been prodding Singaporean businesses to digitise and cut back on their use of their foreign labour. But it is the businesses themselves which are refusing and making excuses.
I hope that this pandemic will be the turning point when it becomes impossible for the towkays to block and hoard all the gains for themselves.
That they are squeezed and are forced to hire and train Singaporeans, and not whine and threaten to close down. If they do, good. Someone else will spring up and do a better job.
Rentals should fall to a reasonable rate, so more can be encouraged to do business for themselves. Contacts can be on a more level footing between tenants and landlords.
But I don’t think it will happen. There are too many established interests that want things to remain how they are. We have known these problems for years, and not much has changed.
There is little I can do. I can only control where I put my money. Only the bare minimum is invested here. I much rather invest in people like Jeff Bezos, Lisa Su, Jensen Huang, and Elon Musk. They take risks, add real value, and sell all over the world.
Many people quietly agree, judging by the lacklustre performance of the Singapore market.
And I think most have to wait a very long time for things to get better here.