Blowin' In The Wind

New Singapore wheeze to help banks boost liquidity

Singapore's central bank is getting less picky about how banks raise funds after recording a net loss of of 9.2 billion Singapore dollars (US$6.34 billion) in its last financial year that ended in March, badly hurt by the global downturn. The loss equalled about 3.5 per cent of the central bank's average assets, said Monetary Authority of Singapore (MAS) managing director Heng Swee Keat.

MAS made a profit of 7.44 billion Singapore dollars in the previous year and its total assets currently stand at 264.75 billion Singapore dollars, according to the Wall Street Journal. Singapore's 2008 gross domestic product was 257.41 billion Singapore dollars, according to the MAS annual report, available on its website.

MAS is not bullish about the economy at all even after a report showed the gross domestic product increased an annualized 20.4 percent last quarter from the previous three months, the first growth in a year. The sustainability of the recovery is "uncertain", said MAS chairman Goh Chok Tong in the bank's annual report today, reports Bloomberg.

More interesting is this Wall Street Journal report:

Singapore's central bank announced new steps that will give banks more options to increase their liquidity, while saying its monetary policy remains appropriate to support the economy.

The Monetary Authority of Singapore's new measures aim to help banks better manage their risks and liquidity profiles.

Effective immediately, the central bank will accept triple A-rated Singapore dollar- denominated debt securities issued by sovereigns, organizations that aren't tied to any one sovereign country such as the World Bank, and state-backed companies as collateral.

(MAS managing director Heng said these will be accepted in addition to Singapore government securities as collateral in the MAS standing facility. The facility was introduced in June 2006 to allow banks to improve day-to-day liquidity management by providing a channel to place excess funds with, or to borrow from, MAS directly, says the MAS annual report.)

The measures are aimed at giving financial institutions more a flexible pool of collateral and are also a pre-emptive measure to meet any liquidity problems faced by them in the future.

MAS managing director Heng Swee Keat said the central bank will also enter cross-border collateral backing agreements with more central banks to accept high-rated foreign currencies and government debt securities as collateral.

Last month, the MAS said it had signed a memorandum of understanding with the Dutch central bank under which banks from both countries can ask for liquidity assistance.

Up, up and away, Singapore

Up, up and away, I was tempted to sing when the BBC World Service reported today that the Singapore economy was bouncing back, soaring more than 20 percent between April and June – up for the first time in a year.

But the economic downturn isn't over yet, warned the government. It merely expects the recession to be milder than feared.

That made this 1967 Fifth Dimension hit particularly apt. Just listen to the song.

Would you like to ride in my beautiful balloon
Would you like to ride in my beautiful balloon
We could float among the stars together, you and I
For we can fly we can fly
Up, up and away.

But then balloons burst, don't they?

Worse, this song was turned into an advertising jingle by TWA, an airline that's gone the way of the dodo.

Still, it's beautiful, like my beautiful Singapore.

Now back to the news.

Lee Kuan Yew, McNamara and the Vietnam war

Singapore's Minister Mentor Lee Kuan Yew's memoir From Third World To First is worth reading not only because it's a history of modern Singapore told by its first prime minister – whose son now occupies that position – but also because it's quite revealing of him and his family.

Mr Lee recalls his public outburst against the US government when it failed to send a medical specialist he had requested to treat his wife in 1965 as well as episodes like this involving her:

One evening over dinner in Singapore in March 1992, former German Chancellor Helmut Schmidt asked me whether China could ever become democratic and observe human rights like the West. Choo, who sat next to Schmidt, laughed outright at the idea of 1.2 billion Chinese, 30 per cent of them illiterate, voting for a president.

But more about that later, for that's not why I picked up this highly absorbing book, published nine years ago.

I wanted Mr Lee's account of the Vietnam war when McNamara died on July 6. The former US defence secretary who served presidents Kennedy and Johnson and escalated the war did not get a hero's send-off.  "Robert McNamara, Architect of a Futile War, Dies at 93," said the headline in the New York Times obituary.

Fifty years of Lee Kuan Yew

It's telling that a Malaysian and not a Singapore newspaper noted Singapore's Minister Mentor Lee Kuan Yew completed 50 years in office, becoming the world's longest surviving national leader, on June 5. It was on that day 50 years ago he was sworn in as the first prime minister of a self-governing Singapore. He was succeeded in 1990 by his deputy, Goh Chok Tong, who in 2004 handed over power to Mr Lee's son – current Prime Minister Lee Hsien Loong.

Singapore has never known a day since the end of British rule when it has not been under the firm and capable leadership of Mr Lee and his People's Action Party. He has led the tiny city state of 4.8 million people to prosperity. From Third World To First is the title of the second volume of his memoirs.

The Star asks:

So why is the image-conscious government so reticent about Lee’s political longevity?

Party insiders say it is because he is bent on avoiding doing anything that will promote a personality cult…

Critics, however, give a different reason. One said the government would rather not mention the subject for fear it would renew calls for him to leave.

In a Yahoo online poll, 53% of Singaporeans said they wanted their founding father to quit politics either immediately or very soon – and that was five years ago…

It is the younger Singaporeans who want him to go. Unlike the previous generation, they are not beholden to him for his contributions to the republic.

Well, he may not be as popular as Nelson Mandela, with whom I contrasted him on Mandela's 90th birthday on July 18 last year. But as I wrote in that post before the economic recession:

His achievements are evident even in the lives and aspirations of ordinary Singaporeans, many of whom have studied abroad, holiday abroad. They may take it for granted and ask how is that different from the lifestyle of people in the Gulf, the South Koreans and the Japanese. Well, the Gulf has oil, the Japanese and the South Koreans make things. What does Singapore produce except a well-educated workforce? It has grown into one of the richest nations in Asia with no other resources at all. And that is proof of the remarkable vision and achievements of the old man.

Lee Kuan Yew on race, equality and foreign talent

I have been reading his memoirs, From Third World To First, and find it quite revealing. He was amazed, he writes, by the views of American professors on race and equality when he visited Harvard in 1968.

The man who might have been UN chief

Singapore's Senior Minister Goh Chok Tong could have been in the position of the man he is shaking hands with -- UN Secretary General Ban Ki Moon.

Maybe the thought did not occur to him when he gave a dinner in honour of the UN chief in Singapore last night. But Mr Goh was seen as a possible successor to the former UN secretary general Kofi Annan three years ago.

Singapore's Minister Mentor Lee Kuan Yew, however, said at the time that Mr Goh was not interested in the job. Singapore's Straits Times newspaper reported in April 2006 that Mr Lee was asked by a reporter: "Rumours have it that Senior Minister Goh Chok is considering taking up the post of the United Nations secretary general. Would you support him?"

Mr Lee replied: "I think you've got to ask him that. All I know is that he is not interested in the job. Answering to five masters and often unable to satisfy two or three at any one time... it is a tough job.

"From what I've understood from him, I think it's not a job that would add to his happy years after office."

The "five masters" Mr Lee sarcastically mentioned are the five permanent Security Council members – all of whom backed Mr Ban in his bid for the post.

South Korea spared no expense to have Mr Ban elected in October 2006. The Times reported days before the election:

The South Koreans have been waging an aggressive campaign on behalf of Ban Ki Moon, the Minister of Foreign Affairs and Trade, and the front-runner to replace Kofi Annan as UN chief at the end of the year. The inducements range from tens of millions of pounds of extra funding for African countries to lucrative trade agreements in Europe...

Mr Ban announced his bid in February and has since been criss-crossing the globe trying to win support. A month later South Korea announced that it would treble its aid budget to Africa to $100 million (£53 million) by 2008… Seoul’s generosity seems to have worked. Yesterday Elly Matango, the Tanzanian Ambassador to Tokyo and Seoul, said that his Government had decided to support Mr Ban.

This month President Roh and Mr Ban headed the most senior South Korean delegation since 1961 to visit Greece, another Security Council member. Overseen by hundreds of South Korean businessmen, the countries signed agreements on trade, tourism and maritime transport.

Now Mr Ban is in Myanmar seeking the release of the the democracy leader, Aung San Suu Kyi.

Interestingly, Mr Goh, also visited Myanmar recently.

I admire Mr Goh -- he would have made a good UN secretary general. With his ability to connect with people, he would have possibly been less low-key than Mr Ban. And he would have been equally diplomatic, a good mediator. There is also his proven skill in crisis management, seeing Singapore through the Asian financial crisis.

But, as Mr Lee said, he did not want the job. A pity. For there is no denying the importance of the United Nations. As the 2006 election showed, countries vie for the honour to fill the UN secretary general's post. The opportunity comes but rarely. There have been only eight UN secretary-generals so far.

Mr Ban is already in the middle of his five-year term. But the next UN chief is unlikely to be an Asian.

India more gay-friendly than Singapore?

My goodness, Indians are voting in favour of same-sex marriage in a Times of India online poll. Add to that the Delhi High Court ruling that same-sex sex between consenting adults is okay, and you are blown away by the change in attitudes. The law against homosexual sex violates fundamental rights, ruled the High Court.

But the Indian government is in no rush to change the law, say news reports.

Speaking as a non-gay, I can understand the government's reluctance to be dragged into another culture war with the religious hardliners already decrying the High Court's ruling.

Still, there is no turning back the tide. Unless the High Court ruling is overturned by the Supreme Court, the law as it stands has been found unconstitutional. So it will have to be changed.

It is certainly outdated. Introduced by the British nearly 150 years ago, it is seldom enforced. I have never heard of any Oscar Wilde-like case in India. If it's not used, what's the point of having it in the law books?

The Times of India reports:

With Delhi High Court legalising gay sex, India on Thursday become the 127th country in the world to decriminalise homosexuality while 80 nations still consider it as an offence.

The process of legal sanction to homosexual acts began in 1989 when Denmark became the first country to grant a status on a par with married couples to same sex partners which was soon followed by other European countries.

Netherlands became the first nation to give full civil marriage rights to gay couples in 2001. Belgium allowed gay marriages in 2003. Spain too legalised full marriages for gay couples in June 2005.

In July 2005, Canada legalised same-sex marriage. New Zealand in 2004 recognised civil union between gay couples as valid and same sex union was recognised in 2005 in South Africa.

I was surprised to find homosexual acts (between males) are still illegal in Singapore. They are legal in Thailand, Cambodia, Vietnam, Laos, Indonesia (except in Aceh), East Timor and the Philippines but not in Malaysia, Brunei, Singapore and Myanmar, according to Wikipedia.

GayLawNet says:

In October 2007, the Singapore government declared that private, consensual, adult homosexual sex would no longer be prosecuted but that its illegality would remain.

Singapore and foreign talent

After a month in America travelling coast to coast and two weeks in India, it's good to be back in Singapore. America is great and India an emerging giant, but there's something engaging about Singapore.

On the flight to India, I saw Indian undergraduates studying in Singapore who were going home for their summer holidays. In the Indian city of Calcutta (Kolkata), I heard of others fresh out of high school who have been accepted in Singapore universities. Those taking student loans may have to serve a bond and work in Singapore for a few years time to pay off the loans. Some may decide to stay on.

One out of five of Singapore's 4.8 million population is a foreigner – and that's excluding permanent residents. Ethnic diversity has become the norm for the world's major cities. At least 30 percent of the population are immigrants in cities like Vancouver, Auckland, Geneva, Los Angeles, New York, San Francisco, Perth and Sydney. Immigrants make up more than 40 percent of the population in Miami, Amsterdam and Toronto and a staggering 80 percent in Dubai.

The figures are from the book, The Flight Of The Creative Class – The New Global Competition For Talent, by Richard Florida. The book is four years old, published in 2005, but the current global downturn has not yet cut off the flow of people going overseas for work or study. I saw Bangladeshi casino workers in Atlantic City. At Delhi airport, I saw three planes set out for Dubai and Muscat in about half an hour.

Florida's book is relevant to Singapore. He says the same things that we have been hearing from our leaders in Singapore about the need for global talent.

He praises Singapore as one of the "first-tier cities" like New York, London, Tokyo, Paris, Chicago, Los Angeles, Frankfurt, Hong Kong and Milan. He writes:

Singapore's government has developed a targeted strategy to spur a more broadly creative economy by investing in core creative clusters, pumping funds into higher education… Its strategy also includes investing heavily in artistic and cultural activity… In the meantime, it has made significant strides towards becoming a ,more open society by allowing gays to work openly in civil service jobs and relaxing its restrictive censorship laws.

Technology, talent and tolerance are essential for growth, he adds.

Not that he thinks the new high-tech economy is an unmixed blessing. It increases the income gap between skilled and unskilled workers, he writes; in America, income gaps are highest in cities like San Jose, New York, Washington DC, Raleigh-Durham, Austin and San Francisco. That is bad for the economy as a whole, he adds, since it restricts upward mobility.

Florida writes:

The creative economy is the Schumpeterian growth engine of our age, and the socioeconomic dynamic it sets in motion is the modern-day equivalent of the divide Roosevelt faced – the growth of two divergent classes: the creative and the service sectors.

He adds:

We need a strategy that is the modern-day equivalent of the New Deal – one that stimulates the creative engine while at the same time extending its benefits to a broad base of people.

Florida, who has taught at George Mason University and Carnegie Mellon University and is now associated with the University of Toronto, also posts his ideas on his blog – Creative Class.

The Singapore Grip

The Singapore Grip by JG Farrell

Anyone who loves Singapore should read The Singapore Grip by JG Farrell. He won the Booker Prize in 1973 for The Siege of Krishnapur about the 1857 War of Indian Independence. The Singapore Grip is also a historical novel, describing Singapore at the time of the Japanese invasion during the Second World War. The book was first published in Britain in 1978 and Farrell died a year later.

The author vividly describes the fighting in what was then Malaya and the fall of Singapore, the burning and the looting, the humiliation of the British, who were outgeneralled and outfought by superior Japanese forces, and the manner in which civilians and soldiers alike tried to escape from the island as the Japanese approached Singapore. The narrative captures the whole spectrum of human behaviour from cowardice and selfishness to selfless courage. There are some stoic heroic figures and a very attractive Eurasian woman who gain your empathy.

But best of all are the descriptions of Singapore before it was devastated by the war – the colonial bungalows at Tanglin, the carnival atmosphere of the Great World, the taxi dancers and the prostitutes, a dying house where the Chinese went or were left by their relatives to die to prevent misfortune at home, the world of the rich colonial businessmen and the relationship between the races. Especially memorable is the description of a plane landing in Singapore. The author gives an aerial view of Singapore as the plane begins its descent – it's marvellous.

I have been reading the book again because I am already beginning to miss Singapore.

I will be away from Singapore for more than a month, returning towards the end of June. This will probably be the last post till then.

So I will end with this – a vivid description of the city I love as it was long ago. These are the opening lines of The Singapore Grip:

The city of Singapore was not built up gradually, the way most cities are, by a natural deposit of commerce on the banks of some river or at a traditional

Image via Wikipedia

confluence of trade routes. It was simply invented one morning early in the nineteenth century by a man looking at a map. "Here," he said to himself, "is where we must have a city, half-way between India and China. This will be the great halting-place on the trade route to the Far East. Mind you, the Dutch will dislike it and Penang won't be pleased, not to mention Malacca." This man's name was Sir Thomas Stamford Raffles: before the war his bronze statue used to stand in Empress Place in a stone alcove like a scallop shell ( he has been moved along now and, turned to stone, occupies a shady spot by the river). He was by no means the lantern-jawed individual you might have expected: indeed he was a rather vague-looking man in a frock coat.

Economics 101 by Singapore's finance minister

No, we don't have a Barack Obama in Singapore but we have some highly articulate, capable ministers who can hold their own in their fields against almost anyone in the world. Just watch Singapore Finance Minister Tharman Shanmugartnam speaking in Switzerland on the government's role in the light of the financial crisis. This clip appeared on the popular Singapore blog, The Online Citizen, which also has a writeup on what he said.

Why is Mas Selamat arrest a Straits Times scoop?

Why was terrorist Mas Selamat Kastari's arrest first reported in the Straits Times?

One would have expected the government to announce the news, especially after the scandal he caused by escaping from a Singapore prison more than a year ago.

Granted he was rearrested in Malaysia by Malaysian police. But they were tipped off by Singapore intelligence, Singapore's Deputy Prime Minister and Home Affairs Minister Wong Kan Seng was quick to say after the Straits Times reported the arrest today.

So Singapore can take credit too for his arrest. All the more reason why the government could have broken the news.

But instead the news surfaced in a newspaper that is not known for investigative stories, particularly regarding the government.

The terrorist was arrested on April 1, the Straits Times reported quoting "regional intelligence sources". 

The report was quick to give credit to Singapore intelligence. It said: