TONY TAN ELECTED PRESIDENT

This Presidential election is certainly a milestone in Singapore’s political history. It was the most closely fought political election and that underscores the increasing level of political awareness and participation of its citizens. This augurs well for the future of democracy in Singapore.

The two candidates with the highest votes came from member of the ruling party PAP and it clearly shows that the citizens still remain conservative and moderate and did not buy into the ideas that the president’s office should be another power centre, to be the people voice as well as to police the government. Such an outcome manifests the growing maturity of the multiracial and multicultural citizenry. It may be interpreted as better understanding of the role of the president and well as the need for political stability.

Clearly, the two former PAP members secured over 70% of the popular votes. The rest of the 30% goes to the non PAP camps or those that will reject any politicians related to PAP. I have expected the percentage would mirror that of the last general election of around 40%.

Whatever the result, the new president would have his work cut out. Wherever he like it or not, he still have to address public expectation and perception resulting from the changing political landscape exacerbate by the tough rhetoric from Kin Lian and Jee Say. The new president would have to be seen to address the domestic problem of rising cost of housing, immigration policy, transportation and host of other issues. Whether it is within his scope of presidential duty, public perception will hold the sway.

On top of this, the elected president actually garnered only one third of the popular vote. So the hard work to reunite the rest of the Singapore that did not vote for him must begin earnestly. Tony Tan has the presidential charisma and well as political background both in domestic and international affairs to carry the office of the presidency. He relationship with the PAP will remind warm and will unlikely becomes a pain and troublesome to the PM.

The 25% of the votes that goes to Jee Say and 5% to Kin Lian was certainly a big disappointment to those who wish to use this election to hit back at the government. Perhaps it is the government strategy of putting in more candidates that result in this low percentage. Many just didn’t want to vote for Tony but with Cheng Bock available, it gives voters a moderating choice. Had Cheng Bock not been a candidate, the outcome would have been a higher percentage for anyone other than Tony.
As for Jee Say, 25%cvotes was certainly below the mark. It’s as good as a rejection of his style and his ideas of the roles of elected president. His votes were just anti- PAP votes and as such, any Tans, whether Tan Ah Kow or Tan Chin Koo could have easily garnered the same percentages.

But what was more discerning was the percentage of Kin Lian. He was the forerunner and was the talk of the town years before this election. Only one conclusion can be made. Even the diehard anti-PAP voters exercised wisdom to choose the more suitable of the two candidates. This message to future candidates is clear; prepare to lose the deposit if you are not up to the mark.

Well, we ordinary folk have short memory. Now that the GE and the EP elections are over, it’s time for the government to take off the gloves. The new elected president will goes into oblivion. They will be seen and heard only as required. That’s and easy job for $4.2 million.

STOCK CARNAGE AROUND THE WORLD, MORE PAIN AHEAD

The last few days, trillions of dollars were wiped off the stock market around the world. After Friday S&P downgraded US crediting rating one notch, stock market fall exacerbated. By Tuesday morning, almost all of the stock market in developed economy has sunk into bear territory. Fear, panic and uncertainty undermined financial markets and send gold into dizzy heights. It triggered monetary authorities and central banks around the world into emergency sessions to take measure to limit the financial carnage.

Many actually felt this market crash was belated. It should have crash long ago if not being propped up by mere optimism and constant short term measures from central banks. Simply put in, no one leave the party when the music is still playing.

Symptoms of financial woes have been brewing for months, beginning with Euro zone debt crisis. The spiralling US budget deficit is well known and new loan is needed to prevent this government from defaulting since the beginning of the year. In China, the inflation was reaching undesirable level. The same problem beset most of the developing countries. Basic food necessities have almost double over the past years. And commodities prices have spiral up of control. The wealth disparity between the rich and poor has reach obscene proportion. Optimism that acceptable resolution can be work out to avoid government default kept the market in hope and in check.

The S&P downgrade was the last straw that broke the camel back. It is therefore not surprise that stock market took a big tumble. The hard truth is that the financial woes are worst than people want to believe. And politicians want to inject the sense of confidence that the economic situation is manageable. But when the truth sank in, waves of panic selling went unabated.

When investors finally acknowledged that US debt level is undesirable and unsustainable under the current economic condition, they panicked and scampered for safety. The only way to prevent a default was to borrow more or continues to print money (quantitative easing}. By doing that, it is now understood that these measure only postpones the problem. The European problem is fundamentally similar, spending more than the revenue it can collect. Without new loans, Greece, Iceland and even Portugal and Spain are heading for sovereign default.

The only way out of this problem is a complete overhaul of the government spending. This means most of social welfare and benefits have to be revamped and scaled down. Government bureaucracies need to be downsized or even shut down. Defence is one area the US and the European need to cut drastically and stop thinking of maintaining overwhelming military power in this world.

This painful belt tightening required partisan politics and very strong political will. Such measure means drastic reduction of welfare and benefits as well as loss of jobs. Which politicians in the democratic world risk losing his election chances to do the right things? It’s never easy to take away benefits.

The American continues to blame the Asian countries of trade imbalance, currency undervaluation and trade protectionism for the current woes. This may be true to some degree, but the politicians are fully aware of overspending is the main culprit. In the globalised world, the American economy has become uncompetitive due to its high cost. In the past, it could sell to the rest of the world anything, but not now. What the US can produce, the Asian can produced at a fraction of the cost. But globalisation and free trade also enabled the US consumers to enjoy the benefits of cheaper products.

In the years to come, as Asian become more affluent, more middle class will be created like the west. Salary and purchasing power will increase in tandem. Currently, the financial disparity between the developed and the developing world is just too far apart. A bus driver may perform the same functions, but why should an Indian bus driver be paid a fraction of the pay compared to a British bus driver.

Educational level with labour mobility will provide workers in this globalised world a level playing field. Free trades will speed up this process. We can now see this happen at the top echelon of management. Many of the brightest are paid according to the skill rather than the colour of the skin. Many westerners work in developing world like locals. Gone are the days, every white man is an expatriate in a foreign land. So the catching up will accelerates. But it also means the workers of the west will suffer stagnation until the rest of the world catch up. It means more misery ahead for the citizen of developed world.

And if the pain is too hard to bear, the US should take a lesson from then Great Britain, where at one time it boasted the sun never set. But after WW2 and in the 50’s it admitted it could no longer maintain the British Empire. It allows many old colonies to go independent. It culminated in the withdrawal of its military east of Suez by 1971.

In Singapore, the Royal Navy in Sembawang Naval Base and RAF in Tengah became history. The US should seriously consider this option.

LONDON'S BURNING. WHAT HAPPEN TO VALUES OF THE WEST

The scene horrendous and unimaginable, social riots in London, the most civilised city in the world. Arson, looting, destruction and violence are completely out of control in this highly developed city that is synonymous with its glorious history. This should never happen in this civilised society. You would think that this kind of riots are reserved for Egypt, Libya, Syria, China or some part of the Third World.

The city of London is the icon of developed world whose social values, moral standard and civic consciousness are for the rest of the world to emulate. It is the centre where, most of the human rights NGO are based. They are supposed to be moral guardian to safeguard and promote human rights and democracy to the rest of the world. The superior moral values of west where there is no place for violence and abuse. These issues are expected to be settled in a civilised way, that is in the parliament or in the courts but never on the streets.

The weakness of the western values has become more evident after this riot. The police and security forces, in the face of the scale and suddenness of this violence have become totally inept and unprepared. It dared not use force to quell protesters. The police are trapped in the own code of not using excessive force and the authority fear of being castigated for use of excessive force has completely render the police impotent to keep the crisis from spinning out of control. Can you imagine that the police ruled out the use of water canons for fear it is too robust.

Well, the police cannot be blamed. If only one protestor dies, hell will break loose and politicians will be quick to blame the police for excessive force. Human rights group will voice their displeasure and disapproval. Newspaper and televisions will continuously broadcast clips of police brutality. Many will promptly jump on the moral wagon to enhance their popularity. But who really suffer? It’s the ordinary folks what will bear the ultimate economic brunt.

Once again, the value of human rights, basic rights or whatever rights has to be relooked. Politicians and NGOs should quickly pick up political courage to stop playing to the gallery. It’s about time; they should literally stand in between the rioters and the policemen and share their experience. Tell us how not to use excessive force during the onslaught of the riotous crowd. Standing on high moral ground to talk of human rights and abuse is a cowardly act.

Stop lecturing the rest of the world about human values and stop insisting western values are also universal values. Each countries should has its own way to manage its own society, managed peace, take pre-emptive measures when necessary.

The riots in London clearly show that western values are not so superior in maintaining law and order, keeping the society in peace, safety and harmony. Shouldn’t the people of London seek their MPs to address the unhappiness and concerns rather than taking it to the streets? If this cannot be achieved after a few hundred years of democracy, then what conclusion can we draw from this riot? The western style of democracy is supposed to create a more civilised society, is it not?

Shouldn’t the police make a decision to use whatever force is required to overcome mob rule? Or are they just scared to face the enquiry after the riots? Whatever it is, the western society has put the civilian, whether a criminals, mobsters or looters on higher priority to that of security forces.

While I posted this blog, the riots have now spread to Liverpool, Birmingham, Nottingham and Bristol and look like its heading for Day 4. Good luck to all the Angmohs.

Next, the carnage on the world stock market.

THE ELECTED PRESIDENT

There’s lot of buzz, even disquiet among the common folks for the coming presidential election. I remember in the past, presidential elections was a non-vent, the attitude on the ground was apathetic. Who care about the new elected president, after all the expectation of the citizen is that the government will shoo in its own favourite for a walkover.

This time round, the interest on the ground seems very much aroused. Perhaps the proximity of this election was so close to the last general election is the cause. The PAP had a reduced percentage of popular vote as well as losing one GRC for the first time. During the election, the level of political awareness was raised especially in the uncontrolled electronic medias. A wind of political change is blowing over Singapore. The political awareness is definitely heightened especially the younger voters who in the past have remained silent and apathetic. This changing political landscape has brought out a number of presidential hopefuls to capitalise on this rare opportunity to mine this shifting trend.

Employing the time tested campaign strategy to win popular votes, many of the hopeful seems to campaign on the need to be the voice of the people, the conscience of the people, the guardian of the citizen. Each potential show no lack of effort to prove their independence, integrity and moral conscience. What these hopeful said is correct but the public somehow seems to believe that the president is there to oversee and check the government. This public perception is certainly misguided.

The citizen of Singapore must not be misled by some of this hopeful. The public must clearly understand the constitutional role of the president and the power that come with his office. In simple term, the president is a ceremonial head of state like the queen of England excepted that he is elected by popular vote. He is also different from the President of USA, Indonesia or Philippines where they have executive power. Only in extreme circumstances that he can step in. It’s like the entire football team which has been red-carded except the goalkeeper. In that position, the goalkeeper will play whatever positions to guard the goal mouth. If need to, he should even mount a one man striker.

What Singapore do not need is another power centre. This will create unnecessary controversies and distract the elected government to function efficiently. What we want is more quality opposition in parliament to raise the level of governance. The check and balance should be done in the parliament. The voices and ears of the people should be the elected MPs.

My only concern in this presidential election is the president’s annual remuneration of over $4 million. This should be reviewed to no more than $200,000. The saving should go to the people who really need it. For someone who’s all the daily needs have been provided by the state and for public service to the nation, taking $4 million is surely obscene.

US GOLD STANDARD AAA DOWNGRADED

Was it a surprise, if you ask me, the answer is no. It’s only a matter of when.

Finally the credit agencies have the courage to downgrade the credit rating of the world’s biggest economy. S & P can no longer ignore the ballooning US debt crisis and it cannot be blind to the financial significance and the impact to the rest of the world. It cannot repeat the same mistake again. They were caught sleeping for not downgrading the housing loans prior to the sub-prime crisis in 1997. The subprime crisis causes the collapse of Lehman Brother and shattered so many Wall Street financial institutions such as AIG as well as many big banks around the world.

The significance of this downgrading signals the beginning of the decline of the American economy. It is an official acknowledge by an American rating agency that all is not well with the US economy. Had it be any other countries, the downgrade would have been as fast as it downgraded Greece and Iceland.

How the downgrade will impact the equity market may not be known in the short time. As the market open tomorrow in Tokyo and Seoul, then Singapore, Hongkong and Shanghai, the market will speak. It could be a kneejerk reaction for sharp sell down but I suspect the market has already factor in the downgrade. But the long term outlook cannot be good and this may signal the beginning of the bear market.

The currency market is where the greatest impact will be. Bond prices and yield will be adversely affected. Borrowing cost in American will have to trend up eventually. The commodities market will track and mirror the global economy. Slowdown is definite; it is only a matter of how slow.

The US dollars have been the reserve currency of the world since WW2. No other currency as the size, depth and clout as alternative. It has been the currency of trade by default. At this point in time, there is just no replacement. It is for this reason that the US currency is able to withstand the pressure of falling rate resulting from it spirally debt to almost unsustainable level.

The impact of the falling in value is wide ranging. The major US creditor like China, Japan and many developing countries will be major loser. As the value of the currency fall, American will become poorer and can consume less. When it buys less, the rest of the world will be affected. And so this will be a vicious cycle and world economy will suffer.

It is not really a pleasant scenario we would like to experience.