Saturday, November 12, 2016

Why Singapore PM Lee is so concerned about TPP?

I happened to read about an article on TPP posted on TOC (The Online Citizen) website
but I found it has misrepresented some of the things on TPP. I have written the following in response on my Facebook:


There are some erroneous or inaccuracies written in this TOC article. Apparently, it is not written by someone who is well verse in Economics.

First of all, TPP is not just about Trade. It is about Free Market Globalization. i.e. Besides the free trade of goods and services, it also includes free mobility of capital as well as labour.

The reason of "Protectionism" vs such Free Market Globalization is not only because it protects companies and their products, but it also protects its wages for the labour as well as certain sovereignty issues in prevention of critical assets of a country being acquired by foreign countries.

While the article is right to say that most of the time, it is the more well off countries which will resist such agreements, but there are also costs to poorer countries. For example, there is "Economic Colonization"; i.e. all critical resources would be exploited or plundered by the richer countries.

As for wages, it is not a guarantee that workers will benefit from TPP just because companies can sell to a larger market or consumer base. In fact, more likely so, workers will be exploited by wage suppression as they could be replaced by a larger and cheaper source of workers among the countries. i.e. supply of workers suddenly increased many thousand folds. This is actually what is happening right now in Singapore.

Moreover, bigger companies benefit the most as compared to the local companies. All these will result in great wealth and income disparity. i.e. Big companies shareholders will be richer while workers suffered lower wages.

There is also an issue of structural immobility. In Keynesian Economics concept, Free market is good as the invisible hands will solve everything. But the truth is, this doesn't take into considerations of many things. Product life cycle is becoming shorter and thus, we see a lot of structural displacement of skilled workers who will suddenly find themselves irrelevant. Talking about re-training and restructuring is easy but execution will be difficult.

The only reason why Singapore needs TPP badly is due to the fact that it is a small open economy without much agricultural sector. Not even much organic industrial sector to start with. We all depend on MNCs and GLCs. MNCs needs mobility of funds. GLCs and our sovereign funds like Temasek and GIC, needed ease of mobility of capital to effect greater returns with less cost in capital investment. These are the main REAL benefits for Singapore.

Small and Medium companies may benefit from bigger market but the truth is, as stated in the article itself, we already have quite a lot of FTAs with most of the individual countries listed in TPP!

But the cost to us, Singaporeans, in return for GIC, Temasek and all those big GLCs to have more investment opportunities, is continued suppression of our wages. Income and wealth disparity will continue to be widen and only those ruling elites and their cronies in these GLCs will earn higher exorbitant bonuses and salaries.

On top of that, as the article says, we will face HIGHER cost of medicines with the elimination of generic drugs.

BTW, when Japan can sell more cars to USA, it doesn't need to use our port facilities. That's utterly wrong to say that. They could well ship direct to US across the pacific. (For anyone who want to doubt me on this point, please refer to this website on a freight forwarding shipping company specialized in car-cargo transhipment)

In short, the reason why our PM Lee is so concerned about TPP is not about Singaporeans'  well being; in fact, TPP will make most Singaporeans worse off, with bigger wage suppression from a larger pool of foreign labour from the Third and First World countries. Singaporeans will face higher healthcare cost and we will face a deepening of income and wealth disparity in Singapore.

The only reason why PAP wanted TPP so badly is because TPP could enhance its GLCs, Temasek Holdings and GIC investment opportunities overseas. We have seen this in CECA which we have signed with India in which we promised easy access and migration for Indians to come to Singapore and work, in return for investment opportunities in Indian's financial industry and such.

This will only help to enhance the ever rising salaries and bonuses of the top management of these entities, the elite cronies of PAP.

These are the crux of the matter, not so much about "free trade" alone, lest about jobs creation for Singaporeans.

Goh Meng Seng

4 comments:

Anonymous said...

"Income and wealth disparity will continue to be widen and only those ruling elites and their cronies in these GLCs will earn higher exorbitant bonuses and salaries."
Goh Meng Seng

Correct.

But still better than if everyone is poor, isn't it?

Income and wealth disparity, evil it may be, but it is still the lesser of 2 evils. That's why China is no longer communist like in the past, where everyone is equal and poor. And now China is very strong some more, due to income and wealth disparity.

Although myself not being formally trained in economics, but I think it is good economics and perhaps even socially to have income and wealth disparity in societies, more so in tiny Singapore, in order for the country to be wealthy and strong.

Anonymous said...

Income and wealth disparity can be a serious political issue leading to govts being voted out or even overthrown, but this is definitely not the case for Singapore.

That's why if need be, PM Lee can afford to have even greater income and wealth disparity for a wealthier and stronger Singapore, and without any worry at all that PAP will be voted out in the next election.

This is so thanks to the kind of opposition Singapore has, with their leaders like Goh Meng Seng, among others.

Anonymous said...

"This will only help to enhance the ever rising salaries..."

Salah! "Enchance" means to improve, make better.
The word you want is "aggravate" or "exacerbate", both of which mean to make worse.

"This will only help to aggravate / exacerbate the ever rising salaries...."

Anonymous said...

In his ministerial walkabout to Geylang Serai market, Dr Ibrahim asked an old Malay lady how long she's been selling Mee Rebus?

She responded in a thick Javanese accent, "About 40 yrs!".

Continued Dr Ibrahim, "Where are your children and why are they not helping you?" The old lady said "I have 3 children, they're in NUS, NTU and SP and all three are very busy!"

Dr Ibrahim, shaking his head in disbelief, proudly told his entourage that even by selling Mee Rebus this old lady has raised her children to be successful.

Dr Ibrahim then enquired what faculty they were pursuing in NUS, NTU and SP.

The old lady shot back, "Just like me lah, selling Mee Rebus in their respective institutions!"