Sunday, November 30, 2008
Friday, November 21, 2008
Are foreign workers any good?
No, I do not really want to debate on the merits and/or pits and falls of having foreign workers in the country. No doubt, they have their merits, although it's hard to educate the man on the street to understand the economics behind this. But I do think that the the social cost, which are mostly intangible especially in the initial stage, have to be considered.
In terms of tangibility, the area of the foreign workers' dorms along Old Tampines road is always filled with rubbish especially on certain hill slopes, and pictures of foreign workers relaxing and partying on the slope after work form in my mind. Whatever happen to green and clean Singapore? Ok, probably this is a sweeping statement and the new generation of Singaporeans aren't too particular about keeping the environment clean. But if you are to ply along the dorms of foreign workers, more likely than not you will see the same scenario. The psychological impact on locals is also evident, and I believe I do not have to talk about it too much.
The government allocates 20% of local university places for foreign students and if you belong to the engineering school or faculty of sciences, that would be most apparent. While I do not object to welcoming foreign talents with open arms since having them around increase competiton and raise the overall quality of the university, 20% is a bit too much in my own honest opinion. The ministers gave the reason of locals not wanting to study these important majors with most opting for business and arts. Well, one can't blame the young 18 year olds from having such preference given the much glamor and $$$ associated especially with the heated marketing campaign and competition among SMU, NUS Business School/ FASS and NTU Business School/ School of Humanities and Social Sciences. On the other hand, no marketing effort to spruce up the dull and boring image of engineering and science was done.
Technology is associated with being hip, world-changing, full of impact, and highly lucrative in universities such as MIT, Stanford (ok, having Silicon Valley next door is a marketing ploy in itself) and also universities in Japan and Taiwan where technology is the main catalyst of economic growth. Electrical Engineering, one of the most 'common' engine majors where NUS/NTU students do not view it with much pride, is actually one of the most competitive course to get in alongside traditional competitive courses like medicine and law in the National Taiwan University. But Singapore isn't doing so bad, with 80% of the global market share in microchip processors and a vibrant life science research center, the Biopolis.
So why aren't the students here viewing technology as an attractive option? Some, or rather, most said engineering/science subjects are too boring. So are they? Or is it the way it was being taught? Business/arts subjects are relatively easier to be perceived to be more interesting since it is mostly qualitative and can be related to real life easily, while the poor engine student struggles to make sense how knowing digital signal processing or linear predictive coding or symbol synchronization can make a difference to his life. This is one of the Singapore Economy-Education Paradox (ok, there's no such term, i coined it myself), where the economy's star industry is not reflected in the education system despite the close connection between the labor force and education. Another example would be while Singapore has one of the best ports in the world, no one seems to be very interested in logistics and port management. In fact, there is no such specialized bachelor degree offered in the 3 local universities. The closest one can find is the Bachelor of Engineering (Industrial & Systems Engineering) offered by NUS and till recently, the Bachelor of Science in Maritime Studies (with Business Major option) offered by NTU, as well as the 3 local business school bachelor degree with concentration in Operations Management.
And then the controversial issue of too many MOE scholarships being given out to foreign students especially those from India and China. With their home countries coming up as super-powers, which student in their right mind, in all logic and patriotism, would choose to settle in tiny limited opportunities Singapore? The resources spent on each undergraduate MOE scholar are immense, estimated at a conservative S$125,000! And that is no small figure. For those unfortunate Singaporeans who didn't get to be admitted into the local universities end up having to spend a fortune on private institutions such as SIM or MDIS, and also most commonly opt to go over to Australia and UK.
For the uninformed, one can get a very good undergraduate/ masters education in countries such as Germany, France, Sweden and Switzerland at a bargain. Look beyond the normal destinations. Sure, there may be some language barriers but there are also some english programmes. Education in Germany is in fact free! And there's Lund University and Stockholm School of Economics, both free as well (although there are plans to charge international students now) Or take the University of St. Gallen, which is one of the more renowned university in Switzerland. Total annual tuition fees is only 1170 Swiss Francs or in today's exchange rate, around S$1480. Take in the estimated living expenses of 2000 Swiss Francs per month, the annual education in Switzerland would cost around S$ 31,000. Almost equivalent to (just) the annual tuition fees at aussie universities. And I believe Europe would be a nicer and enriching place to receive your education than Australia.
In terms of tangibility, the area of the foreign workers' dorms along Old Tampines road is always filled with rubbish especially on certain hill slopes, and pictures of foreign workers relaxing and partying on the slope after work form in my mind. Whatever happen to green and clean Singapore? Ok, probably this is a sweeping statement and the new generation of Singaporeans aren't too particular about keeping the environment clean. But if you are to ply along the dorms of foreign workers, more likely than not you will see the same scenario. The psychological impact on locals is also evident, and I believe I do not have to talk about it too much.
The government allocates 20% of local university places for foreign students and if you belong to the engineering school or faculty of sciences, that would be most apparent. While I do not object to welcoming foreign talents with open arms since having them around increase competiton and raise the overall quality of the university, 20% is a bit too much in my own honest opinion. The ministers gave the reason of locals not wanting to study these important majors with most opting for business and arts. Well, one can't blame the young 18 year olds from having such preference given the much glamor and $$$ associated especially with the heated marketing campaign and competition among SMU, NUS Business School/ FASS and NTU Business School/ School of Humanities and Social Sciences. On the other hand, no marketing effort to spruce up the dull and boring image of engineering and science was done.
Technology is associated with being hip, world-changing, full of impact, and highly lucrative in universities such as MIT, Stanford (ok, having Silicon Valley next door is a marketing ploy in itself) and also universities in Japan and Taiwan where technology is the main catalyst of economic growth. Electrical Engineering, one of the most 'common' engine majors where NUS/NTU students do not view it with much pride, is actually one of the most competitive course to get in alongside traditional competitive courses like medicine and law in the National Taiwan University. But Singapore isn't doing so bad, with 80% of the global market share in microchip processors and a vibrant life science research center, the Biopolis.
So why aren't the students here viewing technology as an attractive option? Some, or rather, most said engineering/science subjects are too boring. So are they? Or is it the way it was being taught? Business/arts subjects are relatively easier to be perceived to be more interesting since it is mostly qualitative and can be related to real life easily, while the poor engine student struggles to make sense how knowing digital signal processing or linear predictive coding or symbol synchronization can make a difference to his life. This is one of the Singapore Economy-Education Paradox (ok, there's no such term, i coined it myself), where the economy's star industry is not reflected in the education system despite the close connection between the labor force and education. Another example would be while Singapore has one of the best ports in the world, no one seems to be very interested in logistics and port management. In fact, there is no such specialized bachelor degree offered in the 3 local universities. The closest one can find is the Bachelor of Engineering (Industrial & Systems Engineering) offered by NUS and till recently, the Bachelor of Science in Maritime Studies (with Business Major option) offered by NTU, as well as the 3 local business school bachelor degree with concentration in Operations Management.
And then the controversial issue of too many MOE scholarships being given out to foreign students especially those from India and China. With their home countries coming up as super-powers, which student in their right mind, in all logic and patriotism, would choose to settle in tiny limited opportunities Singapore? The resources spent on each undergraduate MOE scholar are immense, estimated at a conservative S$125,000! And that is no small figure. For those unfortunate Singaporeans who didn't get to be admitted into the local universities end up having to spend a fortune on private institutions such as SIM or MDIS, and also most commonly opt to go over to Australia and UK.
For the uninformed, one can get a very good undergraduate/ masters education in countries such as Germany, France, Sweden and Switzerland at a bargain. Look beyond the normal destinations. Sure, there may be some language barriers but there are also some english programmes. Education in Germany is in fact free! And there's Lund University and Stockholm School of Economics, both free as well (although there are plans to charge international students now) Or take the University of St. Gallen, which is one of the more renowned university in Switzerland. Total annual tuition fees is only 1170 Swiss Francs or in today's exchange rate, around S$1480. Take in the estimated living expenses of 2000 Swiss Francs per month, the annual education in Switzerland would cost around S$ 31,000. Almost equivalent to (just) the annual tuition fees at aussie universities. And I believe Europe would be a nicer and enriching place to receive your education than Australia.
Sunday, November 16, 2008
Cost of Living
This is kinda random. I was reading through Bloomberg when this heading attracted me.
Cost of Living in U.S. Probably Dropped by the Most in Almost Sixty Years - "Prices May Have Tumbled as Economy Sank: U.S. Economy Preview "
Well, with the USD strengthening so much against the SGD, I was pretty devastated. I can still vividly remember the rate is 1.43 in May. And now it's 1.52 and going on strong.....And apparently the rental fees I am inquiring will be increased 2-5%....
Cost of Living in U.S. Probably Dropped by the Most in Almost Sixty Years - "Prices May Have Tumbled as Economy Sank: U.S. Economy Preview "
Well, with the USD strengthening so much against the SGD, I was pretty devastated. I can still vividly remember the rate is 1.43 in May. And now it's 1.52 and going on strong.....And apparently the rental fees I am inquiring will be increased 2-5%....
Saturday, November 15, 2008
Classical or Keynesian prevails?
I would love to post many of my thoughts especially after the turbulent October month but work load is not granting me the luxury of time. Facing this trade-off, to maximize my utility, this post would be 'pretty' summarized.
"Poor economic data exacerbates financial market" - But OF COURSE!! People reacted to bad news and now many companies are firing. The top catalyst has to be Lehman's bankruptcy. With uncertainty in the market, of course people will consume less and bad news such as increased unemployment, slowing sales in X company and declining profits in Y company would follow. What else do you expect? So it sets off a string of 'bad news on bad news' and what we see today is a lot of over-reaction and subsequent moral hazards playing out. I won't be surprised if after Hong Kong, more countries such as Japan (wait, has it ever really recover from the asset bubble a decade ago? lolz), Taiwan, Malaysia, Indonesia etc goes into technical recession.
10,000 miles away from U.S., DBS fired 900 staff and still have the cheek to say, "We are fundamentally strong, but is now prudent for us to realign ourselves to the challenging economic outlook." I would believe it's to raise enough capital for the payout of the Lehman minibonds which had angered the public. What's an easier way to ensure you have enough money for the payout in the very short term? Just fire off some, or rather, lotsa people in your company especially middle/ top management since they are the most expensive to retain!
While I may sympathize with some (some, mind you) that seemed to have been 'conned' into buying those risky products, somehow I would very much believe there are those who understands such risk, took the plunge and are now trying their luck at getting back some monies. See, moral hazard increased.
Switching back to the States, GM starts to approach the Fed for help citing that the cost of the company's collapse will cost the country more than to save it. GM sells cars. So if they can't sell their cars, it's obviously their own problem and why should the citizens pick up the tab for that? This happens in the mist of unprecedented government bailouts and companies seem to be taking advantage of this 'goodwill'. Moral Hazard is at play again. If GM can't sell their cars, so be it. Let it collapse. The law of the urban jungle cites only the fittest survive. No point spending to maintain a 'unrealized loss' akin to throwing money into a black hole.
How long more can the Fed continue to rescue the frail economy? As mass amount of assets lost value, money supply could shrink--recipe for a deflationary economy. But U.S. is lucky as it is the only country in the world where it can print more money and countries around the world are willing to buy them. But then, there is still a limit to how long more the world can and are willing to sustain the world's largest economy.
Then we have Alan Greenspan admitting the laissez-faire form of economics theory is flawed. Well, that is itself a centuries old debating topic. While the classical form of economics seemed to have failed in the current context, some may yet remember how the Keynesian way was rebutted as out of fashion during the economic boom of U.S. just 8-10 years ago (or even longer) where classical theory showed economic superiority.
I would not take sides although I am more of a Keynesian. Simply because if humans need laws and constitutions established to ensure law and order in the society, it just makes sense to have some regulation in place in the economy.
So what are you? A classical? Or a Keynesian?
P.S. Somehow I am glad yet grim that I would soon have the chance to assess the greatest financial fallout in the States since the Great Depression.
"Poor economic data exacerbates financial market" - But OF COURSE!! People reacted to bad news and now many companies are firing. The top catalyst has to be Lehman's bankruptcy. With uncertainty in the market, of course people will consume less and bad news such as increased unemployment, slowing sales in X company and declining profits in Y company would follow. What else do you expect? So it sets off a string of 'bad news on bad news' and what we see today is a lot of over-reaction and subsequent moral hazards playing out. I won't be surprised if after Hong Kong, more countries such as Japan (wait, has it ever really recover from the asset bubble a decade ago? lolz), Taiwan, Malaysia, Indonesia etc goes into technical recession.
10,000 miles away from U.S., DBS fired 900 staff and still have the cheek to say, "We are fundamentally strong, but is now prudent for us to realign ourselves to the challenging economic outlook." I would believe it's to raise enough capital for the payout of the Lehman minibonds which had angered the public. What's an easier way to ensure you have enough money for the payout in the very short term? Just fire off some, or rather, lotsa people in your company especially middle/ top management since they are the most expensive to retain!
While I may sympathize with some (some, mind you) that seemed to have been 'conned' into buying those risky products, somehow I would very much believe there are those who understands such risk, took the plunge and are now trying their luck at getting back some monies. See, moral hazard increased.
Switching back to the States, GM starts to approach the Fed for help citing that the cost of the company's collapse will cost the country more than to save it. GM sells cars. So if they can't sell their cars, it's obviously their own problem and why should the citizens pick up the tab for that? This happens in the mist of unprecedented government bailouts and companies seem to be taking advantage of this 'goodwill'. Moral Hazard is at play again. If GM can't sell their cars, so be it. Let it collapse. The law of the urban jungle cites only the fittest survive. No point spending to maintain a 'unrealized loss' akin to throwing money into a black hole.
How long more can the Fed continue to rescue the frail economy? As mass amount of assets lost value, money supply could shrink--recipe for a deflationary economy. But U.S. is lucky as it is the only country in the world where it can print more money and countries around the world are willing to buy them. But then, there is still a limit to how long more the world can and are willing to sustain the world's largest economy.
Then we have Alan Greenspan admitting the laissez-faire form of economics theory is flawed. Well, that is itself a centuries old debating topic. While the classical form of economics seemed to have failed in the current context, some may yet remember how the Keynesian way was rebutted as out of fashion during the economic boom of U.S. just 8-10 years ago (or even longer) where classical theory showed economic superiority.
I would not take sides although I am more of a Keynesian. Simply because if humans need laws and constitutions established to ensure law and order in the society, it just makes sense to have some regulation in place in the economy.
So what are you? A classical? Or a Keynesian?
P.S. Somehow I am glad yet grim that I would soon have the chance to assess the greatest financial fallout in the States since the Great Depression.
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