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Thursday, Dec 20, 2012 - 01:45 SGT
Posted By: Gilbert

Financials

You have to give it to the local papers, they don't know when to give it up - The New Paper was next of the dolorous bunch to step up to the plate, devoting practically half the paper to establishing "why affairs are no big deal" (yes, that's one of the actual headlines used). If I were the recently-resigned Speaker, I would head out to rob a bank about now - with any luck, ministers and media alike will hasten to justify how his talent completely justifies pillaging the coffers to pay himself what he thinks he is worth, and it's no big deal really.

Eh, just wait a minute now...


(Source: Hardwarezone Forums)


So it is said. For he is an honourable man. So are they all, all honourable men...


While we're on the subject of honour;
and sorrow



Building Better

Page A6 of the Monday edition of The State's Times declared "DIRTY DORMS: Foreign labour crunch results in shortage of cleaners" in another rather obvious prod towards widening the floodgates, in the process perhaps ascribing cause to effect a little too readily if one considers that the proportion of cleaners and dorm-occupying workers could always be adjusted to come into equilibrium.

So this is probably more accurately restated as "Foreign labour crunch results in shortage of workers" - but this deserves another question of its own: why it is that, almost uniquely among developed (okay, and near-developed) nations, our construction industry is dominated by low-wage foreign labour to this extent?

[N.B. In any case, despite the supposed "crunch", the numbers don't lie - the foreign workforce actually grew from a headcount of 900,800 in December 2007, to more than 1.23 million in June 2012, over three hundred thousand net arrivals in a period of less than five years! If this is a "crunch", I struggle to imagine what a "not-a-crunch" looks like!]

One can name any number of countries - Japan, Taiwan, England, Australia, etc - where the sector remains (as far as I know) largely populated by locals, and tellingly productivity in the construction sector fell every year in the second half of the 1990s, before mostly stagnating since then.

To be fair, this has not been lost on the head honchos, with the Minister for National Development admitting in a Feburary post on his blog that we basically suck, not only against Hong Kong, but even mainland China (no disrespect intended), and diagnosed the underlying cause:

"Hong Kong does not allow any foreign construction workers. It has its own pool of local skilled construction workers who command very high wages. Typically their construction labour cost is about 5 times that in Singapore... With such high labour cost, developers must find ways to standardize the construction work as much as possible to save on labour cost. As a result, their productivity is high and construction pace is fast."

Which seems to be, well, the usual model for developed countries. The ministry more recently expressed a hope to improve construction productivity 25% by 2020, and while that would still imply, seen from another angle, that we're not even confident of catching up to today's Hong Kong in eight years, it is still a step in the right direction.

As to how it turned out this way, well, it's not too hard to speculate on how the main thrust of events went.

One fine day long ago, the industry was faced with a "shortage", term here in quotation marks since a shortage is necessarily a supply-and-demand thing. At this point, the industry (and government) had two choices, the first of which was the conventional approach - pay your guys more, and get them to be more effective. Obviously, this was very possible from Hong Kong's success story, to give just one example.

The other method was having some bright spark suggest, hey, we have all those workers from surrounding countries willing to work for peanuts; why not we just hire a few boatloads of them? Who cares if it takes two or three of them to do the work of one experienced specialist, if they collectively cost less in the end? The government just had to give the go-ahead, which they presumably did, over compliant silence from the "unions" (loosely-applied term)

Now, there may not have been much wrong with this by itself, and in fact even Japan and Taiwan have yielded to labour pressure, but I daresay as far more of a last resort compared to us. However, this mentality strongly encourages a productivity trap - there is little incentive for innovation since labour is so relatively cheap and available, and without even the beginnings of an R&D culture, the industry's only recourse when the government tends towards tightening the labour tap is to cry that they can't cope, will crash and take the whole economy with them.

And of course, if this works, the industry again sees no reason to take any risks in trying to wean itself off cheap labour, and the cycle perpetuates. Quoting the article, "...dorm bosses say paying workers to put in overtime and investing in technology are not long term solutions", and further, turning a profit in construction in this environment seems skewed towards slashing costs, with projects involving complex webs of sub-, sub-sub- and sub-sub-sub-contractors that sometimes leave the poor workers out in the cold.

These are evidently not isolated cases, and as I am typing this, there has been another stoppage of work/strike involving up to 40 workers, this time over unpaid salaries, a sorry indictment of the existing cheaper-labour system.

If one were more cynical, it could be suggested that the government might not be too eager for change due to the inflow of funds from levies (which is frankly just another hidden tax), as well as the fact that the workers stimulate the economy to an extent just by being here. However, as mentioned before, how long this quantitative expansion of growth can be sustained is anybody's guess.


Persuade Me Once

A couple of months ago, I got persuaded by a DBS representative to sign up for the POSB Everyday Card and Cashline, which seems to be another line of credit instrument. Got to give people chances once in a while, I guess they have a quota to meet, right?

I then promptly forgot about the items until another representative called a few days ago, asking if I would like to get on the CashShield insurance scheme. I answered quite honestly that I was already probably overinsured (it seems hard to get this concept over to most agents, who tend to be sincerely convinced that really bad things are likely imminent for their customers, and they are just helping him with that one more policy), but you have to give it to her, she didn't know how to quit either.

Perhaps I should have muttered "not interested" and hung up, but as it happened to be after dinner and I was in a fair mood, I changed tack and asked how the bank expected to earn from this - they're not a charity, right? I left unsaid how the marketing spiel was all about it not costing anything if the Cashline service was not used, since it was obviously not going to be free.

Well, after Googling it up, it isn't that complicated at all - as of today, for S$0.49 on every S$100 on the monthly outstanding balance, the insured is covered for up to S$200000 outstanding balance in event of accidental death, or half that for death or total permanent disability. Sounds great, right?

Now the catches - first off, while Cashline does have a maximum limit of S$200000, that would only apply for customers with a S$50000 monthly income, and I'm not sure how many qualify for that. Even taking a monthly income of S$8000, probably fairly decent for a mid-career professional, the limit would only be about S$32000.

The second part of the realisation is that to "get" the S$32000 by having the liability waived, one has to actually be borrowing S$32000 and not repaying it! So, when considering the effective premium, it would not just be S$156.80 a month (which is already quite alot) in this case, but also the initial interest paid, which currently starts from 1.48% a month (S$473.60, for S$32000), or about 19% a year (which the bank is of course happy to allow to roll over and compound)

The situation should be clear now - one only "receives a big payout" by borrowing a lot, but in such a situation, the bank will be happily siphoning oodles of cash from the interest owed alone, in the meantime! Frankly, if the protection is a means of encouraging customers not to pay off their loans since "it's insured!", it's probably a crappy deal unless the customer expects to die in short order - he would otherwise pay in premium and interest a sum equal to the principal in barely more than four years.

Summing up: Neither a borrower nor a borrower be. Banks are your friendly smiling neighbours... till you owe them, then let's see how much of that kampung spirit remains.


Limpeh Is Foreign Talent

An engaging read, came across when looking up the Rohingya refugee impasse (overshadowed by the recent outpouring of honour, but not exactly new). The writer makes the salient point that Singapore's evergreen excuse for turning refugees away, "we can't cope with more people", is patently completely false, and it's not a slippery slope either because it's not as if the refugees have the means to specifically aim for Singapore; rather, it's more of not wanting to even begin to get involved, and quite sad to say, they appear largely supported in this stand. I guess we're all assholes.

Although the situation is complex, to be fair, with even Aung San Suu Kyi unwilling to take sides, it is perhaps interesting that The State's Times has latched on Thein Sein as their Asian of the Year despite this, well, rather significant failing by any measure, and that is even without considering his known links with drug lords. Then again, local papers are known for very selective forgiveness towards their natural friends.

The other side of the argument is that, as repeated from a 1998 The State's Times article, Singapore had tried to be nice before and taken in a couple of thousand Vietnamese boat people in the 1970s despite a hardline position (quote "You've got to grow callouses on your heart or you just bleed to death"), but some of the countries who had kindly promised to resettle them broke their word. Still, it is good to know that conditions in local camps were relatively easy (well, mostly)

Fortunately, there has been a happy resolution, with our Malaysian neighbours picking up the slack. Well done to them.


Fair Imports

From a conversation between our regular delivery guy who hauls the monthly sack of rice to the flat and my grandma, he's gotten hitched to a Vietnamese lady some time ago, but so far there's been some language issues, and she's also prone to returning to her home country for months on end. Well, to be honest, there aren't that many options for a man making S$2k a month and wanting to start a family nowadays, especially if he's nice, but even this path may be closing.


In This Domain

Accidentally discovered that all four-letter dot-com domains have been exhausted five years ago. So it seems I'm squatting on a bit of exclusive virtual real estate that there will only ever be... less than half a million of. Sorta nice, I suppose.


Technical Failures

A recent update of Chrome has led to search queries sometimes leading directly to a previously-visted page upon entry in the address bar, instead of handing the terms off to the Google search page, and when it does, the search box at the top of the Google page is often missing. I'm not certain of whether it's due to being on the dev release channel, but it's not very usable for sure.

While I'm on this, it seems a toss-up whether Google Chat messages wind up being pushed to Gmail, my smartphone, or both platforms, which has led to me missing replies more than once. Surely this can be resolved too?


Thumbs Up

As it turns out, the supposedly-lost thumbdrive came up in the washing machine, none the worse for wear; apparently, it was in some pocket or other. So much for fates and fortunes.



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