Donaldson Tan / Head, TOC International / London
Cambridge – Last Friday, Minister of Foreign Affairs George Yeo visited Cambridge University in conjunction with its 800th Anniversary. During the visit, he discussed the state of the world and the global economic crisis with Singaporean students. “No one is sure where the bottom is or how long this crisis will last, “ he said. “In the meantime, tens of thousands of companies will go bankrupt and tens of millions of people will lose their jobs. What started as a financial crisis has become a full-blown economic crisis. For many countries, worsening economic conditions will lead to political crisis.”
Recent Developments
Mr Yeo spoke out against government interventions in this global economic crisis. Public policies worldwide can hinder the market from reaching the bottom. “Many stimulus packages being proposed will make the adjustment more difficult”, he said, “For example, bailing out inefficient automobile companies may end up prolonging the pain of restructuring at tremendous public expense.” Attempting to shortcut the process may worsen underlying conditions. He also commented that the wages and salaries of Americans, Europeans and Japanese are being held down by billions of Asians and Africans who are prepared to work for much less. He expects protectionist pressures in America, Europe and Japan to grow, in order to keep jobs at home.
He highlighted the White House’s growing dilemma between injecting liquidity into domestic financial markets and managing an international reserve currency. “If governments try to prevent the re-pricing of assets and human beings, international markets will force the adjustment. A country that is over-leveraged living beyond its means will itself be re-priced through its currency. Its currency will be devalued, forcing lower living standards on all its citizens.”
Furthermore, in response to a TOC enquiry, he acknowledged that the calibrated move by the People’s Bank of China to call for the replacement of the US$ as the international reserve currency will put the coming G20 Summit in a precarious position. The minister said that while it is unlikely for any currency to replace the US$ as an international reserve currency, there will be political and economic obstacles in promoting global acceptance of a super-sovereign international reserve currency.
The world today is at similar crossroads as it was during the Great Depression. A global leadership vacuum marked the Great Depression in the 1930s. “Despite the shift of power across the Atlantic, while Great Britain could not lead, the United States would not lead. In between, the world economy fell,” Mr Yeo said. Great Britain then is United States today while United States then is China today. The US is China’s most important export market while China is the most important buyer of US Treasuries. Moreover, today’s world is more complex as due to its multi-polarity, no particular value system will hold complete sway over others. The current crisis has already caused many people to question the nature of capitalism, socialism and democracy. “With the world in turmoil, many developing countries are studying the Chinese system wondering whether it might not offer them lessons on good governance. For the first time in a long time, the Western model has a serious competitor,” Mr Yeo said.
Responses from Singaporeans at Cambridge
A Singaporean commented that the role of Germany, the world’s biggest exporter, in the modern-day epic of the clash between Western and Eastern civilisations is often underestimated. She also noted that Singapore government has succumbed to China’s soft power. “Despite the failure of the Suzhou Industrial Park, the Singapore Government has direct and indirect stakes in the Tianjin Eco-City Project and the Guangdong Knowledge City Project. I also wonder if the objectives of the Speak Mandarin Policy has shifted towards preparing Singaporeans to be employees at Chinese firms.”
Another Singaporean was disappointed that BG(NS) Yeo did not touch on the Singapore economy and the Resilience Package. He was unsure of the Package’s effectiveness to buffer and shield the Singapore economy from the global economic crisis. He also felt that the government was not clear on how long the Package should last. “There should be economic indicators published quarterly to ascertain the continuity and success of certain schemes in the Resilience Package, such as the Job Credit Scheme and the risk-sharing initiative for trade finance and SME loans, “ he said, “This will send a clear signal to the private sector, so that the firms and the public can make timely adjustment should the government suspends or ends these schemes.”
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This man is just a lot of hot air.
He was the one who insisted on building esplanade and casinos.
*poof* deflate it
Mmm…let’s see….it is like he is trying to push down other countries to bring up our own package?
Academicians are paid for hindsight. Entrepreneurs are paid for foresight. Is BG Yeo a foresight or a hindsight man?
It seems to me Mr Yeo is only trying to express his concerns about the world economy and give his opinion prior to the G20 summit.
He is not the only one saying such stuff. I disagree with him on the stimulus packages. US President Obama is insisting on a tighter regulatory framework in exchange for bailout money, particularly for the auto industry. I agree, however, that the US is probably over-leveraged as far as spending goes.
His implication that the Chinese practice good governance is somewhat ironic. We know in many cases the Chinese government needs to do better. We also know in a number of cases involving personal liberty, Singapore is really lagging behind the Chinese Government. I also do not like the reverse implication that Western governments do not practice good governance just because of the financial crisis.
On the whole, I’d say I still have respect for George Yeo. He’s burdened at some level by dogma, but he’s able to make arguments mostly based on reason.
Well he made it to be ” Distinguished Speaker at Cambridge.” and on the subject spoken – he is the first Asian to do so formally on at an international platform
Congratulations and Singaporeans should be proud of our very own George Yeo
Of course one could addressed more issues but political expedience may dictate otherwise on an international stage.
Fears are many but global fears will include increasing protectionism and with the intense devaluations going on, panic may set in.
Needless to say food security will be one of the top concerns and CSR will go out of the window for some for a while perhaps..
Demand for oil ? – consequences quite imponderable. Would some previously free spending economies in the Middle East go broke ? Serious matter if terrorist atacks were to begin there.
And failed states ? Every day it get closer to it really happening; Can Singapore be a failed state ? Can Malaysia be one ? Is Pakistan already one ? Who is next?
Thank you for the food for thought and the coming stimulating discussions on the net by courtesy of TOC
BTW , what do Singaporeans really think of the Suzhou Industrial Park ?
Most would have forgotten about it already ,but the above curious quote ” Despite the failure of the Suzhou Industrial Park (SIP) …” attributed to a lady – presumably a student at Cambridge ? stirs up interest ……What does she really means ?
And Tianjin Ecocity and Guangdong Knowledge City projects ? Are they not commercial projects unlike the SIP? And SM behind them now as MM was previously with SIP.
It looks like Yeo speech is taken out from a textbook by other authors. Yes what he spoke others have spoken. Listen to BBC is better than reading his speech.
So is this guy leaving politics or not as claimed?
so government should do a lottttttttttttttttttttttttttttttttttttttttttttttttttttttttttt more things to help citizen
@ 3), well said !
And our politicians are obscenely paid for neither hindsight or foresight.
“If governments try to prevent the re-pricing of assets and human beings, international markets will force the adjustment. A country that is over-leveraged living beyond its means will itself be re-priced through its currency. Its currency will be devalued, forcing lower living standards on all its citizens.”
Other countries I agree. However, when it comes to US, their pain will be socialised and any inflationary effect of USD volume will be spread to other countries which may be holding USD or need USD for practical purposes, effectively giving US countrymen a net gain position. The USD holds a very special position unlike all the other currencies.
China knows it and it is feeling the pain, hence the call for the replacement of the US$ as the international reserve currency.
Good article. BG Yeo has always given quotable quotes…a thinker.
Also a great idea by TOC to get university fellas world over for such news. You will have a network of global online journalists quickly. A threat to MSM? Are you paying them??
I dont know wat to say. Many months back I wrote to Aljunied TC requesting for information regarding sinking fund investment. I did not get all the info that I have requested. Last month, I wrote to the minister for attention but todate it is still silence. What is going on?? dont know why leh???
i am a fan of this talented yeo.
I wonder when is he gonna be the next head?
Now got 3 standing by.
I like his very studious expressions and choice of words and speaking style.
Would be good if my professor is him.
what a people’s leader. very much involved with the ground.
u know right?
tomolo goin u kno?
12) AljuniedResident on March 31st, 2009 3.07 pm
So got ask about mossies or not?
I jobless everyday stuck at home (no like to pay n pay for tpt fares or eat outside) kenna mossie bites. Many are Aedes mossies. Can u donch mind kindly help forward this issue to them for the affected aljunied grc residents here?
a few have been hospitalised due to dengue already. Its already a reported fact.
I saw people spray and spray but mossie still got leh. How? Russian roolette ah? i mean wait and see if i lucky the next mossie bite me is not Aedes carrying dengue ah?
I cannot believe a so-called 1st world has such a problem. Many many many months already.
sian ah. wait and wait as i pay and pay the monthly bills…
TOC,
Waz the point of this piece?
Trying to show some balance?
More suited to ST.
A Tan,
It’s a report. :)
George Yeo should tell the world how Singapore can be a role model for their gahmen.
That is whatever the economic crisis, Singaporeans are always very peaceful and support the gahmen with 98% seats in every election. Other gahmens should learn from Singapore how we manage to achieve this. It is a dream of every gahmen!
What Yeo say make sense, but rather than criticize US, why not look at somewhere nearer, like S’pore? Look at the govt throwing money at banks to employ graduates, paying companies to keep workers, loaning money to companies to make investments, giving rebates to property companies rather than direct tenants to relieve their financial burden, distorting the economy and job market with short term measures while preaching about the economy going to be bad in the next few years. This is the first real crisis faced by Lee Hsien Long and team, and the report card is…
God warned against debt, interest, insurance (surety), gambling (even on stocks) and seeking riches in all holy books. Borrowing more money to continue the practice is not wisdom. The Ten Commandments (Sinai Covenant) Exodus 20 says not to make images of anything and not to covet what other people have. Our whole world system is against God’s wisdom and warnings; it must come down for God’s ways to emerge.
The goal in life is not employment; that caused world problems including pollution, energy crisis, reoccurring financial crises, disease, war, immigration, crime, poverty, inequality and social security inadequacies. The goal is a garden paradise lifestyle where we choose trees, plants, and pets that provide fresh food around us. This solves the world problems with one strategy. It is sustainable through eternity, easy, quick, fair and inexpensive. God promises rain in due season to those who follow His word to their prophets. (Leviticus 26). Turning to the garden paradise lifestyle now will save us from the financial crisis we are now in, giving something productive to do for those out of work and giving security to all. God’s word is a sure warning and only greater problems are ahead if we fail to choose His ways now.
Marie Devine,
Are you living in a fantasy world?
It seems that on the current debate between the choice of more stimulus packages (favoured by the U.S) or more regulatory frameworks (favoured by the Europeans), Minister George Yeo seems to favour the latter. This is a point to note from a learned man. His pessimistic view that protectionism will probably surface is worrying. Protectionism will probably worsen the economic situation.
China – good governance? George Yeo is either kissing ass or just plain stupid. Or both.
Foreign Minister George Yeo’s speech is published in full here.
The general consensus I got from talking to Singaporeans after the event itself was that his speech contains neither hindsight nor foresight. He was talking about things that many of us there already long knew. It does not need to be re-affirmed by a minister.
A number of Singaporeans thought they would get a update about Singapore affairs from the horse’s mouth but they were disappointed. Singaporeans abroad are still concerned about what happens at home.
One Malay Singaporean actually voiced out his anger that Singapore voted “Yes” for the Iraq War at the United Nations to George Yeo. I congratulate his courage to take up concern for the unjust war personally.
Donaldson #23 – I occasionally follow George Yeo’s facebook page (his wall) and you can see he seems to take *extreme* care never to show his opinion on Singapore issues. He will only make politically neutral comments and will not even push a PAP-centric view on that page. I believe what you guys witnessed was just an extension of this behavior.
It is the one thing that makes me feel sorry for Mr Yeo. He proudly indicates his political affiliation on facebook as “People’s Action Party” but he does not seem confident enough to publicly talk about his adopted political ideology, discuss issues with that ideology in context and defend them logically and within reason. The strange thing is that I feel Mr. Yeo is fully capable of and competent in the exercise of these three activities.
Chained, what if I am in the real world and you have chosen a perverted world? If I am right, the solution to world problems and the release from a stressful, expensive, oppressive lifestyle in close at hand. Stretch your imagination and consider what would it mean to turn to a garden paradise?
I can’t believe singaporeans have to hear about the financial crisis from this guy?
In America, the economic situation is so bad, that people are losing jobs in the 600,000es every month.
Americans are NOT buying or spending their money.
GM- is going to go bankrupt.
The G20 that is on now, wil be interesting- as Europe does not approve of our President Obama’s spending policies. and i agree with them.
The spending should stop, and let the companies that are NOT making money go bankrupt.
I would say the first instigator of pending disasters started with the deregulation of the public utilities. The fake rolling blackouts of California turned out to be a price-manipulating tactic. Why should the public have to trust a private profit driven business model for modern necessities?
Did everyone notice that in the early two thousands it seemed that mortgage brokers were instantly everywhere. Even your buddies were doing it, bugging you, “make sure your refi with me old buddy”. I remember thinking. “what the hell”, why, what am I missing. Well, seems that the fees charged to close a mortgage could go from 5k to 50k to do a whole lot of nothing. Nice. The word “stated income”, seemed to be the easiest way to get the deal closed for sure. “Stated Income”, intended statistically for a little higher interest rate acting as profit insurance on the statistical default rate as well as the house value to ensure a solid banking investment. Did people lie about their income to get the loans. All the time. So why didn’t anyone care. Well, weren’t brokers getting paid 5 to 50k for nothing, with a seeming sound banking model backing them up. Oh yah. Actually, most of the times the brokers did all the paper work, filled in all the numbers with next to no input short of names and SS numbers to get the deals closed fast and many. The public is the product, “bring them in buy the truckload, its time to make some serious cash”. This run away business model became the mechanism for high volume loan closing and high profits to brokers and bankers. Don’t forget these broker fees get worked into the loan. So a good part of the fees paid out to the brokers are still owed through the loans and a lot of the public are to this day still in debt to these fees.
But everything seemed to be going so well. It wasn’t that bad. The model was working. Working families in the US seemed to have achieved a delicate balance with their budgets with their income vs. there debts. Most families were making it. Close but were pulling it off month to month.
Here comes the landslide. In 2008 the gas prices decides to pretty much double. A few months of this converts higher prices in pretty much all commerce due to the transporting and manufacturing costs. The delicate budgets of millions a families are disrupted. Month after month families attempt to balance out there finances, but to find themselves unsuccessful. For a moment, view the total money circulating in the U.S. economic infrastructure as a full cup of water. When one entity such as an oil company achieves record billions in profits. In other words billions of dollars are removed from circulation and is sitting in a companies account. Sort of like taking a 3/8 cup of the water instead of the 1/8 cup the company usually got. Consequently leaving the rest of the country to pay expenses short ¼ of the money that was usually economically available. If the money is gone, its gone. Simply cant be used if its not there. Simply speaking, the money has been removed from the economy in the form of record fuel company profits.
Did anyone notice that when you start running out of money, our good old bank friends seem to want to take even more cash than ever? A few checks get returned. Lots of $35 charges. Usually $350 per cycle of 10 checks max the law allows to charge per day. Interest rates seem to really jump missing a payment. What about those 2-year arm adjustable rates, mortgages going from $2800 per month to $4300 per month over a month period. This is the same for businesses. When sales get low, expect tons of over draft charges. It seems way better to run your store with cash daily. Forget writing checks. You’re just being a sucker to the bank system. Even the electronic bill pay system puts a day delay on removing the funds they send out with the hopes of creating an over draft situation. Just clear the checks paid as the store sales and withdraw the cash and operate with cash. Save thousands in fees. Pretty much all bills that are late get ridiculous fees attached, from taxes to utilities to credit debt.
What is the public to do. We carry the huge burden of ridiculous fees when money gets low. The economic landslide is inevitable in these conditions.
Problems summery:
Unstable utility costs
Unstable fuel costs
Current banking, finance and insurance systems
Ronald Reagan really had it wrong when he said, “government regulation is the problem not the solution”.
A private company should not have the ability to paralyze the U.S. economy single handedly.
It is essential to have all critical economic infrastructures government regulated, primarily, Banking, Insurance, Utilities and Fuel Systems.
I would also recommend getting the economy somewhat a little less stressed and back on tract if it were passed by congress to have one or two months revolving credit debit and mortgage payments deferred if requested by the borrower. It would allow families to catch up with some other bills and get a little more cash injected into the country instead of the bank systems.
These business systems have the potential for corruption, greed for record profits at the health of the countries expense. We cannot depend on groups of businessmen to act honest and ethical nor should the pubic have to. It needs to be insured by written laws and sustainable by government systems.
Talk is cheap. It’s not just actions that counts, but actions with results focused on those in need and not waste taxpayers’ monies on everyone including those who are not in need. See http://www.transitioning.org/?p=624 for an example of how other government help their private enterprises grow in order to create jobs.
TOC, DT
I would not have written #15, if DT had included paras 2, 3 and 4 of #23 in orginal piece. ))))
A gd piece would be short summary of BS, link to BS, and the focus shld be the comments in paras 2, 3 and 4 of #23. What S’poreans think and expected of speech.
where do US get its money to fund all those
troubled companies?
Marie Devine,
Do you seriously expect everyone to accept there is a loving omnipotent God who will substain everything if man just obeys Him? Your proposition is based on an unproven faith in a God that despite all claims about his greatness has not prevented pain and suffering whether it is man-made or due to nature. REASON is the only salvation for mankind, not some unproven blind faith.
Chained,
Pain and suffering prove God is true to His word. Leviticus 26 and Deuteronomy 28 promise rain in due season, abundant crops and healthy people and animals and peace in the land for obeying His wisdom. It also promises 4 x 7 curses if we disobey; the first is terror and, of course, no rain in due season etc.
The histories in the Bible (Joshua, Judges, 1 & 2 Samual, 1 & 2 Kings and 1 & 2 Chronicals) are proof God did what He said He would do, even though many sounded too horrible for a loving God to do. The purpose is so we will ONE DAY realize we need to love His word with all our heart because it is the source of our abundant life, our provision and our protection from our own wickedness.
He calls for a 7th day Sabbath of no work for anyone, 10% of all your increase must be given to Him and He will increase the power of your days and your money that remains. He warns against debt, charging interest, insurance, gambling and seeking riches. In Malachi 3 God calls people that withhold the 10% tithe- robbers and under a curse, even the whole nation and tells people to prove Him and see if He will not open the window of heaven and pour out a blessing we will not be able to contain. These things seem to fit in with our reoccurring financial crises. When we want His ways, He has an economic system that will be more than you need and never run out and you will not be in bondage to get it. He has promised that all ways of man will fail; so they will, for our own good.
A Tan #29
I shall take in account of your comment in my next news piece. Constructive comments like yours will help us to improve TOC and be more reader-centric in our writing.
George Yeo’s talk is about the financial crisis and the new world order that may emerge after the economic crisis. China is a major player in George Yeo’s post-crisis new world order.
I had omitted comments that have nothing to do with the economic crisis or the new world order that would emerge after this economic crisis in the news article.
aiyoyo
talk n talk n talk
by the way, any effective + efficient solutions by them (elites)?
simply make things not so expensive, life not so pressure,
then commoners happy, then things get well…
seems like simplicity been long forgotten…
aiyoyo
Marie,
What you are saying is too profound. Though there is a logic, it is unfathomable to most. It’s like someone a few thousand years ago saying that we should only take what we can consume and not let money buy our labour to take from nature more than we can consume.
Save your thoughts for those who have faith : )
the newspaper say has facebook and active netizen.
that day he ask singaporean to join him to jog.
this is very special.
i wonder if he visit toc or not?
Sir if you see my comment can you please leave a comment here as well?
if you really got visit toc and saw this but never reply, it is also ok because nobody knows.
maybe only heaven or jbj will know.
but after i saw that newspaper report that you invite people to jog using facebook,
i really feel that you will surely do much much better in the next election really.
if singapore can bet on election results like england i will bet 10K for you to win big.
congrates to you Sir.
very sorry if i say anything wrong to offend you.
This credit crush is both unique and sudden and gahment around do not have a pre prepared solution except to invest more money to keep factories going and empolyees employed. The problem is the Western economy is not able to buy them all like they used to be. It is a problem made in USA and US had to solve it first before the rest of world economy could start to turn again. It was unique and literally changes the balance of power between East and West. The day when USA could do anything she like is truly numbered if not already ceased. The interesting question is why do Singapore fix into this new world? Instead of English speaking we will become more mandarine speaking? I supposed both languages would be used but more and more Chinese will communicate each other in mandarin and English with fellow Malay and Indian plus of cause Ang Mo.