Despite an expected slow recovery from the recession and the rise of business costs, it seems manufacturing in Singapore remains a vibrant and relevant industry. This article aims to present Singapore’s edge as a manufacturing hub that has seen companies such as Abbott, Neste Oil and Illumina investing here.

As an export-dependent economy, Singapore had been the first country in Asia to slump in a recession. Now our manufacturers are feeling the heat especially with the rising cost of running their businesses that have been eroding their competitiveness.

It is not wrong to say that manufacturers are looking into more viable means of sustaining their businesses such as moving to cheaper production hubs like Vietnam and China. However, the truth remains that Singapore has strong fundamentals that still makes her an attractive location for manufacturers.

IP protected location

Besides Singapore’s reputation as one of the best connected countries in the world, with all the sea, air and telecommunications links needed for business, it has also gained recognition for being an Intellectual Property (IP) rights protective country.

For the past two years, Singapore has been voted the most-IP protective country in Asia by the Political & Economic Research Consultancy (Perc). Like Aalst, a local chocolate manufacturer, many who have located their bases in Singapore have found it easier to maximize the value of their corporate IP here.  

CIBA VISION,  with divisional HQ in the US and a Swiss parent company NOVARTIS, is a global leader in the research, development and manufacturing of contact lenses and lens care products. They chose Singapore to set up their manufacturing plant for their DAILIES disposable contact lens in 2005.

Mr Mark Chua, General Manager for CIBA VISION’s DAILIES & Distribution Asian Supply Chain explained. “Despite having other plants in Malaysia and Batam with cheaper alternatives,” he told me, “we chose Singapore to manufacture this particular product because of our long-term strategy in taking advantage of Singapore’s IP protection environment and technology base.”

Their DAILIES are produced by high technology automated machines that dispenses what they call “lightstream technology” that gives its lens precise accuracy. Because they are fully automated without using any manual labour, this provides thorough cleanliness for top quality products. 

With manufacturing performances no longer solely dependent on physical assets alone, Singapore still gets a high vote of confidence from high-tech manufacturers in this new era where growing and managing intangible assets, such as brands, inventions and processes, are critical in achieving the equilibrium of long-term sustainability for their businesses.

Talented and skilled workforce

Makino Asia,  a leading manufacturer of advanced machine tools has its manufacturing headquarters in Singapore where its office is fully integrated with R&D and engineering production. It produces S- and E-series Milling Machines, which are sold worldwide, as well as the CNC Electrical Discharge Machines (EDM) and CNC Wirecut Machines.

As such, a skilled workforce is essential in meeting their clients’ every need by providing high-quality engineering solutions, and reliable technical support. This remains one of the main factors why Singapore has been an ideal location for Makino Asia.

“In Singapore, we are well-positioned to access a three billion population market from India to China in a short time, due to its excellent logistics infrastructure. Language and communication are not a problem with the multicultural workforce,” said Dr Moh Chong Tau, CEO and President of the company (picture right). “There are no limitations to getting the right talent here, regardless of where they come from. This makes doing business here fast and easy.”

Despite labour costs in Singapore being generally more costly than in China and India, their logistics and administrative costs for such operations can add up to as much as three times more than Singapore. That is why Dr Moh is confident that Singapore will continue to play a pivotal role in Makino’s operations.

Moving ahead

Manufacturing in Singapore is moving rapidly up the value chain towards increasingly knowledge-intensive and innovation-driven activities. This transition has been made possible with Singapore’s vibrant economic eco-system of complementary activities – from manufacturing, R&D and innovation, and supply chain management, to shared services and intellectual property management.

Manufacturers also benefit much from Singapore’s network of trade agreements and linkages, such as Free Trade Agreements (FTAs).  The most significant agreement recently signed was with China. This FTA would allow more growth and integration between both countries, and provide freer movement and more economic benefit for our manufacturers.

Moving forward, Singapore is positioning itself for the future. Apart from its strategic location, IP protected environment and availability of skilled and talented workforce from a well-educated population, Singapore’s political stability and security in comparison to our neighbouring countries are conditions that favour business sustainability and profitability.

With such attributes, it only stands to reason that Singapore is in an advantageous position in spite of the harsh external conditions. Manufacturing in Singapore, though costly, might pay off greater dividends in the long run by tapping on the island’s strong and tested fundamentals when the economy bounces back.

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Recent news have been filled with retrenchments, retrenchments and more retrenchments.

It is quite disturbing to read how companies have heartlessly ‘axed’ their employees whom they deem as “excessive” in order to ride through the slowdown.

Judging from the recent comments by the Labour Chief, Mr Lim Swee Say, who conveniently also happens to be a Minister in the Prime Minister’s Office, it’s clear that we should expect no one to owe us a job or pay cheque; not even our government.

I’m not sure about you, but seeing these unfold each day has given me pause and to seriously think about my career path.

Everything increases except our pay

It is not uncommon for us to bemoan how daily expenses for our standard of living have rocketed, but the same cannot be said of our monthly income.

From a globalised marketplace standpoint, where Singapore is competing with low-cost labour countries like India and China (without even mentioning our regional neighbours), I think the harsh truth is that if we increased our income level any higher, it would erode Singapore’s competitiveness and business appeal.

This is the reality that we’ll need to firstly come to terms with and accept. We need to renounce the ‘crutch mentality’ and make the best of what we have.

If we are lucky enough to have any sort of increment regardless of the dire economic situation, we should be grateful.

Nonetheless, salaries do differ exponentially across the gamut of industries and the types of jobs we are in. So this might not apply to you if you are in a niche industry like the Oil & Gas or Civil Service working as a Minister.

The way out is…

After managing your expectations with our reality and if you find that you are a person who is easily satisfied with whatever you have and have no qualms in having others determining your worth and job security, you can choose not to take any action.

However, if you desire to earn more and do not want a ‘glass ceiling’ to your income level, then some practical actions might need to be taken in order to get to that ideal position.

In my opinion, I think there two routes we can consider in ‘escaping’ from the system. One of it is to start our own businesses and the other is to switch to politics and join PAP or sales where much of our salary is dependent on sales commissions.

I think both these routes are career paths that reward us fairly and according to our effort invested and performance delivered.

Maybe some of us can take the opportunity of the approaching year-end by doing a ’stock check’ to re-evaluate our careers.

We can seize the opportunities that are there for the taking in this situation by planning ahead on how we can take our career to the next level in the coming New Year.

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*** See related posts

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Last Saturday, I came out from a Grassroots Induction Programme feeling intoxicated after being overly-fed with PAP-ganda.

This was a session organised by the People’s Association (PA) and I was there to discover more about the overview of the association.

Interestingly, the PA’s vision is “to be a leading organisation in building an active community where all contribute readily to the nation.”

However after listening to the speeches and reading through the handed materials, I concluded that the vision of the PA should be more accurately communicated as “contributing readily to the PAP”, and not our nation.

In fact, after understanding that the PA’s existence was to achieve a political objective – “namely to strengthen the Government’s presence among the people” to counter the communists’ stronghold – it seems that this association is somewhat a white elephant.

With the communist threat out, why do we need PA?

The PA- Party’s Association

Isn’t the PA supposedly a people’s association? Apparently, all of their board of members are PAP politicians led by the chairman, PM Lee Hsien Loong.

Mind you if the PA is indeed for the people, I think it would have been appropriate for representatives from the opposition parties of Potong Pasir and Hougang to be part of the board in contributing to our community.

Well, it looks quite clear that the PA is just another one of those PAP-sponsored agencies to propagate its party’s agenda (please note party, not nation). Another top-down approach.

More down-up approach

Even the NTUC, a union set up for workers is no longer for workers. This is apparent when we see that the core leadership is headed by PAP ministers.

Presently, Mr Lim Swee Say, who holds a ministerial portfolio in the Prime Minister’s Office, is the union’s Secretary-General.

Such institutions such as the PA and NTUC should be voicing the opinions of the people. But these days, the reverse of the government talking down to the people is more obvious. When this overly happens, we need to be wary as the people like you and I will be least heard more and more over time.

Here is an excerpt from a letter in ST Forum by Mr Chua Sheng Yang, that best describes the unhealthy socio-political state we are in:

“Instead of CASE taking up the cause on behalf of investors, it is former Income chief executive officer, Mr Tan Kin Lian.”

I really wonder how CASE, being affliated and part of the NTUC family, forgot to protect our consumers’ interest?

Enough PAP-ganda

When I wake up, I am in my HDB flat. I make sure I switch of my SP Power-ed lights before I leave my home to take either the SMRT or SBS Transit transport to work. If I am late, I would call for a Comfort Delgro cab on my SINGTEL mobile. My route to work will pass by POSB, SP, ITE, NUS, NUH, ST Kinetics, JTC, AH and A*Star. And work gives me money to contribute to CPF and GST.

Every where we turn, we see them. I believe fellow Singaporeans are getting sick and tired with each passing day by being “talked down” to in what we need to do and what not to do.

“Marry early”

“Make more babies”

“Put money in CPF and can take a bit out when 55″

“Put off retirement and work till 65″

“Pursue education”

Every where we turn, we hear the same party’s voice.

If it is not enough that we have to leave full decisions of our nation in the hands of the ruling party, it is equally disturbing that when we choose to speak up and voice our opinions we stand a high chance of getting slapped with defamation like Dr Chee Soon Juan or the late JBJ.

So the question begs to be answered: Is what we’re claiming to be building for our nation or for a party? I leave that answer for you to decide.

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Much attention has been on Singapore’s greying population and it will likely remain a perennial national challenge for many years to come.

According to the United Nations, population ageing will be most significant in Asia. By year 2050, 1.2 billion people in Asia will be 60 years and above – four times the number today.

With our higher life expectancy, Singapore counts as one of the fastest ageing countries in the world. Today, one in 12 Singaporeans are 65 and above.

By the year 2030, that will increase to one in five.

Ageing in Singapore

Anticipating the ageing issues that will arise, our government has made substantial effort to address these issues such as the SICEX 2008 Exhibition that was held at the Suntec Convention Hall two weeks ago.

The Ministerial Committee on Ageing (MCA), led by Mr Lim Boon Heng from the Prime Minister’s Office, has been kept busy since last March by coming up with new initiatives for our more senior citizens. This has come in the forms of advocating employment for older workers to annuities for old age and the tweaking of Eldershield and the CPF.

When explaining the reason behind the key changes of the CPF scheme, PM Lee cited how the government was concerned about Singaporeans’ financial sustainability especially with the rise of life expectancy at 80 years old now.

From a glance, it looks like we do have a government that truly cares for its people with their plans to provide secure retirement for the ageing population. However, if we scratch the surface deeper, we might find another reason.

Tapping on human resource

It is a well-known fact that Singapore, being deprived of all other natural resources, has only our human resource to tap on. That is why the role of education in Singapore is emphasised and is one of our nation’s core foundation.

This also further explains and helps us understand the government’s stance on certain policies or leadership approaches. For instance, we pride ourselves for providing WORKfare and not WELfare.

In Singapore, there is no “free lunch” and all of us are expected to work. If you want welfare, you got to work and contribute to CPF to receive incentives. That is our workfare.

Asset or liability

Imagine when 500,000 Singaporeans retire at age 65 by 2010 out of 4-5 million as projected by statistics. And couple that with the higher life expectancy and the need of healthcare.

Would retirees have enough to survive?

Where would they get the money to survive if their savings are wiped out?

Would there be a sufficient workforce to sustain economic investments and growth?

I believe these questions are our government’s primary concerns. And with the rapid growth of the ageing population, there is an urgent need to find solutions in keeping our economy going.

Not only does a retiree represent un-productivity, he/she also represents in economic terms, a liability.

Why?

Simply because by not working, one no longer contributes to the CPF. Not only does he/she not give, but he/she is taking. Not to mention that our economy, being so dependent on consumer spending in keeping it afloat, would likely experience a big dip with retirees having less spending power.

So if a retiree runs out of money, where does he/she go?

Government lor…

If you don’t believe, you only have to look at our present situation with the rising cases of the poor and needy seeking financial assistance.

Therefore with the number of retirees expected in the years to come, that poses a huge “liability” for our government. And this better explains the initiatives and measures for securing our retirement – welcoming of foreign workers and the recent means testing for healthcare.

Not sure if you agree with me, but all these initiatives, seems to only be for the sustainability of the economy, and not exactly because of any genuine care and concern for us Singaporeans.

Looking hard below the surface, I am faced with the hard truth that I am regarded as nothing more than a mere number contributing to my country’s population statistics.

Work till I die

But to be fair, I applaud the government in doing a fine job in ensuring that our limited human resource in Singapore is fully utilised to contribute productively to our nation’s workforce.

Putting myself in their shoes, this could be a bo bian (no choice) kind of situation.

However, as a working 30 year old Singaporean, my concern is the rising cost of living which will shrink the value of my CPF retirement nest in 30 years’ time.

Another concern is the affordability of healthcare, as by that “retirement age”, healthcare would be a necessity for me to keep working in order to stay alive.

Against such a bleak bo bian backdrop, it is apparent that as a Singapore citizen, I will have to work till I die.

Is our future really ours to make – as an NDP slogan once said?

About the author: A true-blue Singapore heartlander, Andrew Ong is presently working in the Research & Corporate Communicatons division of an NGO which represents the manufacturing sector in Singapore. Other than his work, he enjoys serving others through his church and community work. In his free time, he fuels his passion for writing through his personal blog.

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On the 9^th of April 2007, Minister in charge of the Civil Service, Teo Chee Hean, announced in Parliament:

“Salaries at the MR4 Grade are currently at 55% of the benchmark. Given the large gap, it is not realistic to close the gap fully in one go. Instead, we will close half of the current gap, that is, from 55% of the benchmark, to 77% of the benchmark by the end of this year.

This will be effected in two steps – one step now, and another step at the end of this year. Next year, we aim to close half of the remaining gap, bringing salaries to 88% of the benchmark by end-2008.”
(Sprinter)

The first revision took place on 1st April 2007. The second revision is expected to take place anytime from now till the end of this year, as the minister said. Given that it is uncertain if Parliament will sit in December, one wonders if the second revision will be debated or discussed in the chambers.

How will Singaporeans react if and when it is announced?

Booming economy, inflation woes

The economy is booming. GDP growth for the whole year is projected to be between 7.5 per cent and 8 per cent (CNA). On the job front, according to a study by IBM Consulting Services:

“Singapore created 598 jobs per 100,000 last year, making it the top-ranked country in terms of job creation productivity, far ahead of even the second-placed Czech Republic, which had 389 new jobs per 100,000 residents last year.” (MFA)

However, not everyone is enjoying the fruits of what MM Lee called “Singapore’s golden period”. Besides the widening income gap, inflation has also crept into the equation.

The latest report on the Consumer Price Index makes for depressing reading for many Singaporeans. October’s CPI was 3.6% – the highest in 16 years. (See here).

Daily necessities are rising in cost with no end in sight. Everything from public transport to flour, from chicken to eggs, from petrol to housing prices, from milk to electricity have shot up, some to record levels. PM Lee’s recent assurance that inflation is “well under control” is little comfort to those who are struggling to keep up.

(See TOC’s aggregation of the price hikes for 2007: The relentless rising cost of living.)

Inflation for 2008 is expected to reach 4%. (Straits Times)

Inflation – falling off the chair

With last Saturday’s Straits Times frontpage headline- “October inflation hits 16-year high of 3.6%” – grabbing the attention of many Singaporeans, it is clear that cost has not only risen but is also a major worry for Singaporeans.

The ST reported in that article that DBS Bank’s Irvin Seah “fell over his chair” when the figure was revealed. “This is way beyond market analyst expectations,” he further added. “We knew inflation would go up. We just didn’t know it would come so quickly.”

This piece of news was a confirmation of the dreadful reality that the average Singaporean is already aware of – and living daily. What was disturbing about the news is that the 2 per cent hike in the goods and services tax (GST) in July was cited as one of the causes for the rising cost of living.

This is definitely not good news, especially for the lower income group.

The GST hike in question

When Prime Minister Lee Hsien Loong first announced his plans to increase the GST from 5 percent to 7 percent on 13 November 2006, he explained it thus:

“Speaking in Malay, Mandarin and English, Mr Lee explained that the hike was necessary to finance the enhanced social safety nets, needed to help the lower income group and he emphasised that the offset package would more than counter the rise in GST.

While Singapore’s current model to tackle the widening income gap is sound, Mr Lee said the government would take on two approaches to deal with the new environment – to strengthen the safety nets and tilt the balance in favour of the lower-income groups who do not benefit from the fruits of economic growth.”

However, from the recent article by Reuters titled “Singapore’s economy boom widens income gap” and with the figures of the record inflation presented to us, things do not seem to be happening in favour of the lower income group at this point of time as planned.

In fact, it appears that things are worse than before – the gap widening more and the lower income struggling to make ends meet or to keep up.

It looks like it is the lower to middle income (the mass) groups that are truly footing the bill for the economic development in Singapore with the high income group continuing to reap the “juiciest” fruits of our economic growth.

Good time to revise ministerial salaries again?

In light of the above, is it a good time to revise – upwards – ministerial salaries again? Government ministers have said, when defending their pay hike, that there never is a good time to increase salaries. That may be so but there also should be consideration for moral leadership.

In the April announcement of ministers’ pay hike, revisions were also made to bonuses for ministers. On GDP Bonus for ministers, Mr Teo said:

“We will increase the bonus to a norm payment of 3 months if the economy grows by 5%. The minimum payment will remain at zero if the economy grows by 2% or less. The maximum will be increased to 8 months if the economy grows by 10% or more.” (link)

On Performance Bonus for ministers:

“We will increase the Performance Bonus by 2 months for officers at this level, to a norm of 7 months.” (link)

Thus, it would seem that ministers would be getting a windfall this year-end. A second upward salary revision, a 7 months Performance Bonus and a 3 months GDP Bonus – since GDP is expected to be between 7.5 per cent and 8 per cent.

For the average Singaporean, he can expect continued competition with foreigners for jobs, the lower-skilled Singaporeans continue to have their wages depressed by cheaper foreign labour, he can also expect record inflation leading to an even higher cost of living next year, as some experts are predicting.

It is little wonder then that there have been no public announcements of the 2^nd revision of ministers’ salary so far. It is undoubtedly a politically sensitive issue. One wonders if any announcements will be made at all, with the year ending soon.

We have slightly more than one month to wait to find out.

Read also: Annuities for Singaporeans, pension for ministers?

And: “Singapore less attractive to expats: Survey” by TODAY.

And: “S’pore enjoys record employment, higher wages” by The Straits Times 

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Historically, it has been well documented and proven that no man is perfect. Everyday in the papers, we see politicians, religious leaders and top corporate executive officers embroiled in controversial scandals.

These examples depict how higher accountability and governance should be upheld for those especially in authority as these leaders have direct influence over lives. And this is more critically so for a government that governs a nation as every decision made affects the livelihood of many.

The NKF Scandal Lesson
When the NKF scandal unfolded within our shores, it was claimed that the lack of governance and accountability led to this unfortunate occurrence. The remedy was the government’s heightening of governance within the charity sector to ensure credibility and transparency for the beneficiaries and the donating public.

Now the charity sector has the National Council of Social Service (NCSS) as its ‘watch dog’ to guard against ambiguous charitable organisations. Similarly for consumers, we have the Consumers Association of Singapore (CASE) to turn to, to alert and protect the consumer community from any unfair or unethical trade practices.

These are but only a couple of cited ‘watch dogs’, but I believe you would agree with me that it is common to find an institution or body which exists to uphold good practices and benchmarks in the various industry/profession in our marketplace.

Taking No Chances

But surprisingly, there is no such institution or body in Singapore – with regards to ensuring good governance and accountability by our government. Thus it may appear that the government operates above the law.

Over the years, Singapore has prided itself on having an uncorrupted ruling government, but just like the NKF scandal that ‘exploded’ in our faces, we should never leave anything to chance.

Therefore, we should learn from this as our government can also go down that slippery slope with no proper governance and accountability in check.

Being pro-active

Though I do not foresee how such a body/organisation can take place in Singapore, for a start, Singaporeans should take a more pro-active stance in socio-political issues in our nation.

Why? Simply because it affects you and me.

Practically we can not only read but critique more of our government’s policies and initiatives, so that with better understanding of their consequences and effect, we can better provide constructive feedback to our government from the ground. This might give our government options to evaluate their decisions and their impact on us.

The consequences of us not doing so would eventually see every decision made by the government deemed acceptable and in the worst scenario our consent or our opinions would no longer bear any weight in decision-making as it would appear that we have given the government full control to do as they wish or please.

Let’s build our nation

I hope this article would not be misconstrued as one accusing our government for being a corrupt party or be misinterpreted as one written with anti-government sentiments.
The purpose of this article is in fact to encourage us Singaporeans to build our nation in partnership with our government. And as Singaporeans, we should not leave room for complacency to seep in.

Let us not confine our contributions towards nation building with the mere mandatory tax payments. I believe that we Singaporeans are capable enough to do more than is required for our future.

About the author: A true-blue Singapore heartlander, Andrew Ong is presently working in the Research & Corporate Communicatons division of an NGO which represents the manufacturing sector in Singapore. Other than his work, he enjoys serving others through his church and community work. In his free time, he fuels his passion for writing through his personal blog.

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