Minister pay cut justified?

Yes, it's trending on twitter and carried in newspapers all over the world, from Guardian to Bloomberg.
Everybody's talking about the seemingly massive 36% pay cut that Singapore's Prime Minister Lee Hsien Loong has "agreed" to take.
While it's a long overdue step in the right direction, he remains, and by some orbital mile, the highest paid elected official on this planet. Still 4 times more than Barack Obama and 45 times that of Manmohan Singh.
But the root of the problem remains that many within the regime's ranks still think that high salaries are needed to attract the "best" talents to political office.
Such as one Grace Fu, who probably summed up what many of her colleagues feel:
"If the balance is tilted further in the future, it will make it harder for any one considering political office."

Unfortunately, money cannot be the main motivation for joining politics. You are simply attracting candidates that will put the moolah before servitude. Such as this MP with 64 other jobs.

Personally, I think the pay cut is totally justified and there should be more to come.

GDP growth, the indicator that PAP swears by, is looking extremely weak going into 2012. Singapore could again be the first Asian country to go into a technical recession defined by two consecutive quarters of negative growth.
The party state has failed to diversify from the volatile and highly competitive electronics sector which makes up a massive 35% of non-oil  domestic exports.
Worryingly, the Purchasing Managers' Index or PMI, which measures future business activity, has been declining for 6 straight months.

Granted that if US and Eurozone growth tank in 2012, and if there were a hard landing in China, most economies of the world will be adversely affected.
Difference is that other leaders don't have million dollar salaries nor tell the US to put its fiscal house in order.
I can't help but notice the inverted commas around the word Mentor in this WSJ article.

Additionally, the SMRT debacles, Orchard floods, taxi fare hikes and persistent rise in cost of living speak volumes of the extremely disappointing performance by our Ministers.
This move may have swayed some citizens over to their side.
But please ask yourselves this: Imagine that you were all shareholders of this company called Singapore Inc. Would you continue to agree to pay directors (Ministers) the highest salary among their global counterparts millions of dollars for repeated sub par performance?

I agree with some Opposition parties' suggestion that in addition to top earners, the average salaries of bottom and average earners should also be incorporated into the salary calculation.
After all, the greatest leaders (arguably) didn't have seven figure pay packages: Gandhi, Aung San Suu Kyi, Dr. Martin Luther King, Jr, Tony Blair, Franklin D Roosevelt.....

Finally, an honourable mention to our dear President who apparently volunteered a 51% pay cut. Bravo!

Do foreigners bring wages to people's pockets?

PAP defends its pro-immigration policy by claiming that foreigners help boost GDP growth and hence create jobs and grow wages.

Newly appointed National Development Minister Khaw Boon Wan was quoted yesterday:
“We thought (taking foreigners in) was important to bring wages to people’s pockets, so that we can grow as fast as we can… (and) catch up with other countries. But now, we get the message that ‘we don’t want so much growth, that we are prepared to accept slower growth’”

The hard truth is ordinary Singaporeans are arguably not better off than before the immigration floodgates were opened.
Where is the empirical evidence that local wages, adjusted for inflation, have gone up substantially?
What is the official employment or unemployment rate of Singaporeans (not PRs)?
Are these jobs that were created "good" jobs?

According to the World Bank, Singapore's GDP per capita in 2009 was S$51,152, one of the highest in Asia.
However, using data from the Department of Statistics, you can roughly derive the median personal income is S$2,500 or S$30,000 annual.
The Reform Party's Kenneth Jeyaretnam, an economist by training, argued that as much as 45% of our GDP goes to foreigners.
So it is obvious that all this immigration-led GDP growth did not benefit Singaporeans as much as PAP through state media will claim.

Consequently, if the fallacy of foreigners bringing wages to people's pockets is exposed, then the PAP must stop importing them immediately.
In fact, their numbers must be reduced so as to ensure that the fruit of the country's growth is more equitably shared among Singaporeans, not foreigners, even if it means slower growth.

SAF scholar and National Solidarity Party's Tony Tan rightly suggested in his Choa Chu Kang GRC rally that the government should also be measured by other key performance indicators such as wage growth.
You can watch his speech here:

GDP growth but who wins?

I stopped by a local fish shop on my way back today.
Since there were no other customers, the shop owner started chatting to me.
He was grousing about how it was difficult to make ends meet these days.
I understood what he meant when he told me that his monthly rental was about $4k for a shop space of 200 sq feet or so!
And his location is a rather low traffic area under a HDB block.
For those familiar with the aquarium scene, he probably has to sell 4-5 arowanas each month just to break even. A tough ask.

Earlier, I was at Tanjong Pagar MRT for lunch. I saw at least 5-6 retail outlets permanently shuttered.
Last week, there was a report in the local media about how retailers at train stations and underground exchanges were facing difficulties.

If you've been to Central at Clarke Quay recently, the sheer amount of empty shop spaces is quite shocking.
There are probably alot more retailers, Orchard Road or heartlands, that are in the same situation.

One would think that with scenes like these, the country is in recession. But Singapore's GDP grew at an astonishing rate last year, the fastest in the world!
So why hasn't GDP growth trickled down to more parts of society?

The people benefitting from GDP growth are the landlords, who in all likelihood are the GLCs and related companies. They adroitly use the "growing" economy as an excuse to up rentals.
Tenants also have to contend with relentless hikes in utilities.

When margins are hit, retailers turn to cheaper foreign labour or reduce quality/quantity (eg. food).

So who wins in the end?