Exceptional time needs exceptional leader

Malaysian last quarter growth in 2008 was  0.1%. I expect the 1st quarter to be in the negative territory. The second quarter will probably be worse. That would mean that we are going into recession, since by definition, a country is deemed to be in recession with 2 consecutive negative growth.

Negative growth can be compounded just like positive growth. The effects will be cumulative. And it is more difficult to go up than go down.

If the economy is worth RM1000, for example, and suffers a contraction of 50% in a quarter, it will become RM 500 only. If the next quarter , it suffers another contraction of 50%, the economy would only be worth RM 250.

For this RM250 to go back to RM500, you need to have 100% growth. For RM500 to go back to RM1000, it needs another 100% growth. In other words, it needs 2 consecutive growth rate of 100% to gain back what was lost during the 2 consecutive contraction of 50%. 

So much is the truth behind the figures. The classic example is Japan which has taken more than a decade to climb out of deflation.

China’s (and to a smaller extent India) is the only one showing a more than 6% growth at the moment, but its economy is only one quarter of that of the US, which is in deep recession now. As an export orientated country, it is inevitable that our economy will slide backward.

Much will depend on the US and how OBAMAtackled the economy. Much will depend on how fast the housing sector finds its bottom in the States.

I am afraid that because so much expectations were on OBama, just like Malaysians had in 2004 on Pak Lah, it would be a disaster if Obama cannot deliver in a year or so.  Lee Kuan Yew said in a New Year speech on 6 February that in 9 months, the world would know how Obama’s economic plan is doing.

This speech of Lee Kuan yew reminded me of Winston Churchill, one of the greatest British statesmen . When all seemed lost in the 2nd World War after the fall of France, it was Winston Churchill who, by several of his motivating speeches, lifted the spirits of the British, and they fought courageously to win the Air Battle of Britain, and stalled Hilter’s invasion of Great Britain. His speech of “ we shall fight on the beaches” galvanised a whole nation to fight.

Exceptional times need exceptional leaders. Winston Churchill was one. Lee Kuan Yew has proven to be one. Singapore is indeed lucky that he is still around to galvanise the nation. Obama may yet to prove to be one (for the sake of the world’s poor, I hope he can be one).

Looking around us, do we have any of these leaders with calibers to turn the direction of a nation?

I will post part of Lee’s speech here and see how the government of Singapore has prepared the people for the recession:

Everyone in the world is poorer. US$7 trillion has been wiped off the world’s stock markets. According to a BBC report from Davos, the world’s assets (stocks, properties, pensions, gold, jewellery, etc) have lost 40% of their value. Rupert Murdoch speaking at Davos said personal wealth in the world has fallen by US$50 trillion. Forbes estimated that in Hong Kong , the 40 richest billionaires and millionaires have lost half their combined wealth

 Property values have gone down in every country, so have profits for companies and wages for workers. In Singapore , our SGX market capitalisation lost half of its value last year. Properties at the high end, residential and commercial have gone down. However, HDB prices have held up because many are downgrading from private condominiums to purchase HDB flats. Everyone’s wealth has shrunk as our assets have lost value. But if you have not borrowed excessively to buy assets and have sufficient cash to service your loans, you can hold on to your investments until the market turns up and prices recover.

 Singaporeans need not despair or be depressed. We will have to endure some hardship. But nobody will be destitute, depending on soup kitchens or begging in the streets. Everyone has a home, 95% of Singaporeans are home-owners. They will receive U-save rebates and S&C subsidies, GST credits, Workfare Income Supplements and other forms of assistance.

Most importantly, the government has launched the Jobs Credit Scheme to save jobs for Singaporeans by giving employers a maximum grant of $300 per month for each Singaporean worker. These measures will help Singaporeans meet their basic living expenses and defray their utility bills and conservancy charges. Support is tilted towards the lower income families in the two and three-room flats, and also the middle-income in four and five-room flats.

Some professionals have written to the newspapers that we are ignoring those in the private condominiums and landed properties. The government has not overlooked them. They are getting income tax and property rebates, and GST credits. But it is right that the low income groups should get more help, as they are in greater need.

Ministers and senior civil servants are taking pay cuts of up to 20% as the economy has slowed down substantially. Middle and lower-ranking public officers would also receive lower salaries, but with smaller reductions. It is to share the belt tightening that other Singaporeans have to bear in this difficult period.

Most of what we consume is imported. We do not grow our food, nor manufacture the goods we buy. Whatever we do, retailers will find customers more cautious, because they are preparing for what could be a longish period of negative or little growth. Retailers, like other companies, will get up to $300 per month for each Singaporean employee through the Jobs Credit Scheme, and should also benefit from the 40% property tax rebate, which is the least that landlords should pass on to tenants.

Along Orchard Road and many other shopping centres, tents have been put up next to shopping malls for the mall tenants and others to sell their wares to passers-by at lower prices. The market will adjust. This experience will be remembered by everyone, especially by all those who were born after 1971. After 1971 and the oil crisis which caused oil prices to quadruple, our economy has grown steadily year after year. So this generation may believe that Singapore and Singaporeans will automatically go up the escalator every year. This is not so.

In testing times, we must have the guts to face our problems, maintain solidarity and work together, learn new skills and knowledge through the SPUR programme that the government has launched. We will overcome our present difficulties and emerge stronger from the experience. We will get fresh investments again, higher value investments that will employ more workers who are better-skilled and more knowledgeable. Our standing with investors worldwide is high. They know we are restructuring and that we will pay for our workers to be trained by them, and by other institutes, under the SPUR programme to match the skilled workers that they need. We should take this opportunity to go for training and upgrade ourselves for these higher value-added jobs.

Singapore’s security, stability, reliability and good labour relations are well known. Whatever your job, you are better off in Singapore than if you are in a similar job in any other Asian country, including China and India . The only country where job for job, you can be better off, is in Japan . The Japanese have huge reserves, top class infrastructure and a highly skilled, industrious and knowledgeable workforce.

Do not be discouraged by the present hard times. I am confident the younger generation of Singaporeans have the grit, stamina and resourcefulness to bounce back.

My generation of Singaporeans will never forget the 1960s and early ‘70s when we had only $100 million in our reserves. We faced separation from our then economic hinterland, Malaysia, and “Konfrontasi” and no trade with Indonesia .

That generation kept their nerve and were determined to succeed. Your parents’ and grandparents’ generations had hard lives in shanty huts with no running water or modern w.c, not knowing what the future could bring. They simply concentrated on hard work and built the foundation for the Singapore of the 21st century.


We will go through with restructuring our economy. And retrain and educate our workers to higher levels of skills and knowledge. When recovery comes in the US and EU as it must, we will be ready for a higher level of economic activity.

Your generation can take Singapore forward to become one of Asia ’s most vibrant and beautiful cities. We will have a spectacular marina in the Central Business District; the island will have many beautiful streams and water bodies; our housing estates will be clad in exuberant foliage and ringed by gardens, recreational and sporting facilities. This is not a pie in the sky. It will be realised in the next 5 to 10 years, even with the current financial crisis.

The success of Singapore came from the hard work, resourcefulness and ingenuity of your forefathers and their leaders. You are the descendants of these lion-hearted pioneers. You have it in you to succeed. Joining you are hardworking and talented new emigrants from Asean , India and China . Together we can make the grade.



17 Comments (+add yours?)

  1. Eyes Wide Open
    Mar 02, 2009 @ 14:07:53

    We do have exceptional leaders in Malaysia.

    Our previous PM was exceptionally ineffective.

    Our next PM is exceptionally ruthless and incompetent


  2. Peter Yew
    Mar 02, 2009 @ 14:51:50

    Dr Hsu,

    Let’s go beyond Churchill. Try these:

    Difficult time needs difficult leader
    Corrupt time needs corrupt leader
    Bad time need bads leader
    Good time needs good leader, etc

    Of course the caption really means an unusually gifted and respected leader to pull a nation our of its difficulties whatever they may be. You have named a few great leaders but scanning our 51 years history I cannot really think of any such persons. We are at the crossroad of our national history but we have no leader to help us pull through. Instead we just have follower-leader who is like the Pied Piper of Hamelin.


  3. Dr Hsu
    Mar 02, 2009 @ 15:19:49

    Peter Yew,
    What prompted my writing of this article is that I am quite impressed by SInagporean leaders effort to prepare the nation for the difficult times ahead.

    Whereas here, we are not only failing to prepare the masses, but trying to hide tha fact that the country is going into a recession, and still thinking that we may still have a small positive growth rate. It is certainly self denial.

    The second stimulus package will come out, but have we felt the effects of the first package ?


  4. cilipadi
    Mar 02, 2009 @ 15:21:08

    While Singapore leaders are cracking their heads to pull through this difficult time, Malaysian leaders are cracking their pea size brains (if there are) to play political games, for their own survival.

    A huge contrast indeed. It is a comparison of so near and yet so far.

    As an outsider, what should I perceive from this?

    Malaysian leaders boleh.


  5. klm
    Mar 02, 2009 @ 15:35:29

    We dont need exceptional and gifted leader. We just need a leader we can trust.

    The time is so crazy. Not so long ago, the chinese community and oppositions were after Syed Hamid’s head. Today, UMNO people are after his head ( after signing the “Allah” gazette). That is why he had to rescind the gazette. Seemed he received a lot of SMS (from his own people) threatening to kill him.

    How can we have a govt who signed a law one day and rescind it the next day. This means no more FDI will come. Because the rule can be changed with stroke of a pen.

    In spite of the tough talk, the govt actually is very weak. It will zig and it will zag and it will u-turn. It will be a flip flop government -even when Najib take over a PM.

    Weak government wont be able to guide the country out of the recession.

    So be prepared for the bad time. For a very long time.


  6. Peter Yew
    Mar 02, 2009 @ 15:58:36

    Dr Hsu,

    It is a great pity that our so-called leaders are busy strengthening their political power base rather than attending to the crucial survival of our nation. A good leader must be like the captain of a steamer, charting a course out of danger. Here they are involved in petty squabbles, back stabbings, making confusing statements, and generally not doing any leading at all.

    Our Malaysian Dilemma today is we have this terrible lack of reliable and effective leaders to govern the nation. For the last 25 years there was no serious attempts to groom young leaders of substance to take over the mantle of running the nation. There was no infusion of good values among potential leaders and applying meritrocacy to these candidates. We did not see how good ministers were chosen. Instead I can say that many of our ministers are mediocre with some exceptions of course. Some of the good ones were hounded into leaving.

    It is truly a very sad state of affair for us.


  7. a_messenger
    Mar 02, 2009 @ 16:13:15

    The Zionist Nexus Linking 9-11 and the Financial Crisis


    “The current financial crisis, like 9-11, did not just fall out of the sky. Rather, both 9-11 and the financial melt-down are the results of decades of planning and preparation….”


  8. Disgusted
    Mar 02, 2009 @ 17:31:04

    Really, what ever criticisms directed at the Singapore government on political repression and undemocratic tactics against opposiition, on economic matters they have the best brains…always forward planning for the next 10 years with intermediate monitoring and adjustments.

    Just compare the first top cabinet 5 ministers’ academic qualifications with those corresponding here…starting with the PM. You see the striking contrasts.

    Secondly, our ministers have so far nothing to show on blueprints and measures of their respective portfolios on directions (people oriented forward-looking policies and how to implement it).

    Even on poverty..the statistics are hard to believe. And we depend on EPU on progress…no wonder we are ending up the “dead end” of the road. The government thinks they own the country.



  9. klm
    Mar 02, 2009 @ 17:52:58

    What my friends are forecasting.

    In another 5-10 years time, Malaysian will be working as maids and gardeners in Indonesia. A degree from Uitm will only get you a taxi driver or bus driver job.

    That is how bad we think Malaysia will be if we continue the path.

    Water is going to cover our head. And the UMNO is still talking Ketuanan, Malay rights and all these craps. MCA talking about sex dvd, Gerakan not talking at all and MIC busy stealing Indian’s community money.


  10. daffodils
    Mar 02, 2009 @ 18:46:19

    Singapore is indeed lucky that Mr Lee Kuan Yew is still around to galvanise the nation. On the other hand, what has happened here is a reality check for the indifference and apathy that we are all guilty of. We allowed our political leaders to lie to us. Can you imagine that someone has to put up a full page advertisement to knock sense into their heads? Political wrangling day in n day out. Misplaced priorities!

    We are indeed at a crossroads. The reality of the failed policies and economic destruction over the past years has come home to roost. It’s going to take a long time to re-energize our economy. There will probably be more “bumps” to come.

    Even now, when it is obvious to those of us living on the ground, surviving by being modest, spending little, saving what we can, and working hard, the geniuses still don’t seem to understand that those so called good times are over. The long, hard road ahead surely leads to a better place.


  11. sosong
    Mar 02, 2009 @ 20:56:54

    klm, don’t be so pessimistic, 5 to 10 years is too fast, but perhaps, 20 to 25 years time, your prediction that bolehland ppl want to earn bahts , or rupiahs, RMB, etc. Of course now, many are already earning SG$, NT$, HK$ or Yens


  12. Disgusted
    Mar 02, 2009 @ 21:01:53

    If you think economy is bad, check newspaper.

    Social problems….crime

    15 to 20 mat rempits stopped car. bundled driver and rob (ATM)

    exceptional times….


  13. petestop
    Mar 02, 2009 @ 23:41:38

    Spansion just went Chapter 11. Just a start for the many MNCs here.

    But Malaysia still A-OK, according to our 2nd Finance Minister.


  14. sv
    Mar 03, 2009 @ 05:50:22

    I’ll give a Singaporean point of view:

    LKY is a good leader, maybe he is genuinely concerned about the people. But if you think he’s doing this just purely out of his kind heart, you’re wrong.

    Every move by the Gahmen (Government, as we Singaporeans call it) is a politically calculated move.

    Just like in Malaysia, the ruling party PAP (Pay and Pay) is trying to survive. The sea may appear calm, but the undercurrents are beginning to swirl.

    In Singapore, there is what scholars call a “social contract” between the Gahmen and the people. This unstated contract is the understanding that, we the people agree to be ruled by an autocratic government, have our freedom taken-away, and become obedient citizens for the Lee Dynasty in exchange for economic prosperity and stability.

    From 60s till 90s (until the first Asian Crisis), Singapore always had double digit GDP growth, consequently everytime PAP was returned to power with huge margins. But after the Asian Crisis the economy has slowed, the standard of living has decreased… in the latest election, the PAP had its lowest margin of victory ever. Even though they still won comfortably, the writing is already on the wall.

    With the “independence” generation slowly dying away, LKY’s solid voting bloc is no longer there. The new generation of Singaporeans is politically savvy, many of them are more open to change, having been educated abroad or influenced by western democracy values through the internet and media. The PAP is no longer “sure win”, particularly in a bad economic situation.

    There was a recent article opinioned that PAP’s policy of creating Group Representative Constituencies (GRCs), where 5 MP seats get elected at one shot, can actually come back to haunt them. In good times, GRCs ensure that PAP always win…the opposition can never beat group GRC if one of the 5 candidates in them is a Minister, even if the 4 others are small fry. But in bad times, the opposition have a real chance of winning and if they do, can get 5 MPs into parliament at one shot.

    The PAP is very worried of losing support, that is why they are busy trying to jumpstart the economy.


  15. Tpg2Sg
    Mar 03, 2009 @ 08:44:32

    Hi SV,

    I lived in Msia for 21 years & more than 21 year is Sg and I m very sure Sg is lucky to have LKY kind of leader.

    You should live in Msia for some time then do the comparison again.


  16. a_messenger
    Mar 03, 2009 @ 10:31:59

    The Greatest Depression Under Way
    Gerald Celente

    KINGSTON, NY, 2, March 2009 – “The Greatest Depression” that The Trends Research Institute forecast, well before Wall Street or Washington would acknowledge recession, is upon us.

    The global financial markets are collapsing.

    All the pundit’s cautious predictions and business media’s hopeful expectations at the New Year for an economic turn around and imminent market bottom were dead wrong. There will be no turn around in the second quarter of 2009 or 2010 or 2011 America and much of the world has entered “The Greatest Depression.”

    The global financial system, built on endless supplies of cheap money, rampant speculation, fraud, greed, and delusion is terminally ill and will not be coaxed into remission by stimulus packages nor restored to health by government buyouts and bailouts.

    Today, the MSCI World Index of stocks in 23 developed nations fell 4.9 percent to 713.75, the lowest closing level since March 2003, and its Emerging Markets Index slid 5 percent. The Dow followed, plunging 300 points, closing below 7,000 for the first time since 1997.

    There is no stock market bottom in sight. The only figure that can be forecast with confidence is that the Dow won’t reach zero!

    As the crisis worsens, governments will take draconian measures to prevent total economic collapse and public panic. We have cautioned the likelihood of such measures before. But the rapidity and severity of the economic unraveling now demands immediate attention.

    Expect massive bank failures, runs on banks, and bank holidays. Even if deposits are FDIC insured, quick access to money is by no means assured. At minimum, have reserves on hand for emergencies.

    Trendpost: When the ship is sinking there are very few options: Life boats, life rafts, life preservers and for the late to act, possibly a few pieces of floating debris to cling to.

    We are trend forecasters, not certified financial advisors legally empowered to provide such advice. Although gold prices declined today some $15 to $925 per ounce, we forecast that gold will be one of the few life saving investments that will continue to increase in value, reaching $2,000 per ounce and beyond.

    The Trends Research Institute
    845.331.3500 Ext. 1

    © MMIX The Trends Research Institute®
    Trends Research | P.O. Box 660 | Rhinebeck, NY 12572


  17. klm
    Mar 03, 2009 @ 11:55:14

    Yesterday, we had a discussion why Malaysia with all its natural resources is not at the top of the list of exporting countries for agricultural products in ASEAN.

    1. Thailand is top with agriculture and fishery products.

    2. Indonesia is fast caching up. It is already no 1 in oil palm.

    3. Seemed these two countries are offering large tract of lands in hundreds of hectares and Taiwanese are setting agriculture operation with their expertise.

    4. Malaysia is offering only 10s of hectares in fragments and through UMNOputras.

    Malaysia lost out on two factors :

    (a) parasitic overhead cost that make these venture not profitable

    (b) no economy of scale for modern mechanisation

    In next 5- 10 years Malaysia will not have agriculture and no manufacturing. All we have are corridors to nowhere.


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